Search results

This article is the second half of a series concerning advanced decisions. Central to the problem of AMT (advanced manufacturing technology) is that investment is uncertainty. Under consideration is a highly expensive innovation, often bringing unprecedented operational routines and organisational impacts. The intangible benefits of AMT are dealt with here, and how to quantify them.

This article is the first half of a series concerning advanced manufacturing technology (AMT) investment decisions. Individual problems with formalised techniques in this field are reduced by the frequency of their joint use in organisations. The article emphasises that it is important to appreciate that the nature, costs and benefits of AMT are complex and the systems have a far‐reaching impact on the organisation.

Investment appraisal is shown to be an essential and integral part of the process of selecting the optimum Material Requirements Planning (MRP) or Manufacturing Resources Planning (MRPII) system for a company. The problems of financial evaluation and costing are described and how they can be overcome is shown. Lists are given of the main areas of costs and savings so that managers can identify their company′s own requirements. By concentrating on achieving the major potential benefits, MRPII can be seen to be a very attractive investment and it is suggested that, by using investment appraisal to establish quantified objectives and a timetable for implementation, many of the problems normally associated with the introduction of MRPII can be avoided.

Quality problems have traditionally been measured in term of cost penalties, and therefore efforts to improve quality have been aimed at a reduction in such factors as scrap or rework. When quality is viewed as a potential company asset however, a fundamental change in attitude is needed, because an asset is an attribute that can systematically be increased in value. Techniques have been developed at the University of Manchester Institute of Science and Technology (UMIST) which enable the company‐wide benefits of improving product quality to be included in a financial evaluation of technology needed to bring about the improvement. Various examples are given relating to investments in advanced manufacturing technology, and these show how quality improvement affects the technical specification that is required for new plant.

Despite the almost universal belief to the contrary, inventory reduction should not be a major objective for investing in advanced manufacturing technology because the financial benefits from it can be relatively small compared with other benefits. This article describes how changes in inventory are valued and why inventory reductions can have a complex, and often negative, effect on profitability. High inventory levels are only a symptom of other problems; if these problems are not first identified and solved, inventory reductions can be counterproductive.

This 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.

Mail 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.

The 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.

This 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.

This 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.

The literature offers a variety of different views on the investment decision process for flexible manufacturing technologies, but there seems to be no consensus about what are really the key characteristics of the decision‐making process which guarantee successful advanced manufacturing technology projects. Describes and analyses the investment decision process for a set of investment projects, based on field research conducted in six manufacturing companies, and reveals some of these critical determinants.

Addresses the relationship between firm performance on 15 manufacturing attributes and the extensiveness of advanced manufacturing technology (AMT) portfolios that firms adopt. Mail survey data obtained from 116 manufacturing firms in the USA that had adopted a variety of AMT are used in this research. On average, responding firms reported some improvements in manufacturing performance for all variables except changes in average labour cost (total labour cost/number of direct and indirect labour employees). Adoption of AMT tended to result in marginal reductions in the number of operators and marginal increases in average labour costs across all technology portfolio classifications. For all technology groups, firms recorded their highest level of improvement for product quality, and operator output rates/operator productivity. The majority of firms that had adopted both integrated process technologies and integrated information/logistic technologies reported improvements for 14 of the 15 performance attributes covered in this study.

Although there is a vast body of literature that attempts to define production flexibility, managers are still unable to measure the flexibility they require. However, managers currently are investing in flexible manufacturing systems (FMSs) and planning their manufacturing strategies despite this. Discusses the flexibility and economic viability of FMSs, and concludes that managers do not need to measure the flexibility of an FMS in order to select the correct technical specification. Describes the factors that enable a company to achieve its strategic objectives and suggests that, although increasing flexibility is often quoted as a strategic objective, managers do not need to define or measure flexibility in manufacturing strategy planning. Flexibility just happens to be a convenient word that helps describe the fact that manufacturing facilities must be able to deal with change and uncertainty.

The emergence of advanced manufacturing technologies such as Flexible Manufacturing Systems (FMS) is forcing organisations to re‐examine their manufacturing strategies. CNC machines are an integral part of FMS. The literature dealing with the downtime behaviour of these machines is sparse. The purpose of this article is to analyse the behaviour and forecast downtimes of these machines using Box‐Jenkins time series analysis. It is concluded that the models fitted to the data are appropriate, and the results of this study can be used in production planning.