MTC Handbook Scenarios 1 & 3

4. Change management

Preparing for change includes selecting the change management team and
project leader.

Assessing readiness needs to include considering the scale of change and the required
– and feasible - speed of the programme.

Developing and managing the change needs to include a review timetable.

At all communication events it is important that the need for change is reinforced
and that feedback, including a progress review is given.

Benefits

Change management addresses what is often the most difficult element within a
change programme - the people aspects. Without buy in from employees and other
stakeholders the chances of success are small. A robust CMP wins buy in and increases
the likelihood of achieving the expected business benefits. It will;
  anticipate and address the people issues of change
  reduce resistance to change
  win commitment from those affected
  speed change introduction to deliver financial benefits earlier

See also: 3.1
Business strategy 3.2
Future state mapping

4. Change management Page 50

4. Change management

4.2 Risk identification and management
Risk identification and management reduces the likelihood of failure when
introducing change, whether or not that includes the introduction of new
technology. A robust process needs to be in place to identify, up front, both the
risks and the mitigation steps needed to reduce those risks to an acceptable level.

Drivers
In assessing risk, three questions need to be considered;
  what can go wrong?
  what will we do to prevent it? and
  what will we do if it happens?
Strategic, project and operational failures are costly and can damage reputation
with customers and other stakeholders. A well constructed risk identification and
management plan reduces the probability of failure and helps the understanding
of the risks and what can go wrong.
For each identified risk;
  what is the likelihood of it happening?
  what is the impact severity if it happens?
  what are the cost implications?
  what are the non-cost implications?
  what can we do to prevent it?
  what will we do if it happens?

4. Change management Page 51

Fig 4.2.1: Risk identication and management process Review & plan Review/ Identify the risk 4. Change management
4. Change management Mitigation monitoring Events/
planning relationships

RISK

Rank risk/ Probability/ Assess risk
Develop prioritise consequence impact
mitigation
plan
Functionality/ Costs/
impacts
performance

Page 52 Prioritise risk

4. Change management

Summary approach

It is important to gain the commitment and participation of the management team
and other stakeholders when drawing up the risk identification and management
plan. Involve employees from the potentially affected processes and areas. Their
knowledge and expertise will be vital to ensuring risks are identified and realistic
mitigation and recovery plans put in place.

Identify Assess Prioritise Develop Review plan
the risks risk impact risks mitigation and add
and recovery new risks

plans

Identifying the risk needs to describe the potential event and its relationship to
other risks.
Assessing risk impact needs to consider the consequences in terms of cost,
performance, capability and project timescales.

Prioritising risks needs to allocate weightings to each identified risk based on
both likelihood and severity of impact. Any risks which are both likely and would
have a severe impact need to be the top priorities for mitigation and recovery
planning focus.

Developing and reviewing the plan needs to identify mitigation actions for the
prioritised risks. It needs to track implementation of these, and regularly to revisit the
identified risks for any further requirements, through a structured review process.

4. Change management Page 53

4. Change management

Benefits

Robust risk identification and management reduces the probability of unexpected
project delays and failures. When problems do arise it ensures the actions required
to correct the situation are well understood. Figures provided by the project
management institute suggest that a project with a sound risk management process
can expect a 15 per cent higher success rate than one without.

Other benefits include;
  increased ability to deliver on time consistently
  fewer project interruptions and delays
  quicker recovery when problems are encountered on project
  improved delivery reliability and improved reputation

For a selection of useful change management tools and techniques, see;
“Tools for Success: A Manager’s Guide.”
by Suzanne Turner, published by McGraw Hill

See also: 5a.2
Key questions for your technology vendor 5b.1
Feasibility study for new technology investment 5e.2
Minimise risk of inserting additive technology 5f
De-risking relocation

4. Change management Page 54

5. Technology de-risking

Introduction

The introduction of new technology carries risk for any business – it has financial,
operational and people impact.

The technology readiness level (TRL) model was developed to help understanding
of how innovative technologies move from an initial research stage through to
commercial application within industry. Level 1 representing observation of a
basic technology principle – an idea - and TRL 9 representing technology already
established in commercial use.

TRLs 4 to 6 have traditionally been viewed as the valley of death. Innovative
technology ideas may have proved their future potential in an academic laboratory
environment – but the costs, timescales and expertise still needed to bring the
technology to a stage where it manufactures real components, in real volumes, in a
real factory – for a real profit – are beyond the research and development resources of
all but the largest commercial organisations.

The smaller the technology development resources of an organisation – and for
an SME those resources may well be the experience of a very few, very busy, multi-
tasking engineers – the greater the risks of engaging with innovative new technology.

In effect, the valley of death for smaller companies shifts to the right. The successful
introduction of technology, which to a resource rich multi-national is TRL 8 – ready to
go – presents a level of complexity to an SME which can erode the potential benefits.

The value accelerators within this section of the handbook suggest ways to de-risk the
adoption of proven technology, TRLs 7 to 9, which, though the commercial benefits
are well established, can present many and complex challenges to a
smaller business.

5. Technology de-risking Page 55

5. Technology de-risking

Technology implementation TRL 9

TRL 8 VALUE
ACCELERATORS
TRL 6 TRL 7
INDUSTRY AND
COMPANIES

PRIVATE SECTOR
FUNDS

Applied research TRL 5 CATAPULT
FOCUS

Technology
Strategy Board

TRL 4

Experimental research TRL 3

TRL 2 UNIVERSITIES
RESEARCH
TRL 1
ORGANISATIONS
AND INNOVATORS
RESEARCH COUNCILS

(EPSRC, etc)

Fig 5.1: The TRL complexity level of inserting new technology effectively shifts right for SMEs
The MTC, as part of the Catapult network established by Innovate UK, brings together the best people
in their fields with cutting-edge facilities to develop new manufacturing technologies and enable
businesses to successfully adopt and integrate their use.

5. Technology de-risking Page 56

Chapter 5a

Seek expert advice

Introduction
  5a.1 Validate the market case
  5a.2 Key questions for your technology vendor

5. Technology de-risking Page 57

Page 58

5. Technology de-risking

5a. Seek expert advice

Introduction
The design of a research study has a significant impact on both the quality of
information collected and how it can be interpreted. This is equally true whether
the purpose of the research is to inform new product development strategies, or to
analyse potential market space for new processes and new technology capabilities.

Robust research is needed to evaluate and de-risk strategic investment decisions.

To be fully effective, the design and approach of this research needs specialist input.
Involving an expert and independent partner helps the business avoid pitfalls and can
deliver additional benefits.

Similar principles apply to the selection of a technology vendor. Implementing new
technology is a significant investment for a business, and making the right choice and
ensuring the commissioning process goes smoothly is of crucial importance.

As with a research study undertaken to validate the case for investment in new
technology, working with an independent expert partner with knowledge of the
technology and its application will ensure suitability for the desired application and
reduce risks.

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5. Technology de-risking

5a. Seek expert advice

5a.1 Validate the market case
Bringing new manufacturing technology and equipment into a facility represents
a major investment for any business. It is important to establish whether there is
a market – and a margin - for the capability the new technology will bring and the
products and services new technology allows the business to offer.

Drivers

A market research study is a way to gather information about the demand for, and
potential profitability of, the additional capability any new technology will bring to a
business. This includes analysing competitors’technology, together with current and
projected market size and opportunity. This type of research provides valuable data
to inform the business case and the investment decision.

To be effective the research has to be designed to collect information relevant to the
technology being considered. Involving an independent partner who thoroughly
understands the capabilities of the new technology being considered is a key factor.
The chosen partner also requires access to advanced systems and the latest analysis
tools. This enables the gathering of accurate and insightful information. With this a
business can;
  identify or confirm the technology opportunity
  identify market needs and estimate future demand
  understand the market landscape and dynamics
  identify competitors and their technologies
  develop a plan to effectively capture a profitable market space
  make an informed estimate of return on investment

Summary approach

The research starts by developing a detailed understanding of the market landscape
and where the potential opportunity for the technology exists. It identifies current
and projected market needs, the scale of the opportunity and competitors operating
in the same space.

Information collected and analysed on the market space to be opened up by
investment in new technology informs the development of a route-to-market
strategy. How will the business ensure its new capabilities are levered effectively
to benefit the bottom line? The research also informs assessment of the risks
and projected benefits from capital expenditure on new technology or
innovative processes.

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5. Technology de-risking

5a. Seek expert advice

Agree business Analyse Model Develop Inform
objectives. research data potential route to capital
Evaluate revenue market investment
market streams strategy decision

The first step is to ensure the business objectives and the targeted technology are
understood and agreed. The market space is then evaluated using primary and
secondary research, and the results analysed. The next stage is to model potential
revenue streams from investment in new technology in the context of competition
and projected market demand. A route-to-market strategy is then developed,
including estimates of the investment required to implement the new technology.

Fig 5a.1.1: Elements of a research approach to validate the case for investment in new technology

5. Technology de-risking Page 61

5. Technology de-risking

5a. Seek expert advice

Benefits

By working with an independent, expert partner a business can validate that a
profitable market space will be opened up by investment in new technology.
A structured research study provides valuable information to inform investment
and business planning and;
  confirm the opportunities opened by technology investment
  confirm the suitability of the targeted new technology
  ensure the technology investment will create market value
  inform development of a route-to-market strategy
  de-risk capital expenditure decisions
  provide robust estimates of return on investment

“ When TTI was considering investment into new technology, we approached
the MTC to design and carry out research to inform our decision. We found
the staff at the MTC were very knowledgeable, and communicated well and
in great depth. By working with the MTC we were able to meet and discuss
”projects with a range of potential customers
Tony Alderton, plant manager, TTI Group Ltd

TTI is part of the materials technology division of Dutch company
Aalberts Industries NV. It provides surface engineering and heat treatment
services to the UK engineering industry.

See also:
Developing a technology roadmap 2.1
Business strategy 3.1
Future state mapping 3.2
Building a robust business case 10.1

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5. Technology de-risking

5a. Seek expert advice

5a.2 Key questions for your technology vendor
Selecting the right technology vendor is an important decision to ensure
continuity of production and avoid customer disruption. Ensuring the right vendor
is selected requires a structured process which clearly defines requirements and
specifications. Developing a clear, complete and robust performance specification
before investment is key to de-risking new technology investment.

Drivers
Working with an independent partner, experienced in the targeted new technology,
ensures the performance specification is clear, complete and robust. Without
independent input there is a serious risk that the due diligence required for a major
investment and achievement of the projected benefits is not fully considered.

The introduction of new technology to a business has impacts internally and
externally that must be understood if the implementation is to be successful.
Identification of the right technology vendor is a major factor and should be
considered against the following sample questions;

Internal questions;
  does the specification align with the business strategy?
  does it involve new product, processes, or technology?
  what is the risk level associated with the investment?
Questions for technology vendor;
  can the technology be operated and maintained safely?
  can all functional requirements be achieved?
  can capability be achieved in all projected operating conditions?
  is reliability built into the design and construction?
  has maintainability been considered in the design and build?

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5. Technology de-risking

5a. Seek expert advice

Summary approach

Finding the right vendor starts with the identification of an experienced partner who
can advise on the implications of the technology. The process shown below describes
the key steps to be followed.

Select Understand Develop Develop Develop
independent technology performance questions selection
specification criteria/select
partner and to ask vendor
implications the vendor

Development of a robust performance specification is an iterative process and needs
to be in place before choosing an equipment or system vendor.

The problems or opportunities the new technology is intended to address and the
essential performance criteria must be clearly understood. These should be split into
essential and non-essential.

How much/ Reputation Short list
how fast and track suppliers

record

De ne own teScvehelenncodtlioonrggy Technology
requirements capability
Technology
requirements/ Current & future
speci cations volumes

Fig 5a.2.1 Considerations when selecting technology vendor

5. Technology de-risking Page 64

5. Technology de-risking

5a. Seek expert advice

Benefits

The benefits of seeking independent input from an experienced partner for
performance specification and vendor selection include;

  a more robust business case
  the de-risking of investment
  helps to win funds from lender, or approval from stakeholders
  avoids unexpected under-performance of chosen technology
  avoids costs of retrofits, or other additional costs to achieve functionality
  enables achievement of expected return on investment

See also: 4.2
Risk identification and management 5e.2
Minimise risk of inserting additive technology 6c.2
Demonstrate net shape equipment and process 6c.1
Machine trials 7d.1
Measurement systems downselection 7d.2
Independent advice on optimal NDT methods

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5. Technology de-risking

5a. Seek expert advice

An indicative list of technologies within the experience and expertise
of the MTC on which independent advice can be available is given below:

Advanced tooling and fixturing Automation
Rapid build fixtures, adaptive fixtures Robot set up and programming
Lightweight fixtures and tools Safety protocols and equipment
Smart fixtures and tools Advanced robotic manipulators
Embedded sensors and Sensing technologies
measurement systems SCADA systems
Additive manufacturing* (supervisory control and data
Electron beam melting, laser melting acquisition)
Digital manufacturing and 3D printing High integrity fabrication
Thermal and mechanical post-process- Rotary and linear friction welding
ing (also relevant to net shape) Laser materials processing
Powder material selection, Automated arc welding
management and analysis Vacuum furnace equipment
Net shape manufacturing* Metrology and NDT
Hot isostactic processing Multi-sensory CMMs
Hot crimping Optical measurement scanners
Helium leak detection Laser trackers
Vibration equipment Photogrammetry measurement
Powder filling, processing,preparation Surface topography measurement
Electron gun preparation and set up Ultrasonic testing
Build chamber preparation and set up X-ray computed tomography
Machining Digital radiography
Wire and wire drill electrical discharge Eddy current
machining (EDM) First article inspection
Die sink EDM Electronics
Electro-chemical machining Surface mount technology
Use of lasers Selective soldering
Hybrid technologies (e.g. RECLAIM–see Conformal coating
case study in ch. 6b) Hands-free assembly and rework
CNC machining centres and lathes RF-ID tagging
Fixture set up, machining optimisation Real-time visualisation
Information solutions Simulation tools
Informatics Design for manufacture
Industry 4.0 applications Stress analysis (FEA)
Shop floor management Computational fluid dynamics
Stock management Cell and facitity optimisation
Process and cost modelling

* The MTC is home to the National Centre for Net Shape
and Additive Manufacturing

5. Technology de-risking Page 66

Chapter 5b

Feasibility studies

Introduction
  5b.1 Feasibility study for new technology investment
  5b.2 Adaptive, fast-make, lightweight fixtures – feasibility study
  5b.3 Robot offline programming simulation as a feasibility
study tool

5. Technology de-risking Page 67

Page 68

5. Technology de-risking

5b. Feasibility studies

Introduction

Feasibility studies demonstrate the potential benefit that the addition of new
technology can offer a business.

A robust feasibility study informs and de-risks investment decisions. It is a key tool in
making the business case for any new technology introduction.

Without a robust feasibility study, projected return on investment may be lost as
unaccounted for challenges from new technology come to light after rather than
before the investment.

Working with an independent partner, experienced in the proposed new technology,
ensures a feasibility study is robust, targeted and complete. An independent partner
can bring questions and answers to the feasibility study that a business might
otherwise miss or overlook.

See also: 6a.2
Identify potential for automation 6b.1
Feasibility study for additive manufacturing 6b.2
Feasibility study for net shape manufacture 6b.3
Feasibility study - problem solution generation

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5. Technology de-risking

5b. Feasibility studies

5b.1 Feasibility study for new technology investment
Before investment in new technology it is essential to assess what benefits the
technology will bring to the business.
Will the technology enable expansion? Will it make the business more flexible and
responsive to changing market demands? Will it support the development and intro-
duction of innovative new products?

It is also important to assess the state of readiness of – and for - the
targeted technology.
Are there issues of regulatory acceptance? Has robust market research established there
is a market demand for the additional capacity and capability which the technology
offers the business?
What is the state of readiness of the business for change? Does the business currently
have the skills and support systems to lever the expected benefits from the investment?

Drivers
The productivity and capability benefits offered by new technology allow a business
to remain cost competitive. Effective use of new technology will deliver more robust
products to the market. It enables a business to tackle the challenges of complex,
higher value added products. Engaging with an independent partner with expertise
in new technology capabilities and challenges ensures the feasibility study is robust,
and will;
  provide an overview of key investment decision factors
  identify potential for productivity and capability improvements
  identify further research or independent advice where required
  identify the best technology solution avoiding over-engineering

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5. Technology de-risking

5b. Feasibility studies

Summary approach

A robust feasibility study begins by reviewing the current manufacturing process.

What are the capabilities and constraints?

Full requirements and objectives for the business need to be captured.

What issues or opportunities are to be addressed by new technology introduction?
How does the proposed investment fit the wider technology strategy? What are the
business needs and wants?

Review Carry out Evaluate Simulate and Identify
current state. technical options. validate costs optimum
and market Downselect and benefits solution. Make
Capture research recommend-
requirements
ations

Once requirements are clear, technical market research is carried out. This establishes
available off the shelf technology or technology solutions which can be developed
in the required timescale. Clearly, independent advice from an expert partner is
invaluable at this stage.

Potential solutions are downselected against the agreed needs and wants.
Simulating or modelling one or more options will test assumptions more robustly
than relying solely on information provided by potential technology vendors. It allows
the business to validate the projected costs and benefits. The optimum solution,
based on robust evidence, is then identified.

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5b. Feasibility studies

Benefits

A robust and complete feasibility study, with advice and input from an independent
partner, de-risks use of new technology. Challenges are identified up front and can
be mitigated.

Benefits include;

  identification of the optimum solution – not a solution
  avoidance of over-engineering the solution
  cost benefit trade-offs are made transparent up front
  buy in from stakeholders and investors
  the underpinning of a robust business case
  the achievement of expected return on investment

See also:
Developing a technology roadmap 2
Business strategy 3.1
Validate the market case 5a.1
Cost modelling 5c.1
Discovery - identify potential for improvements 6a.1
Trial alternative technology 6c
[All value accelerators]
Building a robust business case 10

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5b. Feasibility studies

5b.2 Adaptive, fast-make, lightweight fixtures – feasibility study
Tools and fixtures are a significant capital expenditure item in many
manufacturing processes. Traditionally, tools and fixtures are made for a specific
product and stored when not in use. As they tend to be bulky, this puts strain on
the available space. The complexity of keeping track of multiple tools and fixtures
is a non-value added logistical burden.

Drivers
The need for adaptive, reconfigurable tooling and fixturing is self-evident. Reducing
the overall number of tools and fixtures reduces the storage space required, the
tracking complexity and the capital tied up.
Fast-make fixtures reduce lead time on new products and increase responsiveness to
market demand for variation on existing products.
Lightweight fixtures make handling easier and safer, allow single operator changeovers
and reduce power consumption and maintenance. They allow use of smaller, cheaper
robots and associated lifting equipment. They improve accuracy through reduced
inertia at end-of-arm and equipment life through reduced load.
However, while use of advanced tooling and fixturing (ATF) offers benefits, the
limitations need to be understood. A robust feasibility study, with input from an
experienced, independent partner, ensures the technology is applied appropriately.
It will;
  provide an overview of tooling and fixturing possibilities
  identify potential for productivity and efficiency improvements
  evaluate if ATF is suited to a particular application or process

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5b. Feasibility studies

Summary approach

First, review the current and future product range to be manufactured. Also review
the current manufacturing process, capturing capabilities and constraints. Ensure the
business requirements are fully understood. Identify issues and opportunities that an
ATF solution can address.

Then carry out market research and a literature review to identify potential off the
shelf solutions. Evaluate these and other options against the agreed requirements.
Impartial advice from an expert partner, rather than from a potential vendor, enables
the best options to be shortlisted and downselected.

Review Carry out Evaluate Conduct Identify
current state. market options. concept optimum
research and Downselect design. solution. Make
Capture literature Validate costs recommend-
requirements review and benefits
ations

If appropriate, follow an iterative concept design approach for the selected potential
ATF solutions. Identify an appropriate software package to simulate the solution and
validate the expected performance benefits. Simulation enables the best solution to
be identified and scoped for implementation.

For completeness, the feasibility study also needs to determine the current skill
level of the workforce. Only then can the training required for successful technology
adoption be included in plans and costings.

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5. Technology de-risking

5b. Feasibility studies

Benefits

By ensuring a robust feasibility study is carried out, with advice and input from an
independent partner, before selecting an ATF solution, the business de-risks use of
this new technology. It ensures the expected time and cost benefits are achieved.
These include;

  increased product range and product mix flexibility
  changeover reductions
  reduced storage footprint and simplified fixture transportation
  potential weight savings of 50-60 per cent
  increased capacity for production
  reduced time to market

See also: 5a.2
Key questions for your technology vendor 6d.1
Prototyping and testing of advanced tools and fixtures 7b.1
Changeover reduction via advanced tools and fixtures 7b.2
Intelligent tooling and fixturing

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5. Technology de-risking

5b. Feasibility studies

5b.3 Robot offline programming - simulation as a feasibility study tool
Online robot programming is costly. Using it to validate the expected benefits
of investment in automation means production downtime and workflow
interruptions. The potential for programme errors raises cost and safety concerns.
It is critical to avoid collisions which can result in injury or asset damage. A detailed
feasibility study using offline programming in a virtual environment allows
validation of the benefits of using automation before real world deployment.

Drivers
Before deciding to invest in automation a business needs to validate the expected
benefits. In the case of investment in robotics, the business must confirm the
robot can reach all required locations, without sudden movement, and perform all
required operations. A feasibility study using offline programming can confirm if this
is achievable, before investment and without costly trial and error. It de-risks and
reduces the costs of programme validation. It can;
  optimise the sequence and timing of tasks
  optimise operation of robot joints to ensure smooth movement
  optimise the placement of new robots within an existing line
  generate a robot offline programme using path planning output

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5. Technology de-risking

5b. Feasibility studies

Summary approach

First, carry out a process study to understand the current process design, its material
flow, task sequencing and timings. Current resource limitations need to be captured.
Ensure the business objectives are fully understood, including the use of
additional automation.

The data capture for successful offline robot programming will include CAD drawings,
3D CAD models and robot models from vendors. The more complete the data, the
more robust the model underpinning the virtual environment in which the offline
programming will take place.

Study process. Plan robot Generate Verify robot Make
Capture data path offline robot path. Validate improvements
programme
program

Carry out initial robot path planning to optimise the placement and use of space.
Generate the offline programme using the robot path planning output. Use
simulation in the virtual environment to validate placement, layout, sequencing
and timing.

Verify the robot path for all operations, and then validate the robot programme to
ensure there are no collisions.

Improvements to the initial program are made based on the simulation findings.
The verification and validation process needs to be repeated after each
improvement round.

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5. Technology de-risking

5b. Feasibility studies

Benefits

A feasibility study using robot offline programming to validate expected benefits
from automation will save time, money and risk. It minimises real world downtime
while still allowing fact based decision making. It;
  reduces interruptions in production
  removes risks of costly collisions during trial and error testing
  removes risks of injury to staff during trial and error testing
  allows multiple options to be trialled – best solution is found
  increases stakeholder confidence, pre-investment

“ T he MTC’s research has identified the process by which Sandwell UK’s parts
can be geometrically scanned and a CAD model created from this scan.
Although this is relatively proven technology, MTC has taken this a step further
by developing a process in which the robot’s path is created from the scanned
geometry automatically. The MTC has met both the technical requirements
and timescales to allow Sandwell to introduce this new technology into its
”latest machines
Colin McGrory, Technical Director, Sandwell UK Ltd

Sandwell UK Limited is an SME working with motorsport, oil and gas and high quality
engineering companies, carrying out specialised surface processing on components.

See also: 5c.2
Optimise production process with virtual reality 6a.2
Identify potential for automation 10.2
Developing a business case for automation

5. Technology de-risking Page 78

Chapter 5c

Simulation and modelling

Introduction
  5c.1 Cost modelling
  5c.2 Optimisation of manufacturing process
  5c.3 Discrete event simulation
  5c.4 Discovering value from simulation tools

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5. Technology de-risking

5c. Simulation and modelling

Introduction

Simulation, in the form of computer aided design (CAD), finite element analysis (FEA)
and computational fluid dynamics (CFD), has become an essential component of
the design engineer’s toolbox. The use of simulation in manufacturing has been less
widely adopted, except for applications by specialists, most notably in the automotive
and aerospace sectors.

Even common design tools such as FEA and CFD can be used at the manufacturing
level to investigate the thermal, structural and material effects of processes. The key
value of simulation in the manufacturing domain comes from better, cross function
communication and understanding of the impact of decisions on the various
functions involved in creating the product. This reduces time to market, cost of rework
and improves the likelihood of right first time.

The importance of simulation, and the need to drive changes to its use in
manufacturing is captured by the simple but powerful vision.

To out-compete; you have to out-compute.

Simulation to de-risk investment

x40

The higher the capital
investment risk, the
x30 higher the bene t of

using simulation

x20
BENEFITS R

x10
Return on investment multiplier
AMP UP

x0 11-30k 31-150k 31-150k
1-10k

Level of capital investment planned

Fig 5c.1: The higher the level of capital spend planned, the more important it becomes to use
simulation and modelling to de-risk the investment and ensure expected benefits are realised

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5c. Simulation and modelling

5c.1 Cost modelling
Cost is one of the most important factors in decision making. Cost modelling is a
structured approach combining information from product, process definitions,
operational activities and other cost drivers to estimate and understand the
projected, or true, cost of technologies, designs, products and services.

Drivers

Cost modelling is increasingly used by engineers, managers and business leaders. It
enables technology and design evaluations, operational planning and improvement.
It also underpins sound investment and development decisions. It identifies the
best achievable cost per unit. By identifying cost drivers it brings improvement
opportunities into focus. Cost modelling can help;

  inform strategic investment or divestment decisions
  focus operational efficiency improvements for cost reduction
  identify technology, product and process design options
  optimise product or equipment lifecycle costs
  identify costs of green energy and sustainable manufacturing
  evaluate the economic effects of quality and risk
  develop economic equipment maintenance schedules
  optimise service and equipment charge-out rates

Summary approach

Two main approaches are used for cost modelling. When historic cost data is available,
parametric or top down cost estimation is done using regression or data mining.

The alternative is generative or bottom up cost estimation, using activity or feature-
based costing. These are implemented in a software tool like Vanguard Studio or Excel.

Identify Collect data Create cost Conduct Identify cost
options and model sensitivity reduction
constraints analysis
project
opportunities

Cost modelling is undertaken as follows; Page 82
  agree the objective, scope, inputs and required outputs
  collect technical, operational and cost data
  create a cost template in software and populate with input data
  perform a sensitivity analysis on key input parameters
  perform Monte Carlo simulation where input uncertainties exist

5. Technology de-risking

5. Technology de-risking

5c. Simulation and modelling

Benefits
A well-constructed cost model makes the financial implications of any choice
transparent. Externally, it allows for accurate fact-based business intelligence on
competitor performance, supplier or material cost levels and customer or product
profits. Internally, it allows for better cost control and reporting, and improved
forecasting. It underpins sound budgeting and pricing strategies.

An Equipment Total Cost of Ownership Model

INPUTS OUTPUTS

MODEL
STRUCTURE

Fig 5c.1.1: An equipment total cost of ownership model

For further reading on cost modelling see:
Better business decisions using cost modelling: For procurement, operations,
and supply chain professionals.
by, V E Sower, 2011

See also: 3.1
Business strategy 10.1
Building a robust business case

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5c.2 Optimisation of manufacturing process
Simulation and modelling are tools which help select the best option from
the available alternatives. For example, what is the minimum total cost or
maximum profit?
Optimisation modelling can be based mathematically (linear programming
for example), heuristics-based or on genetic algorithms. Optimisation is
widely used in manufacturing and supply chain management.

Drivers

The main driver is the need to maximise the use of resources and apply robust risk
control. Product and process design, manufacturing and supply chain operations,
strategic and investment plans all need optimisation. So, consider applying simulation
and modelling tools to optimise;

  supply chain, factory and process design
  operational planning and scheduling
  inventory optimisation
  energy efficiency optimisation
  pricing decisions
  project scheduling

Summary approach

An optimisation model must first capture the full complexity of the problem. Then a
mathematical engine (or algorithm) is applied to the model to find the best possible
solution. When optimisation models are embedded in applications, planners and
managers are able to perform what if analysis and compare scenarios.

A typical optimisation process is;

  determine the objective – what to optimise
  determine input, output and resource constraints
  choose an optimisation technique, e.g. linear programming
  implement the technique in optimisation software
  perform output analysis
  use the results to change the way the business behaves

Review Develop a Use linear or Produce Develop
options and mathematical non-linear recommend- outline
constraints programming action plan
model to ations
analyse
impacts

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Trial & error

Simulation based

Quality Time Cost Reliability

Fig 5c.2.1: Simulation and modelling is more cost effective than trial and error experiments

Benefits
Well executed optimisation modelling captures all dependencies and constraints
in a problem. This identifies the global optimum, i.e. the configuration that will
best minimise the resources required to achieve the best outcome. Specifically,
optimisation modelling;
  allows for intelligent exploration of all alternatives
  dramatically improves operational efficiency
  reduces inventory levels and lowers logistics costs
  maintains and improves customer service
  plans for future capacity and highlights shortfalls
  uncovers solutions to the toughest challenges

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Case study:
JJ Churchill needed to understand potential variables that could feature in a new
overseas operation before embarking on capital investment. MTC engineers applied
simulation modelling expertise to analyse the layout of the site, flow of machines
and materials within the production areas, lines and workstations. This allowed the
project team to model a number of options and scenarios before making any capital
investment
The engineers made specific recommendations to look at the way machines were laid
out and where investments could be made to ensure they could support any demand
for growth in the future. JJ Churchill Ltd was able to run through what if scenarios
before undertaking the risk and expense of physically reworking the inefficient layouts,
which resulted in a 10 per cent reduction in footprint area, and a 30 per cent reduction
in process costs.
“Through the CASiM2 project JJ Churchill was able to increase resource use by 20 per
cent which led to a 20 per cent annual saving in operational costs. With the help of
the CASiM2 project JJ Churchill Ltd was able to plan and accelerate its business plans
to bring forward commercial opportunities. This has resulted in capital cost savings
of 82 per cent”
Kevin McCormick, Engineering and Sales Director, JJ Churchill Ltd
JJ Churchill Ltd is a Midlands based SME manufacturing and supplying blades and
vanes in the compressor and turbine sections of Gas turbine engines.

This project was delivered with support from the CASiM2 project and the
European regional development fund 2007-13

For further reading on how modelling applies to supply chains: 5d.2
Modelling the supply chain 5d.3
Jeremy F. Shapiro, 2nd Edition 2007 5f.1
5f.2
See also:
Optimise production process with virtual reality
Virtual proving of process design
Discrete event simulation – future factory planning
Facility layout prototyping

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5c.3 Discrete event simulation
Investment in new facilities, production lines or associated equipment is always
risky to a manufacturing business. Any mistakes made will be costly. Real world trial
and error to find the best layout after investment cannot help but be disruptive.
Using discrete event simulation (DES) reduces the chance of a costly mistake, giving
the business – and any investor - more confidence in the projected benefits. It also
allows the business to determine the best layout – or process – before physical
changes are made to the facility and before equipment or employee moves begin.
Finding the best layout or flow up front can deliver major savings.

Drivers
DES de-risks and underpins a robust business case for capital investment. It allows for
informed choices between competing business alternatives. It clarifies the trade-off
balances to be made between cost and increased capability. Most importantly, it
delivers an optimised solution and so generates additional savings and benefits for
the business. DES can be applied to decisions around;
  additional facilities to meet customer demands
  limitations of existing facilities
  capacity and process capability of new or existing facilities
  competitive advantage to be gained
  identifying and mitigating bottlenecks
  production planning verification
  predicting supply chain risk, resilience and robustness

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Case study:
Company X approached the MTC to support the definition of the size and shop
floor layout of a proposed manufacturing facility for the expected load and
maximum peak load.
The objectives and scope of the project were to;
 facilitate refinement of the method of manufacture by indicating critical

points for revision by the customer’s planning team
 reduce the risk involved in the capacity acquisition project by providing

visibility on the dynamic effects of the method of manufacture
(e.g. bottlenecks, resource allocation, product flow)
 recommend alternative facility configurations to meet the expected and
maximum peak loads at minimum non-value-added cost (NVA)
 provide data as an input for 2D Facility layout planning exercise to be
completed by the customer’s planning team

Simulation activity

(Static analysis) MoM re nement and validation

Initial MoM and starting MoM version 5 and baseline
assumptions con guration

46 Operators 46 Operators
3 Cutting machines 2 Cutting machines
11 Work Stations 11 Work Stations

2 Autoclaves 2 Autoclaves
OEE 100% OEE 75%
OPS 75 Operations in total OPS 78 Operations in total

Cost NVA Utistn Thr/pt Cost NVA Utistn Thr/pt
N/A N/A N/A N/A £4.3m 40% 42% 79

Re ned MoM for critical stages, modi ed cutting,
curling and NDT operations
3 operations added;

Electrical inspection
Welding of side panels
Bonding of centre spine
Updated OEE assumptions

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Simulation activity (continued)

Bottleneck mitigation Capacity expansion
and resource balancing

Optimised con guration Optimised con guration
to meet expected load (175) to meet peak/max load (275)

32 Operators 36 Operators
1 Cutting machine 2 Cutting machines
7 Work Stations 11 Work Stations

2 Autoclaves + 1 oven 2 Autoclaves + 1 oven

OEE 75% OEE 75%

OPS 78 Operations in total OPS 78 Operations in total

Cost NVA Utistn Thr/pt Cost NVA Utistn Thr/pt
£3.1m 18% 77% 176 £4.3m 11% 85% 276

5 major bottlenecks identi ed and mitigated Strategic capacity expansion
by strategic capacity expansion +5 technicians
+1 inspector
+1 inspector +1 cutting machine
+1 oven for curing operations + 2 work stations
workforce and equipment
rebalancing by strategic capacity +1 moulding workstation
optimisation +1 assembly workstation
-10 technicians Oven capacity increased
to t + 1part
-1 cutting machine
- 4 work stations

Fig 5c.3.1: Discrete event simulation being used to optimise size and shop floor layout of
a proposed manufacturing facility for the expected load and maximum peak load.

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Continuation of case study
This project, from 40 man-days of simulation input;
 achieved peak/maximum load
 increased value added activity by 30% - 59%
 achieved savings of £1.3M from NVA operational cost of labour,

machines and workstations
This project was delivered with support from the CASiM2 project and the
European regional development fund 2007-13

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Summary approach
[A manufacturing process example is used below]

Gather information on existing process, sequencing, deployed technology, cycle
time and allocated manning level. Ensure an accurate baseline simulation model is
developed as all subsequent simulations and analytical experiments are conducted
on the baseline model. Alternative solutions can then be explored and assessed.

Validate Optimise Select Carry out Optimise for
baseline using optimised optimisation minimum
simulation baseline parts and
current state DES model study –
achieve labour
required
throughout

Optimise the DES model to be capable of meeting existing and future growth
scenarios and to maximise cost effectiveness for the business.

Process High level discrete event simulation sequence
sequences
cycle times

Processes Baseline Baseline Dynamic Dynamic process
Input simulation model process data data current and
future growth data
model Concept Chosen Manufacturing
DES concept Chosen layout data
Deployed model DES concept
technology models optimisation/
manning levels Client
Simulation validation model
Control modelling tool

IDEFO Factory Business
notation layout and case
realisation
Output Simulation
modelling tool

Mechanism 2D CAD
modelling tool

Fig 5c.3.2: High level DES sequence

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It is necessary to study how changes in manufacturing footprint, layout and facility
dimensions meet the capacity and capability requirements of the business. In
addition, what knock on effects does each possible solution have on future operating
costs? The main outputs from a DES study are summarised during this step. Then
recommendations are made and benefits quantified.

Benefits

DES enables business cases to be developed in a more robust and demonstrable
form. DES outputs can convince investors and reassure internal decision makers that
the proposed investment will provide the return on investment expected – and that
that return has been optimised. In short DES;

  protects the business from expensive mistakes
  optimises resource use
  generates annual operational cost savings
  provides capital cost savings
  reduces facility footprint
  predicts supply chain risk, resilience and robustness

See also: 5d.2
Optimise production process 5f.1
Discrete event simulation – future factory planning

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5c.4 Discovering value from simulation
The root cause of quality problems – for example missed tolerances, poor surface
finish or reduced product life – can often be identified by a detailed insight into the
physics of the manufacturing process. Simulation can predict the temperatures,
stresses and deformation that ultimately determine quality. Simulation is more cost
effective than trial and error experiments.

Drivers

Simulation is becoming an essential part of the design process for concept
development, equipment selection and optimisation. However, specialist software
tools and the skilled engineers to use them can be costly. A pilot study can discover
and demonstrate how simulation tools can address the need to;
  optimise metal cutting parameters
  optimise configuration of complex fixtures
  optimise flow and heat transfer in pumps or heating equipment

Summary approach

Many CAD packages include basic simulation capability. However, more complex
parts create problems with the generation of suitable meshes and input of material
data. Trust in the results requires experience of using the software in a broad
range of scenarios.

A pilot study can discover the necessary inputs and model setup process for
accurate process predictions.

Collect Determine Model Plot stable Advise on
cutting data cutting forces dynamic cutting speeds and
behaviour
conditions forces to
minimise
chatter

Example summary approach for dynamic analysis of metal cutting

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Depth of cut, ap(mm) 0.35 f2 f1
0.3 f3

0.25 Lobe 3 Lobe 2 Lobe 1
0.2
600 1100 1600
0.15 Spindle frequency, f (Hz)
0.1

0.05
0
100

Fig 5c.4.1: Demonstration of dynamic analysis of metal cutting. The material removal model is used
to predict the frequency response of the tool. The process is then configured to avoid the resonance
frequencies to improve tool life and surface quality of the work-piece.

Simulation tools assist root cause analysis in (among others) cutting, machining,
fusion welding, forming, cladding, shaped metal deposition and powder bed or
blown powder additive processes.

Input Implement Assess risk Predict Make
material, finite element of tearing, deviation recommend-
process and wrinkling and from pressing
geometric simulation spring back ations
design regarding
data press tool
parameters

Example summary approach for finite element analysis of sheet metal forming

A pilot study discovers which simulation tools are most appropriate to a specific
problem. It will demonstrate how to deploy and use simulation in a business
effectively and sustainably. It informs the choice of software, identifies the skill level
needed to use it and produces relevant example simulations.

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Benefits

A pilot study demonstrates how simulation tools deliver;
  reduced lead time when implementing a new process
  reduced number of failed parts to be scrapped
  reduced number of prototypes
  reduced waste
  improved part quality
  improved tool life

For further reading on dynamic system modelling:
Handbook of dynamic system modelling
Paul A. Fishwick. Chapman & Hall / CRC Computer and Information Science Series.
Taylor & Francis Group, LLC. United States, 2007

See also: 9b.2
Assessment of flow and heat transfer

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Page 96

Chapter 5d

Virtual engineering

Introduction
  5d.1 Virtual engineering as a problem-solving tool
  5d.2 Optimisation of production process with virtual reality
  5d.3 Virtual proving of process design

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5d. Virtual engineering

Introduction
Virtual engineering is a powerful suite of tools used to advance and help decision
making, to communicate and to share vision. A computer aided virtual environment
(CAVE) is a four sided 3D facility. Virtual tools – including CAVEs, improve speed,
enhance decision making and reduce risks, so saving time and money.

Fig 5d.1: The MTC CAVE allows a wide range of simulation and visualisation opportunities for product
and production line design.

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