Hewlett Packard Fort Collins Essays

Hewlett Packard Fort Collins Essays Hewlett Packard Fort Collins Essay Hewlett Packard Fort Collins Essay Fort Collins Division (FCD) was established In February of 1977, headed by Tom Kelley, and known in the beginning as a Calculator Products Group. One year later, the Ft Collins Division produced the HP-250 small business computer system and became known as the Desktop Computer Division (DCD) in august of the same year. In 1979, DCD was HPs most profitable division, reaching revenue of $200M. Their next big leap came in 1983 with the combination of the allied, yet struggling, Engineering Systems Division (ESD). At the time, the ESD was producing the 500 series line of computers. The two combined to form the Fort Collins System Division (FCSD) and produced the first highly-successful 300 series computers. Three years later, the Fort Collins system division reached revenue of 475M in 1988. Introduction Hewlett-Packard is addressing the best approach in manufacturing an upcoming line of 9000HP computers. They assess previously used techniques such as â€Å"repetitive Just-in-Time manufacturing† and â€Å"low volume manufacturing† for the future complex, low-level production line. There are many ways to adapt repetitive manufacturing concepts to lower volume complex products. The following outlines the assessment, incorporation, and feedback experienced by Hewlett-Packard when adopting a JIT manufacturing concept for their line of complex, low-volume, 9000HP computer line. Methodology A common approach to JIT repetitive manufacturing is the progressive assembly line consisting of man and or machine resources. In order to prevent bottlenecks and inventories, these lines are sought to be balanced so that time at each station is equal. The sustainability of a balanced progressive assembly line becomes more difficult with the complexity of the product. Progressive assembly lines are also constrained by the number of operators. This number bust be less than or equal to your number of operators to ensure that each operation or set of operations has at least one resource to perform the task. Additionally, routing must be established that allows the product to flow through all operations. Materials as well as labor are often tracked with work orders rather than batch work orders found in traditional Material Requirements Planning systems (MRP). The complexity of the 9000HP computer line would not typically suite repetitive or JIT manufacturing. Characteristics of progressive assembly lines can be referenced in Figure 1 below. Figure 1: Progressive Assembly Line Visual Adversely, low volume manufacturing areas are not concerned with line balancing because each operation is done in batch rather than piece-part as result of variety and or complexity of builds. These batch quantities are then moved to the next operation’s queue or placed into stock. When encountering a shortage, low volume batch manufacturing can still progress because of the independence of the operations. Unlike progressive assembly lines, there are typically many operations to be performed by a fewer number of people. This allows for one operator to work on one job until completion of the batch, flow the material onwards, and work on another. Lower volume batch processes can be seen in Figure 2 below. Figure 2: Low Volume Batch Processing In order to accomplish JIT manufacturing with low volume, the proper precautions must be regarded and the issues discussed above must be addressed. The list below outlines the greatest differences between low volume batch processes and high volume repetitive manufacturing: * Operation times measured in hours/days * Flow is disconnected * Operations disconnected * People cross-trained in operations * Number of people lt;= Number of operations * Line balance is not a factor * Work order batch accounting used to track material and labor * Process is flexible and can build various products * Batch scheduling The desktop computer family for the 9000HP line contains six million configurations made from nineteen different logical choices, twenty-seven major sub assemblies. The product family has 3,000 part numbers excluding parts needed for more intricate circuit board assemblies and cathode ray tube parts. The assembly of a HP9000 requires 10-20 hours of labor, depending on the configuration, and initial cycle time of approximately 40 workings hours (or fifty-two times per year). This cycle time includes all operations performed, starting with the printed circuit operation and ending with shipment. Hewlett-Packard determined that a traditional batch system was undesirable because of the lengthy cycle times, process inflexibility, and inventory implications. However, the complexity of the 9000HP coupled with low volume builds proves also poor for a progressive assembly line. Conclusively, by isolating the differences between JIT assembly and low volume batching, HP began their approach to a continuous flow customized production technique. The installation of a kanban system and material requirements planning are utilized for shop floor scheduling and purchasing while eliminating the need of work orders. In 1980, HP successfully links the benefits of JIT manufacturing and total quality control (TQC) during an implementation of three separate phases. Abstract Phase I of manufacturing the HP9000 began with a layout of tactics that HP set out to emulate. By minimizing vendors, HP would be able to ensuring material availability. They also wanted to ensure process control by developing quality procedures and rapid feedback problems. Finally and perhaps most importantly, selecting machinery and equipment to minimize setup time while maximizing flexibility and allowing for lot sizes of one. Therefore, Phase I of the HP9000 JIT-TQC implementation consisted of a closed-loop transporter and carousel for stockroom material located on the production line as seen in Figure 3. By installing the transporter and carousel, HP would be able to build the complex product, maintain flexibility, and achieve one at a time production with kanban control. Figure 3: HP9000 Line Continuous Flow Customized Production HP experienced much success with the installation of Phase I such as; low and sustained lot sizes and a decrease of work in process by 50 percent on average. However, overwhelming concern for labor tracking by operation caused the Phase I approach to be abandoned during the incorporation of Phase II just twenty-one months later. Changes in the company allowed for reexamination of the JIT-TQC link and the implementation of Phase II. The Fort Collins Division shuffled their tactics and simplified their objectives to achieve improvement. The decision was made to eliminate the transporter and carousel to save space and improve asset turnover. HP also set out to make TQC efforts more rigorous and use kanban to link final assembly and circuit board operations under JIT principles. Results of Phase II included the sustained low kanban quantities, averaging one and sometimes achieving zero. Output has also risen substantially and the induction of more rigorous quality control proved to be successful with the causes of waste and poor quality eliminated. This has consequently lead to substantial rises in output. Shortly after the implementation of Phase II, Hewlett-Packard Fort Collins Division redefined their manufacturing objectives to better sustain profitability, thus giving rise to the third and final phase – Phase III. New objectives included; maximizing product quality, maximizing product delivery, and minimizing product cost. HP wanted to extend their vision statement and convert all manufacturing to JIT and even begin JIT kanban with suppliers. Conclusion Results of Phase III had not yet been published but today, Hewlett-Packard has successfully converted all product lines to JIT manufacturing and reduced the cost of inventory held from $670,000 to a mere $20,000 within their circuit board line specifically. HP’s influence spans over nearly six decades and even with the company’s humble beginnings, HP has grown into a computer empire; influencing several countries and industries over the course of their existence.