Up until about two years ago, employees working the assembly lines at HON Industries showed up for work each morning wondering whether theyd be building office furniture and fireplaces, or wasting their shifts on make-work projects such as pushing a broom around the shop floor.
The latter had become a common occurrence thanks to an archaic information system—if you can call a cobbled blend of serial cables, dumb terminals and disparate specialty software programs a system—that would routinely crash before, during and after production runs of desk chairs or shelving units or gas fireplaces.
This frustrating pattern of fits and starts had not only hamstrung HONs manufacturing capacity and, in turn, its ability to deliver furniture and equipment to wholesalers and dealers on time; it also had an unfortunate impact on the line-workers pocketbooks.
When the line went down because of technical problems, the employees didnt get their production bonuses. And many times these men and women were all sent home until the information technology staff could resolve whatever bug or glitch was responsible for yet another silencing of the assembly line.
“You can imagine how this became a very emotional issue,” says Malcolm Fields, the companys CIO and the man charged with fixing the problem and getting the assembly lines operating at full capacity. “These people get paid based on their production. When they cant work, their bonuses suffer. From a financial perspective, paying people overtime to not work or to sweep floors is just not acceptable.”
From a bottom-line perspective, taking a hit on wasted payroll because of technical problems was really just a symptom of a larger problem. Inefficiency and inaccuracies on the production lines—even if it was only on one production line—reverberated throughout HONs organization.
When the system broke down in the middle of a production run, the line workers wouldnt always have an accurate job order to refer to. Desk chairs that were supposed to have black fabric on the seats and backs would go through the line and come out gray. Worse, because HON wasnt able to identify where the chairs or the cabinets were supposed to be shipped, theyd collect in a disorganized heap at the end of the line. Delayed shipments, misplaced orders and lost products were commonplace.
“Wed get to the point where we didnt know what order was going where, and how many of this were supposed to go with that,” Fields says. “It was a very low-tech situation that sort of ganged up on us all at once. It wasnt manageable and the downtime was simply too high.”
Despite its decidedly low-tech roots, HON has always aspired to have a production-line process as flexible and efficient as the automobile industry. The idea is to be as lean and nimble as possible. One day youre cranking out metal shelves on the floor and the next day youre turning out chairs in the same exact spot. However, when your operation is dependent on serial cables connected to terminals and then to a Unix server, your flexibility is severely hampered. In HONs case, the accidental severing of a single serial cable would bring down multiple production lines.
“That would happen all the time,” Fields says. “It got to the point where, frankly, it was embarrassing.”
Simple Glitches Led To
Simple Glitches Led To Major Downtime
Fields says he couldnt begin to guess how many times a simple disconnected or damaged serial cable brought production to a standstill. Sometimes it would happen twice or more a day. Sometimes it would happen only once a week.
With a dozen plants operating throughout the U.S. and Mexico, Fields says it seemed as though there was always a problem with some line somewhere in the organization. The management team demanded an immediate improvement.
When one line was down for a considerable amount of time, HON would have to adjust on the fly by having other lines pick up the slack. That not only eroded HONs overall on-time delivery performance, it also caused redundancies in instances where inter-plant communications fell apart. When the line would return to service, workers would race to continue a run of a particular product only to realize later than another plant had already taken care of that weeks shipments.
Then HON would be stuck with a bunch of inventory it couldnt move, not to mention the additional overtime and regular pay it shelled out while the line was inactive and then later when it resumed production.
“They (management) didnt care about the cost or the technology or any of the details,” he says. “They just told me to take care of the problem. We couldnt afford to have these lines down anymore. Period.”
The old system was composed of hardware that included serial cables, disk drives, printers, bar-code readers and dumb terminals, which basically only provided a video display and a keyboard. When an order was scanned through the bar-code reader, the specifications for that product were printed out and given to line workers. On the software side, a crude in-house program was developed to record what products were being manufactured and to transmit that data to a Unix server.
“We had a dumb terminal that could tell us what wed made and what we needed to make, but it couldnt tell us what went wrong with the system when it crashed,” Fields says. “We needed a way not only to leverage the information we were creating on the lines, but also a way to monitor the system to identify and resolve technical problems as they arose.”
Fields says he and the rest of his staff looked into either going with Microsoft Windows or even a version of MS DOS to upgrade their manufacturing systems—clearly a safer and more popular choice back in late 2000—or take a gamble on the emerging Linux operating system.
“If we had made this decision based on risk alone we wouldnt have gone with Linux,” Fields says. “It was pretty new and, frankly, had we not seen the level of commitments being made by IBM and other big-name hardware and software vendors, we wouldnt have gone in this direction.”
-Dollar Linux Commitment”>
IBMs Billion-Dollar Linux Commitment
Last year, IBM invested more than $1 billion to bring Linux, a Unix offshoot, to its full line of servers and to its software portfolio. The money also went toward hiring and training consultants to service Linux accounts. E*Trade is one of many large accounts that has moved to a Linux-only operation in the past year.
Fields replaced all the dumb terminals that were scattered throughout a production site with Intermec workstations running the Linux operating system and a piece of management software from The SCO Group called Volution Manager. HON got rid of all their serial cables in favor of wireless receivers hung from the rafters at each of its 12 manufacturing plants, giving production managers the ability to move the workstations around the plant without limitations.
“For HON, reliability was all they cared about,” says Brad Dew, a product manager at The SCO Group. “Linux gave them the ability to control their environment and control their business. Their business is furniture, not computers.”
Each manufacturing plant has up to 60 production lines operating at a given time. Each line requires its own workstation.
Fields says each workstation completely loaded with the Linux operating system and management software cost about $6,000. With a total of roughly 350 manufacturing lines, the total investment was a little more than $2 million.
“Cost wasnt the primary reason we went with Linux,” Fields says. “I do know that it would have cost considerably more had we gone with Windows but that really wasnt the selling point to us. We just really liked the smaller footprint of hardware and the fact that we could manage the whole thing remotely.”
As an early Linux adopter, HON recognized it would be running a less-mature technology platform with significantly fewer applications. On the other hand, the open-source platform, which has tens of thousands of software-writers contributing to its development each year, provides more stability and independence than a single software vendor.
“For cut-and-dried applications, businesses are finding Linux is comparatively inexpensive next to the fancy features that you get with a Windows NT or Unix server,” says Peter Kastner, chief research officer at Aberdeen Group. “For run-of-the-mill manufacturing processes, Linux provides a perfect environment. The money youre saving by not buying proprietary software and hardware can be used for other projects.”
According to CyberSource Ltd., an Australian information technology consulting firm, a company with 250 computers on a Windows operating system would spend $734,000 over a three-year period for software, hardware, licensing and support. That same company would spend $483,000—34% less—using Linux.
“We knew that using Windows would have cost more in terms of memory and licensing than going with Linux,” Fields says. “But more important, a desktop version of Windows isnt reliable enough to handle the mission-critical applications we need. The downtime was driving everyone crazy.”
HON began rolling out the new workstations in January 2001 and finished the project—give or take a few stragglers— in June of this year. When a new product was scheduled for production, HON rolled in a new workstation running the Linux software. The Volution Manager software can be accessed from any Web browser, giving the technology staff the ability to monitor the entire network from HONs Muscatine, Iowa, headquarters. If something goes awry—like a bug in the software that transmits the data from the bar-code reader to the server—the staff can fix the problem remotely. HONs systems are available more than 99% of the time now—compared to less than 95% of the time previously, Fields says.
When a new product is to be manufactured—for example, a dark-toned wood desktop or a gas fireplace—the computer prints out a ticket with the specifications, shipping date and destination. This ticket is then carried with each individual product all the way through the production line. At the end of the line, the ticket is scanned, telling the server whats been completed and where it will be shipped.
A label is then printed out and attached to the box, tell- ing employees exactly what it is and when and where its to be delivered. Fields says production capacity has increased by “at least double digits” since the workstations were installed.
“The best part about the new system, aside from the fact that it virtually eliminates any downtime, is that at any point we can use the management software to find out exactly how many products are being manufactured on every line in every plant,” Fields says. “I dont want to comment on how the business people here view the improvements that weve made, but I do know that are floors arent getting swept as much as they did in the past.”
HON Industries Base Case
Headquarters: 414 East Third St., P.O. Box 1109, Muscatine, IA 52761
Phone: (563) 264-7400
Business: Manufactures office furniture and fireplacesChief information officer: Malcolm Fields
Financials in 2001: $1.8 billion in sales; $75 million in net income
Challenge: Install and integrate Linux-based IT system for manufacturing facilities
- Maintain on-time production and delivery of goods at 98%— up from 75% a few years ago
- Eliminate all downtime of manufacturing lines in its 12 production sites
- Improve production capacity by at least 10% each year