Opportunities and limitations of the intelligent systems of manufacturing adoption: Romanian case.
Militaru, Gheorghe ; Dumitrescu, Corina
1. INTRODUCTION
Global competition and rapid change of customer requirements are
forcing major changes in the production styles and configuration of
manufacturing organizations. Increasingly, traditional centralized and
sequential manufacturing planning, scheduling, and control mechanisms
are being found insufficiently flexible to respond to the changing of
production styles and highly dynamic variations in product requirements
(Hernandez-Matias et al., 2007).
The Romanian manufacturing companies, as well as those from the
former communist states in South-East Europe, need to assimilate new
technologies, after they have been privatised and reorganized. These
companies have to make great investments in the Intelligent Systems of
Manufacturing (ISM) in order to get through the pressures created by the
global competition and the technological gap between developed countries
and those with emergent economies.
Investments in modern manufacturing technologies can provide
competitive advantages for the companies on the long run. Nevertheless,
the Romanian manufacturing companies have purposes on the short run
especially, such as: the maximization of the profits, capitalization or
the accelerated recovery of the funds advanced in the privatization process by the owners. This behaviour is punished by the market. For
instance, the exports of manufactured goods produced by the Romanian
companies decreased by 40 %, in the first trimester of 2008 comparing to
the same period in 2007.
The authors try to identify the factors which impede or limit the
investments of the Romanian companies in the Intelligent Systems of
Manufacturing. Therefore, the main purposes of this paper are: (1) the
determination of the extent in which the Romanian companies adopt the
new manufacturing technologies, (2) the identification of the risks when
they assimilate these technologies, and (3) the impact of these
technologies on the traditional manufacturing companies.
The paper is organised as it follows. After a brief introduction
there is a presentation of the way in which the investments in the
intelligent system of manufacturing might generate competitive
advantages for the manufacturing companies. Then, a study based on a
sample of specialists from few manufacturing companies is presented in
the third section of the paper. The fourth section is dedicated to the
presentation of both the results and the limits of the study. Finally,
the last section presents the main conclusions and the directions of the
future research.
2. THE INVESTMENTS IN ISM CAN PROVIDE COMPETITIVE ADVANTAGES FOR
COMPANIES
In this section, we will explore in more details the literature on
the intelligent systems of manufacturing adoption and its impact on
business performance.
In Fig.1 is illustrated the impact of the investment in intelligent
systems of manufacturing on the traditional manufacturing companies.
The traditional approaches limit the reconfiguration capabilities
of the manufacturing systems. Reducing costs often means to use
expensive equipment. At the same time, to increase sales means being
able to respond quickly to market requirements even if the equipments
and people might be less used. Low inventory levels mean less cash tied
up on the shelves but customers want product options and more products
means more inventory. Short cycles contribute to cost reduction and
revenue increases (Kuzgunkaya & ElMaraghy, 2008).
[FIGURE 1 OMITTED]
Computer Integrated Manufacturing (CIM) is a new production
approach in which the functions of design and manufacturing are
rationalized and coordinated using computer, communication, and
information technologies. CIM has the capability to largely or entirely
automate flexible manufacturing by coordinating work cells, robots,
automatic storage and retrieval facilities and material handling systems
(Hsich & Jiang, 2007).
The competitive advantage of CIM in manufacturing companies comes
from its ability to develop a large quantity of new products quickly, to
produce small production runs of custom-made items efficiently and
maximize the flexibility of the manufacturer in responding quickly to
changes in the environment (Heizer & Render, 2006).
Computer Aided Design (CAD), Computer Aided Manufacturing (CAM),
Flexible Manufacturing System (FMS), Robotics together with Knowledge
and Information Based Systems and Communication Networks are expected to
respond effectively to the manufacturing requirements that are becoming
highly integrated and complex (Halevi & Wang, 2007).
3. RESEARCH DESIGN AND METHODOLOGY
The research method is a comparative analysis of interviews
conducted in several Romanian manufacturing companies. We conducted
in-depth interviews with production and project managers. Before the
interviews, we developed a questionnaire focused around our research
question.
4. ANALYSIS AND RESULTS
The analysis involved iterating between theory and data. We first
conducted an in-depth examination of the initial interview data to
uncover key themes, then a second-level data analysis, which included
follow-up interviews. During this process, we reviewed theory on the
identification of both the factors which impede or limit the investments
in the ISM and the risks of the companies when they purchase such
assets. Results of the exploratory analysis are reported in Table 1.
Our exploratory analysis revealed two key findings. First, we
recognized that despite all the money, energy, and time spent by
companies trying to automate their factory, ISM is still an unfulfilled
promise for many. We have investigated the problem and identify the
primary obstacles to move rapid adoption of ISM technologies. Some of
the barriers to ISM adoption are presented below:
1. Top management commitment. ISM installation must start from the
top with a commitment to provide the necessary time, money, and other
resources needed to make the changes that ISM requires;
2. Management perception and attitude. ISM requires a new
perspective on the part of management - maybe even a new philosophy. Top
management, industrial and manufacturing engineers must change their way
of thinking and develop new skills;
3. Integration challenge. To take full advantage of ISM benefits,
the entire manufacturing process from product design to procurement,
production scheduling, management, production and delivery must by
integrated;
4. Lack of planning. Lack of understanding of the technology and
suitable infrastructures to support the new technology, inappropriate
matching of technology to organizational strengths and weaknesses will
all contribute to top management failure to appreciate the promise of
ISM;
5. ISM requires flexible organizational structure. The tendency of
the most managers from manufacturing companies to use less flexible
organizational structures and rigid corporate rules are significant
barriers to ISM adoption.
Secondly, the data revealed problems (risks) that may lead to
failure in ISM adoption: partially obsolete facilities, user hostility,
dynamic volume and mix, shortage of technical skill, incompatibility
between systems, varieties of process options, and facilities with mixed
processing.
5. CONCLUSIONS
Two strategic approaches about the adoption of the intelligent
systems of manufacturing (ISM) might be outlined on the basis of both
the results of the study and the literature reviewed by the authors. The
first approach is proactive and it is applied by the companies which
want to be the first that exploit the potential of the most advanced
manufacturing technologies. These companies act in industrial sectors
with a development rhythm on the long run comparable with capital cost.
They have digital integrated systems, massive capital investments and a
considerable market share.
The second strategic approach is reactive and it is adopted in most
of the manufacturing companies from the emergent economies, among which
Romania as well. These companies have low wages costs, but the lower
this competitive advantage is the more interested in assimilating
manufacturing technologies. In Romania the manufacturing companies
impede or limit the adoption of these technologies because of the very
high technological gap, the low investments in the information
technologies, and the lack of knowledge about the ISM or the high
opposition to changes.
Future research in this field ought to be focused on both the
industrial sectors in which these companies act and the identification
of such mechanisms which accelerate the adoption of the advanced
manufacturing technologies available in both developed countries and
emergent economies.
6. REFERENCES
Halevi, G. & Wang, K. (2007). Knowledge based manufacturing
system (KBMS), Journal of Intelligent Manufacturing, vol. 18, no. 4, pp.
467-474, ISSN: 1572-8145
Heizer, J. & Render, B. (2006). Operations Management, Pearson
Prentice Hall, ISBN 0-13-185755-X, New Jersey
Hernandez-Matias J.; Vizan J. ; Hidalgo, A. & Rios, J.(2006).
Evaluation of techniques for manufacturing process analysis, Journal of
Intelligent Manufacturing, vol. 17, no. 5, pp. 571-583, ISSN: 1572-8145
Hsich, S. & Jiang, Z. (2007). Evaluating investment-return
based design for AMHS in semiconductor manufacturing systems, Journal of
Intelligent Manufacturing, vol. 18, no. 6, pp.617-639, ISSN: 1572-8145
Kuzgunkaya, O. & ElMaraghy, H. (2008). Economic and strategic
perspectives on investing in RMS and FMS, International Journal of
Flexible Manufacturing Systems, vol. 19, no. 3, pp. 217-246, ISSN:
0920-6299
Tab. 1. Results of the exploratory analysis (selection)
Antecedents of ISM adoption % Results
Management commitment 60 High
Organizational structure 30 Flexible
Customer satisfaction 76 Important
Loyalty 20 Important
Organizational learning ability 30 High
Efficiency 70 Very important
Flexibility (++) 90 High
Technical skill 65 Very important
Information technology 78 Advanced
Agility (+) 95 Very important
Adaptability (+) 93 Very important