CHAPTER 6 ADVANCED MANUFACTURING TECHNOLOGY 6.1 INTRODUCTION

Transcription

1 CHAPTER 6 ADVANCED MANUFACTURING TECHNOLOGY 6.1 INTRODUCTION Advanced Manufacturing Technology of manufacturing enterprises are studied using the domains of Implementation AMT, Direct AMT and Indirect AMT. Each of these factors and their nature has been discussed in the forthcoming sections in the light of their relevance with Advanced Manufacturing Technology. With the advent of technologies, manufacturing has started evolving at large scale during the recent past. Customers of the twenty first century has become more educated and aware and has started demanding goods and services which are cheap, of good quality and delivered promptly and fast. This has increased the quest on the part of the manufacturing enterprises to strive for lowering their operating costs and improve their manufacturing efficiency by embarking on to types of various Advanced Manufacturing Technology projects. AMTs have been utilized by manufacturing undertakings to gain comparative advantage over their rivals. AMTs adopting companies derive immense value due to such adoption, and this has led to dramatic developments into the field of AMT. AMT exerts significant impact on not only the manufacturing operations of a firm, but the entire operations of the firm. This poses fresh challenges to business firms to competitively manage their manufacturing and information technologies. AMT derives both tangible and intangible utility to manufacturing firms (Kaplan, 1986). Tangible benefits refer to the utility gained by firms adopting such technologies which can be easily quantified. Instances of such benefits can be effective inventory management, space management, improved return on equity (ROE) and reduced unit cost of production. The intangible benefits derived by firms adopting AMT are difficult to be quantified. Instances of such benefits include enhanced competitive advantage, increased flexibility, improved product quality and quick response to customer demand. Hence, the likely benefits which a firm can derive by adopting AMT, considering the competitive environment in which it is operating, justifies its excessive investment in AMT (Swamidass and Waller, 1991; Primrose, 1991; Small and Chen, 1995). AMT exerts a significant pressure on improving the quality and flexibility of small and medium enterprises (SMEs). Prior researches have indicated that AMT 131

2 investments will lead to the strengthening of comparative advantage of the adopting firms (Small and Yasin, 1997; Schroder and Sohal, 1999). 6.2 LARGE-SCALE INSTRUMENT ASSESSMENT METHODOLOGY This section describes about the Individual item reliability, Construct reliability, Convergent validity, Discriminat validity, Independent measurement model, First order Confirmatory Factor Analysis and Second order Confirmatory Factor Analysis Independent Measurement Model Three independent measurement factors have been used to measure the opinion of the respondents about the Advanced Manufacturing Technologies of the manufacturing firms. These factors have been discussed in the forthcoming sections Implementation of AMT The response of the executives of manufacturing units about Implementation AMT were measured using the six indicators of APla, AReq, Acobe, Atec, ADe and ATra as constituents of the Independent Measurement Model. Table 6.1 shows the Results of Independent Measurement Model in respect of Implementation AMT factor. CFA takes care of confirming the designed factor arrangement. Results indicate that the factor arrangement is highly significant. Hence, it can be concluded that all the items included under this domain aptly fit into the said domain. Similarly, the reliability and validity of the model is confirmed by CR being in excess of 0.70 and AVA being in excess of 0.50 respectively. Good reliability and validity of the model signifies the prevalence of satisfactory unidimensionality level. Table 6.1 Independent Measurement Model of AMT1 Table Results of Independent Measurement Model (Confirmatory Factor Analysis) Item Items Standard Factor t - Error Solutions estimate value variance Planning APla Requirement Analysis AReq Cost/Benefit Analysis Acobe Technology assessment ATec Development and Implementation ADe Training ATra Results of Reliability Test R 2 CR AVE

3 The calculated value of GFI is 0.97, which well exceeds the minimum threshold requisite of 0.9, and the value of RMSEA is 0.090, which satisfies the desired range of 0.08 to Further, the values of AGFI as 0.93, CFI as 0.99 and NFI as 0.98 far exceed the desired threshold limit of This signifies the mediocre fitness of the model. Hence, the results confirm the acceptability of the derived model. Figure 6.1 Independent Measurement Model of AMT1 The model for Implementation AMT (AMT1) is shown in Figure 6.1. It can be observed that the factor loadings well exceed the recommended threshold value of 0.50 and hence are significantly important. Based on the factors loadings of the items, the contribution made by the items in respect of Implementation AMT may be ranked as Cost/Benefit Analysis, Requirement Analysis, Development and Implementation, Technology assessment, Training and Planning Direct AMT Six indicators of ADCom, ADRo, ADFle, ADAum, ADAut and ADRap have been used to measure the Direct AMT domain in Advanced Manufacturing Technologies of the manufacturing firms. Table 6.2 shows the Results of Independent Measurement Model of Direct AMT domain. CFA takes care of confirming the designed factor arrangement. Results indicate that the factor arrangement is highly significant. Hence, it can be concluded that all the items included under this domain aptly fit into the said domain. Similarly, the reliability and validity of the model is confirmed by CR being in 133

4 excess of 0.70 and AVA being in excess of Good reliability and validity of the model signifies the prevalence of satisfactory unidimensionality level. Table 6.2 Independent Measurement Model AMT2 Item Table Items Results of Independent Measurement Model (Confirmatory Factor Analysis) Standard Solutions Factor estimate t - value Error variance Computer numerical control (CNC) machines ADCom Robotics (Ro) ADRo Flexible manufacturing ADFle system (FMS) Automated material handling ADAum systems (AMHS) Automated guided vehicles (AGV) ADAut Rapid prototyping (RP) ADRap Results of Reliability Test R 2 CR AVE The calculated value of GFI is 0.97, which well exceeds the minimum threshold requisite of 0.9, and the value of RMSEA is 0.083, which satisfies the desired range of 0.08 to Further, the values of AGFI as 0.93, CFI as 0.99 and NFI as 0.98 far exceed the desired threshold limit of This signifies the mediocre fitness of the model. Hence, the results confirm the acceptability of the derived model. Figure 6.2 Independent Measurement Model of AMT2 134

5 The model for Direct AMT (AMT2) is shown in Figure 6.2. The factor loadings in respect of all the items far exceed the minimum requisite of 0.50 and hence are significantly important. Based on the factors loadings of the items, the contribution made by the items in respect of Direct AMT may be ranked as Robotics (Ro), Automated material handling systems (AMHS), Rapid prototyping (RP), Automated guided vehicles (AGV), Flexible manufacturing system (FMS) and Computer numerical control (CNC) machines Indirect AMT Five indicators of AICom, AIMa, AISt, AIBar and AIMal were utilized to measure the Indirect AMT domain in Advanced Manufacturing Technologies of the manufacturing firms. Table 6.3 shows the Results of Independent Measurement Model of Indirect AMT domain. CFA takes care of confirming the designed factor arrangement. Results indicate that the factor arrangement is highly significant. Hence, it can be concluded that all the items included under this domain aptly fit into the said domain. Similarly, the reliability and validity of the model is confirmed by CR being in excess of 0.70 and AVA being in excess of Good reliability and validity of the model signifies the prevalence of satisfactory unidimensionality level. Table 6.3 Independent Measurement Model of AMT3 Table Item Results of Independent Measurement Model (Confirmatory Factor Analysis) Items Standard Solutions Factor estimate t - value Error variance Computer aided design (CAD) AICom Material requirement AIMa planning (MRP) Statistical process control (SPC) AISt Bar coding (BC) AIBar Material resource planning (MRPII) AIMal Results of Reliability Test R 2 CR AVE The calculated value of GFI is 0.99, which absolutely satisfies the minimum requisite of 0.9, while the value of RMSEA is 0.052, which falls within the desired range of 0.08 to Further, the values of AGFI as 0.97, CFI as 1.00 and NFI as 0.99 far 135

6 exceed the desired threshold limit of This signifies the mediocre fitness of the model. Hence, the results confirm the acceptability of the derived model. Figure 6.3 Independent Measurement Model of AMT3 The model for Indirect AMT (AMT3) is shown in Figure 6.3. The factor loadings in respect of all the items far exceed the recommended threshold value of 0.50 and hence are significantly important. Based on the factors loadings of the items, the contribution made by the items in respect of Indirect AMT may be ranked as Statistical process control (SPC), Material requirement planning (MRP), Computer aided design (CAD), Bar coding (BC) and Material resource planning (MRPII) First order measurement model of Advanced Manufacturing Technology (AMT) Advanced Manufacturing Technologies of the manufacturing firms have been studied using the three factors of Implementation AMT, Direct AMT, and Indirect AMT. These three factors are validated and accepted In Independent Measurement Model by performing First Order Measurement Model Confirmatory Factor Analysis. It helps to study the model very closely. The first order measurement model displays the values of X 2 = , P =0.00, X 2 /df as 2.28, GFI as 0.92, AGFI as 0.89, CFI as 0.98 and RMSEA as These results reveal that all the pre-requisites for the acceptance of the First Order Measurement model are well met. After establishing the individual item reliability of the model, the validity of the model is next tested. The results are presented in Table

7 Table 6.4 First Order Measurement Model of AMT Table Results of First Order Measurement Model (Confirmatory Factor Analysis) Results of Reliability Test Items Items Standard Factor t - Error Solutions estimate value variance R 2 CR AVE Implementation AMT Planning APla Requirement Analysis AReq Cost/Benefit Analysis Acobe Technology assessment ATec Development and Implementation ADe Training ATra Direct AMT Computer numerical control (CNC) ADCom machines Robotics (Ro) ADRo Flexible manufacturing system (FMS) ADFle Automated material handling systems (AMHS Automated guided vehicles (AGV) Rapid prototyping (RP) ADAum ADAut ADRap Indirect AMT Computer aided design (CAD) AICom Material requirement planning (MRP) AIMa Statistical process control (SPC) AISt Bar coding (BC) AIBar Material resource planning (MRPII) AIMal Notes: Construct reliabilit y where ej is the measurement error Standardized loadings Average variance extracted (AVE) Standardized loadings CR Standardized loadings 2 ej 2 ej Standardized loadings 2 / / 137

8 Table 6.5 Reliability Construct Item reliability Construct reliability AVE Suggested value >0.5 >0.6 >0.5 Source: Fornell and Larcker (1981) The individual reliability of the items was evaluated using factor loadings (Ce sar Camiso n and Ana Villar Lo pez, 2010). Carmines and Zeller (1979) has propagated that the factor loadings should not be less than to constitute a valid model. However, some researchers such as Barclay et al., 1995 and Chin, 1998) are of the opinion that factor loadings to the extent of 0.5 or 0.6 is acceptable. In the above table all the factor loadings are above the recommended value. This displays that all the factors possess the desired individual reliability. The next step is to ensure the internal consistency of all the items used for measuring the same concept. This can be done through construct reliability which evaluates the rigorousness with which the latent item is measured by the observable item (Fornell and Larcker, 1981). The authors have propagated that the AVA value should not be less than 0.5 to ensure convergent validity of the model. The construct reliability should be above 0.6 and Table 6.4 portrays that the construct reliability value in respect of all the items far exceeds the minimum requisite value. Hence, all the measurable items command the desirable construct reliability. Table 6.4 displays that the AVA value in respect of all the constructs far exceeds the minimum threshold value. 138

9 Figure 6.4 First Order Measurement Model of AMT The model for Advanced Manufacturing Technology (AMT) is shown in Figure 6.4. The factor loadings in respect of the items far exceed the recommended value of 0.50 and hence they are significantly important Discriminat Validity The distinctiveness of a construct from the other constructs in a model is confirmed by Discriminat validity. This validity may be verified by comparing the AVA with the square of the correlations of the constructs. Table 6.6 indicates that the AVA values far exceeds the square of the correlation coefficient and hence the discriminant validity of the model is confirmed (Fornell and Larcker, 1981). Table 6.6: Correlation Matrix of Independent Domains AMT3 AMT2 AMT1 AMT3 (0.691) AMT (0.588) AMT (0.588) Notes: Diagonal elements (values in parentheses) are the Average Variance Extracted (AVE); off-diagonal elements are the square correlations among constructs. 139

10 6.2.3 Second order measurement model of Advanced Manufacturing Technology (AMT) First Order Confirmatory Factor Analysis for Advanced Manufacturing Technology factors were discussed in the previous sections. The Advanced Manufacturing Technology constructs of Implementation AMT, Direct AMT and Indirect AMT were related to Advanced Manufacturing Technology. It shows that the model is acceptable in First Order Confirmatory Factor Analysis. This was tested with a second order confirmatory factor analysis model where it is assumed that the constructs are linked to each other. In the measurement model and First Order model discussed earlier, three factors have been considered as independent items. These factors are one unidirectional arrow away from the observed items and were consequently labeled as First-Order Factors. Available theory suggests that higher level factor is accountable for lower-level factors. The second-order model represents the AMT, which has not been measured from the respondents. Instead, the AMT derives its value from the three factors included in the first-order model. Hence, the three factors included in the first-order model as independent items now become dependent items. This implies that the variances and covariances of these factors discontinue to be the probable parameters in the model. It should be remembered that these variations and co-variations should be accounted for by the higher-order factor (Bentler, 1992a; Byrne, 1988; Joreskog and Sorbom, 1993). Table 6.7 Second Order Measurement Model of AMT Table Results of Second Order Measurement Model (Confirmatory Factor Analysis) Items Items Standard Factor t - Error R 2 Solutions estimate value variance Implementation AMT Planning APla Requirement Analysis AReq Cost/Benefit Analysis Acobe Technology assessment ATec Development and ADe Implementation Training ATra

11 Table 6.7 Second Order Measurement Model of AMT (continued) Items Table Computer numerical control (CNC) machines Items ADCom Results of Second Order Measurement Model (Confirmatory Factor Analysis) Standard Factor t - Error R 2 Solutions estimate value variance Direct AMT Robotics (Ro) ADRo Flexible manufacturing system (FMS) Automated material handling systems (AMHS) Automated guided vehicles (AGV) ADFle ADAum ADAut Rapid prototyping (RP) ADRap Computer aided design (CAD) Material requirement planning (MRP) Statistical process control (SPC) AICom AIMa AISt Indirect AMT Bar coding (BC) AIBar Material resource planning (MRPII) AIMal In general, statistics indicate that the fit of the second-order model is as good as that of the first-order model. The results displayed in Table 6.7 representing the final full second- order AMT CFA measurement model, shows that the loadings of all three firstorder factors on the second-order factor are positive and significant. The model yielded a good model fit of X 2 =264.96, P=0.00, X 2 /df=1.59, GFI=0.92, AGFI=0.89, CFI=0.98 and RMSEA=

12 Figure 6.5 Second Order Measurement Model of AMT The model for Advanced Manufacturing Technology (AMT) is shown in Figure 6.5. The factor loadings in respect of all the items far exceed the recommended value of 0.50 and hence are significantly important. The results confirm that empirical data adequately fit for this second order Business Environment Characteristics model. However, using CFA, it can be noted that the manufacturing firms are attaching importance to Direct AMT, followed by Indirect AMT and finally, Implementation AMT. Among the variables related to Direct AMT, Robotics is the first important variable, followed by Automated Material Handling Systems, Rapid Prototyping, Flexible manufacturing system, Computer Numerical Control Machines and Automated Guided Vehicles. Among the variables related to Indirect AMT, Statistical Process Control seems to be the topmost important variable, followed by Material Requirement Planning (MRP1), Computer Aided Design (CAD), Bar Coding and finally, Material Resource Planning (MRP2). Among the Implementation AMT variables, Cost/Benefit Analysis seems to be the highest important, followed by Requirement Analysis, Development and Implementation, Technology Assessment, Training and finally, Planning. 142

13 6.3 DESCRIPTIVE STATISTICS OF IMPLEMENTATION OF ADVANCED MANUFACTURING TECHNOLOGY The importance attached to AMT by the manufacturing firms selected for this study has been assessed by studying the mean values assigned by the executives of the manufacturing firms to each of the items used to measure the importance accorded by the firms to AMT. The mean value has been displayed in the following table. Table 6.8 Descriptive statistics of Implementation of Advanced Manufacturing Technology SL. Std. Items Mean No Deviation Rank Implementation AMT Planning Requirement Analysis Cost/Benefit Analysis Technology assessment Development and Implementation Training Table 6.8 portrays the values of mean, Standard Deviation and the ranks assigned to each item according to the importance provided to each of them. The items whose mean values are the highest are most important. It can be inferred from the table that the manufacturing enterprises in the Union Territory of Puducherry are attaching high importance to AMT Implementation. Of the six items included in the factor of AMT implementation, the most preferred item is Development and Implementation, followed by the other items of Training, Cost/Benefit Analysis, Requirement Analysis, Technology assessment and finally, planning. Table 6.9 Descriptive statistics of Direct Advanced Manufacturing Technology SL. Std. Rank Items Mean No Deviation Direct AMT Computer numerical control (CNC) machines Robotics (Ro) Flexible manufacturing system (FMS) Automated material handling systems (AMHS) Automated guided vehicles (AGV) Rapid prototyping (RP)

14 Table 6.9 shows the values of mean, Standard Deviation and the ranks assigned to each item in accordance to their investments. The items whose mean values are the highest are most important, implying that the firms have invested heavily on these machines. Six such items have been ranked, of which the highly preferred item is Flexible manufacturing system (FMS), followed by Automated material handling systems (AMHS), Automated guided vehicles (AGV), Rapid prototyping (RP), Computer numerical control (CNC), and finally machines and Robotics (Ro). It can be inferred from the above table that the manufacturing enterprises in Puducherry are attaching high level of importance to Flexible manufacturing system as the maximum investment is made on this aspect, and the least importance is accorded to Robotics in which the least investment is made. Table 6.10 Descriptive statistics of Indirect Advanced Manufacturing Technology SL. Std. Items Mean No Deviation Rank Indirect AMT Computer aided design (CAD) Material requirement planning (MRP) Statistical process control (SPC) Bar coding (BC) Material resource planning (MRPII) Table 6.10 displays the values of mean, Standard Deviation and the ranks assigned to each item in according to their investments. The items whose mean values are the highest are deemed to be the item which is accorded the highest importance by the manufacturing firms with high investment. The table depicts that the manufacturing enterprises consider Material resource planning (MRPII) as highly important and have invested their maximum funds as the mean value in respect of this item is the highest (4.22). The firms have accorded least importance to Computer aided design as the mean in respect of this item is the minimum (2.86). The table further highlights that the manufacturing enterprises in Puducherry are not making heavy investments in Direct AMT while they invest more in Indirect AMT. However, the manufacturing enterprises make heavy investments in Implementation AMT. Hence, it can be said that the manufacturing firms in Puducherry are attaching high importance to Implementation AMT. 144

15 With the endeavour of conducting an in depth study on the Advanced Manufacturing Technology of the manufacturing firms, Cluster Analysis has been used to segregate the manufacturing firms into different segments Segmentation of Advanced Manufacturing Technology (AMT) Cluster Analysis has been performed to classify the manufacturing enterprises based on their Advanced Manufacturing Technology domains. K-means cluster analysis method has been employed to identify homogeneous groups of manufacturing concerns based on their Advanced Manufacturing Technology. An algorithm which can handle large number of cases has been utilized for the purpose. To understand the effectiveness of Advanced Manufacturing Technology domains, the manufacturing enterprises have been segregated into related groups. Table 6.11 Segment of AMT in Final Cluster Center Factor Cluster Implementation AMT 2.65(III) 4.12(II) 4.38(I) Direct AMT 2.15(II) 3.25(I) 1.81(III) Indirect AMT 3.20(II) 4.23(I) 2.82(III) With the help of K-Mean cluster analysis, the manufacturing undertakings have been segmented into three clusters based on the investments made in Advanced Manufacturing Technology. The three clusters of firms may be labeled as Indefinitely Investing Group, Decisively Investing Group and Implementation-oriented Group. The mean value in respect of the firms included in the first cluster is quite low and hence this cluster has been labeled as Indefinitely Investing Group. The mean values in respect of the factors studied under the Advanced Manufacturing Technology are in the vicinity of excess of the 4 mark, which represents high value, and hence this cluster is labeled as Decisively Investing Group. In the third cluster of firms, the Implementation AMT factor plays a dominant role and hence, this segment has been labeled as Implementation-oriented Group. Table 6.12 ANOVA Factor F Sig. Implementation AMT Direct AMT Indirect AMT

16 From the above table, it can be inferred that the significant value for the six factors considered under the Advanced Manufacturing Technology is less than This implies that the three factors are significant for grouping the manufacturing enterprises into three clusters. The mean values in respect of the three clusters differ significantly. Hence, it can be said that the aforesaid three clusters can be explained using the three factors of the domain of Advanced Manufacturing Technology. Table 6.13 Compositions of the Clusters Cluster Indefinitely Investing Group (1) % Decisively Investing Group (2) % Implementation-oriented Group (3) % Valid % Table 6.13 displays that the highest number of manufacturing firms constitute the cluster 1(88), followed by cluster 2(132) and cluster3 (130). It is interesting to observe that the number of firms in the three clusters are almost similar with not much difference. Hence, it can be concluded that there are almost equal number of firms in the Decisively Investing Group, Indefinitely Investing Group and Implementation-Oriented Group Testing the aptness of segmentation The aforesaid discussion suggests that the manufacturing firms have been segmented based on their Advanced Manufacturing Technology, into three clusters namely, the Decisively Investing Group, Indefinitely Investing Group and Implementation-oriented Group. A shade above one-quarter of the manufacturing enterprises (25.14%) constitute the Indefinitely Investing Group, while 37.71% of the manufacturing firms constitute the Decisively Investing Group and the balance 37.14% of the firms make up the Implementation-oriented Group. The next important issue meriting consideration is to assess the genuineness of the identified clusters and whether each of the clusters is distinct. It should also be verified whether the segmentation of the manufacturing firms using the three factors of Advanced Manufacturing Technology domain is correct. Such verification may be done by using Discriminant Analysis. 146

17 Table 6.14 Tests of equality of group means Wilks' Lambda F df1 df2 Sig. Implementation AMT Direct AMT Indirect AMT Table 6.14 displays that the Wilks lambda value for Indirect AMT is and in respect of Direct AMT. Smaller the value of Wilks lambda, stronger is the group differences among mean values of the three factors. This implies that the mean values of the three segments highly differ in respect of the Indirect AMT factor and the difference is least in respect of the Direct AMT factor. The value of significance in respect of all the factors studied under the Advanced Manufacturing Technology is 0.000, which indicates that the three segments differ significantly in their characteristics. Table 6.15 Eigen Values Function Eigen value % of Variance Cumulative % Canonical Correlation The above table displays that two discriminant functions can be formed based on the three clusters by taking into consideration all the three factors of Advanced Manufacturing Technology. The characteristic of the population is described by these two discriminant functions. Eigen value is used to confirm the distinctness of the two functions. Highest Eigen value denotes that the groups are highly dispersed while smaller Eigen value relates to the groups with lesser dispersion. The Eigen value is higher in the case of the first function. This function describes 60.70% of the variance among groups. The second function has lesser Eigen value. This function describes the residual 39.30% of variance. Canonical correlation is employed to explain the discriminant function. The canonical correlation between the two functions is very high. This value is sufficient to confirm the prevalence of relationship between the three factors. Figure 6.6 portrays the territorial map. This figure clearly confirms the exactness of grouping the respondents into three clusters. The Indefinitely Investing Group is denoted by one, the Decisively Investing Group is denoted by two and the 147

18 Implementation-oriented Group is denoted by three. The symbol * Indicates a group centered. Canonical Discriminant Function 2 Figure 6.6 Territorial Map Canonical Discriminant Function 1 Table 6.16 WILKS LAMBDA Test of Function(s) Wilks' Lambda Chi-square df Sig. 1 through Table 6.16 displays that the Wilks' lambda values for both the functions is adequately low enough to denote that the group means significantly differ. Furthermore, the values of chi-square, Degrees of Freedom and significance highlight that the group means in respect of the two groups significantly differ. 148

19 Figure 6.7 Canonical Discriminant Functions The discriminant diagram portrayed by Figure 6.7 further confirms the precision of grouping the respondents into three segments. Hence, it can be concluded that the three segments are distinct with regard to their Advanced Manufacturing Technology. Table 6.17 Structure Matrixes Function 1 2 Implementation AMT.797 *.187 Direct AMT.704 *.193 Indirect AMT * The above table displaying the structure matrix depicts the two functions which can be formed using the three clusters. These two functions typically illustrate the Advanced Manufacturing Technology of the respondent manufacturing undertakings. These domain functions are Z1 and Z2. The functions can be written as Z1 = 0.797X X2 and Z2 = 0.994Y1 where X1 = Implementation AMT, X2 = Direct AMT, Y1 = Indirect AMT. The first function consists of the two factors, namely Implementation 149

20 AMT and Direct AMT, while the second function engulfs the single factor of Indirect AMT. Since the coefficients value in respect of Implementation AMT is the highest in respect of the first function, it can be said that the two segments differ significantly in respect of the Implementation AMT factor. The value of coefficient in respect of Indirect AMT in the second factor is high. This suggests that Indirect AMT play a boundless role in describing the characteristics of the respondents studied Association between Advanced Manufacturing Technology segments and demographic items It is absolutely important to study the demographic characteristics influencing the Advanced Manufacturing Technology of the three segments. To identify the items that have impact on Advanced Manufacturing Technology segment, it is necessary to find out the items that have an association with it. The chi-square test is used for this purpose. The following table gives chi-square values and their significance for the association between Advanced Manufacturing Technology segment and demographic variables. The demographic characteristics included are number of years in business (Company), Type of Ownership, Type of production system, Targeted customers, Scale of industry, Kind of manufacturing, Type of product, Number of employees, Type of Industry, Location of production plant and Composition of Exports in total turnover of the respondents. Table 6.18 Chi-Square Values for Demographic Variables SL. Significant or Variables Value df Sig. No not 1 Number of years in business (Company) Significant 2 Type of Ownership Significant 3 Type of production system Significant 4 Targeted customers Significant 5 Scale of industry Significant 6 What kind of manufacturing Significant 7 Type of product Significant 8 Number of employees Significant 9 Industry type Not Significant 10 Location of production plant Significant 11 Exports (% of total sales) Significant 150

21 From the above table, it is evident that all the demographic variables have significant association with Advanced Manufacturing Technology. It is proved that all the demographic variables are associated with Advanced Manufacturing Technology excepting the type of industry Length of Existence of Manufacturing Enterprises and Advanced Manufacturing Technology To analyse the association between the length of existence of the manufacturing enterprises and Advanced Manufacturing Technology, the researcher performed chisquare analysis. The Advanced Manufacturing Technology factors are in the form of metric. So the Advanced Manufacturing Technology factors are converted in to category form by using cluster analysis. The cross tabulation between length of existence of the manufacturing firms and Advanced Manufacturing Technology displaying the composition of each of the three clusters is portrayed in the following table. Table 6.19 Length of Existence of Manufacturing Enterprises and Advanced Manufacturing Technology Number of years in business (Company) Indefinitely Investing Group Cluster Number of Case Decisively Investing Group Implementationoriented Group Total <5 46.4% 39.3% 14.3% 100% % 52.8% 16.7% 100% % 38.9% 36.1% 100% % 16.7% 62.7% 100% % 53.3% 33.3% 100% 25&above 27.6% 63.8% 8.6% 100% Total 25.1% 37.7% 37.1% 100% It can be inferred from the above table that almost half of the manufacturing firms which are in existence for a period of less than 5 years come under the Indefinitely Investing Group and almost half of the manufacturing firms which are in existence for a period of 5 to 10 years, 11 to 15 years and 21 to 25 years come under the Decisively Investing Group. It can further be noted that a little under half of the manufacturing firms which are in existence for a period of 16 to 20 years come under the Implementation-oriented Group. 151

22 Figure 6.8 Association between Length of Existence of the manufacturing Firms and Advanced Manufacturing Technology Figure 6.8 portrays the results of Correspondence Analysis to explore the association between the length of existence of the manufacturing firms and their Advanced Manufacturing Technology. The figure displays that those manufacturing firms with length of existence of less than 5 years are closely associated with the Indefinitely Investing Group, while those units which are engaged in business for a period of 5 to 10 years, 11 to 15 years, 21 to 25 years and above 25 years are associated with the Decisively Investing Group. Those manufacturing units engaged in business for a period of 16 to 20 years are closely associated with the Implementation-oriented Group Association between Type of Ownership and Advanced Manufacturing Technology To study the association between Type of Ownership and Advanced Manufacturing Technology of the manufacturing firms, cross tabulation between Type of Ownership and Advanced Manufacturing Technology of the three clusters of the firms have been performed and the results are displayed in the following table. 152

23 Table 6.20 Type of Ownership and Advanced Manufacturing Technology Cluster Number of Case Type of Indefinitely Decisively Implementationoriented Group Ownership Total Investing Group Investing Group State-owned 46.7% 46.7% 6.7% 100% Collective-owned 22.7% 63.6% 13.6% 100% Private 26.4% 29.0% 44.6% 100% Foreign-owned 9.5% 66.7% 23.8% 100% Joint venture 13.0% 82.6% 4.3% 100% Total 25.1% 37.7% 37.1% 100% It can be observed from the above table that bulk of the state-owned manufacturing enterprises (46.7%) come under the Indefinitely Investing Group, while majority of the Collectively Owned enterprises (63.6%), foreign-owned enterprises (66.7%) and firms owned as Joint Venture (82.6%) come under the Decisively Investing Group, while the privately-owned manufacturing enterprises come under the Implementation-oriented Group. Figure 6.9 Associations between Type of Ownership and Advanced Manufacturing Technology Figure 6.9 displays the results of the Correspondence Analysis exploring the association between the type of ownership of the manufacturing undertakings and their Advanced Manufacturing Technology. The figure explicate that manufacturing 153

24 enterprises with private ownership are closely associated with Implementation-oriented Group, while the collective-owned, Joint venture and Foreign owned firms are closely associated with Decisively Investing Group and the state-owned firms are closely associated with Indefinitely Investing Group Association between Type of production system and Advanced Manufacturing Technology To analyse the association between Type of production system and Advanced Manufacturing Technology, chi-square analysis has been performed. The cross tabulation displaying the relationship between Type of production system and Advanced Manufacturing Technology of the manufacturing firms falling under the three segments are portrayed in the following table. Table 6.21 Type of production system and Advanced Manufacturing Technology Type of Cluster Number of Case production Indefinitely Decisively Implementationoriented Group system Investing Group Investing Group Total Job shop 28.4% 35.2% 36.4% 100% Continuous and 30.8% 40.8% 28.5% 100% repetitive Assembly 17.0% 29.0% 54.0% 100% Batch 18.8% 59.4% 21.9% 100% Total 25.1% 37.7% 37.1% 100% The above table displays that a little less than half of the manufacturing firms (36.4%) using the job shop production system and above half of Assembly type of production system (54.0%) come under the Implementation-oriented Group, while more than half of the manufacturing firms using the Batch type and less half of the manufacturing firms using Continuous & repetitive type of production system (59.4% and 40.8% respectively) fall under the Decisively Investing Group. 154

25 Figure 6.10 Association between Type of production system and Advanced Manufacturing Technology Figure 6.10 presents the results of Correspondence Analysis exploring the association between the type of production system used by the manufacturing firms and their Advanced Manufacturing Technology. The figure demonstrates that manufacturing firms following the job batch type of production systems and continuous and repetative type of production systems are associated with the Decisively Investing Group, while the units following the assembly type of production system and job shop type of production systems are closely associated with the Implementation-oriented Group Association between Targeted customers and Advanced Manufacturing Technology To study the association between the demographic variable of Targeted customers and Advanced Manufacturing Technology of the manufacturing firms, chi-square analysis has been done and the cross tabulation between Targeted customers and Advanced Manufacturing Technology of the three segments of the manufacturing enterprises have been displayed in the following table. 155

26 Table 6.22 Targeted customers and Advanced Manufacturing Technology Targeted customers Cluster Number of Case Indefinitely Decisively Implementationoriented Group Total Investing Group Investing Group 23.4% 21.4% 55.2% 100% Domestic market International 14.3% 85.7% 0.0% 100% market Both 28.2% 58.5% 13.4% 100% Total 25.1% 37.7% 37.1% 100% It can be inferred from the above table that more than half of the manufacturing enterprises (85.7% and %) concentrating exclusively on International market and Both international and local markets respectively, come under the Decisively Investing Group, while clear majority of the manufacturing firms concentrating exclusively on Domestic market (55.2%) come under the Implementation-oriented Group. Figure 6.11 Association between Targeted customers and Advanced Manufacturing Technology Figure 6.11 portraying the Correspondence Analysis results, exploring the association between the market coverage of the manufacturing firms and their Advanced Manufacturing Technology, explicates that manufacturing firms concentrating on domestic market are closely associated with the Implementation-oriented Group, while those units concentrating exclusively on international market and on both the local and international markets are closeley associated with the Decisively Investing Group. 156

27 Association between Scale of Industry and Advanced Manufacturing Technology To explore the association between the demographic variable of Scale of industry to which the manufacturing firms belong and their Advanced Manufacturing Technology, chi-square analysis has been performed. The cross tabulation between Scale of industry and Advanced Manufacturing Technology of the manufacturing firms categorized under the three clusters have been displayed in the following table. Table 6.23 Scale of industry and Advanced Manufacturing Technology Cluster Number of Case Scale of Indefinitely Decisively Implementationoriented Group industry Total Investing Group Investing Group Small scale 25.6% 26.1% 48.3% 100% Medium scale 22.5% 58.8% 18.8% 100% Large scale 27.8% 66.7% 5.6% 100% Total 25.1% 37.7% 37.1% 100% It can be observed from the above table that bulk of the Small scale manufacturing enterprises (48.3%) come under the Implementation-oriented Group, while Medium scale and Large scale enterprises (58.8% and 66.7% respectively) come under the Decisively Investing Group. Figure 6.12 Association between Scale of industry and Advanced Manufacturing Technology 157

28 Figure 6.12 portrays the results of Correspondence Analysis conducted to explore the association between the nature of industry of the manufacturing units and their Advanced Manufacturing Technology. The figure clearly explicates that the manufacturing units falling under the Small Scale Industries category are closely associated with the Implementation-oriented Group, while the units falling under the medium and large scale industries are associated with the Decisively Investing Group Association between the Kind of manufacturing industry and Advanced Manufacturing Technology To assess the association between the demographic variable of kind of manufacturing industry and Advanced Manufacturing Technology, chi-square analysis has been performed. The cross tabulation between kinds of manufacturing industry and Advanced Manufacturing Technology of the three segments are presented in the following table. Table 6.24 Kinds of manufacturing industry and Advanced Manufacturing Technology Kind of Cluster Number of Case manufacturing Indefinitely Decisively Implementationoriented Group industry Investing Group Investing Group Total Process 20.4% 37.7% 41.9% 100% Discrete 30.0% 32.9% 37.1% 100% (Product) Both 27.9% 53.5% 18.6% 100% Total 25.1% 37.7% 37.1% 100% It can be observed from the above table that Process and Discrete (Product) manufacturing enterprises (41.9% and 37.1%) come under the Implementation-oriented Group, while the manufacturing enterprises of both kinds are come under the Decisively Investing Group. 158

29 Figure 6.13 Association between kind of manufacturing industry and Advanced Manufacturing Technology Figure 6.13 displays the results of Correspondence Analysis performed to assess the association between the manufacturing enterprises falling under different kinds of industries and their Advanced Manufacturing Technology. The figure clearly displays that the manufacturing enterprises falling under the discrete (product) industries are closely associated with the Indefinitely Investing Group, while the enterprises falling under the Process industries are closely associated with Implementation-oriented Group. The units falling under the combination of these two kinds of industries are associated with the Decisively Investing Group Association between Type of product and Advanced Manufacturing Technology To study the association between the demographic variable of Type of product dealt by the manufacturing firms and Advanced Manufacturing Technology, chi-square analysis has been performed. The cross tabulation between Type of product and Advanced Manufacturing Technology of three segments result are presented in the following table. 159

30 Table 6.25 Type of product and Advanced Manufacturing Technology Type of product Cluster Number of Case Indefinitely Decisively Implementationoriented Group Total Investing Group Investing Group 30.2% 30.2% 39.7% 100% Consumer product Industrial 17.9% 39.8% 42.3% 100% product Both 23.7% 68.4% 7.9% 100% Total 25.1% 37.7% 37.1% 100% It can be observed from the above table that Consumer product and Industrial product manufacturing enterprises (39.7% and 42.35% respectively) come under the Implementation-oriented Group, whereas 68.4% of the manufacturing firms engaged in Both the types of production activities come under the Decisively Investing Group. Figure 6.14 Association between Type of product and Advanced Manufacturing Technology Figure 6.14 displays the results of correspondence analysis performed to assess the association between the nature of products dealt by the manufacturing firms and their Advanced Manufacturing Technology. The figure clearly indicates that those manufacturing enterprises engaged in the manufacture of industrial goods and Consumer product are closely associated with the Implementation-oriented Group, and those units 160

31 engaged in the manufacture of both consumer and industrial goods are associated with the Decisively Investing Group Association between the Number of Employees in the Enterprise and Advanced Manufacturing Technology To analyse the association between demographic variable of Number of employees working in the manufacturing unit and Advanced Manufacturing Technology, chi-square analysis has been performed. The cross tabulation between the Number of employees working in the manufacturing enterprise and Advanced Manufacturing Technology is presented in the following table. Table 6.26 Number of employees in Enterprise and Advanced Manufacturing Technology Cluster Number of Case Number of Indefinitely Decisively Implementationoriented Group employees Total Investing Group Investing Group < % 18.5% 44.6% 100% % 23.2% 61.6% 100% % 53.8% 23.8% 100% % 55.9% 23.5% 100% 501 and above 31.1% 66.7% 2.2% 100% Total 25.1% 37.7% 37.1% 100% It can be observed from the above table that the manufacturing firms employing less than 50 and 51 to 100 (44.6% and 61.6% respectively) come under the Implementation-oriented Group, while those firms employing (53.8%), (55.9%) and 501 and above (66.7%) come under the Decisively Investing Group. Figure 6.15 Association between Number of employees working in organization and Advanced Manufacturing Technology 161

32 Figure 6.15 portrays the results of Correspondence Analysis conducted to explore the association between the number of employees employed by the manufacturing firms and their Advanced Manufacturing Technology. The figure depicts that manufacturing enterprises with less than 50 employees are closely associated with the Indefinitely Investing Group, while the enterprises with employees are closely associated with the Implementation-oriented Group, and all the other categories of enterprises are associated with the Decisively Investing Group Association between Plant Location and Advanced Manufacturing Technology To analyse the association between the demographic variable of Plant Location and Advanced Manufacturing Technology, chi-square analysis has been performed. The cross tabulation between Plant Location and Advanced Manufacturing Technology of the manufacturing enterprises categorized into three segments is depicted in the following table. Table 6.27 Location of production plant and Advanced Manufacturing Technology Location of Cluster Number of Case production Indefinitely Decisively Implementationoriented Group plant Investing Group Investing Group Total Pondicherry 24.8% 43.6% 31.6% 100% Karaikal 23.3% 18.6% 58.1% 100% Mahe 53.3% 6.7% 40.0% 100% Yanam 0.0% 0.0% 100% 100% Total 25.1% 37.7% 37.1% 100% It can be observed from the above table that manufacturing firms with production plant location in Pondicherry (43.6%) come under the Decisively Investing Group, while the Karaikal enterprises (58.1%), Yanam enterprises (100%) are come under the Implementation-oriented Group, and the Mahe manufacturing enterprises come under the Indefinitely Investing Group. 162

33 Figure 6.16 Association between Location of production plant and Advanced Manufacturing Technology Figure 6.16 portrays the results of Correspondence Analysis conducted to explore the association between the manufacturing enterprises with different plant locations and their Advanced Manufacturing Technology. The figure elucidates that the manufacturing enterprises with plant located at Puducherry are closely associated with the Decisively Investing Group, while those with plant location at Mahe are closely associated with the Indefinitely Investing Group and those manufacturing enterprises with plant location at Karaikal and Yanam are closely associated with Implementation-oriented Group Association between Export Compositions in Turnover Advanced Manufacturing Technology To assess the association between the demographic variable of Export composition in turnover and Advanced Manufacturing Technology, chi-square analysis has been performed. The cross tabulation between Exports composition and Advanced Manufacturing Technology of the manufacturing enterprises into three categories is displayed in the following table. 163

34 Table 6.28 Exports (% of total sales) and Advanced Manufacturing Technology Exports (% Cluster Number of Case of total Indefinitely Decisively Implementationoriented Group sales) Investing Group Investing Group Total Nil 23.4% 21.4% 55.2% 100% <20% 25.9% 55.6% 18.5% 100% 20 40% 18.6% 58.1% 23.3% 100% 40 60% 34.4% 56.2% 9.4% 100% 60 80% 38.2% 61.8% 0.0% 100% % 15.4% 76.9% 7.7% 100% Total 25.1% 37.7% 37.1% 100% It can be observed from the above table that majority of the manufacturing firms which are not exporting (55.2%) come under the Implementation-oriented Group, while those firms with <20% export composition (55.6%), 20 40% (58.1%), 40 60% (56.8%), 60 80% (61.8%) and % (76.9%) come under the Decisively Investing Group. Figure 6.17 Associations between Exports Composition and Advanced Manufacturing Technology Figure 6.17 displays the results of Correspondence Analysis conducted to explore the association between the manufacturing firms managing to export and their Advanced Manufacturing Technology. The figure clearly portrays that all the manufacturing firms managing to export are associated with the Decisively Investing Group while the firms which are unable to export are associated with the Implementation-oriented Group. 164