What Top Management Thinks About the Benefits of Hard and Soft Manufacturing Technologies

Abstract

Each year, billions of dollars are spent by U.S. manufacturers to acquire hard and soft manufacturing technologies. Hard technologies are bundle of equipment, computer hardware and software such as computer numerical control, computer-aided manufacturing, robots, etc. In contrast, soft technologies are manufacturing techniques and know-how such as just-in-time, total quality management, statistical quality control, etc.- hardware is not essential to their successful use but can enhance their scope and effectiveness. This large empirical study of 1042 U.S. manufacturing plants develops a model to study the impact of manufacturing technology use on various performance measures; this study provides first evidence from the field that soft manufacturing technologies have many times the measurable effects of hard technologies on product, process, and business performance. Further, the effects of technology use are enhanced by the skilled use of technology. Implications for research and public policy are addressed. This paper has found that, in the opinion of top management in manufacturing firms, soft technologies have an impact on 1) shop floor performance; 2) product line breadth; and 3) growth and profitability. These finding should make the investment in soft technologies easier to justify. If top management controls the purse, and if it sees a link between investment in soft technology and tangible benefits in these three areas, getting top management to invest in soft technology should be easier. Before deciding on requests for investments in soft technologies, we hope top managers would seriously consider the findings of this paper.