- Email: [email protected]
Technology: toys or tools?
283
Job de Haan and Ron Peters *
1. introduction
Ti&wr. University, il;ilburg,7he Netherhuis
The diffusion and use of Advanced Manufacturing Techniques ( ) in Dutch factories that is expected to occur at the beginning of the next century, has been analyzed in a Delphi study with 23 Dutch experts. Four possible scenarios for ‘factories of the future’ were identified; in these special attention was paid to the role that AMT might play. It appeared that AMT would play a different role, depending on the extemar environment and internal condition, varying from very limitea to rather extended. Introducing AMT in these ways should have a positive impact on competitive position of the enterprises, company employment, and the industrial structure. Keywords: Advanced manufacturing techniques; Delphi study; Technology management; Production strategy.
Ron Peters graduated
from Eindhaven University of Technology in Industrial Technology. He worked as a research assistant at IVA (Institute for research in social sciences) and at the Department of Business Administration of Tilburg University. He worked on projects on Advanced Manufacturing Tephniques with special emphasis on production control, tasks for workers and quality of working life. He r 3w holds a position in the Industriebond FNV (Dutch Federation of Trade Unions).
In a research project on the future use of Advanced Manufacturing Techniques [2] in Dutch industrial enterprises, a Delphi-study [8] was carried out using Dutch experts in the field of industrial and production technology. These experts were asked to give their opinion about the development, diffusion, and use of AMT in Dutch industrial enterprises III the next century. In literature AMT is not often defined and only examples are given to indicate what is meant with this concept [Il,9]. We see AMT as ah hardware depending on software which is capable of taking over control of manufacturing in a more or less extended way. So we don’t use the broad, sociologically influenced word technology [l], but stick to equipment and see advancement in the division of labour between man and machine. The aspects discussed in the Delphi study included the technological development of AMT, other industrial development factors, internal conditions aiding the implementation of AMT, expected diffusion of AMT and its degree of integration, and the consequences of these changes on both the performance of the enterprise and the labour force.
* The authors wish to thank Edgar H. Sibley and the anonymous reviewers for helpful suggestions on an earlier version of this paper. Correspondence to: J. de Haan, Department of Business Ad. . rg University P.0. Box 90153, 5000 LE
0378-7206/93/$06.00
0 1993 - Elsevier Science Publishers B.V. All rights reserved
Job de Haan graduated from and got
his PhD. at Tilburg University. In this university he is senior lecturer in management and organization in the Department of Business Administration. He has been engaged in many multidisciplinary research projects in the field of operations management, with special emphasis on organization design and cost benefit analysis. Topics of these projects were quality of working life, advanced manufacturing techniques, environmental care mananagement in developing countries.
284
Information & Management
Research
Iphi-study design In our Delphi-research, we sought qualitative rather than quantitative answers to questions posed during interviews with our panel of experts. We chose this approach because we were much more interested in the direction of developments and the conditions for effective implementation than in numbers that might distract attention from the trend. Besides the problem might be too complex to limit answers to numbers [7,5] The same holds for our use of anonymous responses, we wanted every expert to express a personal opinion, unaffected by thase of other experts. The panel consisted of 23 people from different backgrounds, both professional and educational. The first included scientists, consultants, managers from various industries ((potential) users of AMT as weii as suppliers of AMT hardware and software), officials of governmental bodies and from unions of employees and employers. Educational backgrounds included: technical engineering, social science, economics and business administration. The interviews were conducted in three rounds. The first was very open and unstructured, as the experts were asked to mention any development in pre defined areas, that they thought would bc important: these included external (technical, commercial and social developments) and internal ones (organizational and operational). Finally they were asked to predict whether AMT could be a solution when there were discrepancies and to what extent the introduction of AMT would help. The results of this round were summarized and fed back to the experts in form of some 50 major themes. For every expert his position on these themes, and the responses compared with other members of the panel was made clear. the second round, the experts were asked to react to the themes, especially those where there was a minority point of view. From the results of the the first two rounds, four rough scenarios were made of possible operations in the factories of the future, including special attention to the role the (final) third round
fit in one or two of the scenarios. The comments on these scenarios were included in t output of the process.
3. Expected tecbnol piemen~tion The opinions of the experts are su five statements. I
In the IO or 15 year time frame, deL?elopments in the domain ofhard;uare (e. g., sensors, lasers, etc. ) will be retvoltttionary .
All but one of the experts felt this was an important issue. About 33% agreed with this statement. Those who agreed stressed especially the ability to adapt to ‘new’ situations, such as the use of expert systems in production and selflearning and other, generally applicable, flexible machines. Those who disagreed stated that everything is already possible and that further development will aim at the actual implementation of such methods. Some doubt that this is possible, and that succes depends on the development of relevant software and engineering methods, such as machines that hzve a ‘design for assembly’ technique built ir. II In the next 10 or 15 years, sofmare will improLie to the point that the integration of existing automation is drama tically simpler.
Some 15% of the experts did not agree with this, whereas the others agreed. This could be expected from the reasons given to the first statement. The advantages of integration will be greater if more functions are automated. Some
f big overall cant
l?lfo~atio~l &
n~~erne~lt
285
111 In the next I
workers .
e experts referred to this subject. Most of them a eed (90%). Those who were in favour stressed e improvements in the
man-machine communication will be the edge of future generations of factory workers who will be more familiar with working with computers. Those against this prediction referred mainly to the extra complications that might be expected because of new devices. IV FlexibiMy in production due to advanced manufaCtWi8~ e@!ipmeEt iE the FWG 13 Or I.5 JWlWS should improve the available applications and result in reduction of non productive time, like that used in set up. About 85% of the experts mentioned this topic at first, and only 20% of them were against it. Those who were sceptical gave two types of reasons: first flexibility in one piece of equipment does not necessarily improve flexibility of the total process unless that piece is where the botoccurs. Second, the experts refer to the nce in process industries where the trend appears to be towards fixed automation and standardization. This would then appear to make the computer controlled production into a disturbance. Those who agreed mentioned examples in robotics, programmability and accuracy, broadening of CNC equipment to Flexible Manufacturing Cells or even Flexible Manufacturing Systems, development to three dimensional designs for ustries sponsored by the European and ‘megatronics’, in which electronics and engineering are combined. V Ip2the next 10 or 1.5years the technical possibi?ity of ‘~~rn~~~ed’ groductiou will rise dramati-
ent see it as a goal or c anagerial and organizational impediments that need to be removed. They emphasize that technical devices to facilitate this development already exist. Those who oppose this concept suggest that there will always be people in factories. Also they say that past developments were always slower than predicted. Many practical problems also exist; e.g., identification and registration of miniature components by means of a bar code system, quick and frequent product changes. There are also difficulties produced by the materials that have to be formed. One of the experts stated that even in 100 years there will not be an unmanned factory. According to the experts, the extent to which AMT will actually be implemented in Dutch factories can not only be derived from the technological developments, but also the external developments and internal conditions are of influence. opinions on the actuaI implementation are summarized in four stages: level 1 Factories have some form of AMT; level 2 Factories have some form of AMT in most workplaces; level 3 Factories have AMT in most of the functional fields, and they are integrated within each; level 4 Unmanned factories, with AMT integrated between the functional fields. The opinions of the experts are summarized in Table 1. From this we can learn something about the expected diffusion AMT in the Netherlands: - in most factories there will be some kind of AMT; - there will be hardly any workplace in which workers do not have to deal with some kind of AMT; Table 1 The actual implementation Leve1
Diffusion Nowhere
tally .
the remainder
ot consider this did not agree
of various levels of AMT
1
0
2 3 3
1 10 20
Limited 1
11 11 3
Broad scale
Everywhere
11 9 2 0
11 2 0 0
286
Information & Management
Research
- there will be hardly any factories in which in all functional fields are integrated with AMT; - only on a very limited scale will unmanned factories be found. 4. me origin of the scenario’s: product design and marketing strategy TWOcriteria were crucial for scenarios in the factories of the future in the eyes of the experts. The first deals with dominance in designing the product and the second to the major instrument used in market competition. Thus the experts see AMT only as a means and not as an end, which agrees with general comment? in literature. The instrument should fit into a strategy to meet market demands, so that enterprises can choose whether, if, and how they are to use AMT. The experts did not see enterprises as the victim of ‘technological determination’, where the enterprise must use any available technology to improve its ability to survive. Dominance in designing the product can rest with the customer or the supplier. Batch operations occur when a supplier decides to adapt the products to specific segments of the markets or when economic reasons make the production and storing of smaller numbers advantageous [6,4] But batch ordering may occur if the customers agree to accept commonly used parts in products, specifically desgned for them. This may cause changes in the way that job lots are planned and handled. It appeared that there are two competing factors in market competition: price and product specificity (i.e., meeting customer demands) [lo] At first there was a suggestion that these two instruments would correspond directly with the two types of dominance in design. That is: supplier dominance would lead to price competition if all products are of a sufficient quality. and customer dominance would lead to product speci:i;ity or some would turn to specialist suppliers ;; r]. Although these strategies might seem ‘natural’ for enterprises, it turns out that entrepreneurs are more inventive. In some cases, they try to get competitive advantage by strengthening any natural weakness that they and their competitors have in common, provided that their ‘natural’ strength is at an acceptable level [12] For instance, supplier designed products tend to be produced at a
Table 2 Four scenarios and their popularity Competitive strategy
Price competition Product specificity *
Design dominance Supplier
Customer
Type 1: 1 expert Type 2: 3 experts
Type 3: 2 experts Type 4: 8 experts
* 6 experts stress productspecificity, but no differences between types of products.
reasonable price but for specific, smaller market segments or customer designed products are produced at relatively low price but with limitations on their specificity. Such high or low prices are the result of the costs, as they are normally the ultimate determinants of price in competitive markets. The strategies and their popularity among the experts are shown in Table 2. From table 2 can be concluded that type 4 is by far the most popular of the scenarios, But the other still do have adherence. Especially the price competition scenarios have little support in the Dutch panel. It is obvious that this has to do with the overall economic and industrial situation of the Netherlands. From table 2 can be concluded that 20 of the 23 experts can be classified in the scenarios, 6 of them don’t make any difference with respect to the character of products. but only stress product specificity.
5. Scenario’s for factories of the future We now summarize the opinions of the experts for each of the scenarios for technology, production organization and labour. For the scenarios 2 and 4 this is more difficult then for 1 and 3 because of the 6 experts who only stressed specificity. Based on these opinions we have formulated scenarios as consistent as possible. Finally the experts were asked to comment to these if they thought that would be necessary. (I) Low Cost Strategy For Supplier Dominated Product Design
Here a limited range of relatively simple (consumer) products, like paintbrushes, is produced in large quantities for a stable and large (maybe global) market. Efficiency, including short processing times, is most important.
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At first sight there is no need for any flexible production technique. Fixed automation forms are adequate. But it should not be forgotten that the product-life cycle tends to shorten every time a new generation of products enters the market. A more flexible technique might be appropriate in depreciating the necessary investment over a larger number of different products. In this case there is a smaller portion of fixed cost in each produt t. There may even be more opportunity for cost reduction when unmanned production is both technically and operationally possible. Of course there is hardly any time pressure in adjusting the equipment to new products as this will not often occur during the life of the equipment. If level 4 of technological development occurs in the next 10 or 15 years, this will be the scenario, but if this does not occur, level 3 will be introduced. In the production organization, the machines are normally grouped together in one unit, with a fiied sequence; i.e., serial production. Stock is manufactured according to the demand forecast. If the different production steps are automated and integrated, the production planning and control can be performed in one place. The execution of the production process is then directed by the program and the machines communicate without interference from man. The only influence is at the beginning of the production process, when the production plan for the particular product is communicated to the system. Thus we may face two separate groups of workers. On the one hand, there are workers who do all the pre-production (paper) work as well as the post-production (paper) work. These are highly qualified workers with good education in process control. On the other hand, there are unqualified workers, often parttimers on an irregular basis. Their job consists of picking and placing the parts and goods in production, especially in job segments technically difficult to automate. The requirements in knowledge and qualifications for each of these groups differ so much that it is difficult, if not impossible to move from the latter group to the fist one. (2) The Highly Specific Strategy For Supplier Dominated Product Design Here a large assortment of (consumer) products, such as cars, must be produced for a rela-
J. de Haan, R Peters / Technology: toys or tools?
287
tively small and rapidly altering market segment. Although efficiency remains important, flexibility in production is becoming of interest. Flexible production automation, of course, is most valuable here. The technique might be used for several generations of products, while they may even be subject to fashion within the generations. On the other hand it is necessary to be able to adjust production in a simple way from one range of the product to another, or even between products. Such requirements count stronger in the manufacturing of the final product than in manufacturing of the parts from which the final product is composed. For the latter, the situation is closer to a low cost scenario. The various steps in both the production of parts and the production of final products might be integrated using computer aided production techniques, such as CAD, FMS, CAM and CAD/CAM. In this scenario levels 2 and/or 3 may be relevant. Level 2 will occur only in the production of final products, whereas level 3 might also be used in the parts production department. The production organization has a division between the production of parts and and of final products. Parts production deals with large batch sizes because of their common use of parts in different products; also batch sizes experience economies of scale. In the production of final products the desired variety in the product assortment enters the production process. Flexibility is increasingly important as market segments become more specific and batch sizes are smaller. Assembly of the final products, usually little automated, to stock or even customer order is organized in flexible assembly lines or even in work cells. The planning for final assembly therefore differs from that of parts production, especially in industries in which production takes place after receiving an order. Then batch sizes may become very small. There will be two groups of workers in the factories: those who work in setting up the equipment and lines to control the process and those who do the planning, programming, maintenance and other jobs needed to make the equipment work. Their quality of working life of course differs a lot. But enterprises can choose how to divide the work over the workers: more or less mechanistic or organic.
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Inforrnatiorg& Management
Research
The Low Cost Strategy For Customer Dominated Product Design (3)
Here the final products (usually non-consumer products for industrial markets) are designed and produced to specific customer order. Common use of parts can increase batch sizes and economies of scale to lower the unit CO though flexibility is a prerequisite, there is a nee for efficiency. Stand alone equipment may be used in site+ tions in which there is only limited stand tion. Apart from the automation in actual facturing, it is possible to use results from co--+ puter aided techniques in the pre-produc phase (i.e., CAD- and WE-systems). Because &G the importance of quick product engineering E ‘smart’ development of parts, such systems w become more and more necessary, Thus levels 1 and 2 may be of relevance in this scenario: level 1 for specific designed parts and final products, and 2 for standardized parts. In the production organization job shop, production on customer order dominates. The organization will be functional or in workcells. Final assembly might take place in an assembly department. The differences in production organization and the level to which AMT is used leads to differences in the needed skills of the workers. However, in all circumstances fine craftsmanship is important. This counts more in case there is either no AMT or only stand alone equipment. From the moment that AMT is introduced, t is a need for process control of computer ai activities. 6%) The Specificity Strategy For Customer D nated Product Design
In this scenario, the final products ( unique projects for industrial markets) o designed and produced to customer s often leads to single pro uct production or very small batches. Flexible, tailor made pro tion of very high quality items (‘zero defects’ ‘first time right’) therefore is an absolute prer
CAD and CAE. In manufacturing, there is only limited room for stand alone equipment. Most manufacturing activities are carried out in a more or less conventional way. Thus there will be hardly any AMT and if it is used at all, it will be at the first level only. In the Production Department specialized project teams dominate. They are responsible for complete components and for detailed planning of their part of the project, including material. Such planning must occur within the framework of an overall project plan made at the centralized organizational level. This requires highly skilled experts throughout the factory. They should be able to produce their part even if given only rough or incomplete data as they have the best in sight in the technical feasibility of their work, because of their competence. They need substantial experience and easy mutual discussion among the craftsmen.
6. Conclusions
It is apparant that technology was seen as a tool by our experts and not as a toy. The use of AMT depended on the market situation and the enterprise strategy. Starting from dominance in product design and selected marketing instruments, four scenarios were developed. It appeared that AMT should be used to different extents in various scenarios, as summarized in Table 3. For the scenarios 2 and 3 where two levels of AMT introduction are needed, it is important to separate parts from final product production. In scenario 1 level 4 might be the ultimate goal. As the level of AMT application differs for each scenario the consequences in terms of comemployment possibilities
Table 3 Levels of Strategy
Low costs
T for each scenario Design Supplier dominated
Customer dominated
1: level 3 oh 4
3: level 1 (product) or 2 (parts) 4: level
e possibilities for uct) or
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Obviously, unmanned production removes osubstantially reduces personnel costs. at produc:ion in scenario 1 in high wage counties production in low wage countries. As costs of control will be lower when working on one production site, a trend towards moving back production to high wage countries may occur. This would mean a change in the global division of labour. For the supplier dominated product specifity scenario, the same consequences may hold. However, there is also an extra pull to move production back to the home markets as industries will have to follow their markets as closely as possible. Despite electronic data interchange, it will be of great importance to be physically near the market. For the customer dominated low cost scenario AMT, will form a reason to keep production in the country, because the wage costs will become less important. The use of AMT in this scenario is important for the socio-economic performance of the country. Finally, for the customer dominated specific product scenario there will be hardly an” advantages. It should be pc d out that A&IT in a similar way to most technological development, will lead to an increase of productivity. This will lead to stronger competition between enterprises if as total sales do not grow at the same speed as productivity. As there is hardly any reason to think that this may happen, one may expect to have less enterprises that employ less workers. Unqualified workers will hardly find jobs in the supplier dominated low costs scenario enterprises except for pick and place work. Qualified workers combining both original craftsmanship and process control know-how will be able to choose from jobs offered to them in most other scenarios.
J. de Haan, R Peters / Technology: toys ot to&?
289
So using technology in the strategies of the enterprises will also influence the industrial structure of the economy of countries and of the world as a whole.
References Benders, J. (19931, Optional options: wotk design and manufacturing automation, Avebury, Aldershot. Bolwijn, P., J. Boorsma, Q. van Breukelen, S. Brinkman and T. Kumpe (1986); Flexible manufacturing; integrating technological and social innocatbn; Elsevier, Amsterdam. [31 Duinhof, A.H. and Hanemaaijer, P. (1973) Toegevoegde waarde per personeelslid, een nieuwe toetssteen voor het ondememingsresultaat, in Economische Stat&&he Berichten, Uitgave van bet Nederlands Economisch Instituut. Jaargang 58, No 2919. [41 Heizer, J. and B. Render (1991) Prutiucrion and Opetations Management, 2nd edition, Prentice Hall, Boston, USA. Johnson, J.L. (19761 A ten year Delphi forecast in the electronic industry, in Industrial Market Management, vol. 5, no. 1, 45-55. 161 Krajewski, L. and Ritzman, L. (1987) Operations Management, Strategy and Analysis, Addison-Wesley, Reading Massachusetts, USA. 171 Lachman, 0. (1972) Personal management in 1980 a Delphi study, in Long Range Plarzning, vol. 5, no. 2, 21-24. I81Linestone, H.A. and M. Turoff (1975); The Delphi Method; Techniques and Apphcations; Addison-Wesley, London. [91 Noori, H. (1992) Factors that promote the adoption of advanced manufacturing technologies, in Khalil, T.M. and Bayraktar, B.A., Management of technology III, proceedings of the third international conference on management of technology, Miami, Florida, New York. IlO1Porter, M. (1980) Competitive Strategy, Macmillan, New York. IllI Samson, D. (1991) Manufacturing & Operations Strategy, Prentice Hall of Australia, Brunswick, Victoria, Australia. WI Sorge, A. and Streeck, W. (1988) Industrial relations and technical change, the case for an extended perspective, in Hyman, R. and Streeck, W., Nesv Technology and Indw trial Relations, Oxford, pp. 19-47.
Job de Haan and Ron Peters *
1. introduction
Ti&wr. University, il;ilburg,7he Netherhuis
The diffusion and use of Advanced Manufacturing Techniques ( ) in Dutch factories that is expected to occur at the beginning of the next century, has been analyzed in a Delphi study with 23 Dutch experts. Four possible scenarios for ‘factories of the future’ were identified; in these special attention was paid to the role that AMT might play. It appeared that AMT would play a different role, depending on the extemar environment and internal condition, varying from very limitea to rather extended. Introducing AMT in these ways should have a positive impact on competitive position of the enterprises, company employment, and the industrial structure. Keywords: Advanced manufacturing techniques; Delphi study; Technology management; Production strategy.
Ron Peters graduated
from Eindhaven University of Technology in Industrial Technology. He worked as a research assistant at IVA (Institute for research in social sciences) and at the Department of Business Administration of Tilburg University. He worked on projects on Advanced Manufacturing Tephniques with special emphasis on production control, tasks for workers and quality of working life. He r 3w holds a position in the Industriebond FNV (Dutch Federation of Trade Unions).
In a research project on the future use of Advanced Manufacturing Techniques [2] in Dutch industrial enterprises, a Delphi-study [8] was carried out using Dutch experts in the field of industrial and production technology. These experts were asked to give their opinion about the development, diffusion, and use of AMT in Dutch industrial enterprises III the next century. In literature AMT is not often defined and only examples are given to indicate what is meant with this concept [Il,9]. We see AMT as ah hardware depending on software which is capable of taking over control of manufacturing in a more or less extended way. So we don’t use the broad, sociologically influenced word technology [l], but stick to equipment and see advancement in the division of labour between man and machine. The aspects discussed in the Delphi study included the technological development of AMT, other industrial development factors, internal conditions aiding the implementation of AMT, expected diffusion of AMT and its degree of integration, and the consequences of these changes on both the performance of the enterprise and the labour force.
* The authors wish to thank Edgar H. Sibley and the anonymous reviewers for helpful suggestions on an earlier version of this paper. Correspondence to: J. de Haan, Department of Business Ad. . rg University P.0. Box 90153, 5000 LE
0378-7206/93/$06.00
0 1993 - Elsevier Science Publishers B.V. All rights reserved
Job de Haan graduated from and got
his PhD. at Tilburg University. In this university he is senior lecturer in management and organization in the Department of Business Administration. He has been engaged in many multidisciplinary research projects in the field of operations management, with special emphasis on organization design and cost benefit analysis. Topics of these projects were quality of working life, advanced manufacturing techniques, environmental care mananagement in developing countries.
284
Information & Management
Research
Iphi-study design In our Delphi-research, we sought qualitative rather than quantitative answers to questions posed during interviews with our panel of experts. We chose this approach because we were much more interested in the direction of developments and the conditions for effective implementation than in numbers that might distract attention from the trend. Besides the problem might be too complex to limit answers to numbers [7,5] The same holds for our use of anonymous responses, we wanted every expert to express a personal opinion, unaffected by thase of other experts. The panel consisted of 23 people from different backgrounds, both professional and educational. The first included scientists, consultants, managers from various industries ((potential) users of AMT as weii as suppliers of AMT hardware and software), officials of governmental bodies and from unions of employees and employers. Educational backgrounds included: technical engineering, social science, economics and business administration. The interviews were conducted in three rounds. The first was very open and unstructured, as the experts were asked to mention any development in pre defined areas, that they thought would bc important: these included external (technical, commercial and social developments) and internal ones (organizational and operational). Finally they were asked to predict whether AMT could be a solution when there were discrepancies and to what extent the introduction of AMT would help. The results of this round were summarized and fed back to the experts in form of some 50 major themes. For every expert his position on these themes, and the responses compared with other members of the panel was made clear. the second round, the experts were asked to react to the themes, especially those where there was a minority point of view. From the results of the the first two rounds, four rough scenarios were made of possible operations in the factories of the future, including special attention to the role the (final) third round
fit in one or two of the scenarios. The comments on these scenarios were included in t output of the process.
3. Expected tecbnol piemen~tion The opinions of the experts are su five statements. I
In the IO or 15 year time frame, deL?elopments in the domain ofhard;uare (e. g., sensors, lasers, etc. ) will be retvoltttionary .
All but one of the experts felt this was an important issue. About 33% agreed with this statement. Those who agreed stressed especially the ability to adapt to ‘new’ situations, such as the use of expert systems in production and selflearning and other, generally applicable, flexible machines. Those who disagreed stated that everything is already possible and that further development will aim at the actual implementation of such methods. Some doubt that this is possible, and that succes depends on the development of relevant software and engineering methods, such as machines that hzve a ‘design for assembly’ technique built ir. II In the next 10 or 15 years, sofmare will improLie to the point that the integration of existing automation is drama tically simpler.
Some 15% of the experts did not agree with this, whereas the others agreed. This could be expected from the reasons given to the first statement. The advantages of integration will be greater if more functions are automated. Some
f big overall cant
l?lfo~atio~l &
n~~erne~lt
285
111 In the next I
workers .
e experts referred to this subject. Most of them a eed (90%). Those who were in favour stressed e improvements in the
man-machine communication will be the edge of future generations of factory workers who will be more familiar with working with computers. Those against this prediction referred mainly to the extra complications that might be expected because of new devices. IV FlexibiMy in production due to advanced manufaCtWi8~ e@!ipmeEt iE the FWG 13 Or I.5 JWlWS should improve the available applications and result in reduction of non productive time, like that used in set up. About 85% of the experts mentioned this topic at first, and only 20% of them were against it. Those who were sceptical gave two types of reasons: first flexibility in one piece of equipment does not necessarily improve flexibility of the total process unless that piece is where the botoccurs. Second, the experts refer to the nce in process industries where the trend appears to be towards fixed automation and standardization. This would then appear to make the computer controlled production into a disturbance. Those who agreed mentioned examples in robotics, programmability and accuracy, broadening of CNC equipment to Flexible Manufacturing Cells or even Flexible Manufacturing Systems, development to three dimensional designs for ustries sponsored by the European and ‘megatronics’, in which electronics and engineering are combined. V Ip2the next 10 or 1.5years the technical possibi?ity of ‘~~rn~~~ed’ groductiou will rise dramati-
ent see it as a goal or c anagerial and organizational impediments that need to be removed. They emphasize that technical devices to facilitate this development already exist. Those who oppose this concept suggest that there will always be people in factories. Also they say that past developments were always slower than predicted. Many practical problems also exist; e.g., identification and registration of miniature components by means of a bar code system, quick and frequent product changes. There are also difficulties produced by the materials that have to be formed. One of the experts stated that even in 100 years there will not be an unmanned factory. According to the experts, the extent to which AMT will actually be implemented in Dutch factories can not only be derived from the technological developments, but also the external developments and internal conditions are of influence. opinions on the actuaI implementation are summarized in four stages: level 1 Factories have some form of AMT; level 2 Factories have some form of AMT in most workplaces; level 3 Factories have AMT in most of the functional fields, and they are integrated within each; level 4 Unmanned factories, with AMT integrated between the functional fields. The opinions of the experts are summarized in Table 1. From this we can learn something about the expected diffusion AMT in the Netherlands: - in most factories there will be some kind of AMT; - there will be hardly any workplace in which workers do not have to deal with some kind of AMT; Table 1 The actual implementation Leve1
Diffusion Nowhere
tally .
the remainder
ot consider this did not agree
of various levels of AMT
1
0
2 3 3
1 10 20
Limited 1
11 11 3
Broad scale
Everywhere
11 9 2 0
11 2 0 0
286
Information & Management
Research
- there will be hardly any factories in which in all functional fields are integrated with AMT; - only on a very limited scale will unmanned factories be found. 4. me origin of the scenario’s: product design and marketing strategy TWOcriteria were crucial for scenarios in the factories of the future in the eyes of the experts. The first deals with dominance in designing the product and the second to the major instrument used in market competition. Thus the experts see AMT only as a means and not as an end, which agrees with general comment? in literature. The instrument should fit into a strategy to meet market demands, so that enterprises can choose whether, if, and how they are to use AMT. The experts did not see enterprises as the victim of ‘technological determination’, where the enterprise must use any available technology to improve its ability to survive. Dominance in designing the product can rest with the customer or the supplier. Batch operations occur when a supplier decides to adapt the products to specific segments of the markets or when economic reasons make the production and storing of smaller numbers advantageous [6,4] But batch ordering may occur if the customers agree to accept commonly used parts in products, specifically desgned for them. This may cause changes in the way that job lots are planned and handled. It appeared that there are two competing factors in market competition: price and product specificity (i.e., meeting customer demands) [lo] At first there was a suggestion that these two instruments would correspond directly with the two types of dominance in design. That is: supplier dominance would lead to price competition if all products are of a sufficient quality. and customer dominance would lead to product speci:i;ity or some would turn to specialist suppliers ;; r]. Although these strategies might seem ‘natural’ for enterprises, it turns out that entrepreneurs are more inventive. In some cases, they try to get competitive advantage by strengthening any natural weakness that they and their competitors have in common, provided that their ‘natural’ strength is at an acceptable level [12] For instance, supplier designed products tend to be produced at a
Table 2 Four scenarios and their popularity Competitive strategy
Price competition Product specificity *
Design dominance Supplier
Customer
Type 1: 1 expert Type 2: 3 experts
Type 3: 2 experts Type 4: 8 experts
* 6 experts stress productspecificity, but no differences between types of products.
reasonable price but for specific, smaller market segments or customer designed products are produced at relatively low price but with limitations on their specificity. Such high or low prices are the result of the costs, as they are normally the ultimate determinants of price in competitive markets. The strategies and their popularity among the experts are shown in Table 2. From table 2 can be concluded that type 4 is by far the most popular of the scenarios, But the other still do have adherence. Especially the price competition scenarios have little support in the Dutch panel. It is obvious that this has to do with the overall economic and industrial situation of the Netherlands. From table 2 can be concluded that 20 of the 23 experts can be classified in the scenarios, 6 of them don’t make any difference with respect to the character of products. but only stress product specificity.
5. Scenario’s for factories of the future We now summarize the opinions of the experts for each of the scenarios for technology, production organization and labour. For the scenarios 2 and 4 this is more difficult then for 1 and 3 because of the 6 experts who only stressed specificity. Based on these opinions we have formulated scenarios as consistent as possible. Finally the experts were asked to comment to these if they thought that would be necessary. (I) Low Cost Strategy For Supplier Dominated Product Design
Here a limited range of relatively simple (consumer) products, like paintbrushes, is produced in large quantities for a stable and large (maybe global) market. Efficiency, including short processing times, is most important.
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At first sight there is no need for any flexible production technique. Fixed automation forms are adequate. But it should not be forgotten that the product-life cycle tends to shorten every time a new generation of products enters the market. A more flexible technique might be appropriate in depreciating the necessary investment over a larger number of different products. In this case there is a smaller portion of fixed cost in each produt t. There may even be more opportunity for cost reduction when unmanned production is both technically and operationally possible. Of course there is hardly any time pressure in adjusting the equipment to new products as this will not often occur during the life of the equipment. If level 4 of technological development occurs in the next 10 or 15 years, this will be the scenario, but if this does not occur, level 3 will be introduced. In the production organization, the machines are normally grouped together in one unit, with a fiied sequence; i.e., serial production. Stock is manufactured according to the demand forecast. If the different production steps are automated and integrated, the production planning and control can be performed in one place. The execution of the production process is then directed by the program and the machines communicate without interference from man. The only influence is at the beginning of the production process, when the production plan for the particular product is communicated to the system. Thus we may face two separate groups of workers. On the one hand, there are workers who do all the pre-production (paper) work as well as the post-production (paper) work. These are highly qualified workers with good education in process control. On the other hand, there are unqualified workers, often parttimers on an irregular basis. Their job consists of picking and placing the parts and goods in production, especially in job segments technically difficult to automate. The requirements in knowledge and qualifications for each of these groups differ so much that it is difficult, if not impossible to move from the latter group to the fist one. (2) The Highly Specific Strategy For Supplier Dominated Product Design Here a large assortment of (consumer) products, such as cars, must be produced for a rela-
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tively small and rapidly altering market segment. Although efficiency remains important, flexibility in production is becoming of interest. Flexible production automation, of course, is most valuable here. The technique might be used for several generations of products, while they may even be subject to fashion within the generations. On the other hand it is necessary to be able to adjust production in a simple way from one range of the product to another, or even between products. Such requirements count stronger in the manufacturing of the final product than in manufacturing of the parts from which the final product is composed. For the latter, the situation is closer to a low cost scenario. The various steps in both the production of parts and the production of final products might be integrated using computer aided production techniques, such as CAD, FMS, CAM and CAD/CAM. In this scenario levels 2 and/or 3 may be relevant. Level 2 will occur only in the production of final products, whereas level 3 might also be used in the parts production department. The production organization has a division between the production of parts and and of final products. Parts production deals with large batch sizes because of their common use of parts in different products; also batch sizes experience economies of scale. In the production of final products the desired variety in the product assortment enters the production process. Flexibility is increasingly important as market segments become more specific and batch sizes are smaller. Assembly of the final products, usually little automated, to stock or even customer order is organized in flexible assembly lines or even in work cells. The planning for final assembly therefore differs from that of parts production, especially in industries in which production takes place after receiving an order. Then batch sizes may become very small. There will be two groups of workers in the factories: those who work in setting up the equipment and lines to control the process and those who do the planning, programming, maintenance and other jobs needed to make the equipment work. Their quality of working life of course differs a lot. But enterprises can choose how to divide the work over the workers: more or less mechanistic or organic.
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The Low Cost Strategy For Customer Dominated Product Design (3)
Here the final products (usually non-consumer products for industrial markets) are designed and produced to specific customer order. Common use of parts can increase batch sizes and economies of scale to lower the unit CO though flexibility is a prerequisite, there is a nee for efficiency. Stand alone equipment may be used in site+ tions in which there is only limited stand tion. Apart from the automation in actual facturing, it is possible to use results from co--+ puter aided techniques in the pre-produc phase (i.e., CAD- and WE-systems). Because &G the importance of quick product engineering E ‘smart’ development of parts, such systems w become more and more necessary, Thus levels 1 and 2 may be of relevance in this scenario: level 1 for specific designed parts and final products, and 2 for standardized parts. In the production organization job shop, production on customer order dominates. The organization will be functional or in workcells. Final assembly might take place in an assembly department. The differences in production organization and the level to which AMT is used leads to differences in the needed skills of the workers. However, in all circumstances fine craftsmanship is important. This counts more in case there is either no AMT or only stand alone equipment. From the moment that AMT is introduced, t is a need for process control of computer ai activities. 6%) The Specificity Strategy For Customer D nated Product Design
In this scenario, the final products ( unique projects for industrial markets) o designed and produced to customer s often leads to single pro uct production or very small batches. Flexible, tailor made pro tion of very high quality items (‘zero defects’ ‘first time right’) therefore is an absolute prer
CAD and CAE. In manufacturing, there is only limited room for stand alone equipment. Most manufacturing activities are carried out in a more or less conventional way. Thus there will be hardly any AMT and if it is used at all, it will be at the first level only. In the Production Department specialized project teams dominate. They are responsible for complete components and for detailed planning of their part of the project, including material. Such planning must occur within the framework of an overall project plan made at the centralized organizational level. This requires highly skilled experts throughout the factory. They should be able to produce their part even if given only rough or incomplete data as they have the best in sight in the technical feasibility of their work, because of their competence. They need substantial experience and easy mutual discussion among the craftsmen.
6. Conclusions
It is apparant that technology was seen as a tool by our experts and not as a toy. The use of AMT depended on the market situation and the enterprise strategy. Starting from dominance in product design and selected marketing instruments, four scenarios were developed. It appeared that AMT should be used to different extents in various scenarios, as summarized in Table 3. For the scenarios 2 and 3 where two levels of AMT introduction are needed, it is important to separate parts from final product production. In scenario 1 level 4 might be the ultimate goal. As the level of AMT application differs for each scenario the consequences in terms of comemployment possibilities
Table 3 Levels of Strategy
Low costs
T for each scenario Design Supplier dominated
Customer dominated
1: level 3 oh 4
3: level 1 (product) or 2 (parts) 4: level
e possibilities for uct) or
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Obviously, unmanned production removes osubstantially reduces personnel costs. at produc:ion in scenario 1 in high wage counties production in low wage countries. As costs of control will be lower when working on one production site, a trend towards moving back production to high wage countries may occur. This would mean a change in the global division of labour. For the supplier dominated product specifity scenario, the same consequences may hold. However, there is also an extra pull to move production back to the home markets as industries will have to follow their markets as closely as possible. Despite electronic data interchange, it will be of great importance to be physically near the market. For the customer dominated low cost scenario AMT, will form a reason to keep production in the country, because the wage costs will become less important. The use of AMT in this scenario is important for the socio-economic performance of the country. Finally, for the customer dominated specific product scenario there will be hardly an” advantages. It should be pc d out that A&IT in a similar way to most technological development, will lead to an increase of productivity. This will lead to stronger competition between enterprises if as total sales do not grow at the same speed as productivity. As there is hardly any reason to think that this may happen, one may expect to have less enterprises that employ less workers. Unqualified workers will hardly find jobs in the supplier dominated low costs scenario enterprises except for pick and place work. Qualified workers combining both original craftsmanship and process control know-how will be able to choose from jobs offered to them in most other scenarios.
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So using technology in the strategies of the enterprises will also influence the industrial structure of the economy of countries and of the world as a whole.
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