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Case 2-2
Westinghouse Electronic Systems: T/R Modules (pg 101)

3 Technology in Organizations: Technology Transfer and Procurement 117

Reading 3-1
Intelligent enterprise a new paradigm James Brian Quinn

 
Case 3-1
Oak Ridge Associated Universities (pg 132)

 
Case 3-2
Oak Ridge National Laboratory and Fluid Technology Inc. (pg 140)

 
Case 3-3
Temic Telefunken: A Partner, Not a Vendor (A) (pg 153)

 
Case 3-4
Black & Decker's New Coffeemaker - Procuring the Electronic Module (A) (pg 160)

 
Case 3-5
Temic Telefunken (B) (pg 166)

 
Case 3-6
Black & Decker's New Coffeemaker - Procuring the Electronic Module (B) (pg 168)

4 Research & Development and Commercializations of Technology 172

Reading 4-1
Improving R & D Decisions and Execution Michael M. Menke (pg 173)

 
Case 4-1
Mountaineer: The 21st Century Incubator Project (pg 183)

 
Case 4-2
Brooktrout Technology, Inc.: The Commercialization Process (pg 209)

5 Innovations in Manufacturing 219

Reading 5-1
Making Sense out of Manufacturing Innovations" by Paul M. Swamidass Paul M. Swamidass (pg 220)

 
Reading 5-2
The Celling out of America The Economist (pg 226)

 
Reading 5-3
Managing Innovation on the Factory Floor Marcie J. Tyre (pg 228)

 
Case 5-1
Duriron Company, Inc. Cookeville Valve Division (A) (pg 233)

 
Case 5-2
Duriron Company, Inc. Cookeville Valve Division (B) (pg 244)

 
Case 5-3
Duriron Company, Inc. Cookeville Valve Division (C) (pg 246)

 
Case 5-4
Duriron Company, Inc. Cookeville Valve Division (D) (pg 256)

6 Costing and Technology 260

Reading 6-1
Tools for Cost-Effective Product Design and Development Lakshmi U. Tatikonda and Mohan V. Tatikonda (pg 261)

 
Case 6-1
valuation of Outsourcing Options at Stratus Computer, Inc. (pg 269)
Technical Note: Accounting Measures of Manufacturing Costs (pg 276)

 
Case 6-2
American Saw & Manufacturing Company: Calculating Cost Per Cut (pg 281)
Technical Note: Optimizing Cost Per Cut (pg 288)

7 Customized Case 296

Case 7-1
The Living Case (pg 297)

Appendix: Engineering/Business Partnerships: An Agenda for Action 304

For information on the Thomas Walter Center or this page, please contact:

Thomas Walter Center
Phone: 334/844-4333
FAX: 334/844-1678

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TECNOLOGY ON THE FACTORY FLOOR III:

CROSS-FUNCTIONAL MANAGEMENT OF TECHNOLOGY

______________________________________________________________________

AUBURN UNIVERSITY COLLEGE OF ENGINEERING AND COLLEGE OF BUSINESS

______________________________________________________________________


THOMASWALTER CENTER
FORTECHNOLOGYMANAGEMTENT
 

To read the deatils of the publications click on the links below:

1.  Cross-Functional Management of Technology : Cases and Readings

2.  Technology on the Factory Floor III :Technology Use and Training in the U.S Manufacturing Firms

3. Technology on the UK Factory Plant

    HomePage
 
 
 
 

Cross-Functional
Management of
Technology :
Cases and Readings


by M.Dayne Aldridge and Paul M. Swamidass

Publisher : Richard D.
Irwin, Burr Ridge,
IL, 60521-0085.
To order : Call 1-800-323-4560

Click to Order
 

Introduction 1

Cross-Functional Management of Technology, M.Dayne Aldridge and Paul M. Swamidass 1

1 History and Overview 11

Reading 1-1
Managing Invention and Innovation, Edward B. Roberts (pg 12)

 
Reading 1-2
Common Misconceptions in Implementing Quick Response Manufacturing, Rajan Suri

(pg 31)

2 Product Development and Team-Based Management 45

Reading 2-1
Competing Through Development Capability in a Manufacturing-Based Organization Steven C. Wheelwright and Kim B. Clark (pg 46)

 
Reading 2-2
The Neglect of Engineering Design John R. Dixon and Michael R. Duffey (pg 64)

 
Reading 2-3
Teams Need Open Leaders Michael Maccoby (pg 74)

 
Reading 2-4
Implementing Technological Change With Cross-Functional Teams Robert A. Lutz (pg 77)

 
Case 2-1
Westinghouse Electronic Systems: Integrated Product Development (pg 83)

&ont size=+1>Technology Use and Training in the U.S Manufacturing Firms

Paul M. Swamidass
Professor of Management
Thomas Walter Center for Technology Management
Tiger Drive ,Room 104
Auburn University , AL 36849-5358

(334) 844-4333
Fax: (334) 844-1678
swamidp@eng.auburn.edu
http://www.eng.auburn.edu/center/twc/pms.html

A report based on responses more than 1,000 manufacturing plants
participating in  study sponsored by

The National Association of Manufacturers

The National Science  Foundation and

The Thomas Walter Center for Technology Management.

August 1998










This study was co-sponsored by :

The National Association of Manufacturers,

The National Science  Foundation and

The Thomas Walter Center for Technology Management, Auburn University.

Partial funding provided by the Societal Dimensions of Engineering Science and Technology Program of the National
Science Foundation under grant number SBR-9619054(April 1997)
 
 



To order additional copies : Call the NAM Publications Center at (1-800) 637-3005.
Technology on the factory floor III : technology Use and Training in the U.S Manufacturing Firms
NAM Member Price : $25.00        Non-Member Price : $40.00
plus shipping handling and applicable sales tax. Quantity discounts available









Table of Contents



Acknowledgments...................................................................................................... v

Foreword................................................................................................................... vii

Executive Summary..................................................................................................... ix

Introduction....................................................................................................... 1

Manufacturing Technology Use........................................................................... 3

Technology Use in the NAM 100 PLants............................................................ 5

Technology Use in Exporting Plants..................................................................... 6

Delays in Technology Use................................................................................... 7

Benefits of Investment in Technology................................................................... 8

Investment decision........................................................................................... 11

Computerized Integration Between Units........................................................... 12

Training Methods and Operator Profiles............................................................ 13

A Profile of Participating Plants......................................................................... 16

Appendix I : Data Collection....................................................................................... 18

Appendix II : Glossary of Manufacturing Technology Terms......................................... 21

Appendix III : A Comparison of the NAM 100 Wiith the Larger Samples.................... 23

Appendix IV : The Questionaire.................................................................................. 24
 

Foreword


Technology accounts for as much as one-third of the long run economic growth and two-third of productivity
gain, according to the consensus of leading economists and CEOs i my book, The Rising Tide(John Wiley,
1998). Paul Swamidass's careful and continuing work, in this third Technology on the factory floor study, comp-
lements this macro analysis and perspective of the compelling plant-level data yet released. U.S. man-
ufacturers are investing in technology especially information technology, and they do, indeed, have positive
operational and financial results to show for their investments. If there ever was a "productivity paradox" in
manufacturing , it exists no more.

Likewise, this third report shows that the long, hard work by the manufacturing companies and their employees to
cut costs , improve quality and meet customer demands more quickly has taken hold. There is no going back.
Companies are now poised to meet the next challenge; electronic integration of suppliers and customers. One
can only rejoice that the domestic auto industry, whose prospects looked so poor 15 years ago, now moves its
inventory nearly twice as fast as the rest of the economy.

Not everything is rosy. While companies are spending a surprisingly high amount on training, many workers
lack even the basic educational foundation needed to progress to the higher-skill level required by manufacturers
using hardware, software, networking and rapid-response procedures. The results here confirm those of the
Bureau of Labor Statistics and a separate, recent NAM survey on workforce issues conducted by Grant
Thornton LLP. We have our work cut out for us.

Executives will find useful, specific benchmarking data in the report. The success of manufacturers in putting
the products of the information technology industry to fruitful use makes for impressive reading.
 
 
 
 
 

Jerry Jasinowski
 President
 The Manufacturing Insitute
Executive Summary


This study presents much good news about manufacturing in America.  Skilled technology deployment and use is leading to operational excellence, which yields higher productivity, and ultimately higher profitability.  Plants are making substantial gains in manufacturing flexibility and agility - important reasons for productivity gains - through the increased use of computerized integration, manufacturing cells, and Just In Time inventory practices.

This is the third iteration of the Technology on the Factory Floor series, based on 1997 data from 1,000 plant managers.  Following the previous survey by four years, it captures U. S. manufacturers in a very healthy condition.  Table 1 lists all the technologies surveyed, both "hard" ones like local area networks (LANs) and "soft" ones like shop-floor organization by relatively self-contained cells, as opposed to traditional linear assembly lines.  Table 2 compares the 1997 and 1993 results.

The U.S. trend towards manufacturing excellence continues, as evidenced by a variety of different measures:  overall financials, improved operational capabilities, specific technology use, and successful classes of plants.

The Financial Performance of U.S. Manufacturing Continues To Improve

 Profitability Shows Strong Gains. Return on investment now stands at 16.9 percent, compared to 13.0 percent in 1993.  This gain is higher than expected.

Productivity (Sales per Employee) Increases.  Equally strong annual gains in productivity as measured by sales per employee -- about four percent since the last study in 1993 - lies behind the strong gains in profitability. Sales per employee is a key index of productivity and is crucial to measure because improvements in productivity drive improvement in standards of living.  If you are able to produce more, you are able to earn more.  Table 2 shows continued productivity improvement by the U.S. manufacturing sector as sales per employee grew from $133,000 in 1993 to $147,000 in 1997 - a 10 percent gain.  An independent estimate of productivity by the Labor Departments Bureau of Labor Statistics concurs with this rate of growth.

Manufacturing Plants Gain in Operational Capabilities

Inventory Turnovers Increase. Turnover rates measure industry efficiency.  As Table 2 indicates, the inventory turnover ratio was 9.7 in 1997 - in other words, the average manufacturing plant covered in this report was turning over its inventory every 1.23 months.  Our 1993 report found an 8.0 ratio, indicating that plants were then turning over their inventory every 1.5 months.  The Commerce Departments 1995 estimate of 8.5 confirms our findings (Office of Industry Analysis).

Rejection and Rework Decrease.  The rejection and rework rate is another important index of manufacturing performance.  It measures the ability of the manufacturers to produce consistently high-quality products with few defects.  Rejection and rework rates have decreased from 4 percent in 1993 to 3.5 percent in 1997.  Thus, manufacturers have gotten rid of one-eighth of their waste.

Cycle Time and Manufacturing Costs Decrease.  Seventy-six percent of all manufacturers report reduction in cycle time (from receipt of a customer order to delivery) and 75 percent report reduction in manufacturing costs as a result of technology use.  Figure ES-1 displays other benefits of technology use by manufacturers.

 Highlights of the Most Successful Groups of Plants

Larger Plants Use Technologies More Extensively and Effectively Than Small Plants.  Eight positive performance measures increase with size: sales per employee; inventory turns; LAN use; cell use; percent of transactions computerized between shops and production planning; percent of plants with 90%+ computerization between shops and production planning; percent of plants reporting cycle time reduction as a result of technology use; and return on investment.
 And four positive performance measures decrease with size: on-the-job training time; training budget as a percent of sales; percent of extremely skilled operators in the plant; and the delay in the skilled use of technologies for want of skilled workers.
 Not all technologies may be appropriate for small plants. They may need assistance to understand the use and benefits of several new technologies if they are to exploit all relevant manufacturing technologies.  The training expense associated with the use of soft technologies may be holding back small manufacturers from using soft technologies more aggressively.

Exporters Use Manufacturing Technologies More.  The use of technology rises with the degree to which firms gain their revenues from abroad.  Without exception, exporters rely on technologies more extensively than non-exporters.  The difference is most pronounced in soft technologies such as cells, concurrent engineering (allowing interplay between design and manufacturing rather than the traditional linear treatment of design as prior and then fixed), as well as materials resource planning.  Overall, the evidence indicates that the use of manufacturing technologies adds a measure of competitive advantage to U. S. exporters.

The Transportation Industry Leads in Inventory Turnovers.  Perhaps our most  remarkable operational finding is the inventory turnovers of 19.4 reported by the surface transportation industry (SIC 37), which includes the auto industry -- twice the national average of 9.7.  The transportation industry has become a mature user of lean manufacturing principles; the industry is reaping the benefits of consistent, long-term use of such practices.  Formerly, an average of 19.4 turnovers for an entire industry was only a dream.

The auto industry, which forms the bulk of this SIC class, started adopting soft technologies such as JIT, TQM and SQC about fifteen years ago due to severe import competition from Japan and the rapid erosion of their domestic market share.  The Big Three auto makers have instituted standards and certification for their suppliers based on world-class manufacturing principles, thus spreading the practice all across the nation.  In the process, the industry has proved to be a good training ground.  Personnel moving from this industry to others may have contributed to the spread of such successful techniques.  Moreover, the auto industry, having mastered the challenges of the agile business model, is poised to face the next level of challenge - and opportunity - in electronically based supply-chain integration.

Extremely Skilled Use of All Technologies Has Superior Operational Payoff.  Not all manufacturers use manufacturing technologies with equal skill, and the level of skill matters considerably in how much a firms performance is improved.  Extremely skilled use of technologies requires a thorough understanding of the technology being used, as well as constant training and retraining. Self-identified extremely skilled users of JIT and its variations report the best inventory turns (19.4), lowest manufacturing lead times (5.7 weeks), and one of the highest returns on investment (20.8%).  Extremely skilled users of manufacturing cells comprise the highest single return-on-investment category (21.8%).



 
 



Table 1


List of Technolgoies Covered by Studies
(Amore detailed description of these technologies can be found in Appendix II)
Hard Technology Investigated
1. Automated Inspection
2. CAD.......Computer-aided design
3. CAM......Computer-aided manufacturing, including programmable automation of single or multi-machine systems
4. CIM.......Computer integrated manufacturing
5.. CNC......Machines with computerized numerical control
6. LAN......Local Area Networks
7. FMS.....Flexible manufacturing systems:automated multi-machine systems linked by an automated material -handling system
8. Robots....All kinds of robots
Soft Technology Invetsigated 
1. Bar Codes*
2. Concurrent Engineering*
3. JIT........Just-in-time manufacturing
4. Manufacturing Cells*
5. MRP....... Material Resource Planning
6. MRP II....Manufacturing Resource Planning
7. SQC.......Statistical Quality Control
8. Simulation Modeling*
9. TQM......Total Quality Management.

*Denotes technologies not included in the previous studies


Table 2
A Comparison of Selected 1993 and 1997 Data

 
1993 sample
1997 sample
1. Sample
1042
1025
2. Sales($million)
47.2
34.5
3. Employment(average)
228
168
4. Sales per Employee
133k
147K
5. Inventory turns
8.0
9.7
6. Direct Labor
18.3
19.8%
7. Rejection and rework
4.0%
3.5%
8. Lead Time (weeks)
7.2
7.4
9. ISO-certified plants
4%
20%
10. Foreign-owned(foreign ownership more than 50%)
3.4%
6.3%
11. No sales to defense department
54%
64.8%
12. Percent reporting cycle0time reduction
66%
76%
13. Return on Investment
13.0%
16.8%

Employers Invest Highly in Training, Yet Some Workers Are Not Ready to Progress. Without question, the manufacturing workforce must progress to higher skill levels to master new technologies.  Accordingly, this third survey includes new questions not asked before about training investments, practices, and results - questions whose answers confirm that the weakest dimension of U.S. manufacturers continued ability to lead the world is the education, training, and skill level of the U.S. workforce.

First, the companies covered in our survey reported an average training budget of five percent of payroll.  This is higher than most studies on this subject.  By comparison, a 1995 Bureau of Labor study found that the training budget was about four percent of payroll. The unexpectedly high training expenses may reflect any of the following:  import competition, the multiple skills needed in cells, employee reassignment and new hires resulting from downsizing, and maintaining high skill levels and corporate agility.

Second, on-the-job training (OJT) is the most commonly used training technique although it takes more time to train an employee (8.3 months) than otherwise.  Training by vendors is the quickest training method (5.3 months).  If vendors can provide training, small plants have more to gain by using vendors than larger plants - about four months, compared to two months for larger plants.  Each plant should evaluate its own time-money tradeoff.

Third, the lack of availability of trained operators causes delays in the skilled use of technologies by as much as 4.9 months.

Fourth, plant managers find 36 percent of operators lacking the education for advanced training, while they consider 40 percent skilled and 47 percent eager to solve problems and learn new skills.

 Widespread Soft Technology Use Has Brought Systemic Changes.  Since 1993, slightly fewer plants are reporting the use of JIT, TQM and SQC techniques; however, the benefits associated with the use of these soft technologies are on the rise.  For example, inventory turns and rejection and rework rates have improved to 9.7 and 3.5 percent, respectively.  One can only conclude that, over the last 15 years, essential features of JIT, TQM and SQC have become such generic and ingrained manufacturing practices in this country that they are losing their association with any specific technique.  These systemic changes bring permanence to the improvements we have noticed so far, and the continuous improvement theme underlying these practices should continue to improve manufacturing performance in this country.

Technology Use Produces Faster Customer Response

Networking Leads Growth In Technology Use.  Data from companies who answered both our 1993 and 1997 surveys show that the use of local area networks (LANs) has grown more than the use of any other technology since 1993.   As seen in Figure ES-2, 72 percent of these plants used LANs last year, compared to 46 percent then.

Clearly, by 1993, the use of  certain discrete technologies had reached saturation.  Manufacturers typically began to invest in several different technologies, hard or soft, in the form of internal "islands of automation."  LAN technology enables the integration of these "islands" and taps the synergistic benefits that flow from integration of several technologies, both within the factory and between factories and their customers or suppliers.

The increase in networking has yielded paperwork-cutting, time-saving efficiencies.  Transactions between the shop floor and production/materials planning are now 58% computerized, with transactions between design and customers being 41% computerized. The growth in the use of individual technologies may taper off, but growth will continue in the integration of technologies through the computerization of transactions between internal and external units of manufacturing plants.

Manufacturing Cell Use Also Grows Dramatically.  Next to LAN use, the use of relatively self-contained manufacturing cells has shown the second-highest increase among the NAM 100 plants (Figure ES-2).  Manufacturing cells and computerized integration contribute to the flexibility of manufacturing plants.  Further, manufacturing cells reduce inventory, increase quality and productivity, and enable factories to become better focused.  Since the implementation of cells requires multi-skilled operators, the increased use of cells increases the need for operator training.

 The upshot in the combination of LAN and cell growth is increased agility-the ability of a plant to respond faster to customer orders.  Computerized integration of units inside and outside a factory contributes to agile manufacturing by enhancing the speed of information flow and the ability of manufacturing systems to respond to changes.  Manufacturing cells require operators to be skilled in the use of multiple tasks, which also adds to the agility of the plant.


For information on the Thomas Walter Center or this page, please contact:

Thomas Walter Center
Phone: 334/844-4333
FAX: 334/844-1678

Last Update March 1,2000.
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Other Sponsored Projects




 
 







A report of
The Joint US-European Technology Adoption Project
(USETAP)
Auburn University -- University of Plymouth

TECHNOLOGY ON THE UK
FACTORY FLOOR

A SURVEY BENCHMARKING
MANUFACTURING TECHNOLOGY
USE AND IMPACT IN GREAT BRITAIN
















                                  Dr.Graham W. Winch                                                        Dr.Paul Swamidass
                            Professor of Business Analysis                                 Professor of Operations Management
                    University of Plymouth Business School                                           &Associate Director
                                           Plymouth                                           Thomas Walter Center for Technology Management
                                           PL48AA                                                                  Auburn University
                                            England                                                                  Auburn ,AL,36849
                                                                                                                                   U.S.A
 
 


      Further copies of this report may be purchased from :
Plymouth Enterprise Partnerships Ltd.
21 Portland Villas, Plymouth, PL4 6DX, England.
Tel:01752 2333700   Fax:01752233711

Price is 25Pounds including postage within the EU
 
 

Copies of the paraller US report -
'Technology on the Factory Floor III:
Technology Use and Training in the U.S. Manufacturing Firms'
may be obtained from The National Association of Manufacturers.
Call the NAM Publicatinos Center on 1-800-637-3005 in the US,
or order via the web at:www.nam.org/institute/pubs.html

Price is $25.00 for NAM members, $40 for non-members,
plus shipping handling and applicable tax
 

TECHNOLOGY ON THE UK FACTORY FLOOR
A SURVEY BENCHMARKING TECHNOLOGY
USE AND IMPACT IN GREAT BRITAIN
 
 
 

November 1999
ISBN 1-84102-060-5








Contents


Foreword.....................................................................................................................................iii

Executive Summary.......................................................................................................................iv

1. Introduction
         Technologies investigated....................................................................................................1
2. The Adoption of Manufacturing Technologies...........................................................................3
           Are there differences between large and small plants..........................................................3
           Advanced use of Technology............................................................................................5
           Technology use in exporting and non-exporting plants........................................................6
3. Decisions and Benefits in Technology Investment......................................................................9
           Investment decisions.........................................................................................................9
           The perceived benefits of technology investment...............................................................10
4. Computerized Integration between Units.................................................................................13

5. Training Methods and Operator Profiles .................................................................................15
             Training expenditure and training times required..............................................................15
             Causes of delays in the skilled use of technology.............................................................17
             Employee attitudes and profiles......................................................................................18
 

Appendix A - Sample and Survey Process...................................................................................20
Appendix B - Glossary of Manufacturing Technology Terms.........................................................22
 

FOREWORD


Technology on the UK Factory Plant

 This report is a first tangible result of the Joint Project on the US-European Technology Adoption Practices (USETAP), co-located at Auburn University , Alabama, in the USA and University of Plymouth Business School, Plymouth, in England.

It is an extension of the successful series of studies of manufacturing technology use in the US conducted since 1990 by Dr. Swamidass, sponsored by the National Association of Manufacturers (NAM) and the National Science Foundation(NSF). In the United States. Reports on the US surveys in 1992 , 1994 and 1998 have been published by NAM in the Technology on the Factory Floor series.

This report exploring technology practices in the K manufacturing is intended to provide executives in the UK-based firms , and those policy makers concerned with the performance and promotion of this industry sector,with similar valuable information on the levels of adoption and the impact of technology on manufacturing competitiveness within United Kingdom.

The survey reported here and the latest US survey used identical questionnaires and a similar survey process. By referring to the 1998 Technology on the Factory Floor report alongside this report on the UK, it is therefore also possible to benchmark practices in the US and the UK against each other.It is also intended that further comparative analyses will be published in due course.

The project plans survey routinely the US and the UK manufacturing sectors to provide analysis and updates on trends in the adoption and impact of new technologies . We welcome the participation of sponsors and other  bodies who would be interested in supporting the on-going project work to provide additional information to support companies , policy makers and all others with the global competitiveness of our manufacturing sectors.

The report authors

 Dr. Swamidass is Professor of Operations Management and Associate Director of the Thomas Walter Center for  Technology Management, Auburn University. His industrial experience includes seven years of production  management with a large manufacturer in Asia. He has worked with the National Association of Manufacturers  (NAM) to survey the use of manufacturing technology in US factories since 1990; this effort was partially  sponsored by the National Science Foundation (USA) since 1993. The most recent report to result from these  surveys is called, Technology on the Factory Floor III: Technology Use and Training in the United States. This  report is Published and distributed by the Manufacturing Institute of the NAM, Washington, D.C. He is a  co-author of the book, Cross-functional Management of Technology (Irwin, 1996, USA), and the editor of the  Encyclopaedia of Production and Manufacturing Management (Kluwer Academic Publishing, 2000, forthcoming).

 Dr. Graham Winchholds the University Research Chair in Business Analysis at the University of Plymouth  Business School in the UK.  Dr. Winch has worked in industry in Germany  and the UK, and in consulting in the  US.  His research covers the impacts of technology on company performance and on the use of  computer-generated scenarios and other techniques to enhance the strategic thinking of managers.

 For more information contact:

 The Thomas Walter Center for Technology Management
 Tiger Drive, Room 104
 Auburn University, AL, 36849-5358, USA
 Ph: 334-844-4333;  Fax 334-844-1678
 Swamidp@eng.auburn.edu
www.eng.auburn.edu/center/twc

 University of Plymouth Business School
 Drake Circus
 Plymouth PL4 8A
 United Kingdom
 Ph. 01 752 232811   Fax:
 Graham.Winch@pbs.plym.ac.uk
 www.plymouth.ac.uk

Executive Summary



 

A generally positive picture

In this report we describe the results of a survey of the adoption and impact of new technologies in british manufacturing . The survey parallels an identical exercise carried out within US manufacturing ,though this report focuses on the results of the UK element ,with only a few references to US results .A fuller comarative report is also planned.

The picture od UK manufacturing painted here is generally an optimistic one. With exporting firms from leading the way, the level of adoption of many hard and soft technologies is high -possibly even reaching saturation in some areas.Technologies adoption is accompanied by investment in training to achieve skilled operation. Even with the relatively short pay-back periods required for these investments , the technologies are reported as yielding significant improvments in cost performance as well as increases in competitiveness. Many plants already consider themselves to be extremely skilled users of some technologies, notably CAD,CNC and LAN,though other probably newer, technologies like CIM use of robots and flexible manufacturing systems are clearly much lower on te learnign curve.

While there may be some reluctance on employees' parts to solve new problems and learn new methods with these technologies and that there may be some background educational defeciencies that prevent full skill develpoment which lead to shortages in the availability of skilled operators ,employee resistance is not generally percieved as a critical barrier.

Key pointers form the analysis

Indsustry leaders in technology adoption

Larger plants use technologies more extensively than smaller plants. With all new technologies, a higher percentage of larger plants are reporting adoption. More critically ,across everyone of the nine defined possible benefits accruing from technology investment,significantly higher proportions of larger plants are able to report benefits actually being achieved. Larger firms also report greater levels of computerized transactions internally and with external stakeholders.-customers and suppliers. This points to significant potential for competitive disadvantage. Only in the areas of staff motivation and levels of skilled operation, are smaller plants able to report better performance than their larger counterparts.

Exporters lead the way in technology adoption . The use of technology rises in line with the percentage of revenue generated by export sales. With the sole exception of CNC ,exporters appear to lead non-exporters in technology adoption .This disparity is most marked in CIM amongst the hard technologies but most pronounced across the board with the soft technologies.Whether it is the case that technologies  lead to enhanced exports , or the exporters are simply forced to adopt new technologies faster to remain competitive , it is evident that exporters are benefitting disproportionately from new technolgy adoption. Plants in the survey which are exporters and adopt technology early are gaining a clear competitive edge.

Firms seek to recover tehcnology in quick time. Over 59% of firms require an investment payback period of two years or less, and 85% require three years or less. Vendors and, interestingly customers are seen as primary source of assistance in technology related investment decisions. Government agencies and universities are only marginal providers of such assistance.

Technology investments seem to pay off . The major benefits expected from technology adoption relate to process efficiency - decrease in costs and reduction in cycle time being the leading benefits ,along with focused production and progress toward zero defects. However, manufacturers also seek to improve their competitiveness through increases in product line ,increased market share, and probably zero defects again. As a result of technology use over three years, manufacturers are reporting impressive gains in many of these measures.

Computerised transactions are becoming a critical factor . In every dimension of  intra-company and external communications, over thirty percent of transactions are now computerized with transactions between shop floor and production planning leading at sixty percent . Indeed, a third of respondents are able to report that over ninety percent of teir shopfloor/production planning transactions are now computerised, Companies are thereby able to reap significant benefits in terms of reduced paper-work,fewer errors, and greater speeds and flexibility. They are also able to interact much more effectively and directly with their customers and suppliers, though only around one in twenty lants reports a 90% level of communications with external stakeholders currently being through compterized transactions. As adoption of some technologies approaches saturation, the computer netowrking of operations through LAN adoption will continue to leverage the integration and synerggy between other new technolgies like flexible manufacturing systems and CIM.

Training and operator skills and attitudes

Training accompanies new technolgy investment. Firms in the survey report significant investment in shop-floor operator training -typically just under four percent of payroll costs. A variety of sources of training is used both in-house via on-the-job, computr based, or other training methods, and though external provision from consultants and vendors. Extrnal training seems, marginally , to be traded off against this. Smaller and larger plants seem to gain very similar benefits from using external vs. internal providers.

Software problems and poor vendor support mainly ot blame for adoption delays. Neither lack of training funds nor operator skills are cited as major causes of delays in adoption , however. Software problems and poor vendor support are both reported as causing longer delays.

Smaller firms experience shorter delays in skilled use of technology . Despite generally having longer training cycles and suffering from the availability of trained operators, smaller firms seem to experience much reduced delays in achieving skilled use of technology . In particular, they seem to suffer much less fro msoftware and vendor problems - larger firms should consider why this could be.

Longer term outlook may be less promising. Two factors cast a more pessimistic shadow on longer term global competitiveness of UK manufacturers . Firstly , while employee resistance is not seen as a current problem, their perceived lack of eagerness to solve problems and learn new methods may become one in the fututre.Secondly, around fotry percent of companies are reporting that operatives lack the levels of education that are necessary for advanced training.
 
 

1.   Introduction


British manufacturing companies are competing in ever-more competitive markts, both within the European Union and globally. A major element of competitive advantage comes through the adoption and effective exploitation of manufacturing technologies. This report reports the findings of u survey carried out in the UK manufacturing sector focusing on this critical dimension. The survey seeks to identify which are the technologies most adopted by firms, and to quantify the perceived benefits of adoption and how this relates to training and skill levels required for these technologies.

A parallel survey has been undertaken in the US by the Thomas Walter Center for Technology Management at Aburn University, sponsored by the National Association of Manufacturers (NAM) and the National Science Foundation (NSF). The US survey was the third in a sequence, earier surveys having been completed in 1990 and 1993. The US can therefore benefit from a longitudinal analysis of technology adoption and important tools have been identified. The UK survey now offers the opportunity of comparing practices and implications between US and the UK. To this end the questionnaire used in the UK was identical to the one used in the US survey in every respect apart from minor changes such as currency and job titles. (It is intended that future cycles will also provide trend analysis for the UK).

This report focuses primarily on the presentation of the UK survey findings across the over 250 manufacturing firms who responded. Multi-site firms were asked to select one site and to provide responses to all questions in relation to that plant. This provides a focused data-base without problems of averaging and accumulation across plants, and enables more detailed analysis of traning and benefits at local level. The data presentation is supported by some commentary and, where helpful, reference to some of the critical trends observed in the US. The main purpose for this is to allow UK firms the opportunity to benchmark their behaviour and performance against other Uk manufacturers. However a supplementary report will also be produced which presents a fuller comparison between the UK and the US. This will alow a more global benchmarking exrcise by firms, but should also aid policy makers, suport agencies and training providers to identify critical areas for development.
 

Technologies Investigated

There is a tendency in manufacturing to associate the term 'technology'with automation/materials handling and other hardware-intensive equipment ; such technological innovation usually involving signifcant investment in capital plant. This survey, like its US counterpart, uses the term in am ore general sense to include innovative practices and principles that may be as dependent on training organisation and manufacturing philosophy as on capital investment - these are termed 'soft' technologies.
The survey therefore includes 'hard' technologies that are centered around plant and equipment, like flexible manufacturing systems (FMS), computer-aided  The 'soft' technologies that are covered include some which have now been in use for a number of years, technologies that are covered include some which have now been in use for a number of years, as well as newer ideas, including just-in-time manufacturing (JIT) and manufacturing resource planning (MRP) and total quality management (TQM). These 'soft' terms and the abbreviations used, in particular , have commmonly accepted 'core' meanings and connotations in industry, but the actual implementation, use of supporting software, so on, can vary widely. In this sense, the term is intended to evoke the generic ideas surrounding the term in the minds of the respondents, rather than to imply any particular commercial product, framework, or implementation.

In total seventeen technologies were considered in this survey, eight hard technologies and 9 'soft'. These are listed in Table 1 with a brief explanation of the acronyms used.


'Hard' Technologies Investigated


          The Technology                                       Explanation Where Needed



1.        Automated inspection
2 .        CAD                                                                Computer aided Design
3.        CAM                                                                Computer aided manufacturing including programmable
                                                                                     automation of single or multi-machine systems
4.        CIM                                                                  Computer integrated manufacturing
5.        CNC                                                                 Machines with computerised numeric control
6.        LAN                                                                  Local Area Networks for computers
7.        FMS                                                                  Flexible manufacturing systems; automated multi-
                                                                                     machine systems linked by an automated material
                                                                                     handling systems.
 8.      Robots                                                                All kinds os robots

'Soft' Technologies investigated



          The Technology                                            Explanation Where Needed

1.       Bar Codes
2.       Concurrent Engineering
3.       JIT          &nbsp;                                                             Just-in-time manufacturing
4.       Manufacturing cells
5.       MRP                                                                    Material requirements planning
6.      MRPII                                                                   Manufacturing resource planning
7.      SQC                                                                      Statistical Quality Control
8.     Simulation and Modelling
9.     TQM                                                                      Total Quality Management


 
 

Table 1 Summary of Technologies in the Survey

A fuller definition of these Technologies as interpreted in this report is given in a glossary in Appendix B


For information on the Thomas Walter Center or this page, please contact:

Thomas Walter Center
Phone: 334/844-4333
FAX: 334/844-1678

Last Update April 27,2000.
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