MCS unleashes manufacturing gross profits

The MANUFACTURING CONTROL SYSTEM

FIRST: A MESSAGE FROM OUR FOUNDER

.....In my early work experience at Collins Radio Company in manufacturing Industrial Engineering, Production Control, Materials Management and as a Division Director, I participated in every profit improvement program in manufacturing and engineering that could be imagined.

.....I experimented with changing plant layout; work cells; balanced assembly lines; P.E.R.T. / Critical Path scheduling; Economic Lot Quantity (ELQ) building; an in-house developed Material Requirements Planning (MRP) system; a computer based Engineering design system; a computer driven printed circuit board fabrication factory; A.T. Kearney's Price, Delivery, Quality (PDQ) program (i.e. Lean Manufacturing); a new Engineering Change Notice (ECN) "walk thru" Department; a new "Configuration Control" Department. We had the benefits of the largest non-military Data Center in the world at that time powered by five IBM 7074 Mainframe computers and numerous Collins C-8500 communication computers linked thru the Collins' worldwide Communications System.

.....In most cases we saw some initial improvement, but later went back to our historical performance which was average for Aerospace Electronics.

.....We spent a large amount of time in "Production Meetings" which in reality were "Parts Shortage Expedite Meetings". The closer we got to month end, the longer the meetings and the stronger the motivational comments by management!

.....I studied similar conditions at Bell Helicopter, Douglas Aircraft and a General Motors assembly plant. I concluded that they were no better off or worse than we were.

.....In the Manufacturing Division where I worked Gross Profit Margin (GPM) was about 33% of Sales dollars. The material cost for our products was about 72%, direct labor 10% and Overhead 18%. One of my least desirable tasks was fencing with Department of Defense Auditors as to the accuracy of material (parts) charges. We both knew that the material charges likely weren't accurate but neither of us could absolutely prove our position. This created an embarrassment that helped fuel my desire to create a manufacturing system that could solve this and other difficulties in the manufacturing process.

.....A foundational requirement in the development of a manufacturing system was that it had to be simple to use. I frequently admired how Industrial Engineers could take a design package from Engineering, reduce it to Assembly Write ups / OP charts, use Methods Time Measurement (MTM) to set Labor Standards, hand it off to Production and we built sophisticated electronics equipment such as the Communication / Navigation systems that guided the Astronauts to the moon; and, back to a pin point on earth. Why couldn't a manufacturing "operating system" be constructed to perform in a similar way?

.....I had the good fortune one day to sit down with a group of new employees in my new company who reportedly could program computers to do what I had visualized for some time. I began by stating that we are going to program a system that would enable me and a bunch of chimpanzees to run an efficient factory. I held up a picture of a card cage stuffed with printed circuit boards (PCBs). I explained that there are several circuits on each PCB that could be likened to computer programs and that each PCB is like a computer program module. I explained that the card cage wiring integrated the PCBs (Modules) into a "system" and such would enable us to plug or unplug MCS Modules based on our Customers need.

.....I gave my new staff a set of input documents which defined the file layouts; and, the formats of output reporting. All input for responding back to the system was limited to filling in quantity fields of system created input records. There would be no large amount of keying input data with the attendant errors and labor costs that I had previously experienced. I explained the module interactions, the internal quality controls and a flow chart of system operation that I had used to sign up our new customers. We were to be paid out of cash flow and the Engineering Module was to be installed for the first Customer 4 months from this meeting. We got to it and created the Cannon Manufacturing/Material Control System (MCS) two weeks ahead of schedule and 2% below budget.

.....At one of our early Customers at the end of three months after installation of the MCS, the President said to me, "My Industrial Engineers tell me that our Direct Labor productivity is up 35%, do you believe that"? I said, "No, in my estimate of ROI we aren't supposed to achieve 35% until the ninth month." I went out to Production and looked at some of the operating data we were collecting; and, surprise! surprise! it looked like the Industrial Engineers were right.

.....I was so elated I spent the rest of the day on the phone talking to our staff at the office and my manufacturing friends at Collins Radio Company.

.....We had achieved our design goals and then some. It was a great reward for our dedicated effort over a long time. Subsequently, the MCS reduced Cost of Goods Sold (Manufacturing Costs) by 28% of Sales for that Customer. You have my personal assurance that the MCS will accomplish the Gross Profit increases and other benefits that we project for you.