ELSEVIER Int. J. Production Economics 34 (1994) 305-312

prod&ion economics

Computer-integrated manufacturing, supervisory human intervention in the production

Jon Clark

management, and process

Department 0.fsocio~0g.v & Social Policy, University of Southampton, Southampton S@J ~NH, (iK

Abstract

The origins of Computer-Integrated Manufacturing (CIM) lie in an engineering culture of the early 1980s fascinated by the ideal of a totally automated, workerless, mass production factory. This ideal has three limitations in reality. It under-estimates the different requirements of batch production industries: assumes that total automation is always desirable; and underplays the importance of links between manufacturing and the wider business. The paper examines Pirelli Cables’s experience with CIM in a greenfield factory in South WaIes, tracing how and why the Company modified its original ideal towards a more incremental approach building in greater scope for employee intervention.

1. Mass production, batch production and CIM objectives

In the twentieth century, innovations in manufac- turing technology have been concentrated largely on mass production industries. These are charac- terised by the manufacture of large quantities of similar products assembled from a large number of precisely machined mechanical components with high rates of production output. The machines and machine tools tend to be highly specialized and the equipment and tooling are geared to a restricted range of products.

In contrast to mass production, batch produc- tion involves the manufacture of large, medium or small-sized lots of a wider range of products: 75% are in small batches of less than 50 [l]. Products arc either produced onty once or at intervals to satisfy regular or intermittent customer demand. In

the latter case, companies build up a stock of an item, change over to other orders, and change back to produce the first item when stocks run low. By definition, a factory specialising in batch produc- tion has a capacity greater than the demand for any one product, so that the machines need to be more flexible and general-purpose (see [2]).

Over the past seventy-five years or so, major new technologies such as flow-lines and large main- frame computers have tended to be either too costly or too inflexible to meet the demands of batch production. However, this is changing. Micro-electronics-based computer technologies -of which CIM systems are perhaps the most advanced form-now make it possible to bring the economies of scale of mass production, which constitutes only around 15% of total manufacturing output in ad- vanced industrial societies. to batch production, which constitutes around 40% [l].

09255273/94/%07.00 0 1994 Elsevier Science B.V. All rights reserved SSDI 0925-5273(94)00014-2

What objectives do batch production companies typically have when introducing CIM systems? In the mid-1980s in line with much of the engineering press, the hardware and software vendors, and so- cial scientific theories of the time (the most promi- nent being [3]), many companies embarked on CIM in the belief that the key to competitive ad- vantage was the ability to react instantaneously to changing customer demands. CIM, it was held, would enable them to switch totally flexibly and automatically between different and/or customised products.

A contrasting approach is exemplified by a re- cent successful Japanese experiment in the UK, which identified the most important objective of CIM as “to control complete production and to ensure that the manufacturing is completed in an optimum time with minimum inventory” [4]. This prime emphasis on the use of CIM to improve production ethciency and the materials side of manufacture-minimising work-in-progress and stocks of materials and finished goods-was com- plemented by another significant finding from the same company: “human factors and flexible work- ing practice [were] the keys to the successful imple- mentation of advanced manufacturing technology” (see [4, p. 1071). This takes us to our second main theme, the balance between automation and hu- man intervention.

2. The balance between computer-integrated automation and human intervention in the production process

At the beginning of the development of FMS/CIM systems in the early and mid-1980s there was much talk of the “workerless factory” and total computer control of the manufacturing pro- cess. For example, an article in Fortune magazine in February 1983 [S] described FMS/CIM as the “ultimate entrepreneurial system”, enabling “vir- tually unmanned round-the-clock operation”. Brian Small of Ingersoll Engineers, in his keynote address to the third international Factory 2000 Conference in 1992, recalled the atmosphere of the time [6]:

Ten years ago, the phrase Factory 2000 inspired futuristic

visions-technology-driven, clinical, robotic factories, pa-

perless o&es, minimal workforces, major capital invest-

ment, capabilities as yet undeveloped. The focus was heavily

on the mechanistic, with many a manufacturing technique

heralded as the answer to competitive pressures in the future.

It all seemed a long way from day-to-day reality.

Experience since has suggested that this vision not only did not accord with reality, it led to some enormous and costly mistakes, especially by large mass production companies. Probably the best known company to go down this road was General Motors in the USA, whose Chairman at the time, Roger Smith, was strongly associated with the “technology-is-everything” approach. GM’s experi- ence-of machine unreliability, over-complex software, lack of appropriate organisational change and lack of skilled human intervention-dissuaded many US and UK companies from investing in CIM at all during the mid- to late 1980s. Indeed some critics went further and argued that top-down, highly integrated CIM systems had had their day and now been superseded by less expensive, less experimental, more bottom-up and discrete initiatives in factory automation

(see [7, Xl).

3. Computer-integrated manufacturing or computer-integrated business? The hierarchical structure of a typical CIM system

In the early to mid-1980s CIM was very much concerned with the use of computers in manufactur- ing. What distinguished CIM from the other acro- nyms of the time was its focus on computers as an integrator rather than an aid (CIM versus CAD-CAM, CADMAT, CAE), and the fact that CIM was a top-down comprehensive system of manufacturing rather than a bottom-up aggregate of separate systems (CIM versus FMS). However, by the mid- to late 1980s the emphasis on com- puter-integrated manufacturing had broadened to encompass computerisation of the totality of a company’s business operations as well, beginning with the sales order and ending in the receipt of payment for the manufactured goods delivered to the customer (see [2, pp. 721-21).

J. Clark/M. J. Production Economics 34 (1994) 305--312 307

This idea of a computer-integrated business clearly represented a radical break with previous stages in technical innovation. CIM was not a stand-alone, island or substitution technology, but an integrating one (see on these concepts [9]). To achieve such integration, CIM systems clearly required the establishment of a common set of standards, both in terms of computer hardware and software, and in terms of management information systems.

There is now a general agreement in the litera- ture that the best way to conceive of CIM is through a hierarchical structure, with the overall business management system of an organisation at the top, the manufacturing and plant management systems in the middle, and the machine control system at the bottom. Different terms are often used to describe the various levels in the CIM hierarchy [ 1, pp. 15- 18; 2, pp. 7666767 J, but Fig. 1 presents a schematic synthesis of its core elements. This was the broad model adopted by Pirelli Cables at its Aberdare factory, which will be exam- ined in more detail in the next section.

In considering this model, it is important to recognise that “island automation” of various as- pects of the four systems is quite conceivable with- out there being any integration within and between them. Nevertheless, for organizations which aspire to introduce a fully-fledged CIM system, the most vital and complex part of the hierarchy is the Plant Management System (PMS), which provides the links between the machinery, materials, planning, design and “administrative” levels of the business.’ The PMS is composed of all the plant management hardware and software, plus the computer simula- tion of the overall CIM system, much of which is likely to be a non-standard “one-off” design.

Greenwood has called the Plant Management System “the largest single risk element” in a CIM system, accounting for between 25 and 40% of the cost and 50 and 75% of the total risk involved [l, pp. 158-1591. The more an organization wishes

1 Pirelh Cables Aberdare called it the Plant Operations Manage-

ment System or POMS, and it has also been called the “‘[CIM] control system” [ 131 and the “central plant computer” [12].

Business management system -sales order input and processing

-financial accounting

--personnel (payrolljattendance/training)

-despatch/distribution

-billing/sales ledger

Manufacturing management system --bills of material -basic structure and routing of different products

---material requirements planning (MRP)

-product design and costing

-purchasing

Plant management system -batching and sequencing of particular orders

-work-in-progress inventory

-control of materials handling and workflow

-quality control and management

-management accounting

Process control system (micro-computer/plc control of indi-

vidual machines, processes or devices)

-sequence of operations on individual machines (machine

set-up, production steps) -processes (CNC)

-devices (machine tools, sensors, dies)

F&l. The hierarchical structure of a typical computer-integ-

rated manufacturing system

to integrate the various elements of its business and manufacturing operations, the more important and expensive becomes the software in the PMS and the greater the risk of a “big bang” failure (see [IO]).

This raises a number of important questions, including who has responsibility for the design of the PMS and what priority is placed on its integra- tion with the other elements of the structure. For example, the core elements of the Process Control System (machines/workstations, set-ups, processes, devices) tend to be designed, installed and commis- sioned by production engineers and technologists, either from supplier companies and/or from the company wishing to implement the system. These specialists are normally experts in machine pro- cesses and products, but have littie knowledge of software and the integration of manufacturing and business systems. In contrast, CIM control soft- ware is frequently designed by external consul- tants-few companies have sufficient “in-house” expertise-who are experts in systems design and

computer programming, but who have little detailed knowledge of the intricacies of the manu- facturing or business environments for which they are designing the system.

This can lead to a “polarisation of expertise” [ 1. p. 1591, a phenomenon which is often cited as a prime reason why advanced manufacturing sys- tems often do not perform as well as originally expected (for other UK studies questioning the benefits of CIM see [l 1, 121). More particularly, it suggests that there are likely not only to be prob- lems in integrating the Plant Management and Process Control Systems, but also that links be- tween these and the wider Business Management System are potentially even more complex.

Let us now look at the development of Pirelli Cables’s strategy towards these issues between 1985 and 1993.

4. The philosophy, objectives and architecture of the Pirelli Aherdare CIM system

The multinational Milan-based Pirelli group is best known for its tyres and calendars. However, it is also a leading world supplier of cables with around 60 plants in 14 countries. The cables range from high tech underground and underwater sys- tems to low tech PVC-insulated building wires.

By the early 1980s the company recognised that it had failed to keep abreast of developments in new operating techniques in the manufacture of build- ing wires, and decided that it should support an experiment in computer-integrated manufacturing in one of its locations. While the complete range of building wires runs into hundreds of different prod- uct types, many of which are only ever produced in small batches for specialist customers, there are a number of standard building wires-for use in electrical appliances and house wiring-which are in widespread use and thus tend to be manufac- tured in medium to large batches. Building wires thus seemed to be particularly amenable to an experiment in computer-integrated manufacturing. Since the UK factory based in Southampton was coming to the end of its productive life, the British and Italian companies agreed that the UK should be the location for the new factory. It was explicitly

intended to be as ‘high tech’ and experimental as possible so that Pirelli factories in the rest of the world could use it as a model and learn from the experience. After considering a number of options, is was decided to build the new factory in Aberdare in the Welsh valleys (for further details on this see [ 13, Chapter 31).

The philosophy, objectives and architecture of the Pirelli Aberdare CIM system were clearly out- lined in company publications issued to celebrate the formal opening of the factory in 1988 [14]:

Put simply, CIM means that all aspects of the business are

managed by a highly sophisticated “suite” of integrated

computer systems. Integrating these systems enables the

completely flexible production of the whole range of Pirelh

building wire products _.

At the top of the “computer pyramid” is the Business Man-

agement System handling customer orders These orders

are then passed to the Manufacturing Management System.

(from which data) is fed to the Plant Operations Manage-

ment System (POMS) At the base of the pyramid is the

Process Control System managing and monitoring the basic

functions of the equipment and machinery. Put together these systems represent an unbroken chain of information

and instructions flowing both ways and involving at any

moment of operation 120 million movements of information

per second managed by 4000 megabytes of disc storage.

The heart of the system, POMS, continuously controls the

plant processes and sequences the production minute by

minute. Real-time data from all company resources-avail-

ability of materials, machine status, employee skill levels,

work-in-progress, inventory management parameters- are

used to select, on an event driven basis, the job each machine is to do next and the sequence of movements of material

about the production zones. There are no unplanned activ- ities, no dead stocks of “waiting” material, and no over-

booked or under-booked machines or operations. In short. CIM provides time and motion efficiency of an unprece-

dented order.

In implementing CIM, Pirelli’s objectives were very similar to those of many other companies in the mid-1980s for example, to enable completely flexible (small, medium and large batch) production of all its building wire products. In other words, CIM was intended to give the company the ability to switch from one product to another as customer requirements demanded. The company also had a clear commitment to using CIM not just to inte- grate the manufacturing process, but to automate and manage the whole business from receipt of

1. Ciark/int. J. Production Economics 34 (1994J N-312 309

order to payment by the customer for finished goods.

In addition, while there was no mention of the “workerless factory”, POMS was explicitly de- signed to carry out many of the tasks usually per- formed by both supervisors and operators. It was thus no coincidence that the two basic levels of POMS software were called the Shopfloor Supervi- sor and Machine Supervisor, corresponding in the traditional factory to the shift manager/supervisor and machine operator respectively. The automa- tion of factory management was intended to relieve lst-line managers of their traditional tasks of con- trolling events on the shopfloor, freeing them up to concentrate on the overall management of re- sources (human, material, financial, etc.) and on dealing with “exceptional situations”. Operators, too, were no longer expected to deal with the nor- mal routines of machine operations, but simply monitor the status of production and manage faults and quality problems as they occurred.

This was the ideal vision of a computer-integ- rated business switching flexibly and automatically from product to product as customer requirements dictated. Let us now look at how the system de- veloped in practice [15].’

5. Batch production, Just-In-Time and the evolution of CIM objectives

Under Pirelli’s traditional system of manufactur- ing building wires, production planning was deter- mined by a mix of three main criteria: past sales; the need for long product runs; and current stock levels (ascertained by regular manual checks). The result was that the company always carried large holdings of costly ftnished goods stocks. In contrast, the ideal behind the Aberdare CIM system was, as we have seen, “completely flexible production of the whole range of Pirelli’s building wire products”.

’ This discussion concentrates more on the development of the technological systems at Aberdare than on issues such as per- sonnel policies, job content, work organization and the experi-

ence of employees. For a discussion of some of these issues see article cited in Ref. [15] below.

Orders would be received, given a priority, and automatically sequenced: production would be or- ganised-and switched from one product to an- other, even for small batches, if necessary-to meet customer requirements in real time.

In reality, this ideal approach has been modified in that the Company has now decided to opt for a half-way house between producing “just-in-case” and producing “Just-In-Time”. A reduced amount of buffer stocks continue to be held so that cus- tomers can be guaranteed speedy delivery. How- ever, the average value of finished goods stocks has been reduced by over two-thirds compared with the old Southampton building wires factory because exact computerised information about the avail- ability of each product is now available in real time and because CIM makes it much easier to switch production flexibly if there is an urgent need for a particular product which cannot be met from existing stocks.

The main reason for this change is that the initial ideal of totally flexible “reactive” production has not actually proved to be the most efficient way of meeting requirements of its customers. The main customers for building wires are electrical whole- salers, who then sell them on to the primary users such as electrical contractors and electricians. The wholesalers have fairly predictable overall demands for specific quantities of different product types, particularly the most common ones used in electric house wiring. There is thus no pressing need for totally customer-driven JIT production, parti- cularly given that such a system is not without its own costs.

For example, switching between product types in cable manufacture requires a large number of pro- duction changes to be made, in wire size, machine set-ups, dies, colour of sheaths, etc. Making these changes has two main effects: they all take time (during which, of course, the machines are lying idle), and they also inevitably increase the possibil- ity of machine, device or product faults. Pirelli’s experience in this respect is very similar to that of other companies who set out with the same ideal of using CIM to achieve completely flexible switching between product types. As Jones has reported, companies who began with this objective in the mid-1980s either did not attempt to implement it in

310 J. Clark/Int. J. Production Economics 34 (1994J 305-312

practice, or found it difficult to achieve. The most often cited drawbacks were the length of machine set-up times and increased scrap levels due to faulty production [lo].

Experience therefore suggests that, in general, CIM systems operate most efficiently when there is stable production and longish runs of comparatively standardised products. The greater the variation and the switching of products, the greater the potential for unpredictable events, the greater the complexity of the software required and the greater the stress on the machines. Above all, the successful operation of fully automated systems is predicated on machines and software either not going wrong, or malfun- ctioning only rarely. Practice is often quite different, above all in the early stages of implementation.

6. The balance between computer-integrated automation and human intervention in the production process

Pirelli’s original intention was for a computer- integrated manufacturing environment in which the Plant Operations Management System (POMS), the heart of the system, would receive customer orders, sequence production automat- ically minute by minute, control the activity of all machines and devices, and monitor everything from work-in-progress and inventory to product quality. Many things happened in the first years of operation which led the company to modify its original intention.

Firstly, unexpected mechanical problems with a number of key machines delayed planned trials with the full POMS system by over a year. Second- ly, by this time, plant management was under se- vere pressure to get production out of the door, and decided it could not afford to wait for all the bugs in the full system to be ironed out. Thirdly, during the periods when the full POMS software was up and running, it proved incapable of reacting flexibly and speedily to (a) continually changing production requirements and (b) situations where things went wrong (whether they were material, machine, soft- ware or human problems or errors).

Fourthly, the original specification for the CIM software was in many ways imprecise and arguably

unrealistic. Fifthly, the external software house which designed the system was geographically remote from the factory and it was not until 1991 that in-house software engineers and operations managers with a direct knowledge of the operating requirements and the skills of the staff in the plant took over responsibility for the system and for system modifications. Finally, there was a degree of resistance among shift managers to the use of com- puters in production management, a resistance strengthened by the initial failure of POMS to deliver what had been promised.

For all these reasons, POMS is no longer, as originally intended, the controller of all aspects of manufacturing operations at Aberdare. The inter- face between the system and the staff has been re-designed in-house so that POMS is now more responsive to the machine operators, giving them greater discretion within clearly defined standards, priorities, and quality parameters. For example, pro- duction schedules are no longer fixed as rigid orders from on high, but represent a “wish list” which can be modified by the operator to suit his or her assess- ment of the most efficient or appropriate sequence of production at a particular time. Materials handling equipment in the form of automatic guided vehicles (AGVs) have been re-programmed so that they can now be called up by the operator when a mission is required rather than, as under the original “full POMS” scheme, the operator having to wait for POMS to carry out the mission automatically (which in the early trials often took 30-45 minutes, and in one or two celebrated cases, up to five hours!).

The new modified system has proved highly production-efficient in terms of traditional measures such as output per total employee hour. However, it has not yet been able to show its full potential because of the extended recession in the construction industry which has depressed demand for building wires. At the same time there has also been a sea change in the attitude of the workforce to POMS. When I first interviewed staff in 19903, the

‘The first period of fieldwork took place between July and

September 1990, during which time interviews were carried out with 94% of the total workforce of 148 on site. The second main

period of fieldwork took place in August and September 1992:

this time 97% of staff were interviewed.

J. Clark/Int. J. Production Economics 34 (1994) 305-312 311

vast majority of production managers and oper- ators regarded it as an expensive hindrance which should be aborted. By 1992, when I interviewed staff again, POMS was almost unanimously praised as an indispensable asset in nearly all as- pects of their daily work.

The shift and production managers in particular argued that POMS freed them from the need to control events on the shopfloor and gave them the information they needed to concentrate on the overall management and monitoring of resources as outlined in the original “ideal”. For example, they now have real time information on screen about all aspects of production, from the location of bobbins, orders, materials, and materials hand- ling equipment, to the state of every individual machine and the total monetary value of all work- in-progress, which is now updated on an hourly basis and displayed in neon lights at a strategic point in the factory. They are now in a position to develop into that new breed of line managers which recent research suggests is required by advanced technical systems [ 163:

areas of the business. Most of these had already been computerised but not integrated into a com- mon management information system. By 1993 work was well advanced to bring finished goods stock, warehousing and despatch into the POMS system, and parallel work was being pursued in other areas of the business management system.

What is being implemented now in the area of computer integration at Pirelli Aberdare is what many staff, with hindsight, believe would have been a more effective approach from the outset, namely the gradual implementation of the CIM hierarchy, initially as a set of separate building blocks with common standards, subsequently as an increasing- ly integrated system of management information. If this approach had been adopted, it may well have avoided some of the heartaches associated with the initial “big bang” approach to CIM implementation.

8. Conclusion

they are likely to be facilitators rather than administra-

tors, decisions-makers rather than administrators, problem-

solvers rather than fire-fighters, people with the vision

and ability to think strategically and adapt strategies and

policies to meet operational requirements.

The Aberdare CIM system as it is operating in 1993 is some way from the original ideal of the computer-controlled, automated factory. Up to the present time the requirements of batch production have proved too complex to be totally automated, and the Plant Operations Management System has been modified to allow for greater human discre- tion and intervention. POMS now generates real time information about nearly all aspects of pro- duction, and has the clear potential to extend incrementally into most aspects of the business, including warehousing/despatch, commercial and accounting systems. Its integrating power comes from the fact that it sets the basic engineering parameters, management priorities and quality standards within which human discretion and judg- ment are exercised. It is, in potential if not yet fully in reality, a computer-integrated system for manag- ing an advanced manufacturing facility.

7. From computer-integrated manufacturing to a computer-integrated business?

Despite the original ideal of a computer pyramid composed of four fully integrated computer sys- tems, the realities of getting a new factory up- and-running and getting products out of the door led Pirelli to concentrate in the first two or three years on those aspects of the CIM system con- cerned with manufacturing in the narrower sense. By 1990, POMS had become largely a system for managing work-in-progress. However, once it had been modified to carry out this task successfully, and once “ownership” of POMS was transferred from the external consultants to Pirelli staff, the site manager at Aberdare encouraged systems engi- neers, in consultation with line managers and oper- ators, to extend its use incrementally into other

Acknowledgement

I would like to thank the Leverhulme Founda- tion and the ESRC-funded Industrial Relations

Research Unit at the University of Warwick for financial support of the research discussed in this chapter. My greatest debt of gratitude is to the staff of Pirelli Cables Aberdare, who have given so gen- erously of their time over the past three years, and to the company (in particular David Yeandle, John Siney, David Gaskell and Antonio Colombo) for allowing me to carry out the research.

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