- Email: [email protected]
mediumm-sized enterprises
Technovation, 16(2) (1996) 77-83 Copyright 0 1996 Elsevier Science Ltd Printed in Great Britain. All rights reserved 0166-4972/96 $15.00 + 0.00
ELSEVIER ADVANCED TzcHNOuyjY
Managerial implications of flexible manufacturing for small/medium-sized enterprises Mahesh Gupta and Garret Cawthon College of Business and Public Administration, University of Louisville, Louisville, KY 40292. USA
Abstract SmalUmedium-sized enterprises (SMEs) constantly face challenges as they react to changing environmental factors such as the emergence of worldwide markets and standards for better product quality, demands for faster delivery times and closer business partnerships. These companies must bring together people, resources and facilities to develop, manufacture and market products with an ongoing commitment to accept and react to changing market conditions. Recently, flexibility has been widely recognized as a distinctive competence leading to competitive advantage, and thus Jlexible manufacturing (FM) technologies serve as a strategic asset to accomplish operations strategy. The SMEs must develop a framework to protect and enhance this asset. Only with the proper organizational structure, culture and external alliances can an SME achieve the full potential of FM technologies. In this paper, we provide an overview of strategic, organizational and personnel implications of flexible manufacturing for SMEs. We also discuss the significance of alliances with external partners and per$ormance measures for implementation of $exible and automated manufacturing technologies. Copyright 0 1996 Elsevier Science Ltd
According to the National Planning Association, “An industrial system includes much more than the major industrial firms. There must be a host of smaller companies which design, manufacture and service equipment; make or process essential parts or raw materials; use by-products; provide specialized engineering, financial and legal services and supply many other vital commodities or services” [Il. Small/medium-sized companies, with fewer than 250 employees, represent 98% of America’s eight million businesses and are becoming the backbone of the worldwide manufacturing sector. Given their less complicated organizational structures, higher responsiveness to the global marketplace, and an entrepreneurial spirit, these companies have a real advantage [2]. In the last ten years, this group has created the bulk of the new industrial jobs (as many as eight out
of ten new jobs) and a hefty share of the total industrial output, yet these companies suffer a much higher casualty rate than larger corporations. The major challenge for SMEs is to continuously provide innovative and customized products using the best available process technologies. Improvements in competitors’ capabilities have shortened product life cycles, elevated product complexity, and expanded accessibility to new technical breakthroughs. Flexible manufacturing (PM) technologies offer a key source of competitiveness; thus, they can be used as a weapon by SMEs to combat this growing competition. A small/medium-sized firm competing in a technology-driven industry can outperform its competition if it uses PM technologies as a strategic asset to accomplish its operations strategy. This paper will discuss management’s role in supporting FM objectives with an emphasis on the organizational and personnel issues. Only with the proper organizational Tedmovti VaI.16No.2 77
M.Gupta and 6. Cawthon structure, culture and external alliances can a small/medium-sized firm achieve the full potential of FM.
11 Trends in SMEs The article “Small is beautiful now in manufacturing” [3] states that the current trend is toward small/medium-sized factories: fewer than 600 people per factory. For the manufacturing of some types of product, the workforce could be as small as five workers. For example, Gunn [4] mentions that the Yamazaki Machinery Corporation of Florence, KY, is establishing a plant to manufacture machine-tool parts. The plant will employ only five workers on the first shift and one worker each on the second and third shifts. These small factories, equipped with FM technologies, are capable of building products in ways that will allow for quick and responsive changes in dealing with the shorter product life-cycles and quality demands of a growing international marketplace [31. It is expected that FM technologies will move in increasing numbers (in the tens of thousands) into firms that now employ between 20 and 50 people. A 1985 study directed by Edward A. Ross of Ross Associates, Needham, MA, reports that shipments of small systems will total $115 million (i.e. approx. 76 units) in 1985 and grow at a fairly steady rate of 40% annually until 1990, when they will amount to $618 million (i.e., approximately 660 units) [S]. L2 Flexible manufactwing and its signihwe The evolutionary pace of manufacturing technology has quickened in the past few decades. The fruits of this technological explosion provide firms with flexible manufacturing methods that are directly controlled and indirectly supported by computers. FM uses integrated or stand-alone computer-controlled machines to (i) alter the shape, size, or form of material (e.g., CNC machines); (ii) assemble, reposition, move and store parts, components or products industrial robots and material handling (e.g., systems); (iii) measure and inspect products and materials (e.g., vision and inspection systems); and (iv) design, plan and control products and processes computer-aided design, engineering and (e.g., manufacturing). In addition to the above ‘hard’ technologies, FM is also supported by ‘soft’ technologies such as statistical process control, just-in-time system, group technology, material requirement planning and various computer-assisted systems for planning, scheduling, monitoring and controlling production
[61.
Among others, Rosenfeld [6] noted that flexible manufacturing is a national imperative and US firms, on the average, are falling farther and farther behind their international competitors in manufacturing capabilities. These gaps are greatest among the SMEs that produce products for niche markets and parts, components and tools for large final producers. “Many small companies haven’t advanced beyond use of manual and semiautomatic machines,” notes Ma1 Sudhakar, product manager at Maho Machine Tool Group, Naugatuck, CT. “They [small companies] haven’t even
78
T-Vdl6No.2
begun employing NC or CNC. Getting into cells’ would be too great a technological leap for them.” Bergstrom [7] also points out that FM in the form of cell technology is of great significance to manufacturing productivity - especially to SMEs. Gold [8] also notes that US firms have been using rigid, repetitive automation systems. Such systems can produce a large volume of high quality standardized products at low cost provided that production is maintained at high levels of capacity utilization. An even more profound limitation of such repetitive systems has been their inapplicability to the needs of medium and small manufacturing plants which produce a variety of products in small batches. Flexible manufacturing has been widely touted as a means of gaining the efficiency of increasingly automated production without its costly rigidity for large, as well as smaller, manufacturers. The major benefit of FM is its ability to manufacture products efficiently at low-to-medium varieties and volumes. This added flexibility allows changing product mixes and output levels with minimal losses in productivity. This competitive advantage is based on functionality and quality, with less emphasis on cost leadership. Manufacturing lead times (e.g., set-up, throughput and changeover) are often reduced, fostering improved decision making by management. Also, faster feedback loops improve the introduction of new products to better satisfy changing market demands. The benefits of FM should be analyzed carefully and then prioritized so that each of these benefits can be compared to its relative constraint. Invariably, the outcome for many SMEs is a modular approach (i.e., obtain equipment and computer software) in order to enhance manufacturing capabilities. However, FM capabilities alone cannot provide the real benefits. Management must integrate hardware, software and humanware to maximize FM potentials. Communication must be encouraged between marketing, design, manufacturing and quality control. Effective small/medium-sized firms also must have an organizational design and culture that are able to respond to the challenges created by changing technologies and markets.
2. STRATEGIC lMPllCATlORS OF FM FOR SW A firm’s competitive strategy specifies the potential products and markets, long-term objectives, and policies for achieving the objectives. The competitive strategies used by SMEs have been studied extensively and a number of classifications have been proposed [lO--121. Porter [13 (p. 12)] states that competitive advantage is at the heart of any strategy, and achieving this advantage requires a firm to make a choice about the type of competitive advantage it seeks to attain. Competitive advantage is defined as the way in which a firm actually puts its competitive strategy into practice [ 13 (p. 17)]. Among two main
I A typical manual cell contains two, three or more CNC machine tools, plus accessory equipment. Electrical and mechanical integration are provided by the operator. In an automated cell, a cell controller, network and an automated material handling device, such as a robot or a conveyor, is also included 191.
Flexible mamhcthg sources of competitive strategies, cost leadership implies an emphasis on actions and policies (such as standardized products and economies of scale) that reduce the overall cost of supplying products below that of competitors, and product differentiation implies adding value to products (such as higher quality and better services) to command a higher price. Moreover, a superior competitive position can be achieved when a high differentiation position is combined with a low cost position [14]. Operations strategy (OS) is a functional strategy that is generally guided by a competitive strategy, and results in a consistent pattern in operations decisions so that the objectives of operations strategy are achieved. The four general objectives of an operations strategy are cost efficiency, quality, delivery and flexibility. The overriding reason for using flexible technologies should be to support the operations strategy of the firm. Overall business competitiveness can be strengthened by considering manufacturing’s distinctive competences in the strategic objectives. This consideration is even more critical for small/mediumsize firms that lack financial and personnel resources. They must recognize FM technologies as a prerequisite for competitive advantage. In a symposium on automation, one owner of a small firm stated that “if you don’t use them (computer-based technologies) you get left in the dust” [6 (p. 119)]. A National Institute of Standards and Technology (NIST) report summarizes the responses of a group of small machine tool company executives and notes that “robotics and hierarchical control technology do not seem to have any broad appeal for typical small machine shops. They cannot afford it and do not have the expertise to use it, regardless of its benefits” [15]. Strategic operations management for small/ medium-sized firms can then promote continuous process innovation and flexibility to foster the growth and profitability objectives. Thus, product differentiation and low-cost business strategies can be simultaneously considered by a successful SME. Since large multinationals are shifting most of their production overseas, the strategic implications of flexible manufacturing must be understood clearly by the SMEs as domestic manufacturers need to rely more on FM to curb the US trade deficit [ 161. One or more flexible manufacturing technologies are usually adopted to help implement a firm’s competitive strategy, whether one of growth and market domination or one of defense and protection of markets. In some instances, SMEs buy CNC machining centers, turning centers and grinding machines with the intention of later linking them electronically and mechanically through cell controllers, networks and automated parts-handling systems. Steve Klabunde (vice-president of manufacturing systems at Giddings and Lewis, Fond du Lac, WI) points out that “planning ahead for automation yields as much as 25% of the potential benefits, even if you don’t follow through and automate. You begin to think differently, to challenge long-standing practices” [9].
2.1 Product-process matching Product and process innovations are among the most important sources of competitive advantage for
for SMEs
SMEs. As SMEs are faced with unfamiliar products and processes on a fairly regular basis, they must develop innovative developmental strategies to match the development of products and processes [ 171. Both product and process innovation are critical for maintaining the effectiveness of FM. A small/medium-sized firm must ensure that any new process technology fits with its product lines. Failure to do so is often linked to inconsistencies between the range of products and the available process flexibility. FM technologies make the machine systems more responsive to process and product variations. Illinois Tool Works, a small firm of keyboards and other computer data entry devices described by Nichols [ 181, has successfully reduced product cycle time (from 3 years to 6 months) and expanded product variety significantly by providing more options, models, sizes and colors. The resulting flexibility advantages of FM are often categorized into two attributes: scope and speed [19]. Scope flexibility allows for competition based on product mix, volume mix and customized production. Economies of scope allow many products to be manufactured with the same equipment, though less expensively than with separate processes. Potential advantages include lower capital costs, lower inventories, and better equipment utilization. Speed flexibility, on the other hand, emphasizes quick delivery and design responsiveness to changing technologies and customer interests. This improves the product innovation and delivery rates, especially critical for introducing products into a global marketplace. One example is a CAD-CAM linkage used to reduce the lead times needed to bring designs to manufacturing and thereby creating new opportunities. Peerless Saw Company, a small manufacturer of sawblades described by Meredith [20], implemented a menudriven software to design the sawblades and then used laser technology to manufacture the blades. The company was able to provide faster service along with customization. The company also started applying the new technology to other products and thereby found themselves all alone in a high-margin, custom-products market.
3. ORGANlZAllONAL DESIGN FOR FM A 1987 NAS (National Academy of Sciences) study reported that “non-technological, managerial, and organizational factors powerfully influence the adoption of new technologies and the impact of their adoption on product quality, labor productivity, and the skill requirements of labor” [21]. Generally, firms with FM technologies have different characteristics and needs when compared to companies stressing mass production technologies [22]. One major difference is the use of highly skilled workers than can function in the dynamic FM environment. Their higher skill level requires fewer layers of management hierarchy, thus decentralizing the decision-making to project teams. Also, FM organizations cultivate fast feedback loops with shortened communication lines, enabling processes to respond quickly to product and process changes. Fewer rules and a flatter organizational structure VoI.16No.2 79 Tedniovaiion
M.GuptaandG.GawUn~ enhance both the overall organization’s and the operations’ flexibility with FM. The result is improved product differentiation, efficiency, process development, and integration of managerial and technical functions. Due to the limited supply of resources, organizational design for small/medium-sized firms must be more holistic than for larger firms. SmalYmediumsized firms must transform their mechanistic and bureaucratic structures into an organic problemfocused design to match the needs of FM. Shifting responsibility to workers translates into a more collaborative, egalitarian workplace and higher productivity. Organizational authority is based on knowledge and expertise, not on a position’s status. In 1990, the Consortium for Manufacturing Competitiveness conducted a Skills Panel pilot survey of fourteen small state-of-the-art southern factories and found that more than two-thirds of small-firm employees discussed production problems on the job, 71% suggested improvements, and 53% advised management [6]. This suggests that employees in SMEs do indeed contribute to production innovation and problem solution. Thus, management can enhance the flexibility of operations and reduce risks by pursuing creative workforce policies. This is particularly valuable to small/medium-sized firms that cannot withstand huge fluctuations in market demand. Cross-training is one approach to lowering business risks while improving productivity. Wage rates can be adjusted on an individual basis to maximize personal motivation. Flexibility can also be achieved through adjustments in labor make-up, including temporary, part-time and subcontracted workers. Managers must balance the trade-offs between the lower labor expenses and the superior skill level and esprit de corps needed for FM leadership. Equipment layout must also be integrated with organizational design to maximize a firm’s performance. The traditional job shop layout is not appropriate for FM because machines with similar functions are grouped together to form a department. In an FM environment, machines are grouped into cells, Ushaped clusters that optimize product flow and communication. Operations can also be divided into product-oriented departments that integrate all primary and directly supporting functions. 3.1M-s newrespo&Hes The critical abilities for small/medium/sized business managers are forecasting technological trends and adapting the strategic network to these changes. “When manufacturing’s mission is defined in traditional, narrow terms, manufacturing managers have little room to move” 1231. They must be able to make quick and accurate decisions, as well as direct operations and personnel toward common goals. Innovative leaders lower the barriers of change and empower subordinates to take risks necessary for potential future gains. A strong personality is needed to continuously revitalize and renew the organization. On the basis of their experience gained from a series of six case studies, Meredith and Green [24] suggest ten recommendations for managers in the process
80
TedtnwrtionVd16wO.2
of adopting new FM technologies (see Table 1). Among the six firms studied, five firms had less than 150 employees. “One of the scarcest resources in the firm is management attention, and flexibility consumes a lot of it” [25]. Managers are required to become effective team leaders by effectively coordinating the independent activities of multi-functional teams made up of engineering, manufacturing, marketing and financial personnel. Control is extremely difficult because of the independent personalities and motives of the individual members. Transformational leadership is needed to cultivate employee loyalty and motivation and is especially critical with autonomous work forces [26]. For a technology-based industry, leaders must have crisis management skills to cope with the rapidly changing environment. “Since the new manufacturing system is not controlled at all, a thorough understanding of the technology and its relationship with the key external factors is necessary for quick response” [27]. Top managers should have a broader educational background that couples technical training with interpersonal skills. In order to maintain the company’s continued competitiveness, they must adapt their workforce to demand fluctuations.
3.2 Operator empowerment A common myth with FM technologies is that “new technologies work with both fewer and lessskilled workers” [28]. An overall reduction in the total number of workers may occur if FM technologies are used solely for automation and not for flexibility. To maximize the full potential of FM, a more stable, motivated and loyal workforce is needed. Work activities become less repetitive and more craft-like, technical and professional. Worker knowledge becomes more valuable than equipment when manufacturing many products. Broad job classifications and worker participation create workers with general skills that accumulate with time. The ultimate goal is for each employee to become self-managed. Workforce management must be focused on stimulating worker learning rather than on command and control of a standard set of procedures. Continuous training should be part of each worker’s job requirements. Both internal and external educational sources can be used to improve skills, including community college and computer-assisted programs. James B. Simon, vice president - operations, Giddings and Lewis Machine Tool Co., suggests that the
TABLE I. 2. 3. 4. 5. 6. 7. 8. 9. 10.
I.
Recommendations
for managers adopting new technologies
Do not try to sneak up on your employees. While the technology is changing, change the organization. Embrace the negative consequences. With more computerized communication, increase the amount of face-to-face communication. Attack the strongest force for stability, the existing infrastmcture. Prepare to fight the same old problems. Keep the production utilization of the new equipment low. Do not expect to eliminate jobs. Use the technology to monitor your workers. Change your strategy as you go.
flexible mmufdhg workforce of an enterprise constitutes a tremendous knowledge base and that in an FM environment, their knowledge base should be expanded through training and empowerment. These empowered and multifaceted operators would possess a diversity of talents in flexible manufacturing and thereby play a significant role in identifying the specific FM technologies which best suit their manufacturing needs [7].
3.3 Team fomtion The increasing use of flexible technologies on manufacturing floors is reshaping the traditional roles and domains of the workplace. In many enterprises, workers and management are creatively and successfully addressing flexible manufacturing concepts in order to redefine traditional attitudes and postures towards job descriptions and functions. Thus, team concepts are being formulated and employed [7]. With FM technologies in small/medium-sized firms, work groups form and reform on the basis of current production needs. Lines of command change with time, depending upon the prevailing state of activities. Multidisciplinary teams, such as matrix structures, task forces and problem-solving teams, are needed to acquire input from experts with a variety of skills. Group leaders must have “a detail orientation for technical competency and an integrating orientation to bring marketing, technical, and manufacturing skills together” [22]. They should thrive on change, uncertainty and ambiguity. Trust, rather than formal controls, is crucial in motivating team members. Leaders must direct and coordinate various activities, both horizontally (from research to development to engineering to manufacturing) and vertically (from raw materials to final products) along product lines. “Team organization reverses the specialist’s tendency to optimize single elements at the expense of system performance” [28]. Projects are carried out in groups, employing multi-skilled employees responsible for day-to-day operations. Because the high degree of work interdependence makes identification and measurement of individual performance difficult, participants are rewarded as a group for the flexible design and manufacturing of’high quality products.
4. ORGANIZATIONAL CULTURE The culture of a small/medium-sized firm using FM is described with one word: entrepreneurial. The key behaviors will include flexibility, innovation, effectiveness, and efficiency. Organizational culture is increasingly important, since continuing acceleration of technological change increases performance ambiguity [28]. The new levels of technology involved with FM demand higher commitments to learning than past manufacturing advancements. Organizational culture must adapt to these changes and focus its energy toward performance objectives. The entire network should be holographically integrated to provide the strongest bond between employees and the organization [26]. A clear understanding of the organizational identity, mission and culture needs to be communicated to all of the firm’s employees. Extensive training programs may be
for SMEs
needed in order to develop a common set of values and beliefs. This will yield improvements in all performance criteria, including creativity, productivity and quality. The organizational culture is particularly critical to developing a more egalitarian relationship between corporate functions. Achieving flexibility requires a cultural foundation linking new roles and new expectations. When performance ambiguity is high, organizations that rely on socialization and a common set of norms as the principal control mechanism are more effective than either market or bureaucratic systems. The two classifications of culture - adaptability and involvement - are needed to maintain the organization’s integrity and accomplish its entrepreneurial goals [26]. An adaptable culture strengthens the relationship of the firm with the external environment by emphasizing organizational flexibility and change. An involvement culture focuses on the individual needs of each employee in order to develop enthusiasm and dedication to the firm’s goals. Trust is a necessary fundamental cultural element in technology-based firms. It routinely results from similar motivations and convictions. Workers will not freely share information and resources with one another unless there is confidence in the relationship. “A market system creates incentives that encourage the production of knowledge but these incentives inhibit its distribution; a bureaucracy-central planning mandates the distribution pattern but does not provide the incentives for new knowledge production” [28]. Opportunistic behavior easily can destroy long-term trust, which is especially critical for the survival of environmental fluctuations. “Without cooperative relationships, companies engaged in flexible manufacturing would disintegrate in the acid bath of competition” [29].
5. MTERNAL LINKAGES: NETWORKS AND STRATEGIC ALLIANCES Strong alliances with external partners are critical for technological globalization and growing competitive activity. These partners include suppliers, distributors, equipment vendors, customers and industry experts. Firms with FM technologies, with greater interdependence among their internal subsystems, require more responsive and flexible links to environmental associates. The relationships should be winwin, non-zero-sum unions that are cooperative rather than competitive. They can assist a small/mediumsized firm in improving organizational responsiveness and overcoming weaknesses due to a lack of resources or technical expertise. A variety of strategic alliances and partnerships, including networks, new sector-specific associations and cooperatives, is providing the means for establishing external linkages. For example, successful corporations are discovering that their interests are better served by committing to long-term relationships with small numbers of higher quality supplier firms. Also, SMEs are joining together to reduce costs of services, tackle common problems, expand production capabilities, enter new markets, and generally learn from one another [6]. In partnerships between large and l-Vd.16Ne.2
81
M.Gupta ad 6. Cawthon small firms, ‘vertical networks’, the large firm lends expertise to SMEs in order to raise the latters’ quality standards. The specialized expertise of SMEs spurs innovation, and their pooled resources lead to better design and quicker solutions to production problems. On the other hand, the networks of SMEs, ‘horizontal networks’, enable SMEs to achieve the external economies of scale, access to information, and strength of numbers that accrue to larger firms without sacrificing the economies of scope and special expertise more readily attained in small to medium sized operations
WI. Thus, cooperative relationships are based on trust and long-term associations. The complexity and flexibility of manufacturing operations require an active collaboration over an extended period of time. Cooperation between the company, its customers and its suppliers frees up resources and distributes risk. By pooling resources, companies develop services that are not offered on an individual basis. For example, cooperative arrangements with suppliers can be used to acquire technological innovations whose costs exceed the financial resources available from a single firm.
6. MEASUREMENT OF SUCCESS As SMEs implement new manufacturing technologies to match the new competitive priorities, they must also modify their performance-measuring and appraisal systems. In a recent study of 800 SMEs in the UK, Neely et al. [30] concluded that the firms that compete primarily on quality or time place most emphasis on performance measures (such as field failure under warranty, in process quality, on time delivery, and delivery lead time) which most closely match their business/operations strategies. The SMEs must recognize the numerous shortcomings of the traditional accounting and performance measurements in today’s environment of automation. The success criteria for FM emphasize the long-term, non-financial benefits that cannot be measured by the old financial systems and local performance measures. Such old measurement systems (e.g., return on investment and internal rate of return) neither consider the risk associated with the proposed investment nor the difference between an enhancement in a local area (e.g., implementing a CAD system) and its impact on the total performance of the company. The traditional measurement systems also fail to support the concepts of multi-functional teams. New cost management systems such as the Activity Based Cost/Management (ABC/M) system are being proposed which give management the information needed to implement its competitive strategies [31]. Specifically, the process view of the ABC/M system provides operational information about the various activities being performed and the efforts (resources) required to carry them out. It also provides information about the performance of various activities in terms of efficiency, quality and dependability. Thus, continuous improvement efforts can be directed to eliminate non-value-adding activities and to reduce resources consumed by value-adding activities. Hicks [31] provides a comprehensive guide to ABC/M 82 T&lov~vol16wo.2
for small/medium-sized firms which can be used to establish and maintain an effective performance/ measurement system.
7. CONCLUSIONS Flexible manufacturing technologies offer the process capabilities necessary for SMEs to compete against large corporations and to become successful industrial partners. Responsiveness to changing demand levels and customization of product features are two strategic advantages that overcome the resource limitations often found with small/mediumsized firms. By including the nontangible advantages, FM technologies can be economically favorable to less expensive but inflexible machinery. But equipment alone does not provide flexible manufacturing capabilities. The implementation of FM requires management to develop the proper organizational structure and culture needed to adapt to changing internal and external environments. Managers must develop a system that motivates workers to think and act flexibly and productively to meet company goals. Lastly, alliances with suppliers, customers and other external partners should be intensified to make the small/medium-sized firm a more powerful competitor in the global marketplace.
ACKNOWLEUGEMENTS The authors wish to acknowledge the comments made by anonymous referees on the earlier version of this paper. Their comments have improved the quality of the paper immensely.
REFERENCES 1 C.B. Hoover Resources
and B.U. Ratchford.
and Policies
Economic of the South. Macmillan,
New York, 1951. 2 B. Dumaine. Is big still good? Fortune (20 April 1992) 50-56. 3 E.F. Schumacher. Small is beautiful now in manufacturing. Business Week (22 October 1984) 152-156. 4 T.G. Gunn. World-class manufacturing. Executive Excellence (March 1990) 8-9. 5 Anon. FM TECHNOLOGIES: A boom you’ll guide. Production Engineering (February 1986) 58-60. 6 S.A. Rosenfeld. Competitive Manufacturing: New Strategies for Regional Development. Center for Urban Policy Research, New Brunswick, NJ, 1992. 7 R.P. Bergstrom. FMS: the drive towards cells. Manufacturing Engineering (August 1985) 34-38. 8 B. Gold. On the economic evaluation of future manufacturing systems. Technovation, 6 (1987) 227-245.
9 J.C. Quinlan. Flexible cells for small companies: a dilemma. TooZing and Production (August 1987) 28-30. 10 W. Davig. Business strategies in smaller manufacturing firms. Journal of Small Business Management (January 1986) 3846.
Flexibie manufadilrg 11 J. Meredith. The strategic advantages of new manufacturing technologies for small firms. Strutegic Management Journal, 8 (1987) 249-258. 12 T.W. Garsombke and D.J. Garsombke. Strategic implications facing small manufacturers: The linkage between robotization, computerization, automation and performance. Journal of Small Business Management (October 1989) 34-44. 13 M.E. Porter. The Competitive Advantage of Nations. Free Press, New York, 1990. 14 C.W.L. Hill. Differentiation versus low cost or differentiation and low cost: a contingency framework. Academy of Management Review, 13 (1988) 401-412. 15 Manufacturing Studies Board. Reactions of Small Machine Shop Owners to the Automated Manufacturing Research Facility of the National Bureau of Standards. National Academy Press, Washington, DC, 1985. 16 K. Chittipeddi and T. Wallet. Entrepreneurship and competitive strategy for the 1990s. Journal of Small Business Management (January 1991) 9498. 17 J. Forrest. Strategic alliances and the small technology-based firm. Journal of Small Business Management (July 1990) 3745. 18 J.D. Nichols. How customer needs are shaping the “Factory of the Future”. Management Review (December 1984) 35-36. 19 R. Parthasarthy and S.P. Sethi. The impact of flexible automation on business strategy and organizational structure. Academy of Management Review (1992) 86-l 11. 20 J. Meredith. The strategic advantages of new manufacturing technologies for small firms. Strategic Management Journal, 8 (August 1987) 249-258. 21 R.M. Cyert and D.C. Mowery (eds.). Technology and Employment: innovation and Growth in the US Economy. National Academy Press, Washington, DC, 1987. 22 P. Nemetz and L. Fry. Flexible manufacturing
23
24
25
26 27
28 29
30
31
for SMEs
organizations: Implications for strategy formulation and organization design. Academy of Management Review (1988) 627-638. R. Jaikumar. Flexible manufacturing systems: a managerial perspective. Working paper I-784-078, Harvard Business School, Boston, MA, 1984. J.R. Meredith and S.G. Green. Managing the introduction of advanced manufacturing technologies. Manufacturing Review, l(2) (1988) 87-92. H. Shaiken, S. Herzenberg and S. Kuhn. The work process under more flexible production. Industrial Relations (Spring 1986) 167-182. R.L. Daft. Organization Theory and Design. West Publishing Company, New York, 1992. P. Drucker. The emerging theory of manufacturing. Harvard Business Review (May-June 1990) 94-102. P. Adler. Managing flexible automation. Culifornia Management Review (Spring 1988) 34-56. R. Adler. Workers and flexible manufacturing systems: Three installations compared. Journal of Organizational Behavior (199 1) 447460. A. Neely, J. Mills, K. Platts, M. Gregory and H. Richards. Realizing strategy through measurement. International Journal of Operations and Production Management, 14(3) (1994) 140-152. D. Hicks. Activity-based Costing for Small and Medium-sized Businesses: an Implementation Guide. John Wiley, New York, 1992.
Mahesh Gupta is an Assistant Professor in the Department of Management, University of Louisville, Kentucky. He has published in journals such as International Journal of Production Research, European Journal of Operational Research, International Journal of Production Economics and Computers and Operations Research. Dr Gupta’s teaching and research interests are in the areas of operations management, such as production planning and scheduling of advanced manufacturing systems, quality cost analysis and communication-integrated manufacturing systems. Dr Gupta is a member of DSI, APICS, ASQC, POMS, TIMVORSA and IIE. Dr Garret Cawthon is an adjunct professor
in the Chemical Engineering Department, University of Louisville. He consults with national and international companies and has expertise in designing environmental remediation systems.
Tednmvatiu~Vd.16Mo.2 83
lRANSlAllONS OfABSTRACTS Des rhaux plahation
neuroniques artificiels pour soutenir la et le conHe de la production
Les implications de la fabricath ites et moyennes enhphes drement
flexible dans les pet-
pour le petwmel d’ew-
R&urn6 Depuis peu, les reseaux neuroniques artificiels sont l’objet d’une attention grandissante en tant qu’outils pour des applications commerciales. Dans ce papier nous analyserons des etudes sur la planification - avec des reseaux neuroniques artificiels - de la production. Nous discuterons ensuite des differentes approches possibles, ainsi que leurs limites. Pour finir nous montrerons le potentiel de l’utilisation de reseaux neuroniques artificiels dans la planification et le controle de la production.
Kiinstlicbe neuronale Netze zur UnterstUtzung von Froduktionsplanung und -kontrolle
Abliss Ktinstlichen neuronalen Netzen ist in letzter Zeit vie1 Aufmerksamkeit als Werkzeug fur Betriebsanwendungen geschenkt worden. In dieser Arbeit werden wir Untersuchungen und Umfragen tiber Arbeitsvorbereitung mit ktinstlichen neuronalen Netzen analysieren und die verschiedenen Ansatze sowie ihre Beschranktmgen diskutieren. Weiterhin werden wir das Potential ftir den Einsatz ktinstlicher neuronaler Netze zur Produktionsplanung und -kontrolle zeigen.
redes neurales artificiales corn0 apoyo para la planificaciin y el control de la producciin
Risumi Les petites
et moyennes entreprises (SMEs) doivent constamment relever des delis pour faire face aux facteurs changeants de leur environnement, par exemple l’emergence des marches mondiaux, les normes de qualite, la demande pour des delais de livraison plus courts et des partenariats interentreprises encore plus rapproches. Ces entreprises doivent rassembler des gens, des ressources et des moyens de production pour developper, fabriquer et vendre des produits avec un engagement constant d’accepter et de faire face a de nouveaux changements. Depuis peu, la flexibilite est reconnue comme une qualite distinctive qui rend l’entreprise plus competitive, et done les technologies de fabrication flexible (flexible manufacturing, FM) sont un atout strategique en terme d’operations. Les petites et moyennes entreprises (SMEs) doivent developper une structure afin de proteger et de mettre en valeur cet atout. C’est seulement avec une structure organisationnelle et une culture viables et des alliances qu’une petite ou moyenne entreprise (SME) peut reussir a utiliser pleinement le potentiel des technologies de fabrication flexible (FM). Dans ce papier, on examine les implications de personnel et les implications strategiques et organisationnelles de fabrication flexible (FM) pour les entreprises. Nous Ctudions aussi la signification des alliances avec des partenaires exdrieurs et la performance des mesures pour l’implantation des technologies d’automatisation et de fabrication flexible.
Las
GesdGftsleitende Auswirkungen flexibler Fertigung fiir kleine/mittelgro/3e Untemehmen
Resumen Las redes neurales artificial& se es&r considerando dltimamente cada vez mls coma herramientas con aplicaciones comerciales. En este document0 se analizar5n 10s sondeos hechos acerca de la programacion de la production utilizando las redes neurales artificiales y se comentan 10s distintos enfoques a la vez de sus limitaciones. Se demostrar6n ademas las posibilidades de emplear las redes neurales artificiales en la planificacidn y el control de la production.
Managetial implications of flexible manufactuting for small/medium-sized enterprises M. Gupta and G. Cawthon Technowution, 16(2) (1996), 77-83
Abtiss Kleine/mittlegroBe Untemehmen (SMEs) sehen sich standig Herausforderungen gegentiber, w&rend sie auf sich verandemde Umweltfaktoren wie die Entstehung weltweiter M8rkte und Normen ftir bessere Produktqualitat, den Bedarf nach schnelleren Lieferzeiten und engeren Geschaftsbeziehungen reagieren. Diese Untemehmen mtissen Menschen, Ressourcen und Einrichtungen zusammenbringen, urn Produkte zu entwickeln, herzustellen und zu vermarkten, mit einer stlndigen Verpflichtung, sich verartdemde Marktbedingungen zu akzeptieren und darauf zu reagieren. Vor kurzem wurde Flexibilitat weithin als kennzeichnende Fahigkeit, die zu Wettbewerbsvorteil ftihrt, anerkannt, und somit dienen flexible Fertigungstechnologien (FM) als strategischer Aktivposten zum Erreichen von Arbeitsstrategien. Die SMEs mtissen ein Rahmenwerk entwickeln, urn diesen Aktivposten zu schtitzen und zu St&ken. Nur mit der richtigen Organisationsstruktur, Kultur und extemen Verbindungen kann ein SME das volle Potential von FM T&1~vatimVel.l6Na.2 93
Technologien erreichen. In dieser Arbeit bieten wir einen ijberblick iiber strategische, organisatorische und Personalauswirkungen von flexibler Fertigung auf SMEs. Wir diskutieren at@erdem die Bedeutung von Verbindungen mit extemen Partnem und Leistungsma/3stabe fiir die Durchftihrung von flexiblen und automatisierten Fertigungstechnologien. Las implicadones
administraljvas
flexible para las pequehs
y medhs
de la falnicaciin enqwesas
ReSUM Las pequefias y medianas empresas (SMEs) se enfrentan constantemente a retos a medida que reaccionan a 10s factores ambientales cambiantes tales coma la emergencia de mercados mundiales y de estandares para una calidad mejorada de productos, demandas para un tiempo de entrega mb rapid0 y vinculos comerciales mb estrechos. Estas empresas deben unir a las personas, 10s recursos y las facilidades para desarrollar, fabricar y comercializar productos con un cometido continua de aceptar y reaccionar a las condiciones cambiantes de mercado. Ultimamente se ha reconocido a la flexibilidad coma una calidad a parte que proporciona una ventaja competitiva y, por eso, las tecnologias de fabrication flexible (FM) se convierten en un bien estrategico para lograr la estrategia de operaciones. Las SMEs deben desarrollar un marco para la protecci6n y la mejora de este bien. Solamente con la estructura organizational, la cultura y las alianzas extemas adecuadas podra una SME aprovechar todas las posibilidades de las tecnologfas FM. En este document0 proporcionamos una vista general de las implicaciones estrategicas, organizativas y personales para las SME de la fabricaci6n flexible. Comentamos tambien el significado de las alianzas con socios extemos y las medidas de rendimiento para la implementation de las tecnologias flexibles y la fabricaci6n automatizada.
lndiienous development and acquisition of tedmology an Indian perspective P. Sikka Technovation, 16(2) (1996), 85-90
Dhloppement W&e et acquisition de tedmologie: une perspective indienne
Rkumi Afin de reussir son developpement techno-economique, 1’Inde a adopt6 une approche binaire: il lui faut d’une part crter un climat favorable au developpement de la technologie indigene a travers le pays, et d’autre part reguler le transfert et l’adaptation 94 T1dmodonVol.16No.2
a la technologie en provenance d’autres pays. Tout en decrivant les soutiens politiques, l’auteur a indique diverses strategies adopdes par 1’Inde pour le developpement d’une base de technologie dans le pays, aussi bien qu’un certain nombres de collaborations &rang&es par le biais du transfert de technologie qui se fait a des fins de renforcement, afin de reussir une competence technique dans differents secteurs. De plus, avec les accords du GATT et les programmes de liberalisation commerciale, un changement radical se profile non seulement dans la commercialisation des efforts indigenes de Recherche et Dtveloppement (R&D), mais aussi dans l’import de technologie dans le pays. L’industrie indienne, au lieu d’importer des technologies, prefere importer des produits technologiques afin de bt%Cficier d’une technologie Cprouvee par rapport a la demande du marche, plutot que de devoir payer des royalties avec un argent necessaire au financement du projet gouvememental pour le developpement de la technologie.
Einheimische Ehicklung und Erweh von Technologie: eine indiie Perspektive
Abriss Indien hat fur seine Absicht, techno-okonomische Entwicklung zu erreichen, einen zweifachen Ansatz entwickelt: der eine bezieht sich auf die Schaffung eines Klimas fur die einheimische Entwicklung von Technologie im Lande, der andere befaBt sich mit mit dem Transfer und der Anpassung von Technologie aus den entwickelten Landem. Obwohl der Verfasser die Untersttitzung dieser Politik schildert, hat er verschiedene Strategien aufgezeigt, die von Indien fiir die Entwicklung einer Technologiebasis im Land angenommen wurden, sowie manche Zusammenarbeit mit dem Ausland mittels Technologietransfer, der zur Verbesserung im Hinblick auf das Erreichen technischer Kompetenz in verschiedenen Sektoren eingegangen wurde. Weiterhin ist in Anbetracht von GATT und neuen okonomischen Liberalisierungsprogrammen nicht nur in der Kommerzialisierung einheimischer F&Es Bemtihungen sondem such im Import von Technologie in das Land eine drastische Ver%nderung zu bemerken. Statt lediglich die Technologie in das Land zu importieren, zieht es die indische Industrie jetzt vor, die technologischen Produkte zu importieren, nicht nur, urn die erprobte Technologie mit einem Bedarfsmarkt zu erhalten sondem such, urn Lizenzgebtihren zu vermeiden, die notwendig sind, urn zum von der Regienmg neu geschaffenen Technologieentwicklungsfonds beizutragen.
El deswollo indigen0 y la adqisicih una perspectiva india
de la tecnologb:
Resumen Con vistas a lograr el desarrollo tecno-economico, la india ha adoptado un enfoque doble. Una parte se
ELSEVIER ADVANCED TzcHNOuyjY
Managerial implications of flexible manufacturing for small/medium-sized enterprises Mahesh Gupta and Garret Cawthon College of Business and Public Administration, University of Louisville, Louisville, KY 40292. USA
Abstract SmalUmedium-sized enterprises (SMEs) constantly face challenges as they react to changing environmental factors such as the emergence of worldwide markets and standards for better product quality, demands for faster delivery times and closer business partnerships. These companies must bring together people, resources and facilities to develop, manufacture and market products with an ongoing commitment to accept and react to changing market conditions. Recently, flexibility has been widely recognized as a distinctive competence leading to competitive advantage, and thus Jlexible manufacturing (FM) technologies serve as a strategic asset to accomplish operations strategy. The SMEs must develop a framework to protect and enhance this asset. Only with the proper organizational structure, culture and external alliances can an SME achieve the full potential of FM technologies. In this paper, we provide an overview of strategic, organizational and personnel implications of flexible manufacturing for SMEs. We also discuss the significance of alliances with external partners and per$ormance measures for implementation of $exible and automated manufacturing technologies. Copyright 0 1996 Elsevier Science Ltd
According to the National Planning Association, “An industrial system includes much more than the major industrial firms. There must be a host of smaller companies which design, manufacture and service equipment; make or process essential parts or raw materials; use by-products; provide specialized engineering, financial and legal services and supply many other vital commodities or services” [Il. Small/medium-sized companies, with fewer than 250 employees, represent 98% of America’s eight million businesses and are becoming the backbone of the worldwide manufacturing sector. Given their less complicated organizational structures, higher responsiveness to the global marketplace, and an entrepreneurial spirit, these companies have a real advantage [2]. In the last ten years, this group has created the bulk of the new industrial jobs (as many as eight out
of ten new jobs) and a hefty share of the total industrial output, yet these companies suffer a much higher casualty rate than larger corporations. The major challenge for SMEs is to continuously provide innovative and customized products using the best available process technologies. Improvements in competitors’ capabilities have shortened product life cycles, elevated product complexity, and expanded accessibility to new technical breakthroughs. Flexible manufacturing (PM) technologies offer a key source of competitiveness; thus, they can be used as a weapon by SMEs to combat this growing competition. A small/medium-sized firm competing in a technology-driven industry can outperform its competition if it uses PM technologies as a strategic asset to accomplish its operations strategy. This paper will discuss management’s role in supporting FM objectives with an emphasis on the organizational and personnel issues. Only with the proper organizational Tedmovti VaI.16No.2 77
M.Gupta and 6. Cawthon structure, culture and external alliances can a small/medium-sized firm achieve the full potential of FM.
11 Trends in SMEs The article “Small is beautiful now in manufacturing” [3] states that the current trend is toward small/medium-sized factories: fewer than 600 people per factory. For the manufacturing of some types of product, the workforce could be as small as five workers. For example, Gunn [4] mentions that the Yamazaki Machinery Corporation of Florence, KY, is establishing a plant to manufacture machine-tool parts. The plant will employ only five workers on the first shift and one worker each on the second and third shifts. These small factories, equipped with FM technologies, are capable of building products in ways that will allow for quick and responsive changes in dealing with the shorter product life-cycles and quality demands of a growing international marketplace [31. It is expected that FM technologies will move in increasing numbers (in the tens of thousands) into firms that now employ between 20 and 50 people. A 1985 study directed by Edward A. Ross of Ross Associates, Needham, MA, reports that shipments of small systems will total $115 million (i.e. approx. 76 units) in 1985 and grow at a fairly steady rate of 40% annually until 1990, when they will amount to $618 million (i.e., approximately 660 units) [S]. L2 Flexible manufactwing and its signihwe The evolutionary pace of manufacturing technology has quickened in the past few decades. The fruits of this technological explosion provide firms with flexible manufacturing methods that are directly controlled and indirectly supported by computers. FM uses integrated or stand-alone computer-controlled machines to (i) alter the shape, size, or form of material (e.g., CNC machines); (ii) assemble, reposition, move and store parts, components or products industrial robots and material handling (e.g., systems); (iii) measure and inspect products and materials (e.g., vision and inspection systems); and (iv) design, plan and control products and processes computer-aided design, engineering and (e.g., manufacturing). In addition to the above ‘hard’ technologies, FM is also supported by ‘soft’ technologies such as statistical process control, just-in-time system, group technology, material requirement planning and various computer-assisted systems for planning, scheduling, monitoring and controlling production
[61.
Among others, Rosenfeld [6] noted that flexible manufacturing is a national imperative and US firms, on the average, are falling farther and farther behind their international competitors in manufacturing capabilities. These gaps are greatest among the SMEs that produce products for niche markets and parts, components and tools for large final producers. “Many small companies haven’t advanced beyond use of manual and semiautomatic machines,” notes Ma1 Sudhakar, product manager at Maho Machine Tool Group, Naugatuck, CT. “They [small companies] haven’t even
78
T-Vdl6No.2
begun employing NC or CNC. Getting into cells’ would be too great a technological leap for them.” Bergstrom [7] also points out that FM in the form of cell technology is of great significance to manufacturing productivity - especially to SMEs. Gold [8] also notes that US firms have been using rigid, repetitive automation systems. Such systems can produce a large volume of high quality standardized products at low cost provided that production is maintained at high levels of capacity utilization. An even more profound limitation of such repetitive systems has been their inapplicability to the needs of medium and small manufacturing plants which produce a variety of products in small batches. Flexible manufacturing has been widely touted as a means of gaining the efficiency of increasingly automated production without its costly rigidity for large, as well as smaller, manufacturers. The major benefit of FM is its ability to manufacture products efficiently at low-to-medium varieties and volumes. This added flexibility allows changing product mixes and output levels with minimal losses in productivity. This competitive advantage is based on functionality and quality, with less emphasis on cost leadership. Manufacturing lead times (e.g., set-up, throughput and changeover) are often reduced, fostering improved decision making by management. Also, faster feedback loops improve the introduction of new products to better satisfy changing market demands. The benefits of FM should be analyzed carefully and then prioritized so that each of these benefits can be compared to its relative constraint. Invariably, the outcome for many SMEs is a modular approach (i.e., obtain equipment and computer software) in order to enhance manufacturing capabilities. However, FM capabilities alone cannot provide the real benefits. Management must integrate hardware, software and humanware to maximize FM potentials. Communication must be encouraged between marketing, design, manufacturing and quality control. Effective small/medium-sized firms also must have an organizational design and culture that are able to respond to the challenges created by changing technologies and markets.
2. STRATEGIC lMPllCATlORS OF FM FOR SW A firm’s competitive strategy specifies the potential products and markets, long-term objectives, and policies for achieving the objectives. The competitive strategies used by SMEs have been studied extensively and a number of classifications have been proposed [lO--121. Porter [13 (p. 12)] states that competitive advantage is at the heart of any strategy, and achieving this advantage requires a firm to make a choice about the type of competitive advantage it seeks to attain. Competitive advantage is defined as the way in which a firm actually puts its competitive strategy into practice [ 13 (p. 17)]. Among two main
I A typical manual cell contains two, three or more CNC machine tools, plus accessory equipment. Electrical and mechanical integration are provided by the operator. In an automated cell, a cell controller, network and an automated material handling device, such as a robot or a conveyor, is also included 191.
Flexible mamhcthg sources of competitive strategies, cost leadership implies an emphasis on actions and policies (such as standardized products and economies of scale) that reduce the overall cost of supplying products below that of competitors, and product differentiation implies adding value to products (such as higher quality and better services) to command a higher price. Moreover, a superior competitive position can be achieved when a high differentiation position is combined with a low cost position [14]. Operations strategy (OS) is a functional strategy that is generally guided by a competitive strategy, and results in a consistent pattern in operations decisions so that the objectives of operations strategy are achieved. The four general objectives of an operations strategy are cost efficiency, quality, delivery and flexibility. The overriding reason for using flexible technologies should be to support the operations strategy of the firm. Overall business competitiveness can be strengthened by considering manufacturing’s distinctive competences in the strategic objectives. This consideration is even more critical for small/mediumsize firms that lack financial and personnel resources. They must recognize FM technologies as a prerequisite for competitive advantage. In a symposium on automation, one owner of a small firm stated that “if you don’t use them (computer-based technologies) you get left in the dust” [6 (p. 119)]. A National Institute of Standards and Technology (NIST) report summarizes the responses of a group of small machine tool company executives and notes that “robotics and hierarchical control technology do not seem to have any broad appeal for typical small machine shops. They cannot afford it and do not have the expertise to use it, regardless of its benefits” [15]. Strategic operations management for small/ medium-sized firms can then promote continuous process innovation and flexibility to foster the growth and profitability objectives. Thus, product differentiation and low-cost business strategies can be simultaneously considered by a successful SME. Since large multinationals are shifting most of their production overseas, the strategic implications of flexible manufacturing must be understood clearly by the SMEs as domestic manufacturers need to rely more on FM to curb the US trade deficit [ 161. One or more flexible manufacturing technologies are usually adopted to help implement a firm’s competitive strategy, whether one of growth and market domination or one of defense and protection of markets. In some instances, SMEs buy CNC machining centers, turning centers and grinding machines with the intention of later linking them electronically and mechanically through cell controllers, networks and automated parts-handling systems. Steve Klabunde (vice-president of manufacturing systems at Giddings and Lewis, Fond du Lac, WI) points out that “planning ahead for automation yields as much as 25% of the potential benefits, even if you don’t follow through and automate. You begin to think differently, to challenge long-standing practices” [9].
2.1 Product-process matching Product and process innovations are among the most important sources of competitive advantage for
for SMEs
SMEs. As SMEs are faced with unfamiliar products and processes on a fairly regular basis, they must develop innovative developmental strategies to match the development of products and processes [ 171. Both product and process innovation are critical for maintaining the effectiveness of FM. A small/medium-sized firm must ensure that any new process technology fits with its product lines. Failure to do so is often linked to inconsistencies between the range of products and the available process flexibility. FM technologies make the machine systems more responsive to process and product variations. Illinois Tool Works, a small firm of keyboards and other computer data entry devices described by Nichols [ 181, has successfully reduced product cycle time (from 3 years to 6 months) and expanded product variety significantly by providing more options, models, sizes and colors. The resulting flexibility advantages of FM are often categorized into two attributes: scope and speed [19]. Scope flexibility allows for competition based on product mix, volume mix and customized production. Economies of scope allow many products to be manufactured with the same equipment, though less expensively than with separate processes. Potential advantages include lower capital costs, lower inventories, and better equipment utilization. Speed flexibility, on the other hand, emphasizes quick delivery and design responsiveness to changing technologies and customer interests. This improves the product innovation and delivery rates, especially critical for introducing products into a global marketplace. One example is a CAD-CAM linkage used to reduce the lead times needed to bring designs to manufacturing and thereby creating new opportunities. Peerless Saw Company, a small manufacturer of sawblades described by Meredith [20], implemented a menudriven software to design the sawblades and then used laser technology to manufacture the blades. The company was able to provide faster service along with customization. The company also started applying the new technology to other products and thereby found themselves all alone in a high-margin, custom-products market.
3. ORGANlZAllONAL DESIGN FOR FM A 1987 NAS (National Academy of Sciences) study reported that “non-technological, managerial, and organizational factors powerfully influence the adoption of new technologies and the impact of their adoption on product quality, labor productivity, and the skill requirements of labor” [21]. Generally, firms with FM technologies have different characteristics and needs when compared to companies stressing mass production technologies [22]. One major difference is the use of highly skilled workers than can function in the dynamic FM environment. Their higher skill level requires fewer layers of management hierarchy, thus decentralizing the decision-making to project teams. Also, FM organizations cultivate fast feedback loops with shortened communication lines, enabling processes to respond quickly to product and process changes. Fewer rules and a flatter organizational structure VoI.16No.2 79 Tedniovaiion
M.GuptaandG.GawUn~ enhance both the overall organization’s and the operations’ flexibility with FM. The result is improved product differentiation, efficiency, process development, and integration of managerial and technical functions. Due to the limited supply of resources, organizational design for small/medium-sized firms must be more holistic than for larger firms. SmalYmediumsized firms must transform their mechanistic and bureaucratic structures into an organic problemfocused design to match the needs of FM. Shifting responsibility to workers translates into a more collaborative, egalitarian workplace and higher productivity. Organizational authority is based on knowledge and expertise, not on a position’s status. In 1990, the Consortium for Manufacturing Competitiveness conducted a Skills Panel pilot survey of fourteen small state-of-the-art southern factories and found that more than two-thirds of small-firm employees discussed production problems on the job, 71% suggested improvements, and 53% advised management [6]. This suggests that employees in SMEs do indeed contribute to production innovation and problem solution. Thus, management can enhance the flexibility of operations and reduce risks by pursuing creative workforce policies. This is particularly valuable to small/medium-sized firms that cannot withstand huge fluctuations in market demand. Cross-training is one approach to lowering business risks while improving productivity. Wage rates can be adjusted on an individual basis to maximize personal motivation. Flexibility can also be achieved through adjustments in labor make-up, including temporary, part-time and subcontracted workers. Managers must balance the trade-offs between the lower labor expenses and the superior skill level and esprit de corps needed for FM leadership. Equipment layout must also be integrated with organizational design to maximize a firm’s performance. The traditional job shop layout is not appropriate for FM because machines with similar functions are grouped together to form a department. In an FM environment, machines are grouped into cells, Ushaped clusters that optimize product flow and communication. Operations can also be divided into product-oriented departments that integrate all primary and directly supporting functions. 3.1M-s newrespo&Hes The critical abilities for small/medium/sized business managers are forecasting technological trends and adapting the strategic network to these changes. “When manufacturing’s mission is defined in traditional, narrow terms, manufacturing managers have little room to move” 1231. They must be able to make quick and accurate decisions, as well as direct operations and personnel toward common goals. Innovative leaders lower the barriers of change and empower subordinates to take risks necessary for potential future gains. A strong personality is needed to continuously revitalize and renew the organization. On the basis of their experience gained from a series of six case studies, Meredith and Green [24] suggest ten recommendations for managers in the process
80
TedtnwrtionVd16wO.2
of adopting new FM technologies (see Table 1). Among the six firms studied, five firms had less than 150 employees. “One of the scarcest resources in the firm is management attention, and flexibility consumes a lot of it” [25]. Managers are required to become effective team leaders by effectively coordinating the independent activities of multi-functional teams made up of engineering, manufacturing, marketing and financial personnel. Control is extremely difficult because of the independent personalities and motives of the individual members. Transformational leadership is needed to cultivate employee loyalty and motivation and is especially critical with autonomous work forces [26]. For a technology-based industry, leaders must have crisis management skills to cope with the rapidly changing environment. “Since the new manufacturing system is not controlled at all, a thorough understanding of the technology and its relationship with the key external factors is necessary for quick response” [27]. Top managers should have a broader educational background that couples technical training with interpersonal skills. In order to maintain the company’s continued competitiveness, they must adapt their workforce to demand fluctuations.
3.2 Operator empowerment A common myth with FM technologies is that “new technologies work with both fewer and lessskilled workers” [28]. An overall reduction in the total number of workers may occur if FM technologies are used solely for automation and not for flexibility. To maximize the full potential of FM, a more stable, motivated and loyal workforce is needed. Work activities become less repetitive and more craft-like, technical and professional. Worker knowledge becomes more valuable than equipment when manufacturing many products. Broad job classifications and worker participation create workers with general skills that accumulate with time. The ultimate goal is for each employee to become self-managed. Workforce management must be focused on stimulating worker learning rather than on command and control of a standard set of procedures. Continuous training should be part of each worker’s job requirements. Both internal and external educational sources can be used to improve skills, including community college and computer-assisted programs. James B. Simon, vice president - operations, Giddings and Lewis Machine Tool Co., suggests that the
TABLE I. 2. 3. 4. 5. 6. 7. 8. 9. 10.
I.
Recommendations
for managers adopting new technologies
Do not try to sneak up on your employees. While the technology is changing, change the organization. Embrace the negative consequences. With more computerized communication, increase the amount of face-to-face communication. Attack the strongest force for stability, the existing infrastmcture. Prepare to fight the same old problems. Keep the production utilization of the new equipment low. Do not expect to eliminate jobs. Use the technology to monitor your workers. Change your strategy as you go.
flexible mmufdhg workforce of an enterprise constitutes a tremendous knowledge base and that in an FM environment, their knowledge base should be expanded through training and empowerment. These empowered and multifaceted operators would possess a diversity of talents in flexible manufacturing and thereby play a significant role in identifying the specific FM technologies which best suit their manufacturing needs [7].
3.3 Team fomtion The increasing use of flexible technologies on manufacturing floors is reshaping the traditional roles and domains of the workplace. In many enterprises, workers and management are creatively and successfully addressing flexible manufacturing concepts in order to redefine traditional attitudes and postures towards job descriptions and functions. Thus, team concepts are being formulated and employed [7]. With FM technologies in small/medium-sized firms, work groups form and reform on the basis of current production needs. Lines of command change with time, depending upon the prevailing state of activities. Multidisciplinary teams, such as matrix structures, task forces and problem-solving teams, are needed to acquire input from experts with a variety of skills. Group leaders must have “a detail orientation for technical competency and an integrating orientation to bring marketing, technical, and manufacturing skills together” [22]. They should thrive on change, uncertainty and ambiguity. Trust, rather than formal controls, is crucial in motivating team members. Leaders must direct and coordinate various activities, both horizontally (from research to development to engineering to manufacturing) and vertically (from raw materials to final products) along product lines. “Team organization reverses the specialist’s tendency to optimize single elements at the expense of system performance” [28]. Projects are carried out in groups, employing multi-skilled employees responsible for day-to-day operations. Because the high degree of work interdependence makes identification and measurement of individual performance difficult, participants are rewarded as a group for the flexible design and manufacturing of’high quality products.
4. ORGANIZATIONAL CULTURE The culture of a small/medium-sized firm using FM is described with one word: entrepreneurial. The key behaviors will include flexibility, innovation, effectiveness, and efficiency. Organizational culture is increasingly important, since continuing acceleration of technological change increases performance ambiguity [28]. The new levels of technology involved with FM demand higher commitments to learning than past manufacturing advancements. Organizational culture must adapt to these changes and focus its energy toward performance objectives. The entire network should be holographically integrated to provide the strongest bond between employees and the organization [26]. A clear understanding of the organizational identity, mission and culture needs to be communicated to all of the firm’s employees. Extensive training programs may be
for SMEs
needed in order to develop a common set of values and beliefs. This will yield improvements in all performance criteria, including creativity, productivity and quality. The organizational culture is particularly critical to developing a more egalitarian relationship between corporate functions. Achieving flexibility requires a cultural foundation linking new roles and new expectations. When performance ambiguity is high, organizations that rely on socialization and a common set of norms as the principal control mechanism are more effective than either market or bureaucratic systems. The two classifications of culture - adaptability and involvement - are needed to maintain the organization’s integrity and accomplish its entrepreneurial goals [26]. An adaptable culture strengthens the relationship of the firm with the external environment by emphasizing organizational flexibility and change. An involvement culture focuses on the individual needs of each employee in order to develop enthusiasm and dedication to the firm’s goals. Trust is a necessary fundamental cultural element in technology-based firms. It routinely results from similar motivations and convictions. Workers will not freely share information and resources with one another unless there is confidence in the relationship. “A market system creates incentives that encourage the production of knowledge but these incentives inhibit its distribution; a bureaucracy-central planning mandates the distribution pattern but does not provide the incentives for new knowledge production” [28]. Opportunistic behavior easily can destroy long-term trust, which is especially critical for the survival of environmental fluctuations. “Without cooperative relationships, companies engaged in flexible manufacturing would disintegrate in the acid bath of competition” [29].
5. MTERNAL LINKAGES: NETWORKS AND STRATEGIC ALLIANCES Strong alliances with external partners are critical for technological globalization and growing competitive activity. These partners include suppliers, distributors, equipment vendors, customers and industry experts. Firms with FM technologies, with greater interdependence among their internal subsystems, require more responsive and flexible links to environmental associates. The relationships should be winwin, non-zero-sum unions that are cooperative rather than competitive. They can assist a small/mediumsized firm in improving organizational responsiveness and overcoming weaknesses due to a lack of resources or technical expertise. A variety of strategic alliances and partnerships, including networks, new sector-specific associations and cooperatives, is providing the means for establishing external linkages. For example, successful corporations are discovering that their interests are better served by committing to long-term relationships with small numbers of higher quality supplier firms. Also, SMEs are joining together to reduce costs of services, tackle common problems, expand production capabilities, enter new markets, and generally learn from one another [6]. In partnerships between large and l-Vd.16Ne.2
81
M.Gupta ad 6. Cawthon small firms, ‘vertical networks’, the large firm lends expertise to SMEs in order to raise the latters’ quality standards. The specialized expertise of SMEs spurs innovation, and their pooled resources lead to better design and quicker solutions to production problems. On the other hand, the networks of SMEs, ‘horizontal networks’, enable SMEs to achieve the external economies of scale, access to information, and strength of numbers that accrue to larger firms without sacrificing the economies of scope and special expertise more readily attained in small to medium sized operations
WI. Thus, cooperative relationships are based on trust and long-term associations. The complexity and flexibility of manufacturing operations require an active collaboration over an extended period of time. Cooperation between the company, its customers and its suppliers frees up resources and distributes risk. By pooling resources, companies develop services that are not offered on an individual basis. For example, cooperative arrangements with suppliers can be used to acquire technological innovations whose costs exceed the financial resources available from a single firm.
6. MEASUREMENT OF SUCCESS As SMEs implement new manufacturing technologies to match the new competitive priorities, they must also modify their performance-measuring and appraisal systems. In a recent study of 800 SMEs in the UK, Neely et al. [30] concluded that the firms that compete primarily on quality or time place most emphasis on performance measures (such as field failure under warranty, in process quality, on time delivery, and delivery lead time) which most closely match their business/operations strategies. The SMEs must recognize the numerous shortcomings of the traditional accounting and performance measurements in today’s environment of automation. The success criteria for FM emphasize the long-term, non-financial benefits that cannot be measured by the old financial systems and local performance measures. Such old measurement systems (e.g., return on investment and internal rate of return) neither consider the risk associated with the proposed investment nor the difference between an enhancement in a local area (e.g., implementing a CAD system) and its impact on the total performance of the company. The traditional measurement systems also fail to support the concepts of multi-functional teams. New cost management systems such as the Activity Based Cost/Management (ABC/M) system are being proposed which give management the information needed to implement its competitive strategies [31]. Specifically, the process view of the ABC/M system provides operational information about the various activities being performed and the efforts (resources) required to carry them out. It also provides information about the performance of various activities in terms of efficiency, quality and dependability. Thus, continuous improvement efforts can be directed to eliminate non-value-adding activities and to reduce resources consumed by value-adding activities. Hicks [31] provides a comprehensive guide to ABC/M 82 T&lov~vol16wo.2
for small/medium-sized firms which can be used to establish and maintain an effective performance/ measurement system.
7. CONCLUSIONS Flexible manufacturing technologies offer the process capabilities necessary for SMEs to compete against large corporations and to become successful industrial partners. Responsiveness to changing demand levels and customization of product features are two strategic advantages that overcome the resource limitations often found with small/mediumsized firms. By including the nontangible advantages, FM technologies can be economically favorable to less expensive but inflexible machinery. But equipment alone does not provide flexible manufacturing capabilities. The implementation of FM requires management to develop the proper organizational structure and culture needed to adapt to changing internal and external environments. Managers must develop a system that motivates workers to think and act flexibly and productively to meet company goals. Lastly, alliances with suppliers, customers and other external partners should be intensified to make the small/medium-sized firm a more powerful competitor in the global marketplace.
ACKNOWLEUGEMENTS The authors wish to acknowledge the comments made by anonymous referees on the earlier version of this paper. Their comments have improved the quality of the paper immensely.
REFERENCES 1 C.B. Hoover Resources
and B.U. Ratchford.
and Policies
Economic of the South. Macmillan,
New York, 1951. 2 B. Dumaine. Is big still good? Fortune (20 April 1992) 50-56. 3 E.F. Schumacher. Small is beautiful now in manufacturing. Business Week (22 October 1984) 152-156. 4 T.G. Gunn. World-class manufacturing. Executive Excellence (March 1990) 8-9. 5 Anon. FM TECHNOLOGIES: A boom you’ll guide. Production Engineering (February 1986) 58-60. 6 S.A. Rosenfeld. Competitive Manufacturing: New Strategies for Regional Development. Center for Urban Policy Research, New Brunswick, NJ, 1992. 7 R.P. Bergstrom. FMS: the drive towards cells. Manufacturing Engineering (August 1985) 34-38. 8 B. Gold. On the economic evaluation of future manufacturing systems. Technovation, 6 (1987) 227-245.
9 J.C. Quinlan. Flexible cells for small companies: a dilemma. TooZing and Production (August 1987) 28-30. 10 W. Davig. Business strategies in smaller manufacturing firms. Journal of Small Business Management (January 1986) 3846.
Flexibie manufadilrg 11 J. Meredith. The strategic advantages of new manufacturing technologies for small firms. Strutegic Management Journal, 8 (1987) 249-258. 12 T.W. Garsombke and D.J. Garsombke. Strategic implications facing small manufacturers: The linkage between robotization, computerization, automation and performance. Journal of Small Business Management (October 1989) 34-44. 13 M.E. Porter. The Competitive Advantage of Nations. Free Press, New York, 1990. 14 C.W.L. Hill. Differentiation versus low cost or differentiation and low cost: a contingency framework. Academy of Management Review, 13 (1988) 401-412. 15 Manufacturing Studies Board. Reactions of Small Machine Shop Owners to the Automated Manufacturing Research Facility of the National Bureau of Standards. National Academy Press, Washington, DC, 1985. 16 K. Chittipeddi and T. Wallet. Entrepreneurship and competitive strategy for the 1990s. Journal of Small Business Management (January 1991) 9498. 17 J. Forrest. Strategic alliances and the small technology-based firm. Journal of Small Business Management (July 1990) 3745. 18 J.D. Nichols. How customer needs are shaping the “Factory of the Future”. Management Review (December 1984) 35-36. 19 R. Parthasarthy and S.P. Sethi. The impact of flexible automation on business strategy and organizational structure. Academy of Management Review (1992) 86-l 11. 20 J. Meredith. The strategic advantages of new manufacturing technologies for small firms. Strategic Management Journal, 8 (August 1987) 249-258. 21 R.M. Cyert and D.C. Mowery (eds.). Technology and Employment: innovation and Growth in the US Economy. National Academy Press, Washington, DC, 1987. 22 P. Nemetz and L. Fry. Flexible manufacturing
23
24
25
26 27
28 29
30
31
for SMEs
organizations: Implications for strategy formulation and organization design. Academy of Management Review (1988) 627-638. R. Jaikumar. Flexible manufacturing systems: a managerial perspective. Working paper I-784-078, Harvard Business School, Boston, MA, 1984. J.R. Meredith and S.G. Green. Managing the introduction of advanced manufacturing technologies. Manufacturing Review, l(2) (1988) 87-92. H. Shaiken, S. Herzenberg and S. Kuhn. The work process under more flexible production. Industrial Relations (Spring 1986) 167-182. R.L. Daft. Organization Theory and Design. West Publishing Company, New York, 1992. P. Drucker. The emerging theory of manufacturing. Harvard Business Review (May-June 1990) 94-102. P. Adler. Managing flexible automation. Culifornia Management Review (Spring 1988) 34-56. R. Adler. Workers and flexible manufacturing systems: Three installations compared. Journal of Organizational Behavior (199 1) 447460. A. Neely, J. Mills, K. Platts, M. Gregory and H. Richards. Realizing strategy through measurement. International Journal of Operations and Production Management, 14(3) (1994) 140-152. D. Hicks. Activity-based Costing for Small and Medium-sized Businesses: an Implementation Guide. John Wiley, New York, 1992.
Mahesh Gupta is an Assistant Professor in the Department of Management, University of Louisville, Kentucky. He has published in journals such as International Journal of Production Research, European Journal of Operational Research, International Journal of Production Economics and Computers and Operations Research. Dr Gupta’s teaching and research interests are in the areas of operations management, such as production planning and scheduling of advanced manufacturing systems, quality cost analysis and communication-integrated manufacturing systems. Dr Gupta is a member of DSI, APICS, ASQC, POMS, TIMVORSA and IIE. Dr Garret Cawthon is an adjunct professor
in the Chemical Engineering Department, University of Louisville. He consults with national and international companies and has expertise in designing environmental remediation systems.
Tednmvatiu~Vd.16Mo.2 83
lRANSlAllONS OfABSTRACTS Des rhaux plahation
neuroniques artificiels pour soutenir la et le conHe de la production
Les implications de la fabricath ites et moyennes enhphes drement
flexible dans les pet-
pour le petwmel d’ew-
R&urn6 Depuis peu, les reseaux neuroniques artificiels sont l’objet d’une attention grandissante en tant qu’outils pour des applications commerciales. Dans ce papier nous analyserons des etudes sur la planification - avec des reseaux neuroniques artificiels - de la production. Nous discuterons ensuite des differentes approches possibles, ainsi que leurs limites. Pour finir nous montrerons le potentiel de l’utilisation de reseaux neuroniques artificiels dans la planification et le controle de la production.
Kiinstlicbe neuronale Netze zur UnterstUtzung von Froduktionsplanung und -kontrolle
Abliss Ktinstlichen neuronalen Netzen ist in letzter Zeit vie1 Aufmerksamkeit als Werkzeug fur Betriebsanwendungen geschenkt worden. In dieser Arbeit werden wir Untersuchungen und Umfragen tiber Arbeitsvorbereitung mit ktinstlichen neuronalen Netzen analysieren und die verschiedenen Ansatze sowie ihre Beschranktmgen diskutieren. Weiterhin werden wir das Potential ftir den Einsatz ktinstlicher neuronaler Netze zur Produktionsplanung und -kontrolle zeigen.
redes neurales artificiales corn0 apoyo para la planificaciin y el control de la producciin
Risumi Les petites
et moyennes entreprises (SMEs) doivent constamment relever des delis pour faire face aux facteurs changeants de leur environnement, par exemple l’emergence des marches mondiaux, les normes de qualite, la demande pour des delais de livraison plus courts et des partenariats interentreprises encore plus rapproches. Ces entreprises doivent rassembler des gens, des ressources et des moyens de production pour developper, fabriquer et vendre des produits avec un engagement constant d’accepter et de faire face a de nouveaux changements. Depuis peu, la flexibilite est reconnue comme une qualite distinctive qui rend l’entreprise plus competitive, et done les technologies de fabrication flexible (flexible manufacturing, FM) sont un atout strategique en terme d’operations. Les petites et moyennes entreprises (SMEs) doivent developper une structure afin de proteger et de mettre en valeur cet atout. C’est seulement avec une structure organisationnelle et une culture viables et des alliances qu’une petite ou moyenne entreprise (SME) peut reussir a utiliser pleinement le potentiel des technologies de fabrication flexible (FM). Dans ce papier, on examine les implications de personnel et les implications strategiques et organisationnelles de fabrication flexible (FM) pour les entreprises. Nous Ctudions aussi la signification des alliances avec des partenaires exdrieurs et la performance des mesures pour l’implantation des technologies d’automatisation et de fabrication flexible.
Las
GesdGftsleitende Auswirkungen flexibler Fertigung fiir kleine/mittelgro/3e Untemehmen
Resumen Las redes neurales artificial& se es&r considerando dltimamente cada vez mls coma herramientas con aplicaciones comerciales. En este document0 se analizar5n 10s sondeos hechos acerca de la programacion de la production utilizando las redes neurales artificiales y se comentan 10s distintos enfoques a la vez de sus limitaciones. Se demostrar6n ademas las posibilidades de emplear las redes neurales artificiales en la planificacidn y el control de la production.
Managetial implications of flexible manufactuting for small/medium-sized enterprises M. Gupta and G. Cawthon Technowution, 16(2) (1996), 77-83
Abtiss Kleine/mittlegroBe Untemehmen (SMEs) sehen sich standig Herausforderungen gegentiber, w&rend sie auf sich verandemde Umweltfaktoren wie die Entstehung weltweiter M8rkte und Normen ftir bessere Produktqualitat, den Bedarf nach schnelleren Lieferzeiten und engeren Geschaftsbeziehungen reagieren. Diese Untemehmen mtissen Menschen, Ressourcen und Einrichtungen zusammenbringen, urn Produkte zu entwickeln, herzustellen und zu vermarkten, mit einer stlndigen Verpflichtung, sich verartdemde Marktbedingungen zu akzeptieren und darauf zu reagieren. Vor kurzem wurde Flexibilitat weithin als kennzeichnende Fahigkeit, die zu Wettbewerbsvorteil ftihrt, anerkannt, und somit dienen flexible Fertigungstechnologien (FM) als strategischer Aktivposten zum Erreichen von Arbeitsstrategien. Die SMEs mtissen ein Rahmenwerk entwickeln, urn diesen Aktivposten zu schtitzen und zu St&ken. Nur mit der richtigen Organisationsstruktur, Kultur und extemen Verbindungen kann ein SME das volle Potential von FM T&1~vatimVel.l6Na.2 93
Technologien erreichen. In dieser Arbeit bieten wir einen ijberblick iiber strategische, organisatorische und Personalauswirkungen von flexibler Fertigung auf SMEs. Wir diskutieren at@erdem die Bedeutung von Verbindungen mit extemen Partnem und Leistungsma/3stabe fiir die Durchftihrung von flexiblen und automatisierten Fertigungstechnologien. Las implicadones
administraljvas
flexible para las pequehs
y medhs
de la falnicaciin enqwesas
ReSUM Las pequefias y medianas empresas (SMEs) se enfrentan constantemente a retos a medida que reaccionan a 10s factores ambientales cambiantes tales coma la emergencia de mercados mundiales y de estandares para una calidad mejorada de productos, demandas para un tiempo de entrega mb rapid0 y vinculos comerciales mb estrechos. Estas empresas deben unir a las personas, 10s recursos y las facilidades para desarrollar, fabricar y comercializar productos con un cometido continua de aceptar y reaccionar a las condiciones cambiantes de mercado. Ultimamente se ha reconocido a la flexibilidad coma una calidad a parte que proporciona una ventaja competitiva y, por eso, las tecnologias de fabrication flexible (FM) se convierten en un bien estrategico para lograr la estrategia de operaciones. Las SMEs deben desarrollar un marco para la protecci6n y la mejora de este bien. Solamente con la estructura organizational, la cultura y las alianzas extemas adecuadas podra una SME aprovechar todas las posibilidades de las tecnologfas FM. En este document0 proporcionamos una vista general de las implicaciones estrategicas, organizativas y personales para las SME de la fabricaci6n flexible. Comentamos tambien el significado de las alianzas con socios extemos y las medidas de rendimiento para la implementation de las tecnologias flexibles y la fabricaci6n automatizada.
lndiienous development and acquisition of tedmology an Indian perspective P. Sikka Technovation, 16(2) (1996), 85-90
Dhloppement W&e et acquisition de tedmologie: une perspective indienne
Rkumi Afin de reussir son developpement techno-economique, 1’Inde a adopt6 une approche binaire: il lui faut d’une part crter un climat favorable au developpement de la technologie indigene a travers le pays, et d’autre part reguler le transfert et l’adaptation 94 T1dmodonVol.16No.2
a la technologie en provenance d’autres pays. Tout en decrivant les soutiens politiques, l’auteur a indique diverses strategies adopdes par 1’Inde pour le developpement d’une base de technologie dans le pays, aussi bien qu’un certain nombres de collaborations &rang&es par le biais du transfert de technologie qui se fait a des fins de renforcement, afin de reussir une competence technique dans differents secteurs. De plus, avec les accords du GATT et les programmes de liberalisation commerciale, un changement radical se profile non seulement dans la commercialisation des efforts indigenes de Recherche et Dtveloppement (R&D), mais aussi dans l’import de technologie dans le pays. L’industrie indienne, au lieu d’importer des technologies, prefere importer des produits technologiques afin de bt%Cficier d’une technologie Cprouvee par rapport a la demande du marche, plutot que de devoir payer des royalties avec un argent necessaire au financement du projet gouvememental pour le developpement de la technologie.
Einheimische Ehicklung und Erweh von Technologie: eine indiie Perspektive
Abriss Indien hat fur seine Absicht, techno-okonomische Entwicklung zu erreichen, einen zweifachen Ansatz entwickelt: der eine bezieht sich auf die Schaffung eines Klimas fur die einheimische Entwicklung von Technologie im Lande, der andere befaBt sich mit mit dem Transfer und der Anpassung von Technologie aus den entwickelten Landem. Obwohl der Verfasser die Untersttitzung dieser Politik schildert, hat er verschiedene Strategien aufgezeigt, die von Indien fiir die Entwicklung einer Technologiebasis im Land angenommen wurden, sowie manche Zusammenarbeit mit dem Ausland mittels Technologietransfer, der zur Verbesserung im Hinblick auf das Erreichen technischer Kompetenz in verschiedenen Sektoren eingegangen wurde. Weiterhin ist in Anbetracht von GATT und neuen okonomischen Liberalisierungsprogrammen nicht nur in der Kommerzialisierung einheimischer F&Es Bemtihungen sondem such im Import von Technologie in das Land eine drastische Ver%nderung zu bemerken. Statt lediglich die Technologie in das Land zu importieren, zieht es die indische Industrie jetzt vor, die technologischen Produkte zu importieren, nicht nur, urn die erprobte Technologie mit einem Bedarfsmarkt zu erhalten sondem such, urn Lizenzgebtihren zu vermeiden, die notwendig sind, urn zum von der Regienmg neu geschaffenen Technologieentwicklungsfonds beizutragen.
El deswollo indigen0 y la adqisicih una perspectiva india
de la tecnologb:
Resumen Con vistas a lograr el desarrollo tecno-economico, la india ha adoptado un enfoque doble. Una parte se