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Trace, Track and Control:

High Production Output

at Low Costs

Overview of TTC Solutions

for Manufacturing

Technology White Paper

Technology White Paper

Trace, Track and Control:

High Production Output at Low Costs

This white paper illustrates how TTC solutions help manufacturers cut cost, cut waste, automate critical manufacturing processes, and

increase yields—all critical elements in today’s economic environment. Topics of this paper include:

- TRACK: Visibility of Orders in Production

- TRACE: Traceability of Production Errors

- CONTROL: Accuracy of Production

- Closed-Loop Control: Automated TTC Systems

François Monette, Cogiscan Inc. and Matt Van Bogart, Microscan Systems, Inc.

Product Line Card

To survive and prosper in today’s economy, leading

manufacturers must assemble high quality products at the

lowest possible cost. The total cost of production must

take into account the complete product life cycle including

warranty, recalls, and repairs. Track, Trace, and Control (TTC)

systems are an essential element of success in achieving

these strategic objectives. These systems are designed to

achieve optimal use of materials and resources throughout the

manufacturing process.

First, a TTC system provides real-time visibility of all work-in-

progress (WIP) and materials on the factory  oor. Second, a

TTC system eliminates the risk of human errors associated

with material handling and equipment setup. Finally, a TTC

system provides a complete history of the product life cycle to

enable precise troubleshooting and to minimize the number of

products that need to be returned if a recall occurs.

In the cost structure of most manufactured products, materials

constitute 50 percent of the total cost. For complex products,

such as electronic printed circuit board assemblies, the sum

of individual components can represent up to 80 percent

of the cost of the  nished product. A good TTC system will

TRACE:

Where has it been?

eliminate all waste of time and materials, enabling savings up

to 10 percent of the total product cost, which goes straight to a

manufacturer’s bottom line.

A typical payback analysis for a good TTC system is less than

one year. In a globally competitive manufacturing industry, one

could argue that the cost of opportunity associated with this

investment is a simple matter of staying in business.

TRACK

Every manufacturer requires some level of WIP tracking on the

factory  oor. In many instances this is achieved with paper-based

procedures. Although this type of solution can work, it typically

is not the most ef cient. Production data is not available in real-

time. Also, since the basic production data is not digitized, it

is not practical to perform any kind of performance and quality

analysis, and/or create traceability records.

Automated WIP tracking provides real-time visibility of all open

orders on the production  oor. In the simplest form, this can be

done at the job or work order level simply by scanning a barcode

TRACK:

Where is it now? CONTROL:

Where is it going?

1 www.microscan.com

Technology White Paper

label on the traveler sheet at each operation. The highest level

of precision can be achieved by tracking individual production

units if they are serialized with 1D or 2D symbols or RFID tags.

In addition to basic product tracking, all related production

materials required for a speci c job can be identi ed with unique

ID barcode labels or RFID tags. Scanning these parts as they

move from one location to another provides real-time visibility

of all production materials on and off the assembly line. In

some factories a signi cant amount of time is spent each day

searching for speci c components or sub-assemblies. Everyone

knows that they are out there somewhere, but no one knows

precisely where.

In addition to the direct cost of human resources, this has a

direct impact on productivity. In some cases complete assembly

lines sit idle while someone tries to  nd the missing part. In

other cases, the whole line must be changed over to another

product because the necessary material cannot be located and

additional parts must be ordered. This can amount to hours of

lost production time and missed deliveries.

Knowing and controlling the precise location of all WIP and

materials on the production  oor enables a much higher level of

control over critical parameters such as on-time delivery, cost,

and quality. Additionally, once the data acquisition infrastructure

is in place, additional software applications can be easily

implemented to realize additional bene ts.

TRACE

The topic of traceability is not often associated with a speci c

return on investment (ROI) because this requirement is driven

by the end customer, by a speci c industry standard, or by

legislation. In these instances, a traceability system is a

prerequisite to doing business.

Other times the need for traceability is based on simple

economic considerations. The cost of catching a defect

increases tenfold at each step in the product life cycle. The

actual cost of a product recall can be staggering, without even

considering brand perception damage and the associated impact

on future sales. Several well-documented cases illustrate this

point (see inset).

Considering the very large number of variables and human

beings involved throughout the complete assembly of a product

and its life cycle, the opportunity for something to go wrong is

very high. It is not a question of knowing if something will go

wrong, it’s a question of when it will happen and how bad it will

be. In the case of a serious product failure or security issue,

having a basic traceability system in place can reduce the

number of products to be recalled by orders of magnitude.

Some people like to compare a traceability system to an

insurance policy. It is a small investment that can make an

enormous difference when something does go wrong.

There are different levels of traceability that can be achieved,

from production batch or date code down to serialized units,

and from manufacturing site and date-only to full process and

material information. The challenge for each manufacturer is to

de ne which level is most appropriate for the speci c situation. It

becomes a matter of balancing the actual cost of acquiring and

storing traceability data against the cost of a potential recall.

In a typical TTC historical database, it is possible to determine

precisely when and where a defective product was built simply by

scanning the serial number. It also is possible to retrace every

single lot of parts that was used to produce that speci c unit.

If the defect is related to a faulty batch of parts, it is possible to

identify the list of all products that were built using the defective

parts. As a result, any product recall is reduced to the smallest

possible impact.

The true cost of a traceability system may be far less than

expected. If traceability is considered in the context of a

complete TTC system, full process and material level traceability

will be a natural by-product of the TTC system.

Product Recall Examples

 Sony Batteries

Sony batteries were found catching fi re in laptops sold by

Dell, Hitachi, IBM, Lenovo, Toshiba, and Apple. 9.6 million

laptops were affected and Sony spent $430M to replace all

the defective units. In this instance both Sony and all the

OEMs using the Sony batteries could have saved millions of

dollars if they had better traceability systems to pinpoint the

units affected more accurately.

 Microsoft Xbox 360

The Microsoft Xbox 360 experienced widespread hardware

failure identifi ed by three red lights blinking. Microsoft ended

up spending a reported $1B to extend warranties as a result.

 Tylenol

Tylenol recalled 31 million bottles of Tylenol at a cost well

over $100M.The product market share dropped from about

37 to 7 percent.

 Bridgestone

Bridgestone posted a special $350M loss after its U.S. unit

Firestone announced a recall of 6.5 million tires. This amount

only covered the actual cost of the recall and not potential

lawsuits or loss of revenue. The company stock slid 24

percent in a week.

2 www.microscan.com

Technology White Paper

CONTROL

Production control is the third but not the least critical aspect

of TTC software. The word “control” refers to all aspects of

error-proo ng. It is certainly important to get real-time visibility

of WIP and materials, and to be able to trace historical data,

but it is even more important to build the product correctly

in the  rst place. If the TTC system is primarily intended to

gather traceability data, the control functions will ensure that

operators are using the correct product and materials and are

scanning the correct production information in the historical

database, guaranteeing 100 percent accuracy of traceability

data. Automated machine vision inspection also can be used to

further reduce the possibility of human error.

In the case of product WIP tracking, it is logical and bene cial

to link each scan point to a pre-de ned assembly route. In

this case, the TTC software will compare the actual status

and location of the product to where it should be. An alarm

or warning will be generated if the product has bypassed any

operation. Additional product-related information such as quality

data or inspection and test results can be logged rapidly and

ef ciently while scanning the product from one operation to

another.

When tracking serialized products, basic cycle time information

can become a powerful database for monitoring operational

ef ciency. It is possible to compare real-time information against

calculated throughput and even generate warnings and alarms

when the process slows down below a certain threshold. This

type of control leads to better machine utilization and overall

equipment effectiveness (OEE).

Similarly, while tracking material on the assembly line, the

TTC software can verify that the correct parts are set up in the

correct location to build a speci c product. Again, warnings

and alarms can be generated during initial machine setup to

eliminate the risk of human errors and the associated waste of

time and materials. Optional light towers and physical interlocks

also can be tied to the TTC software to provide more visible

and audible warnings and to stop the production line in case of

critical errors.

Tracking materials on and off the assembly line also enables the

following applications:

· Of ine setup validation to accelerate changeover

· eKanban to pull parts before running empty

· Material reservation/kit management

· Perishable material tracking to avoid using expired material

This leads to more ef cient use of materials as well as

improvements in machine utilization/OEE.

Closed-Loop Control

Manufacturing  oor automation prevents errors by eliminating

as much human intervention as possible. This can be achieved

in TTC systems by replacing handheld barcode readers with

 xed-mount readers integrated in machines, workstations, and

conveyors. Various types of interlocks can be connected to the

readers and TTC software to stop the assembly process in the

event of a misread or when the product is out of sequence.

In some cases, replacing barcodes with RFID tags also can

enable completely hands-free data acquisition and setup

veri cation. RFID technology is commonly used to create

intelligent systems in which tags are attached to different pieces

of tooling,  xtures, or pallets, and RFID antennas/readers are

strategically integrated inside machines.

General Benefi ts of TTC

• Reduce inventory

• Reduce risk of costly product recalls

• Identify and eliminate bottlenecks

• Avoid component shortages

• Improve fi rst-pass yields and reduce defects

• Shorten delivery time

• Improve on-time delivery

• Increase productivity and minimize line downtime

• Reduce labor cost

• Increase inventory accuracy and visibility

• Eliminate kitting errors

• Eliminate machine setup errors

• Eliminate physical inventory count (cycle count)

• Monitor and improve material fl ow and workfl ow

• Improve quality

Quantitative Benefi ts of TTC

• Reduce manufacturing cycle time (35–45 percent) 1

• Reduce manufacturing lead time (30 percent) 1

• Reduce machine/line changeover time (50 percent) 2

• Reduce data entry time (36–75 percent) 1

• Reduce work in progress (17–32 percent) 1

• Reduce paperwork between shifts (56–67 percent) 1

• Reduce inventory (4–6 percent) 3

• Increase product quality (+18 percent) 1

3 www.microscan.com

Technology White Paper

1 MESA International Survey

2 Positron case study, Cogiscan Inc.

3 Return on Investment Calculation, Dynamic Systems Inc.

Additional Sources:

1. Technology Fails: 8 Extreme Electronic Disasters, Computerworld,

October 2009

2. www.recalls.gov – One stop shop for U.S. Government recalls

3. Return on Investment for WMS project, Dynamic Systems Inc.

4. MESA International Survey

5. Materials Management, Pro t Centre, Indian Institute of Materials

Management

6. Survey of Successful RFID Case Studies in Electronics Manufactur-

ing,

Cogiscan Inc.

Conclusion

A good TTC software package should be highly modular and

scalable because, in most cases, manufacturers want to solve

a speci c problem by implementing a small project in a short

time frame. A targeted TTC project will typically cost between

$15k and $50k and will be implemented in a matter of a few

days, providing a very good ROI and quick payback. The basic

TTC system can be expanded in phases over time, each phase

increasing bene ts and ROI.

4

©2011 Microscan Systems, Inc. 03/11

www.microscan.com

North America (Corporate Headquarters)

Email: info@microscan.com

Europe

Email: info@microscan.nl

Asia Pacifi c

Email: asia@microscan.com