2. Dave suggests a test drive. He presses some buttons, your chair rotates and moves into an
enclosed area surrounded by computer screens, and suddenly you see a dash board and a steering
wheel and pedals in position. You actually seem to be in a new mini-van, one decorated as you
wished and with all the options you’ve requested. The van appears to be “in” a parking lot that
you can see through the windshield and windows.
Dave suggests turning the key, and you’re off and driving. You “drive” out of the parking lot
and on to a road. You actually “feel” the van’s response to the road. You make some comments
about turning radius and acceleration, and Dave, sitting in the passenger seat, does some typing
on his keyboard. Following a few more comments about suspension and ride, the van’s driving
just the way you’d like. You try the radio and make a suggestion about the sound and ease of
using the radio. Dave makes more adjustments ..... After about 30 minutes, you’re driving the
“dream” mini-van. It’s just the way you would design it.
You stop, your chair rotates, and you and Dave then talk. You’ve ended up picking a lot more
car than you intended. You’re thinking about cutting back some features and definitely reducing
the paint scheme level until Dave shows you the total price. Although more than you intended to
spend, it’s a great deal for the van you’ve “designed.” There’s no negotiation. Dave checks the
computer and says that standard delivery in New Hampshire is 4-5 days, but because you’ve
requested some very special features, delivery will be in 7-10 days. You write a deposit check,
arrange financing at a good rate through the computer, and walk out, somewhat overwhelmed, in
just 10 more minutes.
Eight days later, you have your new van. It’s exactly like the virtual van you drove, except that
it has “that new car smell.” Much to your delight, you discover your owner’s manual. The van
illustrated on the cover is yours, down to some unique details of the paint scheme and trim, not
just a similar model. Only those options on your van are discussed, including your limited slip
differentials and your custom TV. Even the maintenance instructions are tailored to the level of
work you planned to do yourself. You’re definitely going to spread the word about this miracle.
* * * * * *
Is this scenario far fetched? Absolutely not. It represents but one view of the agile
manufacturing or virtual enterprise vision. Most of the technologies necessary are here today.
Although the virtual reality needed for the sales system is the flashy part of such a scenario, the
real heart of this capability resides in those portions of the enterprise that created the individually
customized van, on-demand. Needed to do this is the agility to economically and rapidly
produce and deliver any choice, in lots as small as one, from a wide range of product
possibilities. This requires an extremely flexible, highly responsive, efficient manufacturing
enterprise. A key enabler is interoperable technical information and full integration, something
3. that is a realistic possibility due to an initiative called CALS. Let’s look at some of the details of
these concepts and how they could, and probably will, make this scenario reality.
Growing global competitive pressures in many manufacturing sectors have been forcing
manufacturers to strive for higher and higher degrees of efficiency (maximum output with
minimum resource use) and effectiveness (all finished goods rapidly sold/transferred to the
customer). Increasingly sophisticated customer expectations are pushing manufacturers to
produce variable product-mixes and to rapidly change products while maintaining top quality
and minimal cost. To do so and remain competitive and profitable, manufacturing enterprises
must continually improve operations. Improvement has traditionally focused upon individual
functions, such as those illustrated in Figure 1, and the processes within these functions.
Specifications
Development
Product
Design
Process
Planning
Manufacturing
Engineering
Purchasing
Manufacturing
Process
Control
Post Production
Support
Owners' Manuals
Preparation
Shipping
Marketing
Product
Engineering
Suppliers Customers
Figure 1 — Some Elements of a Manufacturing Enterprise
During the past few decades, there has been an increasing emphasis on inter-functional
improvement. Interactions among functions and among organizations making up a
manufacturing enterprise commonly involve the flow of information and materiel. For example,
several firms might progressively convert raw materials into a finished, complex product. The
process might begin with a mining or chemical firm and end at a final assembler. The flow of
materiel is "relatively" straight forward, and involves only a few functions in an enterprise. Even
so, a wealth of cost, lead-time, and quality gains result from improving this materiel flow.
Information flow presents a more complex problem.
Figure 2 depicts some of the technical information flow that might occur. In the real world, the
information and the processes/systems that manage it are typically of many different types.
Data may be in manual format (paper, microfilm, etc.) or in electronic format (in computer
4. memory, on tape or a disk, etc.), and the systems that use or manage the information may be
filing cabinets, envelopes that travel with in-process work, various types of computers, and more.
Although manual information is usually easy for a human recipient to understand, this
information is prone to misrouting, loss, or damage, especially in a large or complex enterprise.
Electronic information is amenable to better management but generally can not be readily shared
among dissimilar systems, and often has to be reformatted or recreated for use.
These issues have been especially significant in the national defense community in the United
States. For example, in the mid-1980s, the U.S. Department of Defense (DoD) had several
hundred million engineering drawings in aperture card format, spent billions of dollars annually
on technical information, had hundreds of tons of technical (or owner's) manuals for its military
equipment, and experienced a broad spectrum of inefficiencies and operational problems due to
difficulties in managing and accessing this information.a
Often, the computer systems acquired
by the military to improve defense equipment creation and support could not exchange
information with each other or with systems in industry, resulting in a plethora of “islands of
automation.”a
Thus, in 1985, the U.S. DoD began an initiative called CALSb
to correct these
problems and capitalize on the improvement possibilities.
The objectives of CALS are to improve costs, timeliness, and quality through information
automation and integration. The basics of the concept include 1) one-time data creation with
multiple use, 2) use of this information over the full life-cycle of each manufactured product, 3)
interoperability to allow interworking (such as concurrent engineering) among functions and
processes, 4) user- friendly, system transparent interfacing and access to information (which
5. appears - to authorized users - to reside in an integrated data base), and 5) access, configuration,
and work-flow management. CALS consists of strategies, technologies, approaches, and
standards. Most importantly, CALS has a strong, and growing, international commitment.c
A
fundamental result of CALS is interoperability — interoperability among functions and among
organizations. A full CALS environment, as illustrated in Figure 3, provides all enterprise
elements with “just-right, just-in-time” information.
Specifications
Development
Product
Design
Process
Planning
Manufacturing
Engineering
(Automated)
Purchasing
(Automated)
Manufacturing
(Automated)
Process Control
Post Production
Support
(On-line)
Owners' Manuals
(Automated)
Shipping
(On-line)
Marketing
Virtual
INTEGRATED
PRODUCT
DATABASE
Product
Engineering
Suppliers Customers
Figure 3 — Integrating the Enterprise with CALS
A second area of interaction that has undergone dynamic change during the last few decades
involves the business relationships among enterprise members. Prior to World War II, larger
firms often pursued “full” vertical integration as a way to gain a competitive edge. In the post
war years, many firms found it advantageous to outsource much of what had been produced
internally. The advantages were obvious — a firm concentrating on a specialty product line
could do a better job and could gain greater economies of scale by producing for many
customers. However, the relationships between suppliers and their customers were driven by
cost-based competition and often became somewhat adversarial. More recently, companies,
especially in the automotive and aerospace industries, have been pursuing cooperative,
partnership relationships.
Perhaps the most effective partnership implementation is the Japanese keiretsu. The keiretsu
concept is too complex a subject to be fully explained here and has aspects, such as financial
centers, that go beyond production, materials, and information–flow concern. However, a
keiretsu is, at least partially, a vertically integrated set of companies pursuing specific markets.
6. Each member typically maintains a “horizontal” internal focus and focuses externally on
supporting and providing products to keiretsu members further along on the production chain.
Basically, a keiretsu will act as a single entity that uses its appropriate components (individual
firms) to supply all resources needed to pursue and execute a business opportunity. Thus, a
keiretsu is a dedicated, comprehensive, and flexible partnership formed to succeed in a range of
market opportunities.
The culmination of this trend may be agile manufacturing.d
Agile manufacturing is a cooperative
approach to achieve rapidity, flexibility, quality, innovation, and efficiency. “Rapidity” includes
quick product realization and introduction; production and delivery; and product change,
customization, and upgrade. “Flexibility” is the ability to rapidly and economically produce any
product, in any lot size, from a range of possibilities. Included may be the flexibility to
customize each instance of a high volume product. “Quality” simply means meeting or
exceeding customer specifications and expectations. “Innovation” is the capability to be first
with the best new product. Finally, “efficiency” helps ensure that product perceived–value
exceeds costs.
To so perform, a manufacturing enterprise must be optimized for the instant opportunity. It must
contain the best resources (equipment, facilities, and people), and indeed its success will be
based on the skills, knowledge, and expertise of its people. To be optimized, it may have to
reconfigure itself to excel for each specific opportunity.
For example, several companies, as illustrated in Figure 4, have decided to work together to
pursue some opportunities. Note that the rectangles in the figure represent functions of each
Function
Company
Figure 4 — A Possible Agile Enterprise
7. firm. For the First business opportunity, the five firms shown in Figure 5 form a virtual
company (a temporary, inter-company organization, working as a business entity to pursue a
specific business opportunity) using selected functions from each of the various participants.
These decisions (the participants, the functional allocations) could have been made at the
beginning of the effort or could evolve with the endeavor. Regardless, the result is an instant
enterprise of several companies that has formed to maximize rapidity, flexibility, quality, etc. to
gain the business success desired. (Note — the arrows in the figure indicate possible information
flow, as in Figure 2.)
Figure 5 — Virtual Company 1
At the same time, or perhaps shortly thereafter the first endeavor, another opportunity is
identified. The same seven firm agile enterprise chooses to pursue it. Due to technical or other
differences in the market or product involved, they form a different virtual company, the one
shown in Figure 6.
Similarly, an agile enterprise may change participants for different configurations of a basic
product line. Thus, underlying agile manufacturing is the reconfigurable enterprise that enables
the formation of virtual companies to pursue, and excel at, specific opportunities.
Now, why is CALS necessary for agile manufacturing and the opening scenario of this article?
In the opening scenario, an agile enterprise provided the capability to rapidly produce
individually customized automobiles. Not only must the final assembler have the flexibility to
assemble an on– demand configuration, but, even more importantly, component producers must
8. Figure 6 — Virtual Company 2
be able to quickly respond, when and only when required, to provide the specific items required
for a given final product.
A key requirement of an agile enterprise is the ability to exchange technical information as
shown by the arrows in Figures 5 and 6. Indeed, the 21st Century Manufacturing Enterprise
Strategy report, which first documented the agile manufacturing concept, stated:
Agile enterprises are totally integrated organizations. Information flows
seamlessly among manufacturing, engineering, marketing, purchasing, finance,
inventory, sales, and research departments. Work proceeds concurrently rather
than sequentially. . . Information. . . flows seamlessly between agile
manufacturers and their suppliers, too, as well as between manufacturers and
their customers, who play an active role in product design and development under
agile manufacturing.e
Since any environment involving different, and changing, participants is likely to involve
dissimilar information systems; strategies, standards, and approaches for interoperability are a
must. Thus, CALS.
The opening scenario is not futuristic fiction. The technologies, strategies, and approaches
needed are available today or are on the visible horizon. A limited version of this scenario could
probably be implemented today, and as agile manufacturing, CALS, and virtual reality evolve, so
will the viability of this approach to automotive excellence.
9. Footnotes:
a. See, for example, the discussions on pages 3-4 of, and the references cited in,
reference 9.
b. This acronym originally represented “Computer-Aided Logistic Support.” The
U.S. DoD has changed this name twice since CALS' inception. The term CALS, in some
communities, has become de-coupled from the words underlying the acronym. The U.S.
CALS Industry Steering Group has started using the term “Commerce At Light Speed.”
c. CALS industry groups and government offices have been established in Europe,
the U.S., Canada, and the Pacific Rim. Reference 12 is a CALS executive guide, for
general industry, produced in the UK.
d. Very closely related to agile manufacturing is a concept, that surfaced in the same
time frame, known as the virtual corporation or the virtual enterprise. Indeed, the most
apparent differences between these concepts are 1) agile manufacturing's more narrow
scope (limited to manufacturing), 2) the virtual enterprise's primary focus on
organizational factors contrasted with agile manufacturing's focus on enablers, and 3) a
difference in the organizational level involvement suggested in the initial presentations of
the two concepts (references 3 and 4). The “virtual company” concept is fundamental to
agile manufacturing, and the term is used throughout the initial agile manufacturing
documentation (reference 4).
e. See reference 4, Vol. 1, page 8.
References:
1. Barker, Joel A., Future Edge: Discovering the New Paradigms for Success,
William Morrow and Company, Inc., New York, 1992.
2. Burt, David N. and Michael F. Doyle, The American Keiretsu: A strategic
Weapon for Global Competitiveness, Business One Irwin, Homewood, IL, 1993.
3. Davidow, William H. and Michael S. Malone, The Virtual Corporation,
HarperCollins Publishers, New York, 1992.
4. Goldman, Steven and Kenneth Preiss, Editors, 21st Century Manufacturing
Enterprise Strategy, Iacocca Institute, Lehigh University, 1991.
5. Hammer, Michael and James Champy, Reengineering the Corporation: A
Manifesto for Business Revolution, HarperCollins Publishers, New York, 1993.
6. Lang, Mark S., Agile Manufacturing presentation at SYNCHRONICITY/93
Conference and Exposition, Pittsburgh, 1993.
7. Merli, Giorgio, Total Manufacturing Management: Production Organization for
the 1990s, Productivity Press, Norwalk, CT, 1990.
10. 8. Morris, Daniel and Joel Brandon, Re-engineering Your Business, McGraw-Hill,
Inc., New York, 1993.
9. Ross, Eric M., An Introduction to the CALS/CE Initiative and Intergraph's CALS
Approach (I/CALS), Intergraph Corporation, Huntsville, AL, 1992.
10. Ross, Eric M., “CALS: A Presentation to Ford Motor Company,” BDM
International, Inc., Dearborn, MI, 1989.
11. Ross, Eric M., “CALS: Enabling the New Manufacturing Paradigm,” CALS
Journal, Vol. I, No. 4, Saratoga, CA, 1992.
12. Schofield, Norman, David Froome, Michael Naughton, and Joan Smith, The
Executive Guide to CALS, United Kingdom CALS Industry Council & United Kingdom
Department of Trade and Industry, London, 1993.
13. Sheridan, John H., “Agile Manufacturing: Stepping Beyond Lean Production,”
Industry Week, Vol. 242, No. 8, Cleveland, 1993.
14. Wince-Smith, Deborah L., "Remarks: The Strategic Partnership Initiative and
Critical Technologies," U.S. Department of Commerce Critical Technologies Workshop,
Gaithersburg, MD, 1992.
(A slightly different version of this article, with slightly different graphics, was published in
Automotive Manufacturing International ‘94, pages 37 - 42)
