Engineering Management System

Engineering and the Built Environment

A REPORT FOR ENGINEERING MANAGEMENT SYSTEM OF APPLICON CELLULAR

MANUFATURING PROCESS
SUBMITTED TO
DR. HABTOM MEBRAHTU
BY
KHAN MD ASHIKUL ALAM
SID: 1234126
MOD003628
DEPARTMENT OF ENGINEERING AND THE BUILT ENVIRONMENT
ANGLIA RUSKIN UNIVERSITY-2015

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TABLE OF CONTENT:

1. Introduction: ……………………………………………………………………………………………………………...4

2. Objective: …………………………………………………………………………………………………………………..5

3. Applicon and its Product: ……………………………………………………………………………………………6

4. The Characteristics of the Market Served by the Applicon: …………………………….6

5. The Bill of Material for the Applicon’S Traditional Factory: ………………………………...7

6. Lead time for the Alpha terminal: ………………………………………………………………….9

7. Longest Cumulative Lead Time: …………………………………………………………………....9

8. The plan work order release on MPS: ………………………………………………………....10

9. The difference between the traditional factory and the Applicon’s cellular

manufacturing approach:……………………………………………………………………………..12

a. Material flow: ………………………………………………………………………………………..12

b. Process Lead Times: ……………………………………………………………………………....12

c. Inventories: …………………………………………………………………………………………...13

d. Quality control: …………………………………………………………………………………..…13

e. Shop Floor Order Quantity: ……………………………………………………………………14

10. Changes made due to the investment in new production system:………………..14

a. Plant layout: ………………………………………………………………………………..………..14

b. Planning and scheduling: ……………………………………………………………………….15

c. Reduced Inventory: ……………………………………………………………………………….15

11. Witness Model Of traditional Alpha Production System: …………………………….16

12. Suggestion for Applicon to bring about the further Development: ……………...17

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a. Development of supplier Vendor relationship: ………………………………………17

b. Autonomous Working Group: ……………………………………………………………....18

c. Quality control: …………………………………………………………………………………..18

13. Conclusion: ……………………………………………………………………………………………….19

14. References: ……………………………………………………………………………………………….20

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Introduction:

Applicon introduced the Applicon Graphics System (AGS) in early 1980s electronic market and

co-founded by some MIT professors and venture capitalist. The company later handed over

to the Schlumberger who are manufacturing the computer aided system like computer aided

design (CAD), computer aided engineering and computer aided manufacturing (CAM) system.

The Applicon was a successful manufacturing industry since it started manufacturing in 1984.

BY 1997 the company has a turnover of around £100 million with an employee number of

1000. This huge turnover within a short period of time was possible as the management of

the Applicon has some intelligent decision over the market requirements in 1990s. Despite

they were successful manufacturer of the electronic system the management decided to

change their aim to capture the market of automotive industry and machine shop in 1990

with saturated market of the electronic system. However the company entered into a

completely new production line and introduce the series 4000 in the mechanical market in

1991.

The Applicon is a perfect example of the successful manufacturing industry that is succeeded

by the wright decision at right time. The present manufacturing business is growing much

more challenging day by day. The huge amount of requirements has introduced the

manufacturing process with the challenge of low quality production, inadequate stock and

the short supply time. To overcome this challenge the manufacturing industry are now

adopting the advanced operation management techniques that intelligently deals with the

market requirement, supply chain, management of products , manufacturing process and

proper utilization of the resources and services to client as their necessity (Brandon-Jones,

2011).

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In the present complex manufacturing business world the management need to take decision

on strategic and tactical point of view. The complex manufacturing market has brought up

the necessity of managing the methods of manufacturing, strategic structure of

manufacturing plan, selection of multi task equipment and designing the technology supply

chain (Brandon-Jones, 2011). The present manufacturing process could be simple and

complicated depending on the product need to manufacture. Again the manufacturing

business has to deal with environmental issues more than any other business (Hill, 2015). So

the management needs to design an appropriate model of manufacturing with least use of

renewable resources.

Objectives: The main objective of this assignment is observe and analyse of the Applicon

manufacturing system and the market trends. And following on designing a witness

simulation model of traditional alpha production system. The complete assignment will cover

1. Market characteristics served by the Applicon, A complete bill of material for the

traditional factory and working process of a traditional order.

2. Difference between the Applicon cellular manufacturing approach and the traditional

factory.

3. Investment on new production system and changed were made due to that.

4. A complete witness model of the Alpha production system.

5. Analysing the Applicon and further requirements of initiative for further

improvement.

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Applicon and its Products:

Applicon is a manufacturing company that aims to manufacture and capture the mechanical

market and entered the market with series 4000 in 1992. A manufacturing company apply

the process of conversion of raw materials or parts and turn them into finished goods (Aaron,

2015). Manufacturing requires a machine set up with autonomous working group for a large

scale production. Applicon is specialised in producing software and hardware of computer

aided engineering, design and manufacturing.

The Characteristics of the Market Served by the Applicon:

Although Applicon started successful manufacturing with AGS aiming electronic market in early

1980s it changed its manufacturing to mechanical market because of the saturation of the

electronic market in 1990s. Although it was a successful shift of market strategy it was

unproven with the new Applicon product and there were strong competitors of CAD/CAM

producers like Intergraph and Autodesk, Computer vision.

The unproven product of the Applicon results a serious shortfall of sells than it was forecasted

before. However Applicon reacted logically with the situation emphasising on finished

inventory anticipating increased demand. Another challenge faced by the Applicon in the

competitive market with the production cost of series 4000. It was unlike the electronic market

so the production cost needed to be incurred.

The competitive market Applicon had to serve was a time of technological advancement in

software and hardware. Applicon had to response to this challenge of technological

development to save its competitive edge.

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Apparently the Applicon came to an understanding of more sophisticated customer with a

better understanding of production quality while the market characterised with incessant

design changes.

Basically the characteristics of the market served by the Applicon was highly competitive.

Applicon faces a challenge of monopolistic competition. It has some general attributes

according to the economics online (Economicsonline, 2013)

a. Relatively free entry and exit.

b. Firms possess some level of control over price.

c. There are many buyers and sellers.

d. Products are differentiated.

e. Each firm may have a little monopoly of products because of the differentiation of their

specific products.

As a consequence of high start-up-cost associated with the market it was enormously

occasioned by incurring the cost in the training of the field engineer.

The Bill of Material for the Applicon’S Traditional Factory:

The bill of materials refers to the product structure that is constructed with the list of raw

materials, sub-assemblies, components and quantity of each required to manufacture a

specific products.

A bill of material for the traditional factory in 4620 terminal and its components is constructed

below in fig1. It can be described as a parent child relationship of the materials. For an example

it can be said that 4620 terminal is a parent to the monitor assembly or electronic assembly

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while monitor assembly is the child to 4620 terminal. Same as logic PCB, interface PCB, cabinet

assembly and the cables are child to the electronic assembly. It means to complete the

production of each of the parents the completion of the child will require.

Post top level (36)

Alpha 4620
Terminal 11
days

Keyboard/tablet
Monitor Base/electronics
assembly (11
assembly assembly (11
days)
(11 days) days)

Cont Con Swiv Cabl Logic Inter Cabl Cabi Keyboa Tabl Pen
rol el es (8 PCB face es net rd et (10
trol
pane PCB asse days) (18 PCB (8 asse assem (10 days)
l (10 mbly days (18 day mbly bly (10 days
(18
days (10 ) days s) 18 days) )
day
days)

Agid Cable Cover

PCB s (8 asse
(18 days) mbly
days
(10
)
days)

Figure: Flow-chart of bill of material for a traditional factory

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Lead Time for the Alpha terminal:

If we take a look at the flow chart

a. PCB has a lead time for 18 days

b. Cable assembly has 8 days

c. Top level assembly has the lead time for 11 days each

d. Post top level assembly has 36 days of lead time.

The lead time refers to the time between the order and the shipment. For a bill of material

the lead time means the time between initiation and execution of a process.

Longest cumulative lead time:

The longest cumulative lead time is the longest period time that is taken by an individual

process to complete from order by the customer to shipment to the customer. In this process

the post top level to Agid PCB is the longest cumulative lead time of the system.it takes post

top level 36 + Alpha terminal 11+ Keyboard/tablet 11+ Keyboard 10+ Agid PCB 18= 86 days.

If we consider this cumulative time for market served by the Applicon it is too long. This will

apparently cause a long setting up period and large batches.

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The plan work order release on MPS: If we take a look at the figure 2 and 3 we can see the

inventories and lead time. The MRP indicates calculation of various part from order

placement to shipment of the product. The MRP shows calculation covers each individual

process and the calculated time is week 1-22.

FIG 2: MRP sheet

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FIG 3: MRP sheet

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The difference between the traditional factory and the Applicon’s cellular manufacturing
approach:
There are potential difference between the traditional factory manufacturing and the cellular

manufacturing process adopted by the Applicon. The difference of the two different

manufacturing process is based on some common issues of manufacturing system.

Material Flow:

In general the traditional factory use the push system. In this system a partially assembled

parts are pushed to a work in process area where it waits for the next term. Then it moves to

the BATCH-AND-WAIT or BATCH-AND-QUEUE. Basically the total manufacturing process

follow the same rules for assembling each individual parts following a schedule. So the

materials are pushed to the work in process area depending on the schedule not the customer

requirements.

On the contrary the cellular approach adopted by the Applicon is based on the pull system,

where the materials are pulled to the work in progress area based on the necessity of the

work centre. So there is no materials waiting to be pushed for next session in work in progress

area. This is resulting a smooth movement of the materials one piece at a time based on

customer requirements and no materials queuing on the shop floor.

Process Lead Times:

In traditional manufacturing factory often some of the assemblies wait idly because of non-

value time as well as the testing process. This lead to longer lead times.

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Whereas the cellular manufacturing process reduce the non-value wasted times. In Applicon

the equipment were modified and adjusted to shortening the set up and inspection time

which results a shorter lead time as a consequence.

Inventories:

The traditional factory adopted initially by the Applicon was built to order PUSH type

manufacturing process where the aim is lowering the unit production cost. But the problem

with this approach was over built inventory and huge amount of products stock in the factory.

Furthermore this approach results a large inventory which led the Applicon a huge carrying

cos to spend.

On the other hand the cellular approach aims to keep the inventories at its barest minimum

that often protects the manufacturing problem and the organisation tends to minimise its

inventory because of increasing cost (Wild, 1995).

Quality Control:

In traditional factory manufacturing process the quality control lies with the quality inspectors

who normally conduct the inspection once the product is manufactured completely. This is

often not conducted on a timely basis and the monthly batch creates problem on inspection

by camouflaging the inventories which results a big percentage of defected products.

Whereas in cellular manufacturing approach the factory is divided into small work cell for

monitoring and quality control. The advantage of this manufacturing approach is each

individual assembly is inspected so the problem of any individual machine set up can be

located and the percentage of the defected goods decreases which saves a lot of money.

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Shop Floor Order Quantity:

The traditional factory manufacturing use a large production space characterised by large

batch size and a month long of scheduling. This was resulting a 20 weeks of working process

and the finished inventory stayed in the work in process area for large period of time.

In contrast the cellular approach follow the build on order method that keeps the lot sizes

smaller. In Applicon the material flow were passed to the next stage using the pull system

that keeps the shop floor tidy and use less working and floor space.

Changes made due to the investment in new production system:

Due to new manufacturing approach of the Applicon the production plan needed to change

to just in time (JIT) approach. As Applicon changed is business plan to capture the mechanical

market and adopted with cellular manufacturing approach it had to adopt some specific

change in the layout, inventory, and planning of the operation. Some of the specific change

that were adopted by the Applicon are described below.

Plant Layout:

Applicon changed its traditional PUSH manufacturing process to PULL so the production can

be done in small lot size. Hence each machine were dedicated to assemble one specific parts

of the products. The type of system adopted by the Applicon to avoid the interference of

manufacturing of different parts is called group manufacturing (Patel, 2000) which was a

successful implementation of avoiding long queue parts waiting in the work in process area.

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Planning and scheduling:

The traditional manufacturing system needed to change with operation planning and

scheduling to make the manufacturing process easier. The JIT adopted by the Applicon was

practicable along with the MRP. The change made by the Applicon on scheduling was not to

order any parts to the batches unless they were needed. To maintain the material flow

Kanban system (M A and White, 2004) was used and to manage the routeings, lot sizes as

well.

The change adopted by the Applicon to use the master schedule as intermediary for the final

assembly which was unlikely to the traditional use to planned order release process.

Furthermore Applicon adopted designing final assembly schedule based on actual customer

order it was due to the cellular methods of manufacturing.

Reduced Inventory:

Applicon brought their inventory transaction number down to two only for material storing

and store of finished goods. As the products were made to order it was delivered to customer

once manufactured so there were no need of extra inventory.

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Witness Model Of traditional Alpha Production System:

FIG 4: Witness Model of Traditional Alpha production system OF APPLICON

Fig 5: Statistics of Alpha production system

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If we take a look at the traditional simulation and statistics of the alpha production system

we can see the traditional alpha model simulation. In the model a runtime is 65 days is

assumed for which 150 days warm up time is used. In the design cable components, PCB and

the mechanical assembly are the batch machine which collects the components as a batch of

ten. The key board assembly, electronic assembly, keyboard tablet assembly, and the terminal

alpha are general machine. In the witness model the design use a traditional alpha production

system. In the system the top level integration has the longest cycle period of time that is said

to be a bottleneck.

Suggestion for Applicon to bring about the further Development:

There are several ways for development of the manufacturing companies. The further

development for the Applicon can be achieved through following several steps.

Development of supplier Vendor relationship:

The selection of both supplier and vendor and relationship between them is critically

important for any manufacturing industry. The relationship is built with the business

commitment for example production quality and the supply in time. The ensured quality

production will reduce the time for product monitoring and testing, hence it will reduce the

product lead time in the factory. If the product are handover to the customer just in time the

inventory could be reduced furthermore. The Applicon has only two transaction that can be

reduced to zero if all the components and the parts are supplied just in time.

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Autonomous Working Group:

For the successful achievement of a business organisation the most vital thing is the

employee. The employee are said to be the most important assets of an organisation. The

creative motivation and concept of good working group could be a good proposition alongside

proper equipment and investment. A fully motivated and well trained working group will

ensure the best performance hence the quality production will be certain and the business

goal will be achieved.

Quality Control:

Quality control is an important issue for any manufacturing. Ultimately every prerequisite of

the business development lies on this matter. The production of the quality product will lead

any organisation towards an ultimate success. The quality production can be monitored in

Applicon through quality audit. The development of the quality control and proper inspection

will deduct the wastage cost for the Applicon.

Quality audit in Applicon can be done by external or internal inspector. However the quality

audit should be a part of the company business culture that will not only be used as a

corrective measure for any mistakes rather it could be a well source of information for other

department as well.

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Conclusion:

The efficiency and improvement in a manufacturing industry can be achieved in many ways.

The wrong decision and practice of wrong approach can result a loss in manufacturing

industry. The traditional push method used by Applicon was certainly not appropriate for the

Applicon which caused low quality production, high inventory and long lead time and so many

problem that stuck the way of development furthermore. However Applicon new cellular

method of manufacturing or the just in time approach was able to overcome this problem.

In the present world of global manufacturing market the company has a very little space for

imperfect manufacturing process. In Applicon to verify the most appropriate technique a

witness simulation was used. The witness is a much updated user-friendly simulation software

through which the user can forecast the change needed, justification of investment and

identification of the possible problem to decide and implement precautionary measures.

However the business development and improvement requires a set of supplementary

measures alongside with appropriate industrial set up. Applicon concentrated on the

development of the industrial set up depending on market demand and shift. For the further

improvement of the company some intrinsic development among the employee and the

company business culture can be suggested.

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References
Aaron, H., 2015. What is a manufacturing business. [Online]
Available at: http://study.com/academy/lesson/what-is-a-manufacturing-business-definition-
examples.html
[Accessed 12 April 2015].

Brandon-Jones, A. a. J. R., 2011. Essential of operation management. s.l.:Essex:Pearson Education

Limited.

Economicsonline, 2013. Economicsonline.co.uk. [Online]

Available at: economicsonline.co.uk/Business_economics/Monopolistic_competition.html
[Accessed 22 April 2015].

Hill, A., 2015. study.com. [Online]

Available at: http://study.com/academy/lesson/what-is-a-manufacturing-business-definition-
examples.html
[Accessed 4 April 2015].

M A and White, V., 2004. Core Concepts of Operations Management.. s.l.:USA: Wiley.

Patel, J. P., 2000. Cellular manufacturing: A lean manufacturing concept. [Online]

Available at:
http://www.site.uottawa.ca/~nelkadri/Engineering%20management/CellularManufacturing2.pdf>
[Accessed 2 December 2013].
[Accessed 26 April 2015].

Wild, R., 1995. essential of production and operation management, Text and cases. 4 th ed.
s.l.:Redwood Books.

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