Successful strategies for AMT adoption in India: analyzing important variables via factor and discriminant analysis

Abstract

This paper investigates adoption of Advanced Manufacturing Technologies (AMT) in India. AMT in India have been classified into three levels (simple – Level I, modest – Level II, and sophisticated – Level III) for the present analysis. A general conclusion can be reached that Indian firms we surveyed have high adoption degree of Level I technologies, are going to adopt moe Level II technologies, and are not yet ready to invest in Level III technologies. Factor Analysis is used to identify common components among 25 AMT that were surveyed. Out of these technologies, three are stand alone infrastructure technologies of computer network and therefore are treated individually. The remaining technologies can be nicely interpreted by four common factors: “expensive”, “social”, “production”, and “quality”. Discriminant Analysis is used to identify critical success factors that contribute significantly to the success of AMT adoption. The accuracy achieved is 81.1 per cent (7.9 per cent error rate) by using only four variables out of 19 critical success factors.These influential factors are pace of implementation, hands‐on training program, long‐term automation objectives, and external consultants. However, only pace of implementation has a positive effect on the success of AMT adoption, while both hands‐on training program and external consultants have negative effect, and the effect of long‐time automation objectives is small.