In April, manufacturing CEOs convened in Indianapolis to connect with and learn from top-performing peers and to share insights and experiences on leading American manufacturing’s comeback at Chief Executive’s 3rd annual Smart Manufacturing Summit. The articles to follow aim to capture some of the learnings about additive manufacturing, robotics, automation and mobile connectivity that participants shared.
These comments are excerpted from J.P. Donlon’s interview with Cummins Chairman and CEO Tom Linebarger, at the 2015 Smart Manufacturing Summit in April, in Indianapolis, Indiana.
Q: Founded in 1919, Cummins now has more than 80 plants making diesel and natural gas engines, for companies around the world. How has the company’s manufacturing process evolved?
A: In the 1950s, Cummins had a few plants making a few engines, primarily for North American trucking companies. Today, our supply base and our customer base are both global, so the field of play is completely different and the level of complexity is exponentially more difficult. Our plant managers used to have huge accountability; the plant manager was kind of the center of the universe. He or she was responsible for quality, for people, for delivery, and they were the ones that made sure that our product was what we said it would be and it go there on time.
The challenge now is all about the supply chain. That means that any effort by a plant manager to fix a technical problem in one plant has as much potential to make things worse as to make things better. So most of our focus around manufacturing excellence is in trying to make the total supply chain work. A lot of how the system works together is about IT, of course, information-sharing and commonality.
If you standardize everything, you don’t get innovation. If you let innovation run completely free, you don’t get enough standardization to be able to run the system effectively. That’s where a lot of our focus is today.
Q: What is your core manufacturing challenge?
A: In the commercial engine business, we don’t have huge production runs. The largest single thing we manufacture, the Dodge Ram pick-up [engine], is 100,000 units. Most things that we make are a few thousand per year or a dozen a year. Variation is why people buy from us. On the other hand, we need scale. Almost all of our customers also make engines. We have to be able to do the things cheaper, more places and with more technology than they can or we’re not needed.
That means we’re always looking for ways to provide variety at scale. That’s the core challenge. A lot of our investment in manufacturing technologies are efforts to deal with variation in a way that is less costly and high quality, ways to be able to deliver on short lead times and get to scale in terms of what suppliers we buy from and how we engineer the product.
Q: Why is reducing cycle time so critical for Cummins?
A: We have learned that if we have a long lead time, people change their orders within that period, which creates chaos. So we work to reduce the lead time to the point where they don’t have time to change their minds. In some cases, the reason they change is that they base their orders on forecasts of what they expect people to order from them.
If we can get our lead time inside these windows where the customers aren’t forecasting anymore, they’ve already got firm orders, there’s less chaos. Then we have to move that back to our suppliers so that they can get lead times that are inside our window of firm orders. Then there’s just less chaos and change in the entire chain.
How have technologies like additive manufacturing benefitted your process?
A: We’ve used additive manufacturing for years to make fast prototypes. We’re now pushing additive manufacturing in remanufacturing. It’s common for our customers to bring in old engines to salvage components. However, there’s often damage to the components. For example, particles sometimes get inside a turbocharger’s housing and chip the ends of turbine wheel. We used to throw away about 80 percent of turbine wheels, which are very expensive. Now we use additive manufacturing—a laser deposition, laser cladding process—to put material back on the tips of these wheels so we can re-machine the tips and salvage wheels that we would once have thrown away.
How is Cummins leveraging the Internet of Things?
A: Like many companies, we gather information in our manufacturing process that helps us from a supply chain and complexity point of view. We’re also using telematics [tracking and diagnostics] in the fields. Even though we test and model everything before a product launch, we still end up having issues to resolve when they finally get experienced by customers. With telematics, we can bring information from the sophisticated control systems and sensors on engines to a large database and query that database to solve issues much more quickly.
A few months ago, I looked at a map of the 20 largest customers around the world that showed which of our heavy-duty engines were experiencing a fault and listed all the fault codes. It’s very visual, so you can look and say, “Why are we having so many of those in this area? Is it the cold weather?” With our old system, which is still in use, dealers give us feedback, which we process through our warranty claims system. Then the warranty database brings up issues that are recurring. You can imagine the lag time.
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