Cellular manufacturing brings scattered processes together to form short, focused paths in concentrated physical space. So constructed, by logic a cell reduces flow time, flow distance, floor space, inventory, handling, scheduling transactions, and scrap and rework (the latter because of quick discovery of nonconformities). Moreover, cells lead to simplified, higher validity costing, since the costs of producing items are contained within the cell rather than scattered in distance and the passage of reporting time. Cellular manufacturing facilitates both production and quality control. By five years later, rework and scrap had been cut 50 percent, new product introduction cycles 60 percent, and transactions 90 percent, while also increasing inventory turns three-fold and service turn times 30 percent, and being awarded a
Shingo Prize for the year 2005. It appears to be difficult to isolate how much of those benefits accrue from cellular organization itself; among many case studies researched for this article few include attempts at isolating the benefits. One exception is the contention, at Steward, Inc. (Chattanooga, Tenn.), producing nickel zinc ferrite parts for
electromagnetic interference suppression. According to case study authors, cells resulted in reductions of cycle time from 14 to 2 days,
work-in-process inventories by 80 percent,
finished goods inventories by 60 percent, lateness by 96 percent, and space by 56 percent. Another cellular case study includes quantitative estimates of the extent to which cells contributed to overall benefits. At Hughes Ground Systems Group (Fullerton, Calif.), producing circuit cards for defense equipment, the first cell, which began as a pilot project with 15 volunteers, was launched in 1987. One month later a second cell began, and by 1992 all production employees, numbering about 150, had been integrated into seven cells. Prior to cells, circuit card cycle time, from kit release to shipment to the customer, had been 38 weeks. After the cells had taken over the full production sequence (mechanical assembly, wave solder, thermal cycle, and conformal coat), cycle time had fallen to 30.5 weeks, of which production manager John Reiss attributed 20 weeks to use of a "WIP chart system" by the cell teams and the other 10.5 weeks to the cellular organization itself. Later, when it seemed that the cells were overly large and cumbersome, cell sizes were shrunk by two-thirds, resulting in "micro cells" that cut cycle time by another 1.5 weeks. Finally, by adopting certain other improvements, cycle times had decreased to four weeks. Other improvements included reducing work-in-process inventory from 6 or 7 days to one day and percent defective from 0.04 to 0.01 Switching from a functional (job-shop) layout to cells often costs has a minus net cost, inasmuch as the cell reduces costs of transport, work-in-process and finished inventory, transactions, and rework. When large, heavy, expensive pieces of equipment (sometimes called "monuments" in lean terminology) must be moved, however, the initial costs can be high to the point where cells are not feasible. There are a number of possible limitations to implementing cellular manufacturing. Some argue that cellular manufacturing can lead to a decrease in production flexibility. Cells are typically designed to maintain a specific flow volume of parts being produced. Should the demand or necessary quantity decrease, the cells may have to be realigned to match the new requirements, which is a costly operation, and one not typically required in other manufacturing setups. ==See also==