the missing link in engineer-to-order supply chain logistics presentation by dr. paul doherty school...

The Missing Link inEngineer-to-Order

Supply Chain Logistics

Presentation by

Dr. Paul DohertySchool of Business, Wilfrid Laurier University

Supply Chain Logistics 2003 Conference and TradeshowMay 14-16, 2003 - Toronto, Ontario

Outline

1. The Supply Chain Revisited

2. Engineer-to-Order Manufacturing

3. Design & Costing Automation

4. DCA Impact on Manufacturing

5. DCA Case Studies

6. Discussion

The Supply Chain Revisited

Quotation Requested

Order Placed

Order Received

Physical Transportation

Product & Price Confirmed

Order Released

Production

Customer

Carrier

Supplier

Electronic Transaction Medium

Payment Received

1 2 3 4 5

Predictable Time Units

Conventional Supply Chain Logistics

Product & Price In Doubt ?

(SCL)

Product & Price in Doubt

Product design & price optimized during quotation process

Conventional engineering process is not predictable

Delivery is arbitrarily affected

… SCL BREAKS DOWN

Which Industries Suffer?

Characteristics Complex, high-value assembled products Iterative quotation process Design never fixed until order placement Delivery lead time measured in weeks

… Engineer-to-Order manufacturing

Engineer-to-Order Manufacturing

Nature of business Standard product with infinite variations Customer specs drive configuration Established Engineering design rules Defined purchase and fabrication costs

SCL has limited foothold

Traditional engineering approaches are the obstacle

Engineering Influences

Design Eng. ManagerProject

ManagerDesign

Engineer

CAD Modelling Technologist

Manufacturing Engineer

Tooling Engineer

Purchasing Manager

Manufacturing Eng. Manager

Director of R & D

Director of Engineering

Director of Manufacturing

Production Manager

Purchasing Agent

Shop Floor Foreman

Work Cell Operator

Receiver

Development Engineer

CAD Detailing Technologist

Technical Writer

Configuration Manager

B.O.M. Manager

Document Clerk

Quality Inspector

CNC Programmer

SUPPLIER

CUSTOMER

Engineering "System" assemblies

models drawings

illustrations sketches

processes Bills of Material

Field Service Technician

Process Planner

Marketing Manager

Sales Engineer

Graphic Artist

Expediter

Confirming Product & Price

CUSTOMER

SALES PERSON

Identify Needs

ENGINEERDesign Product

PURCHASING AGENT

Cost Materials

Identify Material Needs

Generate Drawings

PRODUCTION ESTIMATOR

Enlist Technical

Input

Cost Processing & Labour

Prepare Bid

Package

Receive Quotation

Request Quotation

1 2 3 4

Typical Lead Time in Weeks

Participants

Why SCL Breaks Down

Product definition is not automated

SCL fails where all product-related data is not instantly accessible

Major opportunity for application of new business-enabling technology

Fundamental change necessary Design and process standardization Enterprise integration of technical workflow

Technological Trends

The Information Age3 Stages of Evolution

1960 1970 1980 1990 2000 2010

IBMMa

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ita

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SunIntel

OracleMicrosoft

Linux

BISwith

DCA, etc.


1960 1970 1980 1990 2000 2010

IBMMa

rke

t C

ap

ita

liza

tio

n

SunIntel

OracleMicrosoft

Linux

BISwith

DCA, etc.


1960 1970 1980 1990 2000 2010

IBMMa

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t C

ap

ita

liza

tio

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SunIntel

OracleMicrosoft

Linux

BISwith

DCA, etc.

Business-Enabling Technology

Subset of Business Intelligence Systems (BIS)

Next-generation software platforms Automates knowledge processes Provides real-time decision-making Minimizes industrial process redundancy

Design & Costing Automation

Computerization of product design and fabrication standards to minimize Engineering effort.

"Engineer-in-a-Box"

Support for mission-critical function in engineer-to-order manufacturing

Ideal DCA Technology Model

Web-based enterprise environment Embedded geometric product definition driven by

engineering and fabrication rules

Interface enabling non-technical staff to define and validate unique configurations

Automatic 3D CAD assembly generation

Detailed technical documentation extraction

Interfaced with ERP for costing Tied to scheduling for promised delivery date

DCA System Architecture

Manage customer

info

Submit product specs

PRODUCT SPECIFICATIONS

PRODUCT STRUCTURE TEMPLATE

RULES BASE COMPONENT SPECIFICATIONS

1. Model 2. Options 3. Performance 4. Constraints

Logical assembly order for all possible subassemblies, components, and weldments

1. Generic fits & tolerances 2. Performance equations

3. Performance curves

4. Configuration option logic

5. 3d spatial relationships

6. Special fits & tolerances

7. Constraint management

8. Drafting standards

Design Fabrication 1. Process type definition

2. Processing order logic 3. Tooling standards

4. Machine standards

5. Labor standards

Dimensions 1. Industry standard tables

2. Company- specific alteration 3. Revision level

Attributes 1. Materials

2. Finishes 3. Raw mat'l codes 4. Part No. reference 5. Qty/factor rules

Geometry 1. CAD part family masters

2. Design feature history 3. Variables 4. Revision level

Browser User

Interface

UNIQUE GENERATED PRODUCT DESIGN

DATA STORAGE 1. CAD geometry pool 2. SQL database 3. Coded rules logic 4. Saved config records 5. Customer history

Data Editor

CAD Seat

ERP link

DCA Impact on Manufacturing

Cost Savings (% of annual revenue)

Sales Eliminate paperwork

Engineering Eliminate redundant quote-related design work

Purchasing Minimize procurement errors and return-stocking charges

Estimating Eliminate redundant quote-related costing work

Production Eliminate Engineering Change Orders

Dramatic Cycle Time Reduction

CUSTOMER

SALES PERSON

Identify Needs

ENGINEERDesign Product

PURCHASING AGENT

Cost Materials

Identify Material Needs

Generate Drawings

PRODUCTION ESTIMATOR

Enlist Technical

Input

Cost Processing & Labour

Prepare Bid

Package

Receive Quotation

Request Quotation

1 2 3 4

Typical Lead Time in Weeks

DCA Technology

Automatically generates the design, drawings,

Bill of Materials, labor requirements, and calculates cost

precisely

in 10 minutes

anywhere in the world.

Web Enabled

Identify Needs

Request Quotation

Receive Quotation

Lead Time in Minutes

1 5 10

CUSTOMER

SALES PERSON

Participants

in minutes

Changes Market Dynamics

Materials

Labour

Assets

Administration

Sales & Engineering

Net ProfitP R O D U C T

P R I C E

Current Product Cost Structure

Materials

Labour

Assets

Administration

Sales & Engineering

Net Profit

Implement DCA

OPTION 1 Increase Profit

Materials

Labour

Assets

Administration

Sales & Engineering

Net Profit

OPTION 2 Reduce Price

Other DCA Benefits

Deliver better customer service

Improve product quality & consistency

Grow market opportunity by focusing on new product development

Weather economic downturns with stabilized fixed costs

Overview of DCA Operation

1. Enter customer specifications (via Web?)

2. Design rules check for errors or inconsistency

3. Design rules report prints out

4. A 3D model (digital prototype) is generated automatically

Then…

Overview of DCA Operation

5. Technical documents generated: Bill of Materials Production drawings Labor content Approval drawing Price quotation Web-based visual Spare parts list Capable-to-delivery date

6. Customer acceptance received

7. Quotation is confirmed as Order and transferred to ERP

Downstream DCA Add-ons

Automated CNC programming

CRM and SFA

Projections Sales and revenue Material requirements Capacity demand

Automated production purchasing

Field service documentation

DCA is SCL's Missing Link

Provides total product data visibility

Treats design data as any other logistics asset

Drives error-free manufacturing for variable product definition

Puts engineered-to-order product on predictable schedule

Case Study #1: PROFILE

Product Pressure Vessels($10,000+ per unit)

Configurability 80% of sales are standard variations

Cost Elements Engineering, material, welding

Annual Revenue $12 million (240 units / year)

Quote 'Hit' Rate 10% of approximately 2,400 quotes / year

Case Study #1: PRODUCT

Case Study #1: COSTS

Sales Staff $350,000

12 people(excluding overhead)

Estimating Staff $100,000

Engineering Staff $350,000

Sales & Design Salaries $800,000 / year

Cost for Std. Variations (80%) $640,000 / year

Case Study #1: OUTCOME

Traditional Design & Costing Automation

Features Generally less accurate Results depend on staff skill No central searchable records Cumulative quotation lead

time average of 3 weeks

Precise cost-base pricing of purchases, processes, labour

Bill of Mat'ls & labor content Precise drawings & visuals Retain design from quote to PO

Time 1 manday per quote or design

500 minutes

Multiple iterations on demand

10 minutes

Result98% cycle time compression

5% of Sales reduction in fixed costs

Case Study #2: PROFILE

Product Engineered designs and costing for custom-built homes

Configurability 95% of sales are standard variations

Cost Elements Architecture, Engineering,webserver infrastructure

Annual Revenue Startup, plan 1,000 homes 1st yr

Value Proposition Custom homes at production prices throughout North America

Case Study #2: PROTOTYPE

Case Study #2: VISUALIZATION

Case Study #2: DRAWINGS

Case Study #2: COSTING

ItemNumber

Quantity Document Number Title Material

1 2 BA-01.1 Base Face Beam Pine

2 8 BA-01.2 Base Joist Pine

3* 2 BA-01-01.1 Base Start Spread Beam Pine

4* 12 BA-01-01.2 Base Spreader Beam Pine

5* 2 BA-01-01.3 Base End Spread Beam Pine

6 2 BA-02.1 Base Cover Standard Panel Plywood

7* 1 BA-02.2 Base Cover Rear Panel Plywood

8 2 BA-02.3 Base Cover Side Panel Plywood

9 1 BA-02.4 Base Cover Corner Panel Plywood

10 2 W1DA-01.1 Front Single Panel Door Oak

11 2 W1DA-01.3 Front Standard Door Knob Brass-plated Steel

12 4 W1DA-01.2 Front Door Hinge Brass

13 1 W1DA-02.1 Front Door Left Side Molding Spruce

14* 1 W1DA-02.2 Front Door Header Molding Spruce

15* 1 W1DA-02.3 Front Door Right Side Molding Spruce

16 2 W1DA-03.1 Front Door Left Side Trim Mahogany

17 2 W1DA-03.2 Front Door Header Trim Mahogany

18 2 W1DA-03.3 Front Door Right Side Trim Mahogany

19 2 W1DA-04.1 Front Door Side Sill Mahogany

20 1 W1DA-04.2 Front Door Head Sill Mahogany

21* 2 W1DA-05.1 Front Door Frame Side Stud Pine

22* 2 S01 Standard Wall Stud Pine

23* 2 W1DA-05.2 Front Door Header Pine

24* 1 W1DA-05.3 Front Wall Right Base Plate Pine

25* 1 W1FA.1 Front Wall Base Plate Pine


27* 1 W1FA.2 Front Wall Head Beam Pine

28* 1 W1S01C2 Front Wall Stud 01 C2 Pine






34 1 W1EA.5 Front Outside Cladding Corner Molding Pine

35 1 W1EA.1 Front Wall Exterior Panel 1 Plywood



38* 1 W2WA-01.1 Left Single Pane Window Frame Pine

39* 1 W2WA-01.2 Left Window Glass Pane Glass

40* 4 W2WA-02.1 Left Window Base Molding Pine

41* 4 W2WA-02.2 Left Window Side Molding Pine

42* 4 W2WA-03.2 Left Window Trim Base Pine

ItemNumber


43* 4 W2WA-03.1 Left Window Side Trim Pine

44* 2 W2WA-04.1 Left Window Sill Side Pine

45* 2 W2WA-04.2 Left Window Sill Base Pine


47* 4 W2WA-05.1 Left Window Header Pine

48* 2 W2WA-05.2 Left Window Side Frame Pine

49* 1 W2FA.1 Left Wall Base Plate Pine

50* 1 W2FA.2 Left Wall Head Beam Pine

51* 1 W2S01C2 Left Wall Stud 01 C2 Pine










61* 1 W2EA.5 Left Outside Cladding Corner Molding Pine

62* 1 W2EA.1 Left Wall Exterior Panel 1 Plywood



65* 1 W3FA.1 Back Wall Base Plate Pine

66* 1 W3FA.2 Back Wall Head Beam Pine

67* 1 W3S01C2 Back Wall Stud 01 C2 Pine






73 1 W3EA.5 Back Outside Cladding Corner Molding Pine

74* 1 W3EA.1 Back Wall Exterior Panel 1 Plywood



77 2 W4WA-01.1 Right Single Pane Window Frame Pine

78* 2 W4WA-01.2 Right Window Glass Pane Glass

79 8 W4WA-02.1 Right Window Base Molding Pine

80 8 W4WA-02.2 Right Window Side Molding Pine

81 8 W4WA-03.2 Right Window Trim Base Pine

82 8 W4WA-03.1 Right Window Side Trim Pine

83 4 W4WA-04.1 Right Window Sill Side Pine

84 4 W4WA-04.2 Right Window Sill Base Pine

ItemNumber



86* 8 W4WA-05.1 Right Window Header Pine

87* 4 W4WA-05.2 Right Window Side Frame Pine

88* 1 W4FA.1 Right Wall Base Plate Pine

89* 1 W4FA.2 Right Wall Head Beam Pine

90* 1 W4S01C1 Right Wall Stud 01 C1 Pine












102 1 W4EA.5 Right Outside Cladding Corner Molding Pine

103 1 W4EA.1 Right Wall Exterior Panel 1 Plywood



106* 9 RA-01-01.1 Roof Truss Base Beam Spruce

107 24 RA-01.2 Roof Truss Inclined Beam Spruce

108* 18 RA-01-01.3 Roof Truss Support Beam Spruce

109* 18 RA-01-01.4 Roof Truss Brace Beam Spruce

110* 18 RA-01-01.5 Roof Truss Top Center Plate Steel


112 3 RA-01.1 Roof Ridge Beam Spruce

113 2 RA-02-01.2 Roof Covering Front Panel Plywood

114 4 RA-02-01.1 Roof Covering Standard Panel Plywood

115 2 RA-02-01.3 Roof Covering Rear Panel Plywood

116 78 RA-02-02-01.1 Roof Standard Shingle Asphalt

117 8 RA-02-02-01.2 Roof Shingle Row 1 End Asphalt

118 6 RA-02-02-02.1 Roof Half Shingle Asphalt


120 2 RA-02-02-03.2 Roof Shingle Last Row Start Asphalt

121 10 RA-02-02-03.1 Roof Shingle Last Row Standard Asphalt

122 2 RA-02-02-03.3 Roof Shingle Last Row End Asphalt

123 1 RA-02.1 Roof Peak Cap Phosphate Steel

124 2 RA.1 Roof Peak Clapboard Pine

ItemNumber


1 2 BA-01.1 Base Face Beam Pine

2 8 BA-01.2 Base Joist Pine

3* 2 BA-01-01.1 Base Start Spread Beam Pine

4* 12 BA-01-01.2 Base Spreader Beam Pine

5* 2 BA-01-01.3 Base End Spread Beam Pine

6 2 BA-02.1 Base Cover Standard Panel Plywood

7* 1 BA-02.2 Base Cover Rear Panel Plywood

8 2 BA-02.3 Base Cover Side Panel Plywood

9 1 BA-02.4 Base Cover Corner Panel Plywood

10 2 W1DA-01.1 Front Single Panel Door Oak

11 2 W1DA-01.3 Front Standard Door Knob Brass-plated Steel

12 4 W1DA-01.2 Front Door Hinge Brass

13 1 W1DA-02.1 Front Door Left Side Molding Spruce

14* 1 W1DA-02.2 Front Door Header Molding Spruce

15* 1 W1DA-02.3 Front Door Right Side Molding Spruce

16 2 W1DA-03.1 Front Door Left Side Trim Mahogany

17 2 W1DA-03.2 Front Door Header Trim Mahogany

18 2 W1DA-03.3 Front Door Right Side Trim Mahogany

19 2 W1DA-04.1 Front Door Side Sill Mahogany

20 1 W1DA-04.2 Front Door Head Sill Mahogany

21* 2 W1DA-05.1 Front Door Frame Side Stud Pine


23* 2 W1DA-05.2 Front Door Header Pine

24* 1 W1DA-05.3 Front Wall Right Base Plate Pine

25* 1 W1FA.1 Front Wall Base Plate Pine


27* 1 W1FA.2 Front Wall Head Beam Pine







34 1 W1EA.5 Front Outside Cladding Corner Molding Pine




38* 1 W2WA-01.1 Left Single Pane Window Frame Pine

39* 1 W2WA-01.2 Left Window Glass Pane Glass

40* 4 W2WA-02.1 Left Window Base Molding Pine

41* 4 W2WA-02.2 Left Window Side Molding Pine

42* 4 W2WA-03.2 Left Window Trim Base Pine

ItemNumber


43* 4 W2WA-03.1 Left Window Side Trim Pine

44* 2 W2WA-04.1 Left Window Sill Side Pine

45* 2 W2WA-04.2 Left Window Sill Base Pine


47* 4 W2WA-05.1 Left Window Header Pine

48* 2 W2WA-05.2 Left Window Side Frame Pine

49* 1 W2FA.1 Left Wall Base Plate Pine

50* 1 W2FA.2 Left Wall Head Beam Pine











61* 1 W2EA.5 Left Outside Cladding Corner Molding Pine




65* 1 W3FA.1 Back Wall Base Plate Pine

66* 1 W3FA.2 Back Wall Head Beam Pine







73 1 W3EA.5 Back Outside Cladding Corner Molding Pine




77 2 W4WA-01.1 Right Single Pane Window Frame Pine

78* 2 W4WA-01.2 Right Window Glass Pane Glass

79 8 W4WA-02.1 Right Window Base Molding Pine

80 8 W4WA-02.2 Right Window Side Molding Pine

81 8 W4WA-03.2 Right Window Trim Base Pine

82 8 W4WA-03.1 Right Window Side Trim Pine

83 4 W4WA-04.1 Right Window Sill Side Pine

84 4 W4WA-04.2 Right Window Sill Base Pine

ItemNumber



86* 8 W4WA-05.1 Right Window Header Pine

87* 4 W4WA-05.2 Right Window Side Frame Pine

88* 1 W4FA.1 Right Wall Base Plate Pine

89* 1 W4FA.2 Right Wall Head Beam Pine













102 1 W4EA.5 Right Outside Cladding Corner Molding Pine




106* 9 RA-01-01.1 Roof Truss Base Beam Spruce

107 24 RA-01.2 Roof Truss Inclined Beam Spruce

108* 18 RA-01-01.3 Roof Truss Support Beam Spruce

109* 18 RA-01-01.4 Roof Truss Brace Beam Spruce



112 3 RA-01.1 Roof Ridge Beam Spruce

113 2 RA-02-01.2 Roof Covering Front Panel Plywood

114 4 RA-02-01.1 Roof Covering Standard Panel Plywood

115 2 RA-02-01.3 Roof Covering Rear Panel Plywood

116 78 RA-02-02-01.1 Roof Standard Shingle Asphalt


118 6 RA-02-02-02.1 Roof Half Shingle Asphalt


120 2 RA-02-02-03.2 Roof Shingle Last Row Start Asphalt

121 10 RA-02-02-03.1 Roof Shingle Last Row Standard Asphalt

122 2 RA-02-02-03.3 Roof Shingle Last Row End Asphalt

123 1 RA-02.1 Roof Peak Cap Phosphate Steel

124 2 RA.1 Roof Peak Clapboard Pine

Discussion

DCA is revolutionizing manufacturing Enterprise technology with <1 year ROI Ensures North American competitiveness Gradual erosion of ERP importance

SCL needs the Missing Link Expand SCL into engineer-to-order industry Close the delivery loop for complex products Smoother supply chain interactions

Contact Information

Paul Doherty, MBA, PhD, P.Eng.

Wilfrid Laurier UniversityDept. of Business & EconomicsWaterloo, Ontario N2L 3C5Tel: (519) 884-0710 ext 6295#Email: [email protected]

The Missing Link inEngineer-to-Order

Supply Chain Logistics

the missing link in engineer-to-order supply chain logistics presentation by dr. paul doherty school...

Documents

product slide

minutes slide

erp slide

obstacle slide

order manufacturing

discussion slide

ontario slide

engineering influences