Advanced Manufacturing Technology Investment Research Articles

Advanced Manufacturing Technology Investment Patterns

This study presents a longitudinal analysis of patterns of investment in advanced manufacturing technologies (AMT) and financial performance. Investments in AMT from fifty manufacturing plants in the metalworking industries are examined. Data was collected via mail surveys administered to fifty manufacturing plants at three separate data collection times: 1994, 1996, and 1998. This study seeks to fill a void in the area of technology management, which is comprised primarily of cross‐sectional studies that do not address the dynamic nature of investments in technology. The results suggest differences in the evolutionary profile of several technologies, including e‐mail, bar coding, robotics, and computer aided design. Further tests indicate that there is a positive relationship between many of these technologies and plant financial performance. Finally, the longitudinal data suggest that there is approximately a two‐year time lag between investment in technology and performance improvements.

Adoption of AMT by South African manufacturers

This paper presents the results of a survey of South African manufacturers that examined their planning and implementation activities relating to advanced manufacturing technology (AMT) investments. Data were collected by means of a postal questionnaire survey to which 84 companies responded to questions regarding their largest AMT investment in the last three years. The analysis is structured on a process model of adoption of AMT comprising three stages: motivation and idea generation for AMT; AMT proposal evaluation; and AMT implementation. The paper presents results relating to formulation of strategies; nature and size of AMT investments; sources of AMT investment ideas and forces motivating AMT investments; AMT proposal development; training in AMT and production management; AMT proposal evaluation; planning and implementation time periods and benefits and risks/difficulties. These dimensions are evaluated across dimensions of company size, types of AMT, and type of production system.

Investment appraisal techniques for advanced manufacturing technology (AMT): a literature review

This paper presents an overview and guidance for manufacturing companies which are preparing to invest in advanced manufacturing technology (AMT). The purpose of this paper is to explain the reasons why the company may encounter problems while adopting AMT, and to look at the many suggestions offered by the relevant literature for improving the performance of evaluation in AMT investment. According to the four major steps in adopting AMT (i.e. strategic planning, justification, training and installation, and routinization and implementation), the research work here aims to assist managers or investors to recognize problems at each step, thus offering appropriate ways to avoid and/or solve those problems. It is believed that improved justification methods will encourage more firms to invest in AMT and to realize the benefits these investments can offer.

Investment appraisal of advanced manufacturing technology in the czech republic, usa and united kingdom

The results of a survey large Czech manufacturing companies are presented which shows the current levels of investment in advanced manufacturing technology (AMT), the techniques and criteria used to assess AMT capital projects, and attitudes to the need for further investment. Comparisons are made with the results of earlier identical surveys in the UK and the USA. The comparisons reveal numerous statistically significant differences. The current levels of AMT investment in the Czech Republic are relatively low, the techniques used for evaluation relatively unsophisticated, the investment criteria used are more short term, and there is less concern about the need for AMT.

An empirical taxonomy of advanced manufacturing technology

An empirical advanced manufacturing technology (AMT) taxonomy with three groups was identified from cluster analysis. The analysis was based on a survey of Swedish metal‐working industries and 324 relevant responses were received (response rate of 38 percent). The first group, “the traditionalists” is characterised by firms of relatively small size with low levels of investments in AMT. “The hard integrators” emphasise computerised transactions between sub‐units and processes to a larger extent than the investment in administrative, design and manufacturing technologies. “The high investors” group contains relatively large firms that have invested in most technologies and have computerised their transactions significantly more than both the other groups. Companies with heavy investments in AMT had developed the infrastructure (worker empowerment, improvement programmes and organisational design) and maintenance (prevention and integration) aspects to a greater extent than low investors. They also performed better.

Advanced manufacturing technology investments in Britain: 1989 versus 1996

This paper compares the results of surveys conducted in 1989 and 1996 that examined the planning and implementation activities associated with investments in Advanced Manufacturing Technology (AMT) in British manufacturing companies. The same data collection instrument was used in both surveys which focused on a number of aspects of the AMT planning and implementation process. The similarities and differences identified in respect of motivation for investing in AMTs, role of respondents in strategy formulation, nature and size of AMT investments made, sources of information used, financial evaluation carried out, training in AMT and production management, benefits of AMTs, and risks and difficulties associated with adopting AMTs are discussed. Conclusions and implications for management are presented.

Evolutionary Patterns of Flexible Automation and Performance: A Longitudinal Study

This study presents a longitudinal analysis of patterns of investment in advanced manufacturing technologies (AMT) and financial performance. Investments in AMT from 112 manufacturing plants in the metal-working industries are examined. Data were collected via a mail survey administered to 202 plants in 1994, and readministered to 112 of the same plants in 1996. This study seeks to fill a void in the area of technology management, which is comprised primarily of cross-sectional studies that do not address the dynamic nature of investments in technology. Four major conclusions are drawn from the data. First, several individual technologies have higher investments in 1996 than in 1994. In particular, electronic mail has the largest increase in investment, a finding that suggests that manufacturing firms are finding ways to take advantage of the exploding potential of electronic communication. Our second conclusion is that plants invest in technology in an incremental fashion over time rather than using an all-or-nothing approach. Plants with low investments follow one of three technology strategies as their investments in AMTs evolve: (1) continued low investment, (2) investment primarily in design-based technologies, or (3) equalized investment in design, manufacturing, and administrative AMTs. Third, analysis of the degree of manufacturing involvement in developing business strategy indicates that plants that have a more proactive role for manufacturing invest greater resources in AMTs. Finally, while AMT investment was not positively associated with performance in a cross-sectional analysis, longitudinal analysis of data collected two years later does reveal a relationship. In short, the analysis supports the proposition that there is a lag between initial investment and resulting performance improvements.

Planning processes for advanced manufacturing technology by large American manufacturers

In response to an increasingly competitive environment, many manufacturers have invested in advanced manufacturing technology (AMT). While many studies regarding the use of AMT have been performed, little is known about how firms plan and manage their AMT investments. This is surprising given the evidence about the impact such investments can have on an organization. To address this, a survey of large American manufacturing firms was conducted. Respondents were asked, among other questions, why their firms made such investments and the fit with their business strategy; which functional areas were involved in idea generation, the planning process, and proposal assessment; and what the anticipated risks, difficulties and benefits were from making such investments. The results from this survey are provided along with an analysis of the responses.

Investment in advanced manufacturing technology: a study of practice in large U.K. companies

This paper reports the results of a survey investigation into the investment decision making practices of large U.K. manufacturing companies, especially in relation to investments in advanced manufacturing technologies. A 23% response rate was received in a survey of the finance directors of 466 large U.K. manufacturing companies. Responses were classified into three groups ranging from non-users of AMT to sophisticated users and analysis revealed that more sophisticated users do emphasize certain intangible benefits in combination with measures relating to the traditional dimensions of return and risk.

Robot automation in the mould shop

British toolmakers are not renowned for their investment in advanced manufacturing technology. In spite of this mould and die maker, Fletcher & Hamilton has taken the ultimate step and installed the first robotic EDM cell in the UK at its Cheltenham plant. This new facility was introduced following a BIMBO that has transformed the company into a profitable operation specialising in the manufacture of moulding tools for the caps/enclosures, medical and pharmaceutical industries. The philosophy surrounding this transformation is described together with the set‐up and operation of the EDM cell.

A methodology to select optimal system components for computer integrated manufacturing by evaluating synergy

The enormous growth in manufacturing automation has produced a plethora of advanced manufacturing technologies (AMTs) with diverse features. These AMTs could consist of semi- and fully automated systems or equipment. Manufacturing companies are seeking ways to gain a competitive edge over their competitors by investing in AMTs, where the ability to make rational choices among these AMTs is important for success. Integration of AMTs in an enterprise brings many islands of automation into a single database-shared entity. Effective integration by efficient communication links among these AMTs will generate significant benefits across many traditional functional units, eliminate many functional barriers, and provide opportunities to achieve the competitive goals. The effect of synergy caused by the integration of AMTs will have an impact on various functional units of the enterprise. This paper provides a methodology, firstly to identify appropriate technologies for a company based on their strategic focus, and secondly to estimate the functional interrelationships within the framework of a unified approach for the justification of computer integrated manufacturing (CIM). These derived functional interrelationships are utilised to assess the effect of synergy in an integrated enterprise and identify the optimal capital investments in AMTs as system components of CIM.

A reference framework for the application of MADM fuzzy techniques to selecting AMTS

In the last decade, there has been growing interest in the assessment and selection of investments in advanced manufacturing technologies (AMTs). Several authors have pointed out the shortcomings of traditional financial techniques, proposing alternative approaches usually referred to as 'non-conventional' approaches. Among them, some authors have recently proposed fuzzy multi-attribute decision making (MADM) techniques, which seem to be particularly suitable for dealing with the intangible effects of AMTs. However, no attempt has so far been made to analyse and compare the various MADM techniques included in the fuzzy theory with respect to their applicability to the assessment and selection of AMTs. The objective of this article is to give a reference framework for the application of a MADM fuzzy approach to AMT selection. In particular, the paper describes three major categories of fuzzy MADM approach and compares their results using a case study.

Strategic evaluation of flexible assembly systems on the basis of hard and soft decision criteria

Justifying investments in Advanced Manufacturing Technology has proved to be a rather complex issue for production management. Although they are aware of the strategic character of this technology, practitioners often seem to neglect that aspect in their decision process because of inappropriate management support methods. On the one hand, conventional approaches to justification of investment focus exclusively on hard decision criteria such as costs or paybacks. On the other hand, qualitative methods, such as scoring models, emphasize soft investment variables while lacking precise quantification of hard investment factors. Some methodical progress has been made by merging these traditional approaches into multi-perspective or multi-layer frameworks in order to strengthen the strategic dimension of investment decision processes. Against this background an integrated, system dynamics approach to evaluating complex investments in Flexible Manufacturing Systems has been developed and is presented in this article. Finally, the findings are illustrated by an investment case study. © 1998 John Wiley & Sons, Ltd.

On the Applicability of Analytical Techniques for the Selection of AMTs in Small-Medium Sized Firms

The appraisal and selection of investments in advanced manufacturing technologies (AMTs) have received a considerable attention in the literature over the last decade. In particular, many articles, after highlighting the major shortcomings of traditional financial techniques when applied to the analysis of AMTs, have proposed alternative approaches, such as modified discounted cash flow techniques, strategic approaches and multi-attribute decision making methods. However, little attention has so far been paid to the applicability of such "non-conventional" approaches to small-medium sized firms (SMFs). This omission is particular critical for two reasons. First, in most SMFs the decision to adopt a given AMT is usually not supported by any technique, but is based rather on an "act of faith" in a new technology on the part of the entrepreneur. Second, there are some non-conventional techniques that seem particularly suitable for SMFs, in that they do not require major financial and strategic competencies or complex information and planning systems. This article seeks to increase the awareness of major non-conventional approaches among the owners and managers of SMFs and analyse critically the applicability of such approaches.

Unlocking the potential of advanced manufacturing technologies

AbstractThis research examines whether investments in advanced manufacturing technologies (AMTs) such as flexible manufacturing systems (FMS), computer aided design (CAD), computer aided manufacturing (CAM), robotics, etc., are more likely to lead to improved performance if they are supported by improvements in the manufacturing infrastructure of the company. This question is evaluated using data gathered from 202 manufacturing plants chosen from industries generally considered to have relatively high investments in technology.Multiple item scales are developed and adapted from sources in the literature to measure investments in technology, infrastructure, and the performance of the plant. Evidence supporting the reliability and validity of these scales is provided. Hierarchical regression is used to analyze the relationship between technology, infrastructure, and performance. The results suggest that there is an important interaction between the adoption of advanced manufacturing technologies and investments in infrastructure. Firms that invest in both AMTs and infrastructure perform better than firms which only invest in one or the other. Separate analyses on sub‐samples of firms with the highest and lowest investments in AMTs show that infrastructural investments have a stronger relationship with performance in the high investment group. Thus, the data indicate that infrastructural investments provide a key to unlocking the potential of advanced manufacturing technologies.

Economic and strategic justification of AMT inferences from industrial practices

Organizations vary greatly in their approaches and success in justifying investment in advanced manufacturing technology (AMT). This study investigates usage of various justification approaches by US manufacturers and examines the impact of such practices on the ultimate performance of AMT projects. Responses from a survey mailed to 584 plants in the US were used to test four propositions concerning AMT justification practices. We first discover that the majority of plants are not utilizing the more sophisticated justification techniques that are being touted by many researchers. Significantly, firms using hybrid justification strategies which include both economic and strategic justification approaches were found to attain higher levels of success from their AMT projects than plants that used only one method. However, once a plant used a hybrid justification method, preference for either strategic or economic criteria had no impact on the level of success of the project. Not surprisingly, plants using the more complex manufacturing technologies were more likely to have multiple functional departments involved in the justification process. Finally, the composition of inter-departmental teams for planning, justification and installation activities have an impact on the success of the AMT project.

Advanced manufacturing technology investment: criteria for organizational choice and appraisal

Argues that as opportunities arise for companies to exploit new markets, a critical issue is how firms should be organized to cope with innovation and competition in a fast moving business environment. Suggests changes to organizational procedures with the potential to deal with complex investment decisions better. Based on theory, surveys and practice, these include changes to the traditional role of financial analysis, extending the capital investment process to one which combines strategic and financial management considerations. Puts forward a set of criteria which should be met once advanced manufacturing technology practices have been recognized.

Investment decision making in UK manufacturing industry

Investment in manufacturing is important to sustained UK economic recovery, quality of life and national economic standing. Considers results from a survey of UK manufacturers on influences on capital investment, the appraisal methods used and the impact of recent changes, particularly in interest rates. Compares results with the Bank of England and CBI surveys and studies of appraisal methodology. Outcomes include the finding that UK interest rates are not seen by most manufacturers as an important influence on their investment decisions. Examines the effects of factors such as inflation, taxation and the UK and EU economic outlooks. Responses confirm near universal usage of the payback method in financial appraisals and widespread use of multiple criteria. Looks at UK investment in advanced manufacturing technology (AMT) and what allowances are made for intangible benefits. Considers a number of aspects of short‐ termism and concludes that the Cadbury recommendations are unlikely to have a major impact.

Planning for advanced manufacturing technology

While some reports on successes of advanced manufacturing technologies (AMT) have been glowing, many companies have tossed millions of dollars worth of fancy equipment into their factories and wound up with little to show for it. It is becoming clear that many of the AMT failures today can be attributed to an inadequate planning process. Proposes a four‐stage research framework that addresses issues in: planning the manufacturing system; planning for an appropriate infrastructure; planning for new relationships with the external environment; and justifying investment in AMT. Assesses the strengths and weaknesses of selected contributions in each stage, and identifies gaps in knowledge where research is needed. The framework devised should help tomorrow’s research build on the past and increase the research’s acceptance by industry, since it draws on both research‐ and practitioner‐based literature along with findings of the field study.

AMT investments in New Zealand: purpose, pattern and outcomes

Discusses the purpose, pattern and outcomes of investments in advanced manufacturing technologies (AMTs) in New Zealand firms. Based on data collected from 57 firms, explores the motivation for investing in AMTs, the nature and size of investments, speed of implementation and outcomes including benefits and difficulties experienced. Concludes that although New Zealand firms have made positive investments in a range of sophisticated AMTs, they appear to focus on operational benefits with little, if any, attention to marketing and strategic benefits. Concludes with a brief comparison of results from a parallel study conducted in Australia.