Pictures of the Future      Spring 2008

Toward Factories that Optimize Themselves

Interview with Günther Schuh

Prof. Dr. Günther Schuh, 49, has been Chairman of the Production Systems department at the RWTH Aachen University in Germany since 2002 and is a member of the Board of Directors of the Fraunhofer Institute for Production Technology (IPT). He developed the concept of the "virtual factory" and has played a key role in motivating the discussion on "lean innovation." His most important research results include definitive methods and instruments for complexity management.

There is a growing trend toward individualized mass-market products. Why?

Schuh: Global products sold to customers in identical designs everywhere on earth are now only seen in the luxury segment, such as in expensive watches and cars. But all standard products are subject to regional and cultural influences. There are two broad trends that are dependent on the economic environment of a country. One trend is design to cost production in great volumes for large markets where the buyer has little money. Here, the principle of economies of scale takes effect. But in high-income countries like Germany, differentiated quality products take precedence. Here, the economies of scope come into play—in other words, customized products. But even in prosperous countries, customers don’t want to pay much more for their customized products.

How do you resolve this dilemma?

Schuh: Manufacturers strive for mass customization or individualized mass production. This means that kits or platforms pre-fabricated to the greatest extent possible are then refined. A prevalent notion here is the degree of commonality involved; this is the reuse or multiple use of components, which can be seen quite clearly in the automotive industry. There, to an Increasing extent, many models are built on the same platform. Customers don’t care whether their drive trains are identical in construction to those of another model. However, they are interested in the special options that make their cars seem individual. We can still tap into a great deal of potential in this regard, both organizationally and technologically. Development costs can be cut by at least a third over the medium term with a comprehensive commonality strategy.

So there is an effort to achieve greater efficiency through prefabricated mass-market products, while there is also increasing demand for customized products. To what extent can these interests be reconciled?

Schuh: When it comes to individualized production, manufacturers must be able to convert the intricacy of customer demands and competitive conditions into manageable complexity. For that, they need advanced standardized assembly kits and production machines that can be used flexibly, allowing product variation without added costs. Product design and process layouts have to be tailored to this. In the past, for example, a house had to be built around standard windows, because an individually dimensioned window would be a one-off production and thus too expensive. Today, you can manufacture any kind of window in a standard process and buy it at a standard price.

What does this mean for manufacturing?

Schuh: In high-income countries, the ideal target for specifically configured products is 90 % of production. Getting a smooth production program ironed out for that isn’t a trivial matter. If you want to set up a system of affordable customized production, virtual production is crucial. Virtualization makes it possible to reduce planning and preparatory work considerably and achieve process stability for all configurations and combinations.

How will manufacturing change over the next 30 years?

Schuh: The manufacturing hall of 30 years from now will look much like what we have today, but the systems will mesh with one another differently. Virtual production and process planning will be integrated into the production process. That means that during production, the product can simultaneously be tested, optimized, simulated, and improved. Machining centers will become more versatile, and the same goes for assembly lines. More and more software agents will monitor customized production processes. Ultimately this will give rise to a factory that can optimize itself, adapting quickly and efficiently to new constraints—a factory that is therefore agile, anticipatory, and adaptive to a high degree.

Will this be an advantage or a disadvantage for high-income countries?

Schuh: This trend, which of course applies above all to products and goods on the luxury end of the scale, will ensure the viability of manufacturing in advanced economies. I think this is precisely where our hopes lie—in highly developed capacities for managing complexity.

                                                                 Interview conducted by Klaudia Kunze