Simple Solutions That Work! Issue 5

quality. Robotic automation is one of the tools for accomplishing this goal. Robots can provide foundry floor production capabilities that allow the foundry to respond effec- tively to global pressures and future market changes. Although diffi- cult to measure, this capacity has a clear economic value. A robot can be reprogrammed and retooled so that it can be a valuable tool as our customers’ needs change. An automated foundry work cell will reduce direct labor and related cost and reduce the requirements for employee services and facilities. JustifyingRoboticAutomation Justifying robotic systems is amulti- step process. Deciding when to automate and to what degree can be a difficult task, STEP 1. TECHNICAL FEASIBILITY STUDY1 Is the casting designed for robotic handling? • Is it possible to do the job with the planned procedure? • Is it possible to do the job in the given cycle time? • How reliable will the total system be? • Does the foundry have operators and engineers that canwork with robots? • Is it possible to maintain safety? • Can the requiredquality standards be maintained? • Can inventory be reduced? • Can material handling be reduced? • Is the current material handling system adequate? STEP 2. SELECT WHICH JOB TO AUTOMATE. • Castings belonging to the same family • Cast ings present ly being manufactured near each other • Castings that can share tooling • Castings that are of similar size, dimensions, and weight • Castings with a simple design STEP 3. INTANGIBLE CONSIDERATIONS • Will the robotic system meet the direction of foundry’s vision statement? • Will the robotic system meet the foundry’s standardization of equipment policy? • Will the robotic system meet future model changes or production plan? • Will the plan improve morale of the workers? • Will the plan improve the foundry’s reputation? • Will the plan improve technical process of the foundry? STEP 4. DETERMINATION OF COST AND BENEFITS • Capital investment cost as compared to changes in profit STEP 5. PROJECT COST FOR AN EXAMPLE CELL THAT WILL POUR, EXTRACT, AND COOL • 210kg robot .................. $85,000 • End effector.................. $10,000 • Tool changer ...................$3,500 • Programming ...............$20,000 • Peripheral equipment ..$15,000 • Guarding.......................... $4,000 • Installation cost.............. $5,000 • Total.............................. $142,500 • Salvage............................. $5,000 • Standard accounting methods are then applied to determine the project’s feasibility. STEP 6. ADDITIONAL ECONOMIC CONSIDERATION • The values for the components in the cash flow equation are incremental values. They are increases or decreases resulting directly from the project (investment) under consideration. • The higher the NPV and rate of return, the better and lower the payback period. • Theuseof thepaybackperiodas a primary criterion is questionable. It does not consider the cash flows after the payback period. • In the case of evaluation of mutually exclusive alternatives, select the alternative with the highest NPV. Selection of the alternative with the highest rate of return is incorrect. This point is made clear in many references (see Stevens (1995), Blank (1989), andThuesenandFabrycky (1989)). • In selecting a subset of projects from a larger group of independent projects due to some constraint (restriction), the objective is to maximize the NPV 15