Advanced Manufacturing Technology Investment Research Articles

Problems in the implementation process of advanced manufacturing technologies

The investment in advanced manufacturing technologies provides great benefits to the enterprises that manage them correctly; however, when this process is not fulfilled in a proper way, it could generate the bankruptcy of the company. That is why the implementation process is considered as a complex problem. In this paper, the results of a survey made in some industrial plants in Juarez City, Chihuahua, Mexico were discussed. In such survey, it asked about the situation related to the 26 most commented and reported problems in the literature; the questionnaire was validated using the Cronbach’s alpha coefficient, and factorial analysis was applied to the obtained information from a 189 cases sample size. Results indicate that the main problems that the assembly plants have to confront when they implement advanced manufacturing technologies are related with maintenance, required special installations, suppliers are far away; there is no accomplishment of the production standards; there are no economic resources, fear risk to invest; and finally custom’s problems.

Effective Factors on Advanced Manufacturing Technology Implementation Performance: A Review

This study reviews an extensive body of literature to investigate the factors effective on performance of companies implementing Advanced Manufacturing Technology (AMT). The purpose of this study is to provide a comprehensive viewpoint of issues related to successful AMT implementation and offer some directions to managers and investigators to make a company well-prepared to accept technology. The factors are grouped into three categories: technological, organizational and internal/external. The literature showed that in order to have a fruitful result from AMT investment, the organizational structure and culture, operational strategy and human resource should be organized and integrated appropriately with each other to avoid probable barriers and problems. Proposed framework can be used as a guideline for managers and investors in improving their AMT implementation process.

Introduction of Advanced Manufacturing Technology: 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 introduce AMT to Local context and explain the reasons why the company may encounter problems with adopting AMT. In addition to that, the author suggests many avenues to look at AMT applications and the many suggestions offered by the relevant literature for improving the performance of using AMT investment. Further, the research work here aims to assist managers to understand the benefits, types and investment of AMT and identify the problems in the local context. The author of this paper believes that proper understanding of AMT will encourage more firms to invest in AMT and to realize the benefits to make more contributions to society by improving world standard quality of product. DOI: 10.4038/suslj.v6i1.1694 Sabaragamuwa University Journal, vol 6, no. 1, pp 116-134

Complementarities in the implementation of advanced manufacturing technologies

The purpose of this analysis is to use complementarity analysis to explain why some implementations of advanced manufacturing technology (AMT) provide a high return on investment while others do not. By analysing the engineering environment, as well as the technology used in the manufacturing process, we hope to provide further insight into the necessary environmental conditions for high returns on investments in AMT. This paper aims to advance current understanding of the impact of organizational fit through complementarity analysis of 26 AMT and 12 engineering management practices. The results reveal that analysis on the dependencies of implementation of AMT must be conducted at the industry and plant size levels, otherwise the environmental differences may lead to inconclusive or misleading results for the majority of senior managers engaging in strategic AMT investment decision making.

Evaluation of advanced manufacturing technologies using Taguchi's loss functions

PurposeThe purpose of this paper is to provide a tool for decision makers to consider both tangible and intangible factors while making decisions regarding investment in advanced manufacturing technologies (AMT).Design/methodology/approachTraditional financial approaches are often used for evaluation of advanced technologies. However, the difficulty arises when the result of financial techniques cannot provide a conclusive recommendation for a technology adoption. The current research is an attempt to address this issue by including factors that allow distinction between technology alternatives with similar financial results. This task is accomplished in a two step process. First, a process is developed for identifying all potential benefits associated with adoption of an AMT. These are the benefits that were not measurable for inclusion in the financial analysis. Second, a mechanism is developed for quantifying these benefits to be used for ranking of the technology alternatives. This task is done by soliciting decision maker's input on importance of the benefits, required benefit goals, and his/her perception of how well each technology meets the benefit goals. This information is then used in Taguchi's loss functions to assign ranks to technology alternatives.FindingsInvesting in new technologies is the only way for manufacturers to survive in today's competitive market. Thus, there is a need by these manufacturers to have access to a decision model that will help them with their investment decisions.Practical implicationsThe procedure proposed here helps companies to rank the technology alternatives and identify the best technology for adoption.Originality/valueThe identification of intangible benefits associated with adoption of a new technology and use of Taguchi's loss function to quantify these benefits.

Complementarities between information sources to support the implementation of Advanced Manufacturing Technologies

In the past decade, manufacturers have invested significantly in the implementation of advanced manufacturing technologies (AMT) in an attempt to reduce costs and gain a competitive advantage in their industries. The benefits of these investments in AMT have been varied, and in some cases significantly negative. To date, the impact of information supports on AMT implementations and the complementarities that exist between such supports have not been determined. This study develops a model of manufacturing plant productivity using complementarity assumptions developed by [13, 14] to identify the impact of acquiring specific sets of information supports on the implementation of AMT. In order to demonstrate the practical application of the results, the optimal information support practices are provided for a couple of example plants using a solution lattice based on results from this study.

Strategies for Manufacturing in Southern China

INTRODUCTION The Pearl River Delta in Southern China (PRD) is a collective name covering the triangular region around the confluence of the Pearl River system that stretches across Guangdong Province of Southern China. The relocation of manufacturing plants from Hong Kong to Guangdong Province began in the early 1980s (Information Service Department, 2002) and is now virtually complete, leaving Hong Kong with only the related manufacturing services. The PRD region had more than 53,000 of manufacturing establishments in 2001 (Federation of Hong Kong Industries, 2002), while the total export value for the region in the same year accounted for 4.7% of the world merchandise trade (Federation of Hong Kong Industries, 2002). The PRD has thus developed into a very important member of the global manufacturing establishment (Zhao, Lo, & Sculli, 2005). The flow of manufactured items within a company and between companies has now become an important area of research, and at a macro level, these companies play their individual roles along the entire value chain. The structure and nature of the underlying industrial networking strategies has, to the authors' best knowledge, received limited attention from researchers, and a logically defined classification of industrial network strategies is needed in order to obtain a deeper insight into industrial networking. The results presented in this paper, are possibly a first attempt to devise a framework for the development of the associated industrial taxonomy using empirical evidence collected from manufacturing firms in Southern China. The two main industrial zones of Southern China are Hong Kong and PRD, and the taxonomy developed applies to the industrial networks of the manufacturing industries across both zones. Classification in a very broad sense is the grouping of similar objects (Everitt, 1993). It is a rather primitive method for categorizing objects into groups that are characterized by similarities and differences that the other groups do or do not possess to the same extent. Gordon (1996) suggests that the classes are discovered through the process of classification and are unknown a priori. He defines classification as: ... the investigation of a set of objects in order to establish whether or not they fall naturally into groups (or classes, or clusters) of objects with the property that objects in the same group are similar to one another and different from objects in other groups; these groups are unknown at the start of the investigation, and need to be determined. In recent years, cluster analysis has been the main technique used to reveal the underlying structure of various empirically based Operations Management (OM) topics, including advanced manufacturing technology (AMT), quality management system (QMS) and supply networks. Diaz, Machuca and Alvarez-Gil (2003) applied hierarchical cluster analysis to determine the appropriate number of groups for AMT investment patterns in the aeronautical industry. They identified 3 relatively distinct groups: traditionalists, designers, and investors who represent the underlying structure of the industry. Yeung, Chan and Lee (2003) adopted the hierarchical procedures to identify 4 specific groups of electronics manufacturing firms that are significantly different in their practice of QMS. Harland, Lamming, Zheng, and Johnsen (2001) employed cluster analysis to define 4 types of manufacturing firm that have distinct characteristics in supply networking strategies. Evidence of the growing popularity and acceptability of the use of cluster analysis in OM research can readily be found (Miller & Roth, 1994). In order to address network classification in industrial networks, Rudberg and Olhager (2003) suggest two distinct research tracks: supply chain research and manufacturing networks. For the first research track, i.e. research on supply chain, Fisher (1997) proposed two distinct types of supply chain according to the demand nature of the products--functional or innovative products. …

Antecedents and trajectories of AMT adoption: The case of Greek manufacturing SMEs

This study examines antecedents and trajectories of advanced manufacturing technology (AMT) adoption in three categories: stand-alone, intermediate, and integrated technologies. Antecedents of adoption include prior investments in AMT, developments in firms’ manufacturing capabilities, technology strategy, absorptive capacity, and environmental pressures. Based on a sample of 87 Greek manufacturing SMEs, we find that AMT adoption follows an incremental, piecemeal progression from the least complicated through intermediate to integrated technologies. It is found that an increase in the firms’ quality and flexibility capabilities induces them to adopt further AMT, whereas advances in low-cost, innovation, and delivery capabilities appear negatively related to further AMT adoption. Absorptive capacity, technology strategy and environmental pressures play a central role in decisions for additional investments in AMT. In the context of a catching-up economy, these results support the notion of a ‘stepwise’ technology accumulation process as well as ‘satisficing’ technological change.

A comparative study of advanced manufacturing technology and manufacturing infrastructure investments in Singapore and Sweden

This empirical study compares the advanced manufacturing technology (AMT) investment, the manufacturing infrastructure investment, and the interaction effect between these two types of investments using data from a sample of firms in Singapore and Sweden. The results suggest that the interaction of AMT investment and manufacturing infrastructure investment has a positive impact on the firm profit and growth in Sweden, but does not have a positive impact on firm profit and growth in Singapore. In addition, this study shows that the AMT investment has significant positive correlation with infrastructure investment and firm performance in Sweden but not in Singapore.

Justifying investment in advanced manufacturing technology: a portfolio analysis

PurposeThis paper seeks to present the results of an investigation on the justification of investments in advanced manufacturing technology (AMT) at manufacturing plants in the USA. Unlike previous research that explored the adoption and use of a specific AMT or groups of similar AMT, this study focuses on a plant's combination of technologies or its technology portfolio.Design/methodology/approachMail survey responses from a sample of 82 plants are used to examine the relationships between the type of technology portfolio being used and the justification approaches and evaluation techniques that were utilized to justify these investments. The study also investigates the level of functional integration and the level of effort applied to several activities during the justification stage of the AMT projects.FindingsThe majority of plants that had adopted the more complex technology portfolios were using hybrid (economic and strategic) justification approaches supported by ratio and discounted cash flow justification techniques. Plants that were using the less complex portfolio also used hybrid approaches, but tended to concentrate on the use of ratio techniques. Findings on the level of functional integration at various stages of the AMT project are also reported.Research limitations/implicationsThis research concentrated on discrete‐parts durable goods producers in the USA. Further studies are needed to determine whether the findings can be generalized across other industries or in other countries.Originality/valueThis research uses an innovative portfolio analysis approach to investigate the important topic of justification of AMT. Managerial implications arising from the results of this study and a number of new research avenues are advanced.

Advanced manufacturing technology adoption—the German experience

The decision process that organisations utilise when evaluating technology investment opportunities is a complex and even political process; however, the correct decision can provide the organisation with considerable operational and competitive benefits. The research presented in this paper presents the findings of a postal survey of the benefits provided by technology investments to large German manufacturers. It was found that only where middle management generated the idea for the advanced manufacturing technology (AMT) investment was success in that investment significantly more likely. Respondents who established a project team to plan the technology proposal, regardless of the department which generated the ideas for technology investment, were not significantly associated with a greater likelihood for success. The respondents typically took between 3 and 12 months before making the final decision to invest, irrespective of the department generating the idea for the AMT, and a further 6 months to implement the AMT. Respondents who utilised a discounted cashflow analysis took significantly longer to make the final decision to invest. The greatest number of manufacturing outcomes of significantly higher importance was identified for respondents where Engineering, IT or R&D generated the AMT ideas. It was also determined that the respondents most frequently considered AMT investments in computer hardware or software and technical training for process workers to be necessary at the time of considering the investment. Middle management were found to be significantly more concerned than managers on other levels about opposition of workers to the AMT, while the process workers were significantly more concerned about interruptions to the process during installation.

Exploring flexibility and execution competencies of manufacturing firms

Manufacturing flexibilities improve a firm’s ability to react to customer demands without incurring excessive time and cost penalties. While development of manufacturing flexibilities is desirable and indeed critical for some firms, exploiting the flexibility capabilities to achieve tangible firm-level performance outcomes through effective execution is becoming increasingly important. This paper presents a conceptual model that introduces two new constructs: flexibility competence and execution competence as distinct from manufacturing flexibility. Based on the proposed conceptual model and a multistage data envelopment analysis (MDEA) of empirical data, the roles of flexibility and execution competencies in determining performance are examined. The results indicate that some firms are more effective than others in exploiting investments in advanced manufacturing technologies and strategic sourcing initiatives to develop manufacturing flexibilities. Thus, lending credibility to the new construct referred to as flexibility competence. We also conclude that some firms are more effective than others in converting manufacturing flexibilities into tangible firm-level performance, suggesting that execution competence is an important construct that needs attention. We suggest future research in this area for comprehensively investigating these two new constructs proposed in this paper and identifying the factors that influence them.

Advanced manufacturing technologies: evidences from Indian automobile companies

This research reports the findings of an exploratory survey on advanced manufacturing technologies (AMT) administered in Indian automobile companies. The objective of the survey is to assess the status of advanced manufacturing technologies, identify advanced manufacturing technologies relevant to Indian automobile sector companies, identify competitive priorities, assess the degree of investment in advanced manufacturing technologies. Responses from 68 companies are analysed and presented.

A view of developing patterns of investment in AMT through empirical taxonomies: new evidence

In line with the theoretical premises of the research, the aim of this paper is two-fold: firstly, to determine whether there are different patterns of advanced manufacturing technology (AMT) investment behavior in the Andalusian aeronautical industry that can be associated with different technology strategies, as in other sectors and geographical areas and, secondly, to identify possible similarities or differences from previous research, such as Boyer et al. [J. Operations Manage. 14 (4) (1996) 297–313] and Jonsson [Int. J. Operations Production Manage. 20 (12) (2000) 1446–1474]. A survey of the 20 plants in the population was conducted via postal questionnaire between July 1999 and April 2001, with a structured interview being held at a later date. A cluster analysis was performed which allowed a taxonomy with three groups of plants to be established: traditionalists, designers and investors. These three groups differ from each other with regard to their AMT investments, industrial activity, size and degree of integration. Differences between the groups in company performance cannot be appreciated. Although the results apparently seem to back up most of the findings of previous works biased to larger companies, they do bring certain aspects into question regarding the explanation for the way the groups are formed. The three critical factors which determine AMT investment in the sector are the company’s being of a certain minimum size, undergoing a period of expansion, and type of activity.

Manufacturing investments in the Czech Republic:: An international comparison

The principal economic measures taken by the Czech Republic (CR) over the last 10 years to encourage investments in more advanced manufacturing technology (AMT) 1 1 AMT is a term applied to any form of manufacturing process that embraces a computer control system, from the basic numerically controlled machine tools to fully computer-integrated flexible manufacturing systems. are briefly described. The results of a survey in large CR manufacturing companies are presented which show the current levels of investment in 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 in the US. The comparisons reveal numerous statistically significant differences. The current levels of investment in the CR are relatively low, the techniques used for evaluation relatively unsophisticated, the investment criteria used favour short-term investments, and there is less concern about the need for AMT. It would appear that more generous incentives and stronger management motivation are needed if the Czech manufacturing industry is to compete effectively in the world markets.

Consider your options: changes to strategic value during implementation of advanced manufacturing technology

Strategic investments such as flexible manufacturing technology yield benefits to a company beyond the immediate cash flows. These strategic benefits can be captured, to some degree, using real option valuation techniques. However, real option models presume these can be identified and evaluated at an early stage in the investment process. In this paper, the authors argue real option value is often only vaguely defined at the adoption stage and frequently manifest during implementation. By examining four advanced manufacturing technology investments during implementation within different organizations, this study qualitatively explores the changes to original real options as unanticipated problems surface and solutions are found and implemented. The study found that as the companies adapted to implementation setbacks, the form, scale, value and clarity of the real options changed. For three of the companies, the changes to options were negative while the fourth case indicated positive effects. Most prevalent were delays in the earliest possible exercise date. The results highlight the need to consider changes to strategic value as companies adapt to setbacks that arise during project implementation. Implications for the evaluation of such projects are discussed.

Do foreign‐owned firms manage advanced manufacturing technology better?

This paper uses regression analysis of factors obtained from measured variables to find statistical relationships between investment in advanced manufacturing technology (AMT), the planning effort associated with that investment and operational performance of manufacturing firms operating in Australia and Canada. We used this data to test the proposition that foreign firms manage the implementation of AMT better than their domestic counterparts. Several reasons have been advanced for this largely untested proposition. Three hypotheses derived from it were supported by statistical analysis even when the effect of different organisational sizes is taken into account; lending some support to the persistent idea that Australian managers are not as effective as their overseas counterparts.

Evaluating Investments in Advanced Manufacturing Technology: A Fuzzy Set Theory Approach

In this paper, a model for the evaluation of investments in advanced manufacturing technology is developed. Many authors have called for an integration of financial and non-financial factors in such evaluations, and this paper demonstrates that it is conceptually possible to do this using the mathematics of the analytic hierarchy process and fuzzy set theory. The development of the model has certain distinguishing features. First, it is based on a conceptual framework that combines the three dimensions of risk, financial return and non-financial factors. The empirical basis for this has been investigated and previously reported by the authors. Second, models previously developed and reported in the literature are shown to suffer from certain flaws relating to the use of linguistic scales, the ranking of fuzzy performance indicators and partiality in the treatment of investment decision variables. These issues are addressed through the development of simpler linguistic scales based on the analytic hierarchy, a revised procedure for ranking fuzzy numbers and an attempt to build a comprehensive model through the three dimensions described above. Triangular fuzzy numbers are used throughout in order to make the mathematics tractable and relatively easy to understand, and to facilitate presentation of a worked example. However, so that the reader is not misled, attention is drawn to some of the complexities in fuzzy arithmetic, especially the important distinction between subtraction/division and deconvolution of fuzzy numbers.

Process‐technology fit and its implications for manufacturing performance

AbstractThis study investigates the issue of fit between process environment and advanced manufacturing technology, and its impact on manufacturing and business performance. We find that different process environments tend to align advanced manufacturing technology investments in distinct profiles, which are associated with superior performance. Deviations from these ‘ideal’ profiles are shown to have a negative impact on manufacturing performance. The findings also suggest that firms are not fully exploiting the potential afforded by AMT investments to compete in off‐diagonal positions in the Hayes–Wheelwright framework.

Development of a justification tool for advanced manufacturing technologies: system-wide benefits value analysis

Growing competition and increasing demands from customers are forcing small manufacturers to consider investments in advanced manufacturing technologies (AMTs). For many reasons, such investments are often difficult to justify by means of a traditional economic analysis alone. As a result, it is often necessary to consider the system wide benefits associated with AMTs in order to justify their adoption. A process known as system wide benefits value analysis (SWBVA) has been developed to assist decision makers with their advanced technology decisions. Users of the tool first perform an economic analysis to see if the investment is economically justified. If it is not yet justified, the gap between the minimum desired economic return and the actual return amount is calculated. Users can follow a series of procedures to determine if the value of the system wide benefits associated with the advanced technology is sufficient enough to justify this gap. These procedures involve customizing a formal model of system wide benefits to suit the technology decision being evaluated, setting desired goals for each benefit being considered, and answering a series of input questions about the level of those benefits they feel can be obtained from such a technology. A fuzzy expert system is the internal mechanism used to manipulate user inputs into crisp output values for each benefit category. If the determined output values for each system wide benefit are greater than or equal to the user-defined benefit goals, then the gap amount is believed to be justified. Users are provided with a summary report on the calculated results and are allowed to readjust their benefit goals and repeat the analysis if necessary.