22-Mec-B5 Product Design and Development · December 2016

Question 5 of 7: Design, Materials, Processes and Canadian Productivity

Nivaar worked solution (AI-drafted; not reviewed by a licensed engineer)

Question 5: Design, Materials, Processes and Canadian Productivity (15 marks)

Question text not reproduced: the examination questions are © Engineers and Geoscientists BC. Open the official past paper (linked at the top of this page) to read the question, then follow the worked solution below.

Productivity is output divided by input. Labour productivity is output per hour worked; multifactor productivity divides real output by a bundle of labour, materials, energy and capital services. Canada’s difficulty, as Statistics Canada and the OECD both report it, is not that Canadians work less but that output per hour has grown more slowly than in peer economies, driven by lower capital intensity per worker, slower diffusion of new technology into small and medium firms, and a smaller share of output in high value-added products. Every one of those three is a design problem before it is a policy problem, because a designer sets both the numerator (what the product is worth) and the denominator (how much labour, material and capital it takes to make it).

A — How design enhances productivity (6 marks)

Design acts on productivity in five distinct ways. First, it removes work content: the DFMA reasoning of Question 2 deletes parts and the operations attached to them, and unlike a plant-floor efficiency programme the saving is permanent and needs no supervision. Second, it concentrates volume through platforms and modularity: a common clamp module across six rack variants means one tool, one supplier, one set-up and six times the learning-curve progress, and it collapses changeover time, which is pure lost capacity. Third, it makes the product suitable for the capital equipment available — designing for automated handling, for in-line test, and for tolerances the existing machines can hold is what allows a firm to raise capital intensity without raising scrap. Fourth, it eliminates rework at its source: concurrent engineering, early supplier involvement and a stable specification cut engineering change orders, and an ECO after tooling is among the most expensive events in a programme. Fifth, and most important for the Canadian argument, design raises the numerator: productivity measured as value added per hour improves just as much by making a product worth more as by making it faster, and moving from a commodity rack to a designed, branded, higher-performing one is the lever a small economy can actually pull.

Given. The rack plant of Question 1 builds 24,000 units a year using 18,000 direct labour hours, of which assembly is 9.5 min per unit. The DFMA redesign takes assembly to 5.5 min per unit. At constant prices the annual output is valued at $329 per unit, and the input bundle is labour at $42 per hour, materials, energy and capital services.

Find. Labour productivity, multifactor productivity and the capacity released by improved equipment effectiveness, before and after.

1. Compute labour productivity. Assembly consumes $9.5\times 24{,}000/60=3{,}800$ h before and $5.5\times 24{,}000/60=2{,}200$ h after, so total direct hours fall to 16,400. Then$$LP_0=\frac{24{,}000}{18{,}000}=1.333,\qquad LP_1=\frac{24{,}000}{16{,}400}=1.463$$units per hour, a gain of 9.76 % from a design change alone, with no new equipment and no change in how hard anyone works.
2. Compute multifactor productivity at constant prices. Real output is held at the pre-change price so that a price cut is not mistaken for a productivity loss: $24{,}000\times 329=7{,}896{,}000$ dollars. The input bundles total $18{,}000\times 42+1{,}050{,}000+95{,}000+420{,}000=2{,}321{,}000$ and $16{,}400\times 42+912{,}000+78{,}000+455{,}000=2{,}133{,}800$ dollars, so$$MFP_0=\frac{7{,}896{,}000}{2{,}321{,}000}=3.402,\qquad MFP_1=\frac{7{,}896{,}000}{2{,}133{,}800}=3.700$$an 8.77 % improvement even after paying for the extra capital the new extrusion die represents.
3. Convert equipment effectiveness into released capacity. Overall equipment effectiveness is the product of availability, performance and quality, $OEE=A\times P\times Q$:$$OEE_0=0.82\times 0.88\times 0.94=0.678,\qquad OEE_1=0.90\times 0.93\times 0.98=0.820$$so the same assets can now deliver $24{,}000\times 0.820/0.678=29{,}023$ units. Collecting the three measures,$$\boxed{LP:\ +9.8\%,\qquad MFP:\ +8.8\%,\qquad \text{capacity}:\ +20.9\%}$$all obtained without hiring anyone or building a new plant.

B — How materials innovation improves productivity (5 marks)

Materials raise productivity through four mechanisms, and only the first is the obvious one. Higher specific properties let sections be thinner, so less material is bought, less is moved and less is formed; the rack’s move from a steel weldment to a 6061-T6 extrusion took 1.7 kg off the part and $138,000 a year off the material bill at constant output. Near-net-shape materials and stock forms delete whole operations: an extrusion arrives with its final cross-section, so the press, the weld fixture, the weld and the weld dressing all disappear, and yield rises because scrap falls from 12 % to 4 %. Better processability raises the rate of the operations that remain — free-machining grades, controlled-inclusion steels and coated carbide or CBN tooling all act through Taylor’s tool-life relation $VT^{n}=C$, where a higher constant $C$ means a higher cutting speed at the same tool life, and cutting speed is throughput. Materials that carry their own finish remove secondary processes: pre-coated coil, self-coloured and UV-stable polymers, and anodisable alloys eliminate a paint line with its ovens, its energy, its work-in-process and its rework loop. There is a fifth, slower mechanism worth naming: new materials such as fibre composites and printable alloys enable products that could not previously exist, and that raises value added per hour through the numerator rather than the denominator, which is precisely where Canada’s gap lies.

C — How manufacturing-process innovation improves productivity (4 marks)

Process innovation acts on the three terms of overall equipment effectiveness directly. Availability rises with quick changeover (single-minute exchange of die), condition monitoring and predictive maintenance, and tooling made by additive methods in days rather than weeks — the rack line moved from 0.82 to 0.90 largely through changeover reduction. Performance rises with higher-rate processes and automation: servo presses, multi-axis machining that replaces four set-ups with one, robotic material handling, and the removal of the walking and waiting that dominates most manual cycles. Quality rises with in-process measurement and closed-loop control, poka-yoke fixtures that make a wrong assembly physically impossible, and statistical process control that catches drift before it makes scrap; 0.94 to 0.98 was worth more than it looks, because every rejected unit had already consumed all of its material and labour. Two broader moves belong here as well: additive manufacture collapses the tooling lead time that gates every new product introduction, and digital integration — model-based definition, a single digital thread from CAD through CAM to inspection, and shop-floor data collection — removes the transcription errors and the information waiting time that no amount of machine speed can recover. Together these took the line from 67.8 % to 82.0 % effectiveness, which is 5,023 more units a year from assets already owned.