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Flexible Manufacturing Systems: Cost Accounting Project

Free Management EssaysFlexible manufacturing systems are widely used in different fields for increasing flexibility of the manufacturing process, decreasing time and expenses. However, implementation of flexible manufacturing systems in real life in scale of a big country can lead to considerable technical, financial, and organizational issues. These issues form complicated tasks to managers. Below an example of the implementation of these systems in iron, steel, and manufacturing companies in India in the end of the 20th century will be provided.

The flexible manufacturing systems should be implemented gradually into the manufacturing process in order to minimize any negative effects on the managerial system of companies.

Theory, Definitions, and Basic Understandings

Flexible manufacturing systems are special manufacturing systems with some amount of flexibility. These systems enable companies to react to different predicted and unpredicted changes.

The main characteristic of flexible manufacturing systems is their flexibility. Manufacturing flexibility is an ability to work with different mixed parts. These parts can be mixed in different manners. Flexible manufacturing systems have the ability to adapt to changes of design of a product and volume of production. In other words, such systems can adapt to different external and internal changes, which have effect on value delivery in a cost-effective and timely manner. Flexibility allows corresponding to numerous unpredicted changes, which can lead to risks and threats to the whole manufacturing system.

There are two categories of flexibility: machine flexibility and routing flexibility. Flexible manufacturing systems with machine flexibility can be changed for manufacturing new production. Also, these manufacturing systems can change the order of performed operations. Flexible manufacturing systems with routing flexibility can use multiple machines in order to make the same operations on a part. These machines can adapt to such considerable changes as change of capacity, manufacturing capability, and manufactured volume.

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Content of Flexible Manufacturing Systems

Majority of flexible manufacturing systems have similar content. They consist of a group of processing stations controlled by an integrated computer control system and connected with each other by means of an automated storage and material handling systems. Such manufacturing systems have a wide and differentiated content: computer-controlled machines, robots, stand alone systems, numerical controlled machines (CNC), computers, instrumentation devices, sensors.

Use of robots in flexible manufacturing systems increases utilization and volume productivity. Usually, robotic cells (nodes) are placed along automatic guided vehicles or conveyors. Different combinations and placement of robotic cells will give different productivity of the full system. Material handling system enables movement of parts from one robotic cell to another. Finished parts are routed to special automatic inspection mode.

Inspection modes or inspection machines are usually stand-alone systems. These machines can operate independently, i.e. they can be disconnected from a distribution network and electric transmission. Automatic CNC machines are operated by precisely commands, which are encoded on a storage medium. Computers perform controlling operations in these machines. CNC systems use different programs for producing computer files, which are interpreted to extract the commands necessary for operating some particular mechanism through a post processor. Examples of such programs are computer-aided manufacturing (CAM) and computer-aided design (CAD). Automated CNC machines are connected with the material handling system. This is made for the optimization of the flow of parts. Also, these machines have the central control computer. Users of automatic CNC machines have an ability to control machine flow and material movements with the help of this computer.

Data traffic of flexible manufacturing systems contains short messages and large files. These messages and files come from different devices and nodes. Small-size files are represented by transmitted messages for machining data, status monitoring, instrument-to-instrument communications, and data reporting. Large-size files include executive software and other data.

Types of Flexible Manufacturing Systems

There are different types of flexible manufacturing systems: sequential flexible manufacturing systems; random flexible manufacturing systems; dedicated flexible manufacturing systems; engineering flexible manufacturing systems; and modular flexible manufacturing systems.

Sequential flexible manufacturing systems operate like a little batch flexible transfer line. These systems produce one-piece part batch type. After that, special planning and preparations are performed. Then, the next piece part batch type is produced. Random flexible manufacturing systems produce any random mix of piece part types at any period of time. Dedicated flexible manufacturing systems perform continuous production for extended periods of time. These systems have the same, but limited mix of piece part batch types. Engineering flexible manufacturing systems produce the same mix of part types throughout time of work. Modular flexible manufacturing systems provide users with wide capabilities in a stepwise fashion into any of the previous four types of flexible manufacturing systems.

Main Findings Concerning Flexible Manufacturing Systems

History of Flexible Manufacturing Systems

In the 1960s, the intensiveness and complexity of market competition grew rapidly. The increase of demand and growth of market forced manufacturers to find new ways of increasing quantity and quality of the manufactured production. They started to search for new methods of production, which will provide flexible and fast response to unpredicted changes in the market. The solution was found in the implementation of flexible manufacturing systems into the process of production.

The first flexible manufacturing system ‘System 24’ was presented in England in the 1960s (Profitable growth for all). This system produced light flat alloy components. ‘System 24’ could work without human operators under control of computers for 24 hours. In that period, flexible manufacturing systems were very complex and large. They contain numerous computer numerical controlled machines (CNC) and complex material handling system.

Flexible manufacturing system has developed greatly since that time. In 1989, about 1200 systems were used in manufacturing processes in different parts of the world (Directions of manufacturing system’s evolution from the flexibility level point of view). At that time, the most developed mechanisms have two or more computer numerical control machine tools. These tools were connected via materials handling system. A central computer controlled the manufacturing process. In 2000, the number of flexible manufacturing systems increased to about 3500 (Directions of manufacturing system’s evolution from the flexibility level point of view). Nowadays, these systems are used in different industries.

Flexible manufacturing systems have become widely implemented in different countries because of their revolutionary ideas of flexible manufacturing systems and their considerable positive impact on different industries and fields. These technologies have become extremely popular due to the revolutionary ideas pertaining to quality and consumer satisfaction and because of innovations made in manufacturing management.

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Application of Flexible Manufacturing Systems in Different Fields

Notwithstanding numerous issues described above, flexible manufacturing systems are very useful because machinery equipment can be used for different related purposes. For example, the same equipment can be used for manufacturing different parts for different models of goods or for manufacturing customized parts. Nowadays, the majority of flexible manufacturing systems are controlled by computers. Most changes in the manufacturing process are performed through entirely automated processes. This provides accuracy and decreases time of manufacturing.

One of the main goals of using flexible manufacturing systems is the ability to change time and process of manufacturing without decreasing the quality of the final product. These systems provide quick adaptation to changeable market conditions.

These systems have a very complex structure. They represent a set of integrated subsystems. This is made for several purposes. The first purpose is an ability to produce different components virtually at random. The second purpose is to be capable for working virtually unattended for a long time.

Flexible manufacturing systems have such characteristics as a changeable system structure and a fixed machine structure. These characteristics provide the ability to perform two or more operations and can be used for several purposes. That is why, the cost of such equipment may be higher than the cost of equipment designed to perform only one purpose. However, flexibility of these mechanisms helps users to save money. The same equipment may be used for manufacturing different products, different amounts of the same product and different parts of the product.

Flexible manufacturing systems are widely used in the production of a big amount of small sets of goods. Also, manufacturing of automobiles is an example of a flexible manufacturing system. Special equipment is used for attaching doors to sedan. The same equipment can be adjusted and used for attachment to sport cars or other models of the automobile. Big international automobile companies use flexible manufacturing systems in their manufacturing process for multipurpose operations. In 2004, Ford Motor reduced company’s expenses by about $ 2.5 billion by using flexible manufacturing systems in five Ford plants (Profitable growth for all). The company also saves money by manufacturing updated cars with the use of these systems. Moreover, these mechanisms provide the company and advantage to adapt to different customers’ preferences and any changes in world and regional automobile markets.

Notwithstanding the implementation of the flexible management system in the manufacturing process, the automobile industry of the USA loses its positions to the Japanese market.

At the same time, in the last several years flexible manufacturing systems are integrated into different fields with high competition. Among such fields, there is automotive manufacturing. High level of competition-enforced manufacturers to search for new ways to decrease expenses, increase profitability, and save quality of production. Metal Technologies Inc integrated flexible manufacturing systems into their manufacturing process for increasing automation of processes and product capabilities (Metal Technologies Inc. embraces flexible manufacturing systems for automation). Product capabilities became automated from stage of arrival of raw materials to the final stage of delivery of finished parts. The owner of this company, Doug Conrad, explained using of flexible manufacturing systems by the following: “You need machining centers that can leverage the full capabilities of a flexible manufacturing system by minimizing every instance of out-of-cut time while offering the flexibility necessary to produce a diversity of part materials and features. Without our Makino a81 horizontal machining centers, we simply couldn’t work as fluidly or as efficiently” (Metal Technologies Inc. embraces flexible manufacturing systems for automation). Nowadays, this company uses flexible manufacturing systems with a climate controlled quality inspection laboratory and robot loading. Such systems have become the element of globally competitive business.

Also, flexible manufacturing systems help to stand against competition from the side of manufacturers from low labor cost countries. These systems help to decrease intervention of operators and increase throughput of the manufacturing process.

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Advantages and Disadvantages of Flexible Manufacturing Systems

Flexible manufacturing systems have numerous advantages and disadvantages.

One of the main disadvantages is a high cost of flexible manufacturing machines. This cost is based on the complexity of mechanisms, which provides the ability to perform numerous purposes. The next disadvantage is substantial pre-planning of the manufacturing process. All details of this process should be pre-planned for the minimization of any delays, mistakes, inaccuracies, and failures. Also, people who operate flexible manufacturing systems should have sufficient knowledge and skills. Moreover, nowadays flexible manufacturing systems cannot adapt to all the possible changes

There are a lot of advantages of these systems. Flexible manufacturing systems lead to a considerable reduction of manufacturing costs. This reduction is based on the decrease of manufacturing time, human intervention into manufacturing process, decrease of mistakes and failures (due to better management control), and ability to adapt to different changes. The cost of final production is also decreased. At the same time, the quality of this production has become higher.

The main advantage of these systems is a rather high flexibility of management of manufacturing resources. Moreover, these mechanisms have high machine efficiency and labor productivity. Lead time has become shorter. Company can produce more goods of higher quality within less time with less human efforts and less expenses.

Flexible manufacturing systems have not only current benefits. These systems have numerous future benefits. Use of technology can make inspection 100% feasible. Computer diagnosis can guide work crews repairing features and improve estimation of failures of mechanisms. Human labor and human intervention will be minimized because all or almost all processes will be automated. Special robots that have some kind of textile sensing and vision can be widely implemented into flexible manufacturing systems. Computerization of production processes will be increased. Implementation of more sophisticated tools will support automation and computerization. Among other future benefits, there are decrease in the time of manufacturing and time of delivery of production from manufacturers to suppliers.

Flexible Manufacturing System Managerial Issues

Flexible manufacturing system is successfully used in different fields of economy. They help to decrease cost and time of production and increase flexibility of manufacturing. However, in a format of a big country, there can be some issues if flexible management systems are implemented. An example of such country will be India.

In 1987, the government of India faced a problem of considerably increasing demand. It was looking for ways to make the economy of the country more vibrant. In the next several years, industrial and trade policies of the country were considerably changed. These initiatives include liberalization of the Foreign Exchange Regulation Act (FERA), virtual scrapping of the industrial licensing, and Monopoly and Restrictive Trade Practices (MRTP) regulations, downward adjustment of the rupee value by over 21 percent, etc.

All these initiatives were supported with the reduction of tariffs on machinery by about 30% in 1992-1993 (Mahadevan, 1994). The import weight tariff was also decreased by about 30% (from 87% in 1990-1991 to 47% in 1993-1994). Iron and steel industries together with machine tools corporations were searching for new ways of manufacturing production. In 1989-1990, import and export of steel, iron, and machinery rapidly increased. That is why, domestic manufacturers were obliged to meet international standards. Also, they were obliged to keep prices on their production on a global level in order to be competitive on the international market. The situation became sharper because of the reduction of inner barriers. Big international companies (especially Japanese companies that offered high quality goods on low process) received free access to the national market of steel, iron, and machinery production. At the same time, Indian manufacturers faced problems in obtaining international standards for exporting their production. For example, ISO 9000 Certification is necessary for exporting goods into European Countries (Mahadevan, 1994). Indian manufacturers were striving to obtain this certification. So, companies in India were searching for new ways of manufacturing high quality production with a low cost, decreasing lead time, and cutting inventory investments. Implementation of flexible manufacturing systems seemed to be one of the best solutions.

Indian manufacturers faced numerous technical problems, financial issues, personnel issues, and organizational issues during the implementation of flexible manufacturing systems. Financial issues concern performance of an organization and economic well-being. Indian companies faced the high cost of flexible manufacturing systems. So, installation of these systems required big initial investments. At the same time, managers could not clearly predict efficiency of these investments, time of return, and risks of implementation of flexible manufacturing systems. The cost structure of companies was changed significantly because direct labor component was decreased and machines replaced people.

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Organizational issues concern the organizational value system, culture, and strategies. Managers of Indian companies had no certainty concerning the return of invested funds, necessary labor for performing manufacturing operations, and level of education of employees. Moreover, managers were obliged to find new workers of high technology backgrounds: software engineering, computers, and controls. These processes were supported by the creation of high technology maintenance systems.

Also, Indian companies faced considerable personal issues during the implementation of flexible manufacturing systems. The role of human employees decreased and companies were forced to lay off some workers. Employees were not evaluated by their manufacturing skills after implementation of flexible manufacturing systems. People were expected to monitor working of machines, but not to operate these machines. As mentioned above, managers were forced to hire new workers, which could prepare programs for flexible manufacturing systems and make plans and schedules. Indian companies were forced to implement new training methods and new managements systems.

One more issue is that the manufacturing process should be carefully planned in order to minimize any failures. Indian companies had no experience of such planning.

Conclusion on the Background of Different Studies

Flexible manufacturing systems can process a large amount of different parts simultaneously at the work station. At the same time, quantity of production can adapt to changeable inner and outer conditions like decrease or increase in demand. These systems have numerous positive sides, like high flexibility, lowering of expenses on manufacturing of goods, decrease of delays and failures. However, a real example of the implementation of flexible manufacturing systems in India was presented above. Companies faced considerable technical, financial, and operating issues.


Flexible manufacturing systems have numerous positive and negative sides. Implementation of these systems into the manufacturing process requires strict planning and scheduling of the process in order to minimize any issues described above. The companies should not switch to flexible manufacturing systems within a short period of time. These systems should be gradually implemented into the manufacturing process in order to dispose of any negative effects and failures.

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