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DESIGNING A CELLULAR MANUFACTURING PLANT
David R. Dixon and David W. Scott
(Article reprinted with permission from the June
1995 issue of The Fabricator)
In many industries, U.S. manufacturers are being driven to offer
rapid delivery of a growing variety of products in relatively small
quantities. Customers expect to be able to order any style and any
color at any time — and at lower prices. This is true whether the
customer is an end user, retailer, distributor, or original equipment
To meet these challenges, manufacturers are turning to Just-In-Time
(JIT) and cellular manufacturing. JIT technologies provide the capability
to make frequent, small lot deliveries of high-quality products.
These same capabilities can result in higher productivity for all
of the assets in the business — people, space, equipment, inventory,
JIT is defined as 10 key technologies working together to improve
Equipto, headquartered in Aurora, Illinois, manufactures storage
and material handling equipment. In 1992, manufacturing was housed
in 3 facilities in Pennsylvania, Texas, and Aurora. Historically,
pallet rack and shelving in standard sizes and colors comprised
the majority of products shipped. Replenishment orders from distributors
were filled from finished goods inventory.
In 1992, the company's manufacturing process was suited to meeting
the historical demands mentioned previously. Manufacturing facilities
were arranged in process functional layouts. Process technologies
in use were primarily hard-tooled stamping, punching, and forming
operations that produced long runs of standard products.
Large finished goods inventories smoothed customer demand and ensured
timely response to customer orders. Typical lead times in the shop
averaged 6 to 8 weeks.
Throughout the 1980s and early l990s, the market had completely
changed. In addition to very high quality, customers demanded quick
delivery and a proliferation of products and colors — all at lower
prices. Customers were requiring shipment of standard product in
5 days or less.
The company's marketing department recognized the changes in the
market and was responding to them. Customers were being offered
delivery within 5 days of order. Expanded color selections and
an array of product variations were made available.
Unfortunately, manufacturing was not configured to respond to the
new demands. By the end of 1992, the company held more than 5
months of Work-In-Process (WIP) and finished goods inventories.
70% of its 700,000 square feet of manufacturing space
was devoted to inventory. Despite these inventories, the company
still experienced stock-outs and occasional rush orders to meet
The company recognized that manufacturing had to adapt to the new
circumstances. With the goal of creating a manufacturing resource
able to build short-run, high-variety products to order, a set of
design criteria was established. These criteria were organized around
the following elements of cellular manufacturing strategy:
• Process technology
• Human resources
The thrust of the redesign program was to configure these elements
for rapid throughput of the company's varied product line while
minimizing inventory and maintaining high quality.
The key concept in cellular manufacturing is to create focused subsets
of the factory. The focus of the cells should be on part or product
families. Cells must be designed so that all activity within the
cell is visible and manageable from the standpoint of scheduling,
capacity planning, and work assignment. A helpful guideline is that
there should be between 5 and 10 people in a cell.
Process Technology. The primary equipment considerations in cellular
manufacturing are to provide:
• The capability to complete a part from start to finish within
• Sufficient capacity to handle the projected load.
• Technology that provides for quick setups.
• Capability to consistently meet required tolerances and specifications.
Processes developed for a functional, hard-tooled factory often
are not effective in a cellular environment. Setup time is the major
obstacle to integrating traditional hard-tooled technologies into
cellular manufacturing. Long setups, if done frequently to accommodate
small lots, greatly increase the amount of equipment required to
handle a given load, driving up space requirements and costs. Fast
setups and small lots go hand in hand.
For those reasons, most manufacturers are opting for technologies
that employ general-purpose equipment and tooling that facilitate
fast setups. However, there is no doubt that, given sufficient volume,
creative hard-tooled applications have their place in cellular manufacturing.
Hard tooling that can be set up quickly or permanently can offer
cost and performance benefits in certain circumstances.
Facilities. In a cell, the distance that a part travels is greatly
reduced. However, the number of moves increases with smaller lot
sizes. The challenge in developing facilities plans for cellular
manufacturing is to create a detailed layout and material handling
and storage methods that minimize the cost of moving and storing
Within a cell, the layout can have a direct impact on its effectiveness.
Long "assembly line" cells look organized on a layout.
However, large distances between workstations destroy the ability
of cell work groups to communicate and to balance the load within
the cell by moving from station to station.
U-shaped cells or other similar configurations are often the most
effective arrangements for manufacturing.
Systems. In cellular manufacturing, systems or procedures have
5 main functions:
1. Communicating a requirement for production (orders) to the
2. Communicating a cell's need for material to other cells or
3. Managing and balancing the work load within the cell
4. Evaluating the capacity available within the cell to produce
to a given schedule
5. Tracking completion of work by the cell
Of these functions, capacity planning and tracking are best done
by using the computer. The first two functions are often addressed with
visible signals such as Kanbans (pull systems). Balancing of the
load within the cell is addressed through analysis of workstation
capacities, strategic grouping and sequencing of work, operator
cross training, and close coupling of operations within the cell.
Human Resources. In implementing cellular manufacturing, as with
any of the 10 technologies of JIT, training is vital.
Employee training must include cross training to enable each employee
to at least help with any job in the cell, team building and communications
training, and development and implementation of clear operating
procedures and guidelines within the cell.
In addition, training is needed both for the direct labor work
force and for management.
In October 1992, the company hired TCA to help design and manage the transition
to JIT and cellular manufacturing. The company's process for planning
a transition to JIT and cellular manufacturing included 6 steps.
Step 1 — Determine Product Volume and Mix
These categories represent marketing's definition of product groupings
and correspond roughly to divisions in the company's product catalog.
Within each product category, representative parts are identified.
For example, the shelving product category includes shelving units
that vary by depth, width, height, number of shelves, back panel
configuration, and end panel configuration. A single shelf unit
— 18 inches deep, 36 inches wide, and 7 feet high with six shelves
and no back or side panel — was selected to represent all shelf
Then, the complete bill of materials was exploded for each product,
and process data was gathered for each part.
Step 2 — Chart Process Times of Representative Parts
Process times (run time and setup time) for each part are identified.
Step 3 — Identify Product / Part Families
The purpose of Step 3 is to group the product categories identified
in Step 1 so that a manufacturing cell can be created for each part
or product family.
After extensive analysis, the company decided that product-focused
(rather than part-family-focused) cells were appropriate. The deciding
factor was process technology.
With the soft-tooled technologies, there were no clear differences
in the types of equipment required to produce different parts or
products. However, almost all of the hard-tooled applications were
product oriented. For example, separate roll forming equipment and
tooling had been established for the uprights associated with each
type of pallet rack and shelving. The decision to retain certain
hard-tooled processes in the cells drove the product focus.
In other applications, it may not be most appropriate to create
product-focused cells. Other bases for grouping parts or products
into families include factors such as material type and thickness;
common routings; and part size, configuration, and geometry.
At this stage, the company also decided to create a punching cell
that would deliver punched parts in the flat to each of the product
specific cells. Although 2 product cells contained dedicated CNC
turret punches, none of the other cells had enough volume to fully
load a turret punch.
Because this punching technology represented a significant investment
for the company, it sacrificed a little on the ideal of producing
a product from start to finish within the cell in favor of some
practical economic considerations.
Step 4 — Identify Alternative Process Technologies
The left column lists the hard-tooled process technologies it employed
in the past. The right column lists the new, more flexible process
technologies integrated into the cellular operations.
Note that hard-tooled technologies were retained in several instances.
Over time, the company had engineered some creative and effective
With these approaches, certain high-volume products (standard
shelf sizes, for example) could be produced effectively on a hard-tooled
line retained in the cell.
To truly integrate these operations into a cellular manufacturing
environment, later setup reduction efforts (encompassing both hard-
and soft-tooled processes) were added to the overall implementation
Step 5 — Develop Conceptual Manufacturing Cells
This cell is typical of most other cells created by
Parts enter the cell either directly from raw materials or from
the punching cell. They are punched, formed, and welded within the
cell. They exit the cell for paint and then return to the same cell
for final assembly.
To determine the equipment requirements in each cell, overall process
time was calculated from projected volumes and expected lot sizes.
This step required considerable application of engineering experience
to determine setup and run times for operations transferred from
the hard-tooled to the CNC equipment.
The conceptual cells roughly approximate the physical size of the
cell and equipment items in it to facilitate the plant layout process
in Step 6. The intent of creating a conceptual cell layout is to
test the feasibility of the cell concept and to take a quick cut
at the space and configuration requirements of the cell.
Step 6 — Create Layout for Manufacturing Cells and
A layout is created in 2 steps. First, a macro layout
planning process optimizes the location of each cell with respect
to the other functional activity areas in the plant. This is done
by carefully considering all material flow and other nonflow relationships
between the different areas.
A similar layout was created for the Texas facility. The Aurora
plant was closed in anticipation of the productivity improvements
associated with cellular manufacturing.
Using the macro layout as a guide, a detailed layout for the plant
located each specific piece of equipment.
(This article has focused in detail on the process of identifying
and creating manufacturing cells. In truth, the process of creating
a plant layout based on those cells could fill an article larger
than this one. Therefore, this layout effort has been simplified
here as Step 6.)
October 15, 1993 became the project launch date. Over the next
60 days, all of the machinery that had been housed in the 3
manufacturing facilities, along with new CNC turret punch presses
and press brakes, was reconfigured into the cellular layouts in
the Pennsylvania and Texas facilities. By early January 1994, the
physical modifications and moves were complete.
While the company had built inventory for several months before
the move, it still needed to continue some operations to satisfy
customer demands. After some early struggles to maintain deliveries,
the focused cells began to perform as planned. Today, product-driven
cells are able to shift quickly from product to product in response
to specific customer orders.
In addition, the company learned some lessons about how to implement
far-reaching organization changes:
• Understand the magnitude of the effort required to plan and
implement major changes. It takes time to create a plan supported
• Pay attention to the demands placed on people affected by the
reorganization. Up-front training for the entire management team
and for those directly involved in planning and implementing the
changes can make the process easier.
• Be prepared to deal with special human resource problems. From
the shop floor to the executive offices, there will be some who
are unwilling or unable to adapt to the new environment.
• Continuous improvement is the core of World Class manufacturing.
The company is continuing its search for ways to improve customer
response. A cross-functional team is studying the information
technology needs of the changing manufacturing organization. Another
team is working to streamline the order entry process, and cell
team leaders are learning how to schedule and manage their product-focused
Total square footage of the facilities has been reduced from 700,000
to 260,000 square feet. Overall capacity is believed
to be much greater. Inventories have been reduced by 40%,
including a 45% reduction in WIP.
90% of all products are being shipped on time, with
some product cells at higher levels, while sales have increased
20%. Manufacturing lead times on all products are being reduced.
Many products are now manufactured to order with less than 5-day
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