Manufacturing capacity expansion activity within the component manufacturing (CM) industry for wood trusses and wall panels is at a fever pitch. The overwhelming majority of CMs have the same limited capacity issue trying to keep up with sales, which led to excellent record-breaking sales volumes and profits last year (see “Record-Breaking EBITA Exceeded Mid-Twenties for Many Component Manufacturing for 2021.”) Currently, this need for expansion has now pushed most equipment vendors’ sales for new equipment orders to 2023. Sadly, many CMs are making costly errors in their planning and investments.
New Equipment and Building Facilities — The Dark Side
From the moment the contract is signed, it is easy to foresee many CMs having unnecessary capacity constraints within the overall processes because of the equipment selected, the equipment set up, and the design of the new building facility.
In the past, more than one client has told me they thought their vendor misled them about the capabilities of the new automated equipment they purchased. From my perspective, I could see why they were not achieving the results they were promised. The same complaints will happen to many when the new equipment does not meet expectations. It is not enough to purchase new automated equipment. The entire material process system also needs to be upgraded, along with different methods of processing the work being done.
What appears to be simple, such as upgrading a truss assembly table with auto-pucks, creates many other issues that need to be addressed. Here is a hint: When adding any new equipment into the manufacturing process, start in the design department and work your way through the entire manufacturing process—the little details matter. Too many CMs overlook all the other equipment, material flow, and processes that need to be upgraded or improved upon when adding new equipment to achieve the desired results.
New manufacturing buildings are being built with severe limitations and absolutely no ability to expand in the future. Too many CM professionals with decades of professional experience are mistaken about what is best for new manufacturing building designs.
Case Study from Recent Client
A CM requested from their equipment vendor a new building design with an equipment layout for their pending new production expansion. Keep in mind that the client was spending millions on the new building and new equipment. He wanted the best possible overall system. The vendor was all too eager to provide this new building layout, and, at first glance, it looked straightforward from the CM’s perspective. However, I explained how the new manufacturing building could not be expanded in the future for additional capacity beyond the current request. And quite frankly, the design of the building was certainly not the best in many aspects. I could see many inefficiencies that could have been easily avoided, such as material flow and unnecessary congestion in work areas. The client was shocked and had never been shown how industrial engineering principles would create a better system and manufacturing building, which would meet their current and future needs. Lean and Six Sigma training is not enough. When designing a new manufacturing facility, you should always seek advisement from those with an industrial engineering background and experience within the CM industry. Spending a few thousand dollars to get it right can easily save you millions.
Example of Good Intentions Gone Wrong
Just-In-Time (JIT) is one of the most misunderstood and misapplied lean manufacturing tools. When JIT is appropriately used, it is very effective for saving money and improving processes. But when misused, I cannot emphasize enough how determinantal this one tool can be to any CM operation. For example, see my recent article on what more than one equipment vendor is recommending to their customers.
Regardless of their good intentions, many of the CM decision makers' assumptions and vendor's recommendations will cost millions in future lost revenues and inefficiencies of labor. One should be very cautious of the so-called “free” advice, which may not be so free. For the comparable minuscule investment, perhaps an unbiased 3rd party review of your expansion plans that has no emotional attachment or financial gain for the choices your group is making might be very well worth the investment.
