Restructuring Manufacturing
Financial enterprises have been on the spotlight for long periods of time praised for driving economic growth yet without creating value and sustainable growth. However, it has been observed that a sustainable growth can be attained by value creation through manufacturing. Value creation results when a product is manufactured for sale at a price that is higher than its cost of production. As such, the difference in prices between the cost of sale and the cost of production is called the profit. The price and volume of such products are set by the market, whereas the profit margin is determined by manufacturing. The latter regulates the cost of labor and materials.
Reduction on the costs of production can be achieved through the use of DFMA program. DFMA program is a process used to alter a design with an aim of reducing the production costs while maintaining functionality of the finished product. In order to realize benefits sustainably, the business methodology needs to have all quadrants that include; tools, business processes, organization and infrastructure. A business process with a set of tools has to be used to identify ways to start, select, plan, staff and manage projects.
In addition to that, infrastructural needs have weight on the matter and are very important. For instance, computer resources are needed to store analyses, share and reuse DFMA analysis. However, file security is of utmost importance because DFMA analyses are recipes to reduce the cost of production and should be safe from competitors. It is vital that the design engineering leads the work and the supply chain sees the work as a way of making more profit.
Despite the fact that many companies do not use this method, conducted studies have presented radical savings from DFMA deployment, and 20 to 50 percent reductions in labor and materials. There is need to reinvent the supply chain because the direct savings of labor and materials are staggering, but the downstream savings in the supply chain are more significant. Downstream savings result from the elimination of activities that the customer will not pay for, or non-value-added (NVA) activities.
The lean thinkers have largely been relegated to NVA reduction on the manufacturing floor where value stream mapping (VSM) is the tool of choice to define the activities, resources and information flow required to deliver value to the customer. In the value stream map, a time is put for every activity in the value stream and each time is defined as value-added or NVA. Since NVA time makes up most of the time in the value stream, there is a huge time savings even with modest percentage reductions in NVA time. With that noted, it is inevitable to replace “value stream” with “supply chain,” which this gives a clear scenario.
The link between part count and NVA activities is clearest when thinking in the context of seven wastes noted by Taiichi Ohno which include; overproduction, waiting, transportation, processing, inventory, movement, and defective products wastes. Since DFMA is working towards eliminating such wastes, it increases savings in that dimension by cutting out the costs. DFMA deployment is an open framework that involves hard work due to its part-by-part, process-step-by-process-step approach to designing out cost.
In conclusion, systematic DFMA deployment is a rigorous process that can guide manufacturing companies toward increased profitability in lesser time spans. Using this method, it is possible to resurrect U.S. manufacturing and re-elevate manufacturing as a profession. This will result in the creation of a robust and sustainable future economy for us and our children.