The International Manufacturing Technology Show wound down in Chicago last week and the sticky issue of attempting to buy excellence in the form of advanced technology versus managing for excellence through lean always comes to the forefront when this every other year extravaganza of whiz bang stuff takes place. The big buzz this year was a 3D printed car … it has only 49 parts crowed the makers, versus thousands for traditionally made cars – only the 49 parts includes one part number for the drive train which was not 3D printed and most of the thousands of parts attributed to traditional cars are drive train parts so it is not exactly and apples to apples comparison. Given its size, 40 MPH top speed and the 120 mile range of its electric motor it would be more accurate to say that a souped-up golf cart was made at the IMTS.

But technology is important – 3D and otherwise. The challenge is to know when advanced technology truly enhances customer value in the most cost effective way; and when it is just an attempt to compensate for poor management.

3D-carAs a labor cost reduction strategy technology has a pretty dismal track record compared to the productivity gains possible from seriously ratcheting up the rate of flow. GM, for instance, spent $30 billion on robotics in the Roger Smith era as the cornerstone of their strategy to outperform Toyota; and then filed for bankruptcy twenty years later for the stated reason that their labor costs were woefully uncompetitive with Toyota’s.

Technology that juices up the Cpk numbers and enables near perfect quality, on the other hand, is usually a pretty good investment. This gets right at the heart of Six Sigma thinking. Some technology does this and some – like 3D printing – is more apt to degrade Cpk levels. Before making a technology investment t improve Cpk it is usually a pretty good idea to re-examine the part and product design to look at the other half of the Cpk math – check to see if the tight tolerance is really needed before spending a lot of money on improving the ability to meet that tight tolerance.

Technology for the sake of flexibility is more complicated. The likes of 3D printing are a mixed bag. The big plus is the elimination of tooling costs. On the downside, however, is the 40 some hours it took to print the car at the IMTS versus split seconds for the big stamping presses that chunk out entire car bodies in current auto plants.

The big selling point seems to be the flexibility of making one off parts rather than runs of identical parts in old school mass production, which is all about setup times. That is where bad management, and bad management thinking come in. Most manufacturers still accept long set up times as unavoidable – most don’t even measure it for that matter. Rather, they accept the half hour or one hour someone plugged into some ERP system years ago and it has become a self-fulfilling prophesy. There can be no lean – no small batches, no progress toward lot sizes of one – without SMED (Single Minute Exchange of Dies). And the setup/changeover reduction from 3D printing and other technologies is only real in the world of nonsensical accounting. The time to change over the stamping press is not really eliminated; it is merely replaced by time spent programming the machine to make the next one off part. That trade-off is lost because accounting sees factory labor with crystal clarity, but is largely clueless regarding overhead costs where 3D programming is typically buried.

In the end the question about the value of investments in advanced technology comes down to why the investment is being made. If it is a labor cost savings it is probably a waste of money; and if it is in the name of flexibility it is best to make sure every second of setup time has been wrung from the existing technology through the zero cost benefits of SMED first. And if the goal is quality, best to be sure the problem isn’t an unnecessarily tight spec before investing in technology to better hold the spec.