Mike Shipulski, Ph.D.

Director of Engineering

Hypertherm, Inc.

Systematic DFMA Deployment, it just Could Resurrect US Manufacturing

• We have lost our way• Working definitions• The savings• The problems• The learning• Systematic DFMA Deployment

– Comparison with other systematic methodologies• Lean, Six Sigma, DFSS

– Quadrants of DFMA Deployment– Five Milestones of DFMA Deployment Process (M1-M5)

• Big Finish

Outline

• We praised financial enterprises for driving economic growth knowing full well that moving and repackaging financial vehicles did not create sustainable growth

• All the while, manufacturing has taken it on the chin with:– Astronomical job losses– The thinnest capital investments– And, most troubling, a general denigration of Manufacturing as an institution and

profession• We can resurrect Manufacturing with a back-to-basics approach to

create sustainable economic growth.• Manufacturing creates value when it combines raw materials and

labor with thinking, which we call design, to create products that sell for more than the cost to make them, where

Profit per part = Price – Cost [1]

replacing Cost with Materials and Labor, eq. [1] becomes

Profit per part = Price – (Materials + Labor). [2]

We have lost our way

• Total profit is a function of the number of parts sold, so modifying eq. [2] for Volume

Profit = [Price – (Materials + Labor)] x Volume. [3]

• The Market sets price and volume• We are left only to with Materials and Labor to influence Profit.• At the most basic level, we must reduce Materials and Labor to increase Profit.• This is so important it must be written as a formula:

Increased Profits in Manufacturing result from reduced Materials and Labor costs. [4]

• How do we use the simple fundamentals of eq. [4] to resurrect US Manufacturing?

• I propose we must change our designs to design out Material and Labor costs using Systematic DFMA Deployment.

We have lost our way

Working Definitions

Working Definition 1. Design for Manufacturing (DFM)A methodology to change a design to reduce the cost of making parts while retaining product function.

Working Definition 2. Design for Assembly (DFA)A methodology to change a design by eliminating parts to reduce the cost of putting things together while retaining product function.

Both definitions include:1. Change the design2. Retaining product function3. Reduce the cost

• Part-by-part and feature-by-feature reduction of costs

• Hard work is required• Part count reduction of 20 – 50%• Labor time reduction of 20 – 60%• Cost savings of 20 – 50%• Savings achieved in all types of industries

– High volumes, low volumes– High tech, low tech– Big ones, little ones– Savings are possible with all types

• Downstream savings are significant

The Savings

1. Waste of overproduction (of parts)

2. Waste of time on hand - waiting (for parts)

3. Waste in transportation (of parts)

4. Waste of processing itself (parts)

5. Waste of stock on hand – inventory (of parts)

6. Waste of movement (from parts)

7. Waste of making defective products (using parts)

Cartoons from Suzaki, The New Manufacturing Challenge, 1987.Wastes from Ohno, Toyota Production System, Beyond Large-Scale Production, 1978 (Japanese), 1988 (English).

Breadth of Factory Savings is StaggeringIntroduce a low waste design to your lean folks

1. Waste of overproduction (of designs)

2. Waste of time on hand - waiting (for designs)

3. Waste in transportation (of designs)

4. Waste of processing itself (designs)

5. Waste of stock on hand – inventory (of designs)

6. Waste of movement (from designs)

7. Waste of making defective designs

Cartoons from Suzaki, The New Manufacturing Challenge, 1987.Wastes from Ohno, Toyota Production System, Beyond Large-Scale Production, 1978 (Japanese), 1988 (English).

Breadth of Engineering Savings is StaggeringFewer parts to design

Business Metrics - profit per square foot, warranty cost per unit

0

1

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4

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Normalized Warranty Cost Per Unit

Expon. (Normalized Profit Per Square Foot)

Expon. (Normalized Warranty Cost Per Unit)

• The significance of the savings are a problem – most don’t believe

• Companies don’t know how to start• Companies don’t realize full savings

– Narrow implementation (e.g., one sub-assembly)• Low DFMA deployment factor, D

– Poor implementation• Projects run out of Manufacturing or Purchasing

– Poor project selection• DFM at the expense of DFA

– Poor organizational roles and responsibilities• Project resources unallocated

• Companies don’t know how to put all the pieces in place– It’s more than just DFMA tools– Infrastructure, organization, business processes, tools

The Problems

The Learning

• How to create a DFMA Deployment plan including– Business processes, tools, organization, and

infrastructure

• How to select, plan, and staff the projects• How to execute projects

– Analyze the baseline design– Create and track the right hard metrics

• How to manage, pace, guide the projects– Hard metrics– Low overhead report-outs

• How to formalize and share learning

Systematic DFMA Deployment

What is it?How to do it?

Systematic MethodologiesLean, Six Sigma, DFMA Deployment

Lean Six Sigma

Design forSix Sigma

DFMADeployment

Cost Quality

ManufacturingProcess

ProductDesign

Systematic MethodologiesLean, Six Sigma, DFMA Deployment

Lean Six Sigma

Design forSix Sigma

DFMADeployment

Cost Quality

ManufacturingProcess

ProductDesign

e.g., warranty cost reduced,fewer opportunities for defects

RTYno missing fasteners = (Yield for a single fastener) number of fasteners

Number of defects = probability of a defect x number of opportunities

• Clear goals – company profitability• Clear roles and responsibilities

– E.g., Lean Black Belts, Six Sigma Black Belts, DFMA Black Belts• Well established business processes and metrics

– Project selection, chartering, resourcing– Review mechanisms– Communication processes

• Clear accountability• All the supporting pieces, not just the toolbox

– Six Sigma is not Minitab– Lean is not value stream mapping– Systematic DFMA Deployment is not just DFMA toolbox

• All the Quadrants– Organization, infrastructure, business processes, tools

Systematic MethodologiesLean, Six Sigma, DFMA Deployment

Organization

InfrastructureTools

Company-wideSavings from

Systematic DFMADeployment

BusinessProcesses

Quadrants of Systematic DFMA DeploymentDesign Engineering leads the work

Experts within Design Engineering or on a separate team

How many DFMA Black Belts

How many DMFA Master Black Belts

How to define accountability

How to allocate resources

How to involve the supply base

How to start the initiative

How to select projects

How to plan and staff projects

How to execute projects

How to manage and pace projects

How to manage software licenses

How to share (and not share) DFMA analyses

How to share special processes

How to share the learning

How to track savings

How to start the initiative

How to select projects

How to plan and staff projects

How to execute projects

How to manage and pace projects

• M1 Goal Setting• M2 Project Selection and Planning• M3 Resource Allocation• M4 Project Execution

– M4.1 Signature of baseline product and process– M4.2 DFMA tools on baseline design– M4.3 Goals and design approach– M4.4 DFMA tools on new design– M4.5 Validation of product function

• M5 – Design Review

Systematic DFMA DeploymentProcess with 5 Milestones

M 1Goal Setting

M 2Project Selection & Planning

M 3Resource Allocation

M 4Project Execution

M 5Design Review

Example Project Portfolio

$150

$100$70 $60 $50 $40 $30

$300

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$500

$0

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Savings Target

An Example Project Portfolio

Pareto Chart of Part Count by Part Type for your product

668

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0%

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40%

60%

80%

100%

HT2000LHF Primary Component Cost Pareto

1717.74

833.88 817.34 809.84 788.71

663.37

532.45

400.73

333.46 322.50288.12 285.75

197.03 192.22160.27

124.85 102.09 89.63 70.0037.73

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M 4.1Signature of

Baseline Product & Process

M 4.2DFMA tools

on Baseline Design

M 4.3Goals: Part Count, Assembly Time

Design Approach

Part Count: 60 (40% reduction) Labor Time: 30 minutes (50% reduction)

Cost : $650 (35% reduction)

Volume: 100,000 per yearEstimated Savings: $350,000 per year

Part Count: 100 parts Labor Time: 60 minutes

Cost: $1,000 Volume: 100,000 per year

Design Approach• Highest cost subassemblies first• Reduce fasteners• Reduce connectors• Stress analysis to reduce material• More injection molding• New materials• New manufacturing process

M 4.4DFMA Tools on

New Design

M 4.5Validation of

Product Function

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Generation 2 Follow-on GasModule

Baseline Gas ModuleR

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COST

Goal – 0.50(50% less than Baseline)

Part Count1353

717

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Generation 2 Baseline 1

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Goal – 675 parts(50% reduction)

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Baseline Design New Design

Estimated Savings$350,000 per year

Part Count By Part Type

Cost by Sub-Assembly

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20

40

60

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New Design Baseline Design

Product Function

Non-Value Added Labor

Parts, Labor Cost

Project Savings

Project Resources

DFA of existing sub assemblies

DFA of existing products

DFA/DFM in New Product Development20-50% savings

Purchasing

Suppliers

Manufacturing2% savings

5% savings

15% savings

10% savings

Purchasing, Engineering,

Manufacturing, Suppliers

Purchasing, Engineering.

Assembly, Suppliers

Almost Everyone

Purchasing, Engineering.

Assembly, Suppliers

Opportunistic

SystematicSystematic

Opportunistic

DFM for Target Costing, Cost Negotiation

DFM of existing parts (design change)

Savings and Resources

Jan Mar May July Sept NovDesign

ManufacturingPurchasing

Suppliers

0

100

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600

2009 2010 2011 2012 2013 2014

Year

Pro

fits

CompanyProfitability

Goals

Feature CostDiameter over 2" Requires larger machineLength over 3" Requires a new value streamholes smaller than 0.010" high cycle time, low process yieldsmall radii high tooling cost

Features That Create Cost

Product Function

M1 – Goal Setting

Steering Team (or group that creates accountability)• Company profitability goals drive projects• Define desired savings and timing of savings• Align resource requirements• Give input to project selection – M2• Savings and resources differ among project types

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2009 2010 2011 2012 2013 2014

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fits

Profitability Goals

Savings and Resources are Different for Project Types

DFA of existing sub assemblies

DFA of existing products

DFA/DFM in New Product Development20-50% savings

0.2 – 0.5 savings factor, S

Purchasing

Suppliers

Manufacturing 2% savings

0.02 DFMA savings factor, S

5% savings

0.05 DFMA savings factor, S

15% savings

0.15 DMFA savings factor

10% savings

0.1 DFMA savings factor, S

Purchasing, Engineering,

Manufacturing, Suppliers

Purchasing, Engineering.

Assembly, Suppliers

Almost Everyone

Purchasing, Engineering.

Assembly, Suppliers

Opportunistic

SystematicSystematic

Opportunistic

Target Costing, Cost Negotiation

DFM of existing parts (design change)

Savings and Resources

Savings = S x (labor + materials) x D

A contrived example of yearly savings for a range of deployment levels and project portfolios for and example company with

Total company Labor + Materials = $100 Million

$0

$5

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0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

D, deployment factor

Yea

rly

Sav

ing

s, in

Mill

ion

s

DFMA Savings Factor (S) = 0.110% savings

More DFM projects

DFMA Savings Factor (S) = 0.220% savings

DFMA Savings Factor (S) = 0.330% savings

More DFA projects

$15 Million Savings per yearDFMA Savings Factor = 0.3Deployment Factor, D = 0.5

Labor + Materials = $100 Million

Deployment of 100%Broad DFMA Deployment Across The Company

10% deploymentNarrow DFMA Deployment

Savings increase with DFMA savings factor. Three example savings factors are shown: 0.1, 0.2, and 0.3.DFMA savings factor is a function of types of projects in DFMA Deployment project portfolio.Savings increase as DMFA is deployed more broadly across the company (toward the right).

M2 – Project Selection

Engineering Leaders• Create project portfolio• Estimate savings• Estimate resource needs• Give input to resource allocation – M3

Example Project Portfolio

$150

$100$70 $60 $50 $40 $30

$300

$200

$650

$750

$820

$880

$930

$970$1,000

$500

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

Project 1 Project 2 Project 3 Project 4 Project 5 Project 6 Project 7 Project 8 Project 9

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Savings Target

Savings and Resources Project Portfolio

DFA of existing sub assemblies

DFA of existing products

DFA/DFM in New Product Development0.2 – 0.5 savings factor

20-50% savings

Purchasing

Suppliers

Manufacturing0.02 savings factor

2% savings

0.05 savings factor

5% savings

0.15 DMFA savings factor

15% savings

0.1 DFMA savings factor

10% savings

Purchasing, Engineering,

Manufacturing, Suppliers

Purchasing, Engineering.

Assembly, Suppliers

Almost Everyone

Purchasing, Engineering.

Assembly, Suppliers

Opportunistic

SystematicSystematic

Opportunistic

DFM for Target Costing, Cost Negotiation

DFM of existing parts (design change)

Savings and Resources

M3 – Resource Allocation

Engineering Leaders• Define resource needs and timing

Steering Team• Secure commitment of resources (people, tools)• Time for training and redesigning the product

Jan Mar May July Sept NovDesign

ManufacturingPurchasing

Suppliers

M4 - Project ExecutionThe biggest phase

• M4.1 - Signature of baseline product • M4.2 - Evaluation of baseline product with DFMA tools• M4.3 - Set formal goals: Part Count, Assembly Time, Cost• M4.4 - Design new product, use DFMA tools new design• M4.5 - Validation of product function

Design Engineers• Formalize product functionality• Create Pareto of part count by part type• Create Pareto of cost by subassembly

Manufacturing Engineers• Define features that create cost

Pareto Chart of Part Count by Part Type for your product

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ners

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Main

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Structu

ral

Nu

mb

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f P

arts

0%

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40%

60%

80%

100%

HT2000LHF Primary Component Cost Pareto

1717.74

833.88 817.34 809.84 788.71

663.37

532.45

400.73

333.46 322.50288.12 285.75

197.03 192.22160.27

124.85 102.09 89.63 70.0037.73

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Baseline Design New DesignBaseline Product

Product FunctionPart Count by Part Type

M4.1 - Signature of baseline product and process

Features That Create CostFeature CostDiameter over 2" Requires larger machineLength over 3" Requires a new value streamholes smaller than 0.010" high cycle time, low process yieldsmall radii high tooling costwelding high labor, cycle time, low yield

M4.2 - Evaluation of baseline product with DFMA tools

Design Engineers• Build the baseline design• Score the baseline design with DFMA tools

M4.3 - Formalize goals: Part Count, Assembly Time, Cost

Design Engineering Leaders

• Set formal part count goals

• Set formal labor time goals

• Set formal cost savings goals

• Estimate Savings

• Define Design approach (based on signature of baseline)

• Inform M4.4 design work

Formalized Goals Part Count: 60 (40% reduction) Labor Time: 30 minutes (50% reduction)

Cost : $650 (35% reduction)

Volume: 100,000 per year Estimated Savings: $350,000 per year

Design Approach• Redesign highest cost subassemblies• Reduce fasteners• Reduce connectors• Stress analysis to reduce material• More injection molding• New materials• New manufacturing process

M4.4 – Design Work and DFMA Tools on New Product

Design Engineers• Design the new product• Evaluate new product with DFMA tools• Present metrics

0.49

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Baseline Gas Module

Re

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Goal – 0.50(50% less than Baseline)

Part Count1353

717

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400

600

800

1000

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1400

Generation 2 Baseline 1

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Goal – 675 parts(50% reduction)

Baseline ProductNew ProductNew Product Baseline Product

Part Count Cost

M4.5 - Validation of product function

Design Engineers• Test new product to verify product functionality• Test new product to verify robustness

0

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New Design Baseline Design

Product Function

Baseline ProductNew Product

M5 – Design Review

Design Engineers• Present product functionality data• Present product robustness data• Present metrics

– Cost, part count, labor time

• Present assembly sequence

Engineering Leaders• Recommend go-forward plan

Steering Team• Decide on go-forward plan

– Launch product, cut into production, do another project, stop

M 1Goal Setting

M 2Project Selection & Planning

M 3Resource Allocation

M 4Project Execution

M 5Design Review

Example Project Portfolio

$150

$100$70 $60 $50 $40 $30

$300

$200

$650

$750

$820

$880

$930

$970$1,000

$500

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

Project 1 Project 2 Project 3 Project 4 Project 5 Project 6 Project 7 Project 8 Project 9

Ind

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in t

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$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

Po

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s (

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Savings Target

An Example Project Portfolio

Pareto Chart of Part Count by Part Type for your product

668

16169 61 34 24

0100200300400500600700800

Faste

ners

Connec

tors

Inte

rface

/Pro

tectio

n

Main

Par

t

Lable

s

Structu

ral

Nu

mb

er o

f P

arts

0%

20%

40%

60%

80%

100%

HT2000LHF Primary Component Cost Pareto

1717.74

833.88 817.34 809.84 788.71

663.37

532.45

400.73

333.46 322.50288.12 285.75

197.03 192.22160.27

124.85 102.09 89.63 70.0037.73

0.00

200.00

400.00

600.00

800.00

1000.00

1200.00

1400.00

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M 4.1Signature of

Baseline Product & Process

M 4.2DFMA tools

on Baseline Design

M 4.3Goals: Part Count, Assembly Time

Design Approach

Part Count: 60 (40% reduction) Labor Time: 30 minutes (50% reduction)

Cost : $650 (35% reduction)

Volume: 100,000 per yearEstimated Savings: $350,000 per year

Part Count: 100 parts Labor Time: 60 minutes

Cost: $1,000 Volume: 100,000 per year

Design Approach• Highest cost subassemblies first• Reduce fasteners• Reduce connectors• Stress analysis to reduce material• More injection molding• New materials• New manufacturing process

M 4.4DFMA Tools on

New Design

M 4.5Validation of

Product Function

0.49

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0.4

0.6

0.8

1.0

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Generation 2 Follow-on GasModule

Baseline Gas ModuleR

ela

tiv

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COST

Goal – 0.50(50% less than Baseline)

Part Count1353

717

0

200

400

600

800

1000

1200

1400

Generation 2 Baseline 1

Nu

mb

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of P

arts

Goal – 675 parts(50% reduction)

0

20

40

60

80

100

Baseline Design New Design

Estimated Savings$350,000 per year

Part Count By Part Type

Cost by Sub-Assembly

0

20

40

60

80

100

New Design Baseline Design

Product Function

Non-Value Added Labor

Parts, Labor Cost

Project Savings

Project Resources

DFA of existing sub assemblies

DFA of existing products

DFA/DFM in New Product Development20-50% savings

Purchasing

Suppliers

Manufacturing2% savings

5% savings

15% savings

10% savings

Purchasing, Engineering,

Manufacturing, Suppliers

Purchasing, Engineering.

Assembly, Suppliers

Almost Everyone

Purchasing, Engineering.

Assembly, Suppliers

Opportunistic

SystematicSystematic

Opportunistic

DFM for Target Costing, Cost Negotiation

DFM of existing parts (design change)

Savings and Resources

Jan Mar May July Sept NovDesign

ManufacturingPurchasing

Suppliers

0

100

200

300

400

500

600

2009 2010 2011 2012 2013 2014

Year

Pro

fits

CompanyProfitability

Goals

Feature CostDiameter over 2" Requires larger machineLength over 3" Requires a new value streamholes smaller than 0.010" high cycle time, low process yieldsmall radii high tooling cost

Features That Create Cost

Product Function

• Clear goals – company profitability• Clear roles and responsibilities

– E.g., Lean Black Belts, Six Sigma Black Belts, DFMA Black Belts

• Well established business processes and metrics– Project selection, chartering, resourcing– Review mechanisms

• Clear accountability• All the supporting pieces, not just the toolbox

– Six Sigma is not Minitab– Lean is not value stream mapping– Systematic DFMA Deployment is not just DFMA toolbox

• All the Quadrants– Organization, infrastructure, business processes, tools

Big FinishSystematic MethodologiesLean, Six Sigma, DFMA Deployment

• Our children must learn how to do manufacturing if we are to have a secure economy

• Systematic DFMA Deployment is a credible approach to resurrecting a profitable US industrial base.

• I hope you take something from this work that helps you improve your part of the US industrial base.

The Future