By Udo, Godwin J.; Ehie, Ike C.; Olorunniwo, Festus
Industrial Management , Vol. 37, No. 5
In the quest to lower operating cost and improve manufacturing efficiency, a record number of companies are embarking on different forms of advanced manufacturing systems (AMS). Dramatic developments in advanced manufacturing technologies at various organizational levels can be attributed to numerous promises that can improve the competitive position of the company. AMS affects not only manufacturing, but the whole company, giving new challenges to an organization's ability to manage both manufacturing and information systems. The far reaching impact of AMS on a company's competitive position has been well documented. AMS can be defined as a group of integrated hardware-based and softwarebased technologies, which when properly implemented, monitored, and evaluated can improve operating efficiency and effectiveness of the adopting company. It encompass a broad range of computer-based technological innovations that include numerical control (NC) machine tools, cellular manufacturing, machining centers, industrial robots, computer-aided design and manufacturing (CAD/CAM) systems, automated manufacturing planning and control, manufacturing resource planning (MRP II), flexible manufacturing systems (FMS), and automated storage and retrieval systems (AS/RS).
These manufacturing technologies have the potential to improve production performance dramatically and create vital business opportunities for companies capable of successfully implementing and managing them. AMS can also provide distinctive competitive advantages in cost and process leadership. Events of the last decade--U. S. productivity problems, Japanese manufacturing success stories, and the world's poor economy-have moved manufacturing strategy and process technology issues from the bottom to the top of the company's priority list. Manufacturing issues such as quality and flexibility are no longer discussed only on the plant floors, but also in the boardrooms. Practitioners and researchers have since developed strong interest on how AMS can be used to combat global cornpetition. Growing numbers of organizations are now adopting AMS to cope with fragmented mass markets, shorter product life cycle, and increased consumer demand for customization. Although AMSs can help manufacturers compete under these circumstances, they often serve as a double-edged sword, imposing organizational challenges and at the same time providing competitive benefits.
With the growth in competition, managers increasingly rely on and expect a return on AMS investment--a more accurate evaluation of the resources spent on AMS, and benefits derived from such investment. Previously defined lists of potential AMS benefits as shown on Table 1 are quite impressive and lead one to believe that AMSs have the potential to be one of the most powerful computerized tools available to businesses.
Benefits can be classified as tangible and intangible benefits. The tangible benefits are those that can be easily quantified while the intangible benefits cannot be easily quantified. In the strategic management area, the use AMS to achieve competitive advantage has received renewed attention. Manufacturing organizations now widely accept that AMS may be useful in implementing leading-edge corporate strategy. Many authors believe that AMSs have become a key part of competitiveness in the marketplace. Although the promises of AMS are numerous, and have been found to have direct links with an organization's operating performance, only a handful of companies have been able to realize the full benefits of AMS. The rate at which these benefits are derived varies to a large extent from one company to another. Beatty concludes that only half of those companies adopting AMS ever achieve the benefits sought after. Success in AMS implementation becomes reality when set goals and objectives stipulated by the adoption strategy are fully realized.
Determinants of AMS Benefits
Reasons for AMS failure include lack of developing an effective champion, lack of planning for a high level of system integration, not using organization integration techniques, lack of experience with modern technologies, an inadequate understanding of new technologies, and lack of top management support or knowledge of AMS. …