Manufacturing assistance center brings new initiative to traditional manufacturing
Bopaya Bidanda and David Cleland
For the greater part of the 20th century, American manufacturing dominated the world. During the last several decades, however, we have seen that domination steadily decline as our leadership position was lost to overseas competitors. Western Pennsylvania has been especially hard hit by the dramatic decline of traditional heavy manufacturing. It has been estimated that over 125,000 manufacturing jobs have been lost over the past decade alone. The Manufacturing Assistance Center (MAC) is an initiative designed to help Western Pennsylvania recover its status as a world leader in manufacturing.
The Rationale for a MAC
Even though small and medium-sized organizations (SMO) account for a significant portion of a nation's economy, their importance often goes unrecognized. For example, there are over 360,000 manufacturers in the United States, employing over eight million workers and generating more than half the manufactured value in the U.S. Furthermore, small companies of fewer than 100 employees are expected to account for eight out of ten new jobs!
In spite of the need to incorporate new, advanced technology and become competitive on a global level, SMOs are faced with many challenges—financial, organizational, managerial. SMO managers typically do not have enough time to address even “firefighting” issues. Strategy, managerial education, and technological planning often fall by the wayside during the frenetic routine of everyday tasks.
SMOs have traditionally not had access to external resources for objective assessments of new technologies—consulting organizations cater to large companies and salespeople obviously have a biased view of the relevance of the technology they represent. Thus, the thesis of the MAC project was based on the concept of shared manufacturing—that small manufacturers from different environments have similar problems. Networking different manufacturers with different needs and sharing modern manufacturing technologies, facilities, equipment, and management systems realizes the synergistic benefits of sharing resources.
This concept can be implemented by establishing industry-university-community networks of MACs that allow sharing of resources in an objective forum. Governments in industrialized nations like Germany, Italy, France, and Japan have had a long history in providing the necessary infrastructure for networks based on shared manufacturing to flourish. For example, Japan has 169 kohsetsushi (technology assistance) centers to work with SMOs. The government provides about 500 million dollars in annual spending for these centers. For a small fee, companies use equipment at the center that they cannot afford to purchase on their own and consult experts about special problems. The concept of shared manufacturing is still in its infancy in the U.S. and the MAC project is one of the first such centers here.
A detailed analysis of existing shared manufacturing projects revealed that the difference between the successful and not-so-successful centers is often a function of the amount of planning and needs assessment conducted prior to the formal start of a project. We viewed the MAC project from the perspective of Cooper's new product development model, containing seven distinct activities. Each of the seven stages in this model consists of several activities and is described below.
Stage 1 – Recognition of Need. The principle motivation came from two primary sources: the documented needs of local manufacturing establishments and the academic need to inject the flavor of “real-life manufacturing” into the university curriculum.
Stage 2 – Preliminary Assessment. Here, information was collected to assess the existing manufacturing profile of the study area. This enabled the project team to identify the target market's segment from the abundance of public domain information available on the area's manufacturing demographics. It was found that focusing on the metalworking and tool and die industry would give a MAC the greatest “bang for the buck.”
Stage 3 – Concept Development. The objective at this stage was to gain a detailed understanding of the users of the Center and the specific needs of prospective users. The first step began with the detailed development of a database of potential users from the population of SMOs in the seven-county region contiguous to Pittsburgh, Pennsylvania. A detailed survey that elicited the required information was mailed—the overall rate of return was 60 percent. The overwhelming majority of respondents (80 percent) expressed a strong interest in the idea of establishing a MAC in the area. Manufacturers who responded identified their major challenges as:
- Quality and cost
- Adapting new technology
- Foreign competition
- Hiring and maintaining a skilled workforce
- Engineering and manufacturing cycle time reduction
- Continuous improvement.
Figure 1. Laboratories at the MAC
Stages 4 and 5 – Development and Testing. A preliminary configuration for the MAC emerged from the market research, the set of equipment most suitable for the MAC and within associated laboratories are shown in Figure 1. Additionally, manufacturers felt that in order to best meet their needs the MAC should concentrate on:
- Pilot manufacturing
- Product and process development
- Employee and supervisory training
- Showcasing new equipment and/or products
- Studying new manufacturing processes and technologies
- Studying new management techniques
- Studying new quality management technologies.
An important part of this phase was the identification of funding sources to design, build, test and start-up the MAC. Funding sources included federal sources such the U.S. Department of Commerce (Economic Development Administration), state sources such as the Ben Franklin Program, and private industry, in addition to significant internal university resources.
After funding was secured, additional work packages identified and implemented included:
- Final machine tool and system specification
- Preparation of RFP for design, engineering, and construction
- Review of proposals and negotiation, and award of contracts
- Installation of machine tools and other equipment
- Design, testing, and implementation of the management system of the plant.
Stages 6 and 7 – Trial and Launch. Previous experiences indicate that long-term and evolutionary projects require a significant amount of time of both the plant and the strategy used. The major activities that were accomplished during this stage include:
- Pilot operation of the MAC
- Final negotiation and execution of working agreements with local users
- Evaluation of the efficacy of the MAC by local manufacturers
- Moving along the road to self-sufficiency.
The Organizational Challenges
As a strategic initiative of the University of Pittsburgh, the MAC is assigned to the Industrial Engineering Department of the School of Engineering. Two co-directors, who are members of the faculty, are responsible for the strategic management of this Center, drawing on resources from the University's offices for the overall logistic support of the Center. The co-directors are also leaders of a MAC team that has been designated and organized to provide a cadre of people dedicated to the strategic and operational management of the MAC. Both full-time professionals and graduate students provide professional assistance to the MAC team. Graduate students who are assigned to work at the MAC look on such assignments favorably as it exposes them to both the technical and managerial aspects of a working factory dedicated to assist small and mid-size manufacturing firms, provide a teaching factory for students and a research factory for faculty.
A systems integrator and staff have responsibility for the operational management of the MAC's factory. This staff includes manufacturing engineers, machinists, a software engineer, and marketing and administrative personnel.
As would be expected, there are many diverse stakeholders that have an interest in how well the MAC is managed and how well it is able to deliver value to key stakeholders. These stakeholders include employees, users, students, faculty, University administrators, regulators, professional organizations, vendors, original-equipment manufacturers, and federal, state, and private funding agencies. Although the MAC has a goal of becoming self-sufficient in five to seven years, funding grants are currently an important source for both strategic and operational resources.
The diversity of MAC stakeholders, and the need to satisfy these stakeholders, has given rise to the creation and operation of a “virtual organization” for the MAC—in the sense that the organizational design for the MAC includes anyone or any agency that can contribute to the well-being of this Center. Residual authority and responsibility for the continued success of the MAC require that the project team go anywhere to get the resources and support required to make the MAC a reality. In doing so, the MAC team has drawn on a wide variety of sources for support and, in so doing, manages a virtual organization of stakeholders who provide support to the Center through a multi-dimensional matrix organization.
Working in the context of this matrix organization required extraordinary attention to the de facto aspects of authority—in the sense that the MAC co-directors' ability to influence key stakeholders to support the MAC was singularly important to its success. By continually communicating with these stakeholders, building and maintaining strategic alliances with them, and making them a part of the MAC project paid extraordinary dividends in their unwavering support of the MAC initiative. Without such support, the MAC would not have enjoyed the initial success that it has.
To facilitate the virtual organization of the MAC, strategic partnerships have been consummated with key stakeholders who are willing to dedicate some of their resources to the MAC to ensure its effectiveness in providing a shared manufacturing facility for Western Pennsylvania.
The Ongoing MAC Project
The MAC has been fully operational since November 1994. The investment has begun to pay off for the MAC stakeholders in Western Pennsylvania. In addition to providing assistance to small and mid-sized manufacturers through technical assistance projects, workshops, and training programs, a number of start-up and infant manufacturing businesses have used the MAC to develop their capabilities in manufacturing technology. The work of the MAC has facilitated competitive improvements in large companies, enhanced strategic partnerships, supported academic institutions, and provided business for vendors.
Equipment at the MAC is currently being used by local manufacturers to learn about the latest technology in equipment used in the digital factory— the current configuration of the MAC's technological capability. In addition, the MAC is an active member of the Western Pennsylvania Manufacturing Extension Program, a federally funded program dedicated to assisting former local DOD manufacturers to convert to competitive non-defense work.
The initial success of the MAC is apparent. Part of the success can be attributed to the strong need for such services in Southwestern Pennsylvania. The support provided by a major university has been noteworthy in the success enjoyed by this Center. Thus far, the image of the MAC has been highly positive because of the outstanding credentials and support provided by the MAC project team. Nevertheless, the MAC continues to face several strategic issues. A strategic issue is a condition or circumstance, either internal or external, that will have a significant impact on the successful operation of this Center: such as, continued user acceptance; adequate working capital; continued stakeholder support; opportunity for self-sufficiency in five to seven years; additional funding for capital equipment; and continued support by University faculty as a site for manufacturing systems technology research.
The conceptualization, design, and development of the MAC has been a challenging and worthwhile endeavor for the University of Pittsburgh project team. As the MAC continues to enjoy success, it will be an outstanding example of how a major university can make meaningful and measurable contributions in support of its industrial community responsibilities.
Drs. David Cleland and Bopaya Bidanda co-founded the MAC and currently serve as co-directors of the MAC. Portions of this article were reproduced and drawn from previous papers on the MAC project that include:
Dharwadkar, S., Bidanda, B., and Cleland, D. 1994. “Shared Manufacturing Assistance Center Project: A New Product Development.” Chapter in The Global Project Management Handbook. Ed. Cleland, D. and Gareis, R. McGraw-Hill.
The Manufacturing Assistance Center – A New Concept in Shared Technology. 1993. The Ben Franklin Innovator (Winter).
Bopaya Bidanda, Ph.D., is associate professor and ALCOA Manufacturing Fellow at the University of Pittsburgh. He has published widely and currently serves as the president of the Pittsburgh Chapter of the Institute of Industrial Engineers.
David Cleland, Ph.D., is Ernest E. Roth Professor of Engineering Management at the University of Pittsburgh and a PMI Fellow. He is the author and editor of 26 books and numerous journal and magazine articles.
PM Network • August 1995
PMI research shows project teams that draw from an array of perspectives and skillsets deliver powerful outcomes.