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REALITIES OF TODAY’S MANUFACTURING PRODUCTION ECONOMICS
Machine shops seek to produce a certain number of parts of a certain quality, in a certain amount of time, at a certain cost. Consistently achieving those goals involves controlling a myriad of factors including cutting parameters, tool cost and changeover times, machine tool utilization, workpiece handling expense and material and labor costs.
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roduction economics is the art and science of balancing process factors to achieve desired results. Over more than two centuries of machining history, the elements of production economics have multiplied in number. Manufacturing first evolved from craft-level singleitem output to mass production of standardized parts using machine tools. Improving manufacturing methods brought about a second generation of mass production featuring production lines and output of increasingly greater numbers of identical parts: a high volume, low product mix (HVLM) scenario. Then CNC machines and robots fostered a third generation of mass production efficiency. Most recently, digital technology applied in programming, machine tool controls and workpiece handling systems is facilitating a fourth generation of manufacturing production, known as Industry 4.0, that enables cost-efficient, high-mix lowvolume (HMLV) production.
To effectively accomplish the shift from HVLM to HMLV production it is crucial that manufacturers recognize the changing and growing realities of production economics and take advantage of the information and technology available to analyze their operations and meet their goals. A key element of the transformation involves abandoning overly simplistic beliefs and practices and uncovering hidden costs that can undermine attempts to maximize productivity. High Volume, Low Mix, Simple Economics Standardized machining processes were developed in the 19th century to speed production of identical products with interchangeable parts. Automotive manufacturing refined this HVLM approach to a maximum degree, establishing transfer lines and other methods to make hundreds of thousands or millions of the same part over and over for years. The long-term nature of HVLM production allows manufacturers to fine-tune multiple process factors for
27 | Industry Asia Pacific | November 2018
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