Importance of Various Factors For Implementing The Advanced Manufacturing Technologies in Manufacturing Enterprises

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1 Importance of Various Factors For Implementing The Advanced Manufacturing Technologies in Manufacturing Enterprises Hussain Bux Marri, Department of Industrial Engineering and Management, Mehran University of Engineering and Technology, Jamshoro, Sindh, Pakistan Murlidhar Nebhwani, Department of Industrial Engineering and Management, Mehran University of Engineering and Technology, Jamshoro, Sindh, Pakistan Muhammad Nouman Shaikh, Flat No. 202-A West Point Tower, DHA Phase-II Extension, Karachi, Pakistan Ghulam Yasin Shaikh, Department of Industrial Engineering and Management, Mehran University of Engineering and Technology, Jamshoro, Sindh, Pakistan Abstract Manufacturing Technologies (MTs) have been attempted to be made easier, faster, more accurate and sophisticated, in these efforts the advancement in manufacturing technologies is the ultimate choice. Manufacturing enterprises tend to switch from traditional to the automated systems for production with the involvement of computers through the use of Advanced Manufacturing Technologies (AMTs). This research has highlighted the implementation issues regarding the scope of technology utilization, organizational change management while implementation new technologies and systems, human resource practices changes & current practices in various production issues while implementing AMTs in MEs of Pakistan. An empirical study has been carried out which is based on a conceptual model developed using the empirical data. Keywords: AMTs, MEs, Implementation. 1 INTRODUCTION In today s dynamic world, the concept of being faster, easier, and human friendly, comfortable, & sophisticated is spread beyond imaginations. This concept has found a wide space in the world of manufacturing and production. The companies all over the world are seeking to adopt the faster, easier, accurate, flexible and sophisticated ways of manufacturing the products and/or providing the services. By adopting these ever-demanded characteristics the production organization attains an edge over the competitors who now are not only within the same region in which the company exists, but are present all over the world to compete. In order to make manufacturing an easier, more accurate, flexible, sophisticated, faster and cheaper, the use of computer in manufacturing is the optimum option available. 1

2 AMTs appeared to represent a perfect interaction between technological potential and the manufacturing challenges. AMT refers to manufacturing process technologies that use computers to store and manipulate data (Dean et al, 1992). AMT can be described as a group of computer-based technologies, including computer-aided design (CAD), computer numerical control (CNC) machines, direct numerical control (DNC) machines, robotics (RO), flexible manufacturing systems (FMS), automated storage and retrieval system (AS/RS), automated material handling systems (AMHS), automated guided vehicles (AGV), bar coding (BC), rapid prototyping (RP), material requirement planning (MRP), statistical process control(spc), manufacturing resource planning (MRP II), enterprise resource planning(erp),activity-based costing (ABC), and office automation (OA) (Beaumont et al., 2002). This research is focused on the implementation issues of AMTs in manufacturing enterprises of Pakistan. An implementation model has been developed in order to highlight the current AMT implementation, an empirical study on various MEs of Pakistan has been conducted using a questionnaire. In order to research in the area of implementation of AMTs in MEs of Pakistan, it is highly intended and essential to focus both Small and Medium Scale Enterprises (SMEs) and large Scale Industries (LSIs). Keeping in view various MEs situated in different regions of Pakistan were taken under consideration for the research. MEs were all different in their nature & scale. 2 FOCUSED AREAS OF RESEARCH Due to the immense depth of the topic, it was highly justified to select certain areas of AMT implementation in manufacturing enterprises of Pakistan. Looking into the circumstances of Pakistani MEs, it was felt reasonable to focus on not only how MEs are currently practicing AMTs, but also how they can improve this practice. If they are not using AMTs at all, how can they use, and how the use can be justified in such environment where the automation was not at all a concept in reality. Hence human resource practice, technological know-how and uplift, government support as well as performance measurement factors were selected as the research area. 3 ADVANCED MANUFACTURING TECHNOLOGIES OVERVIEW Advanced Manufacturing Technologies (AMTs) provide benefits and advantage in areas that would enable MEs to maintain quality, operational, organizational and financial performances. AMTs are a source of strategic competitive benefits, such as improved quality, greater flexibility and cost reduction (Dangayach and Deshmukh, 2001). AMT requires multi-skilled workers and teamwork (Maffei and Meredith, 1994). However, implementation of AMT has been found to be one of the most lengthy, expensive and complex task a firm can undertake (Sambasivarao and Deshmukh, 1995). 2

3 Management aspects play a critical role, it is argued that to exploit the benefits of AMT, a flexible organization capable of quickly react to changes is needed (Nemetz and Fry, 1988), This implies that organizational structures should become more organic characterized by a more responsive decisionmaking processes, greater participation by workers, smaller differences between workers and managers, higher levels of communication, and higher levels of horizontal interaction (Saraph and Sebastian, 1992). A deep understanding of AMT involves a careful assessment of the innovation s potential, how it will serve the organization, the effect on the organization and workers, justification of the investment and other factors that will enable successful implementation. Failure of AMT implementation is often the result of inadequate detailed planning (Ramamurthy, 1995), The use of AMTs increases the demand in terms of decision making and requires higher knowledge intensity at all levels. Hence it has been stressed that a complete change has to be brought about in the organization, while implementing or modifying modern technologies, so that an effort does not go in waste and a total organizational goal could be attained. 4 RESEARCH METHODOLOGY This section is concerned with the nature of research methodology within which the research process is to be carried out. The two modes of data, viz. quantitative and qualitative have been used. Quantitative research is, then, a genre which uses special language which appears to exhibit some similarity to the ways in which scientists talk about how they investigate the nature of order-variable control, measurement & experiment (Bryman, 1988). On the other hand qualitative approach aims to reflect the meaning people apply to their actions; how people make sense of their world from the perspective of those people. Questionnaire was developed into 4 different sections; the respondents were given task to rate on the scale 1 to 7, varying from strongly agree to strongly disagree respectively. In order to implement AMTs in manufacturing enterprises of Pakistan, we developed a conceptual model. The conceptual model consists of 4 parameters viz: Human resource practices, Technological uplift, government support and performance measurement as shown in Figure 1. Total 15 companies were contacted amongst 10 companies agreed to respond the questionnaire. Response of 3 companies was partial, either the questionnaire returned incomplete or the data of the resourced person him/her was unreliable, hence the data gathered from those 3 companies was discarded, while rest of the companies did not responded. The companies selected for the study were textile, automotive, tools manufacturing, and home appliances. It was made sure to get the questionnaire filled by the personnel directly concern with 3

4 technology management and enhancement in the companies. However, the questionnaires were mostly handed over to HR, factory, production, and plant managers. Performance Measurement: Marketing objectives, lead time reduction, competitive advantages, performance Human Resource Practice: Job Design Plant Culture Employee Training Employee Motivation Implementation of AMTs in MEs of Pakistan Technological Uplift: CADCAM FMS GT ROBOTICS CNC, DNC MRP, MRPII Government Support: Incentive schemes, tax credits, technical backing, loans, liberalization of market economy & logistics Figure 1: Conceptual Model for implementation of AMTs in MEs of Pakistan 5 EMPIRICAL ANALYSIS An empirical study of MEs located in Pakistan was conducted using questionnaires. The background of the companies, who have responded, has already been discussed in section 4. The Empirical study consists of four parameters viz: Human resource practices, Technological uplift, Government support and performance measurement. The details can be found hereunder: 5.1 Human Resources Practices Organizational population varied with the variation in scale of MEs, organizational structure was mostly centralized, while most of the workers were found semi skilled, harmony between managers and subordinates existed to an excellent extent, benefits and incentives were not given on the required level, while goal congruence was high. On the other hand, public services and organizational relations were of intermediate, while plant culture was favorable to implement AMT in MEs. 4

5 5.2 Technological Uplift During the empirical study the companies were asked about the technologies such as CAM, CAD, FMS, GT, Robotics and others adopted by them. The response of the surveyed companies is shown in Figure 02. Technologies in Use No: of Companies CAM CAD FMS GT Robotics Others Technologies Fig 2: Technologies in use 5.3 Government support for the implementation of AMTs Implementing advanced manufacturing technologies is not an easy process; it s so complicated and costly that a company within its resource boundary cannot attain the desired level of success. For this reason, external supporters such as counterparts, Large Scale Industries (LSIs) & government must be joined hands for the success of the project. Government support in terms of incentive schemes, tax credits, technical backing, loans, liberalization of market economy & logistics was studied in the empirical study of certain companies of Pakistan. In scale 1-7 ranging from least to most important above defined parameters were ranked by each company. Empirical study shows that, only 40 % of the companies have given due importance to collective incentive scheme. For tax credits most of the companies had an average answers. Technical backing is not impressively received by the companies from the government. Only 20 % of them had given it a considerable importance. Loans were not also highly received by the companies on the greater extent from government. Only 20 % of the companies were benefited from the factor. Liberalization of market economy was also a factor which was not appreciably received by the companies. Hardly 30 % of the companies were ranked fine in this area. Logistical support has been given relatively better importance by the government to the companies. Therefore, many companies had an adequate ranking for this. 5

6 5.4 Performance Measurement The survey companies were asked about their performance measurements in the areas like: marketing objectives, lead time reduction, competitive advantages and performance improvements while implementing AMT. The details of performance measurements can be found hereunder: Marketing Objectives During empirical study, 60 % of the companies were found giving 6 or more to defending market share, all the rest were giving it lesser, out of 7, in scale 1-7 ranging from least to most important. Hence it is found that MEs of Pakistan are highly conscious about their existing market share. Building new market share was relatively more important to only 30 % of the companies, rest of the companies were not as much interested in this. Creation of new markets for new or existing products is the absent concept in focused MEs, only 20 % MEs shown high interest in this factor, the rest 80 % had very little idea of building new markets Lead Time Reduction During the study in the area of implementation of AMTs in MEs of Pakistan, it was found that 50% of the companies have well reduced, 20% greatly reduced, an other 20% have very little reduced and remaining 10% have little reduced their lead time after the implementation of AMT as shown in Figure 3. Lead Time Reduction 10% 20% 20% 50% Greatly Reduced Well Reduced Little Reduced Very little Reduced Fig 3: Lead time improvements using AMTs Competitive advantages During the empirical studies it was found that out of 10, 7 companies use better quality to obtain the competitive advantage, 5 used cheaper products and quick delivery to customers too, while quick changeovers, was the least heavily used factor. The Figure 4 shows the complete trend. 6

7 Competitive Advantage using AMT Better quality Number of companies Factors Quick Delivery Cheaper products Reduced processing time Quick changeovers Improved planning & control Fig 4: Competitive advantages attained using AMTs Performance improvements During the study, manufacturing enterprises were asked about their performance improvements in the areas like: productivity, delivery, product efficiency, sales and distribution while implementation of AMT. The survey companies have achieved a good degree of improvements in above mentioned areas. The details can be found in Figure 5. Performance Improvement Productivity Good Delivery Performance Productive Efficiency No: of Companies Sales Distribution Greatly Improved Well Improved Little Improved Very Little Improved Unchanged Fig 5: Performance improvements using AMTs 7

8 6 VARIOUS FINDINGS OF RESEARCH It was found that only 30 % of the manpower was ready to accept new technologies in their working environment, while in contrary to them 70 % of the top management was willing for the AMT implementation. In 70 % of the companies the automation tendency was found existent, whereas in remaining 30 % companies there was no automation tendency found. Concept of product innovation was moderate in 50 % of the MEs while it was high for 30%. Product variety was high for 60 % of the companies. There s already more mechanical work done in the industries than manual, ratio can be generalized as 7:3. For failure & maintenance work, more than 50% companies rely on external aid. Government support in terms of technical backing was found very low, while in terms of logistics it was not so condemnable. On the whole the government support to the MEs for updating the technological environment is not so encouraging in Pakistan. 7 CONCLUSION An attempt has been made in this paper to study the importance of various factors for Implementation of AMTs in manufacturing enterprises located in Pakistan. Implementation of AMTs is confined to small number of companies. In manufacturing enterprises, there s a rising tendency of AMTs utilization but they lack commitment, long-term vision, & employees willingness for the implementation and/or uplift of the technologies, moreover, they lack capital as well as guidance and support for the technology implementation. Scientifically, the MEs don t have sufficient in house technological expertise and are still dependent over the foreign experts, as well as foreign logistic support in terms of machines, technologies and systems design. References Beaumont, N., Schroder, R. and Sohal, A. (2002), Do foreign-owned firms manage advanced manufacturing technology better, International Journal of Operations & Production Management, 22 (7): Bryman, A., 1988, Quantity and quality in social research, Published by Routledge, London and New York. Dangayach, G.S. and Deshmukh, S.G. (2001), Practice of manufacturing strategy: evidences from select Indian automobile companies, International Journal of Production Research, 39(11): Dean, J., Yoon, S. and Susman, G. (1992), Advanced manufacturing technology and organization structure: empowerment or subordination?, Organization Science, 3 (2): Maffei, M.J. and Meredith, J. (1994), The organizational side of flexible manufacturing technology, International Journal of Operations & Production Management, 14 (8): Nemetz, P.L. and Fry, L.W. (1988), Flexible manufacturing organizations: implication for strategy formulation and organization design, Academy of Management Review, 13 (4):

9 Ramamurthy, K. (1995), The influence of planning on implementation success of advanced manufacturing technologies, IEEE Transactions on Engineering Management, 42 (1): Sambasivarao, K.V., and Deshmukh, S.G., 1995, Selection and implementation of advanced manufacturing technologies, classification and literature review of issues, International Journal of Operations and Production Management, 15 (10): Saraph, J.V. and Sebastian, R.J. (1992), Human resource strategies for effective introduction of advanced manufacturing technologies (AMT), Production & Inventory Management Journal, 33 (1):

Effectiveness of Advanced Manufacturing Technologies in SMEs of Auto Parts Manufacturing

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