report automation

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Production and Operations Management Automation

AIBA, Mangalore 1

MASTER OF BUSINESS ADMINISTRATION

PRODUCTION AND OPERATIONS MANAGEMENT

PRESENTATION REPORT

ON

PRODUCTION TECHNOLOGY AND

TECHNOLOGY MANAGEMENT

(AUTOMATION)

BY

GROUP NO: 4

SUBMITTED TO:

Ms. PRATIBHA SHETTY

LECTURER

AIBA

ALOYSIUS INSTITUTE OF BUSINESS ADMINISTRATION


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AIBA, Mangalore 2

GROUP NO: 4

GROUP MEMBERS:

NEETHA RAO 0816091

PRAVEEN JACOB 0816098

GURU DARSHAN 0816081

ARLEEN 0816065

CHANDRASHEKAR 0816073

ABHIJEETH POONJA 0816096


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Meaning of technology

Role of Technology in POM

Classification of Technology

Choice of technology

Primary Areas of Technology

Design Technology

CAD

CAD/CAM

Production Technology

Automation Issues

Management of Technology

Creating and Applying Technology

Technology Strategy

Technology Choice

Guidelines to implementation of technologies

Technology Integration

Deciding on Automation Alternatives

Managing Technology in Global EnvironmentBibliography

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Technology is a resource of profound importance not only in production but also

profitability and growth of the entire business organisation. Technology drives

productivity and also drives change in this world. Technological change is a major factor

in gaining competitive advantage. The development and innovative use of technology can

provide a firm distinctive competence. Competitive advantage can be achieved not just

from creating new technology but also by applying and integrating existing technologies.

Technology is a significant ingredient in virtually all production and operations

management decisions^ Advances in computer technologies (both hardware and

software), automation, robotics, lasers, information and communication technologies

have had broad-reaching impact across all industries. To stay competitive, manufacturing

and service organisations must adopt new technologies.

Firms that have used technology as a competitive weapon have effectively

integrated their technology strategy and business strategy. As these firms invent and

develop new technologies, they offer new products and services.

THE MEANING OF TECHNOLOGY

Technology is defined to be the know-how, physical things and procedures used

to produce products and services. Know-how means knowledge and judgment of how,

when and why to employ equipments, processes and procedures. Knowledge includes

craftsmanship and experience, physical things are equipments and tools, procedures are

the rules and. techniques for operating the equipment and performing the work.

Technologies require a support network to be implemented. A support network

consist of physical, informational and organizational relationships that make a technology

complete and allow it to function as intended.

Advanced technology refers to the application of the latest scientific or

engineering discoveries to the design of production and operations processes.

Technology and technique do not mean the same. Technique is the totality of

methods rationally arrived at and having absolute efficiency whereas technology is the

organisation and application of knowledge for the achievement of practical purposes.

Some of the examples of technology are manufacturing or production technology, design


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technology, computer technology, communication technology, nuclear technology,

satellite communication technology, space technology, missile technology, laser

technology and the like.

ROLE OF TECHNOLOGY IN PRODUCTION AND

OPERATIONS MANAGEMENT

Advances in technologies create new products and services and reshape

processes. Technology takes many forms, beginning with ideas, knowledge and

experience and theft, utilizing them to create new and better ways of doing things.

Technology provides distinctive competency and competitive advantage to a firm over

others. The impact of technology is pervasive.Influence of technology on the production organizations: A vital factor in production

organizations is whether the technology involves capital intensive operations (i.e., large

investment in plant and machinery) or labour-intensive operations. Technology will

affect:

(i). the organisation of production,(ii). the capital investment in plant and equipments, building etc.,

(iii). the scale or volume of production operations,(iv). the influence of labor relations in production operations.

Influence of technology on production strategy: The management of production is

vitally concerned with the technology of the production process. It must organize

according to the technology adopted and by the adoption of productive system which is

either capital intensive or labour intensive. Also, it must design a highly sophisticated

production control system for batch production, or a materials management system for

high capacity assembly line operations.

Technology and organizational structure: The organization is not simply a technical or

social system. It requires structuring and integrating human activities around various

technologies. The technical system is determined by the task requirements and shaped by

the specialization of knowledge and skills required, the types of machinery and


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equipments involved, then information processing requirements and the layout of

facilities.

Any change in the technical system affects the organizational elements. The

impact of technology on the organization- its goals, structure, psychological system and

managerial system will be quite significant.

CLASSIFICATION OF TECHNOLOGY

Technology can be classified as:

y Manual technology: Use of muscular power to do work which was prevalentbefore industrial revolution.

y Mechanized technology: Use of machine power in place of man power and is thefirst step towards automation. E.g., would include power operated tools, tool

changing devices, powered materials handling equipment such as conveyers, jib

cranes for loading and unloading heavy jobs.

y Automated technology: This is any form of equipment or machine which willcarry out a preset program or sequence of operations and at the same time

measure and correct its actual performance in relation to that program.

y Current technology: Is any technology currently used by a firm for itsoperations.

y Appropriate technology: This is the technology that meets the requirements oftime, place and objectives of the firm at a particular point of time.

Appropriateness is an inherent quality in technology

y State of the art technology (Proven technology): Is the modern technologywhich has been adopted by many developed countries in the world. This

technology will enable the firm to produce state of the art products using state of

the art designs.

y Advanced technology: Latest technologies based on latest scientific orengineering discoveries and used in the design and production process. E.g., are

space technologies, missile technology, and information technology and so on.


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y Obsolete technology: Is an outdated technology replaced by superior technology,thereby resulting in obsolescence of the old technology which has been replaced.

y Capital intensive technology: Is that which involves huge investments in capitalassets such as equipment and machinery, materials handling and storage systems,

information handling (storage and retrieval) systems, communication system and

office automation equipments.

y Labour intensive technology: Is that which does not involve investment in hugecapital intensive systems, but makes use of abundant labour (man power)

available in the Country. For example in India, textile and mining industries adopt

labour-intensive technologies.

CHOICE OF TECHNOLOGY

The choice of technology depends on several factors, both internal and external to

the organisation choosing the technology. The various internal factors are:

(i) availability of funds for investment,(ii) product life cycle and technology-life cycle position,(iii) present plant capacity and technology adopted (i.e., current technology).

Technology can be quite capital intensive and require high investment in equipments,

machines and processes. The question is whether the firm can afford to invest in a new

technology which may be highly expensive. Also, the change to a new technology is not

advisable when the product is in the saturation or decline stage in its life cycle. New

technologies for processing may be best suited for developing and manufacturing new

products.

The new technology chosen should be capable of matching with the existingtechnology and plant capacity so that there will be a synergy effect on the plant capacity

when a new technology is adopted.


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The external factors involved in the choice of technology are

(i) government policies and regulations, availability of resources such as rawmaterials, energy, skilled labour etc., required for using the new technology,

(ii) market scenario (market demand, customer requirement of product qualityetc.).

Technology life-cycle: Like a product has its life cycle, technology also has a life

cycle. The various phases or stages in a technology life cycle are:

(i) Innovation in which stage a new technology (product or process technology)is developed,

(ii) Syndication during which stage, the technology is demonstrated and slowlycommercialized,

(iii) Diffusion stage in which a new technology gradually replaces the currenttechnology and

(iv) Substitution stage in which the current technology becomes obsolete and iscompletely, replaced by the new technology.

PRIMARY AREAS OF TECHNOLOGY

Three primary areas of technology are :

(i) Product technology: Product technology translates ideas into new productsand services for the firm's customers. It is developed primarily by engineering

and research groups when creating new products and services. They develop

new knowledge and ways of doing things, merge them with and extend

conventional capabilities and translate them into specific products and

services with features that customers value. Developing new product

technologies require close co-operation with marketing, to find out what

customers really want, and with operations to determine how the goods and

services can be produced effectively. Product technology also requires the

design of systems to support field installation and maintenance.

(ii) Process technology: The methods by which an organisation does things relyon the application of process technology. Many process technologies used by


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an organisation are unique to a functional area and some others are used more

universally. Some of the examples of process technologies are computer-

integrated manufacturing, computer aided design and computer aided

manufacturing, laser beam welding, automated guided vehicles, automated

storage and retrieval systems, robotics, electronic reservation systems in

hotels and railways, optical mail scanners, electronic fund transfers in

banking, autopilots and ship navigation systems in transportation services etc.

(iii) Information technology: Managers use information technology to acquire, process and transmit information so that they can make more effective

decisions. Information technology pervades every functional area in an

organisation. Office technologies include various types of telecommunication

systems, word processing, e-mail, computer graphics, the Intranet and the

Internet.

(iv) Design technology: Design technology includes tools and techniquesprovided by the information science to contribute to better, cheaper and more

rapidly designed products. For example, computer-aided design (CAD), and

exchange of information standard known as STEP (Standard for the Exchange

of Product Data).

(v)

Production or Manufacturing Technology: It includes numerical control, process control, vision systems, robots, automated storage and retrieval

systems, automated guided vehicles, flexible manufacturing systems and

computer-integrated manufacturing.

(vi) Technology in Services: Technology in services include the following:a. Credit and debit cards, electronic funds transfer and automatic

teller machines in financial services.

b. Multimedia presentations and internet in educational services.c. Optical checkout scanners, automatic reservation systems in

hospitality services.

d. Electronic publishing, interactive T.V., voice mail, 'notepad'computers & cellular phones in communication services,


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e. MRI/CT Scanners, sonograms, patient-monitoring systems, on-linemedical and information systems in health-care services.

f. Satellite directed navigation systems and automatic ticketreservation systems in transportation services.

g. Point-of-sale electronic terminals, bar-coded data and automatedsecurity systems in wholesale/retail trading services.

(vii) Virtual Reality Technology: Virtual reality is a virtual form ofcommunication in which images substitute for the real thing, but still allow

the user to respond interactively. It is an extension of the computer-aided

design technology, for example, virtual reality technology is used to develop

3-D layouts of everything from restaurants to amusement parks.

(viii) Disruptive Technology: A disruptive technology is the one thata. has performance attributes that are not valued yet by existing customers or for

current products

b. performs much worse on some performance attributes that existing or futurecustomers value but will quickly surpass existing technologies on such

attributes when it is refined.

(ix) Advanced or High-tech Production Technology: Advanced or high-tech production technology means applying the latest scientific or engineering

discoveries to the design of production processes. New production technology

almost always means that information technology and automation have been

integrated into production processes.


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DESIGN TECHNOLOGY

The recent development in the technology of product design comprises certain

tools provided by the information sciences that contribute to better, cheaper and faster

design of products. They are:

(i). Computer-aided design (CAD)(ii). Computer-aided design and manufacture (CAD/CAM)

(iii). Standard for the exchange of product data (STEP)(iv). Virtual reality technology

Computer Aided Design (CAD)

It is an electronic system using computers for designing new parts or products or

modifying existing ones, replacing the traditional drafting work done, by a draftsman on

a drafting board. The CAD consists of a powerful desktop computer and graphics

software that enables a designer to manipulate geometric shapes. The designer can create

drawings and view them from any angle on a display monitor. CAD software have been

developed for designing electronic circuits, printed-circuit-board design, designing and

drafting three dimensional drawings, and also for analysis of heat and stress inmechanical designs.

Advantages of CAD are:

a) Allows designers to save time and money by shortening design and developmentcycle time.

b) Eliminates prototype model building to prove the designsc) Allows designers to determine costs and test such variables as stress, tolerance,

product variability, interchangeability and serviceability.

d) Low cost of design even for a custom-built, low volume product.e) Eliminates manual drafting completely


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f) Makes review of numerous options in designs possible before final commitmentsare made because of the speed and ease with which sophisticated designs can be

manipulated

g) Faster development, better products and accurate flow of Information to otherdepartments

h) Product cost can be determined at the design stage itself.

Two extensions of CAD technology are

a) Design for manufacture and assembly (DFMA): DFMA software focuses onthe effect of design on assembly. It enables designers to examine the integration

of product designs before the product is manufactured or assembled.

b) 3-D object modeling: 3-D object modeling allows the building of small modelswhich is useful for prototype development. It rapidly builds up a model in very

thin layers of synthetic materials for evaluation and considerably reduces the time

and cost required for prototype development using a manufacturing process.

Computer Aided Design and Manufacture (CAD/CAM)

Computer-aided-manufacture (CAM) refers to the use of computer software to

direct and control manufacturing equipment. When computer-aided-design (CAD)information is translated into instructions for computer-aided-manufacturing (CAM) the

result of these two technologies is referred to as CAD/CAM system.

Advantages of CAD/CAM systems include:

(i). Product quality: CAD permits designers to investigate more alternatives andevaluate the designs from the point of view of potential problems, and

dangers.

(ii). Shorter design time: A shorter design phase reduces costs and enables afaster response to the market

(iii). Production cost reduction: Reduced inventory, better use of personnelthrough improved scheduling and faster implementation of design changes

lower costs.


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(iv). Database availability: Accurate database can be built up to provide the sameinformation for use by all concerned.

(v). New range possibilities: The ability to rotate three dimensional designdrawings to check clearances, to relate parts and attachments etc., will

provide new capability to manufacturing.

(vi). Minimum involvement of direct workers, because CAD informations aredirectly translated into instructions for automated production machines.

(vii). Higher quality and productivity.

CAD/CAM implies a merger of CAD and CAM and an interaction between the

two systems which results in the automation of the transition from product design to

manufacturing.

The integrated CAD/CAM enables analysis and interchange of informationrapidly between a CAD system and a CAM system. It is a totally integrated package

for computer aided design and manufacturing. It considers manufacturability aspects of

parts such as processing steps, machine capabilities, tool changes, holding fixtures

requirements and assembly requirements while designing the product. The new product

designs can be stored in a common database and through CAM, the new products can be

DATABASE

GEOMETRICMODELLING

ANALYSIS

KINEMATICS

AUTOMATEDDRAFTING

CAD CAM

NC/CNCMACHINES

ROBOTICS

GEOMETRIC

MODELLING

FACTORYMANAGEMENT

y NC- Numerical Controly CNC- Computer Numerical Control


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manufactured quickly and economically and introduced into the market. Thus

CAD/CAM promises great product flexibility, low production costs and improved

product quality.

Standard for the Exchange of Product Data (STEP)

STEP provides a format allowing the electronic transmittal of three dimensional data

(design information) to be exchanged internationally, allowing geographically dispersed

manufacturers to integrate design, manufacture and support processes. STEP enhances

collaboration, using talent whereever it is in the world, and at the same time reducing

design lead time and development cost.

Virtual Reality Technology

Virtual reality is a visual form of communication in which images substitute for the real

thing, but still allow the user to respond interactively. It is based on computer-aided

design system which holds design information in electronic digital form. Using suitable

softwares, a virtual aircraft or a virtual car can be assembled by projecting the

images on the floor and developing 3-D model of what the inside of the design of the

product look like. This technology is used to speedup product development, reduce costs

and improve products.


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PRODUCTION TECHNOLOGY (OR MANUFACTURING

AUTOMATION)

In addition to the developments in design technology, a number of advances are in

technology used to enhance production. Some of these advancements in productiontechnology are:

(i). Numerical control and computer numerical control (NC and CNC)Many machines such as lathe, milling, drilling and boring machines are new designed

for electronic control called numerical control (NC). The numerically controlled (N/Q

machines have control systems which read instruction and translate them into machine

operations. When these machines are programmed through their own minicomputers and

have memories to store these programs, they are called computer numerical control

(CNC) machines.

Advantages of NC machines:

(i) Smaller machine set up time,(ii) Machine motions and tool changing are controlled by instructions

on a control system,

(iii) increased productivity and higher quality,(iv) Suitable for low volume production.

Advantages of CNC machines:

(i) Instructions may be stored and handled more efficiently,(ii) Micro computer system controls the machine settings and

operations rather than human beings,

(iii) Real time and off-line diagnostic possibilities may be built into theCNC system,

(iv) Machining data and operator instructions may be displayed on thescreen of computer.

Application of NC/CNC machines: These machines are used to machine parts

(i) with complex machining requirements,(ii) requiring high precision,(iii) in developmental stages where many changes may be needed,(iv) normally requiring extensive tooling,


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(v) requiring fast or slow machining speeds,(vi) made from expensive raw materials and(vii) required in small quantities of repetitive batches.

(ii). Automated process controls: Automated process control makes use of informationtechnology to monitor and control a physical process. It is also used to determine

and control temperatures, pressures and quantities in petroleum refineries, cement

plants, chemical plants, steel mills, nuclear reactors etc. Process control systems

operate in a number of ways:

a. Sensors collect data,b. Analog devices read data periodically (say once a minute or once a

second),

c. Measurements are translated into digital signals which are transmitted to adigital computer,

d. Computer programs read the digital data and analyse the same,e. The resulting output may take numerical forms which include messages on

computer controls or printers, signals to motors to change valve settings,

warning lights or sirens etc.

(iii). Vision systems (Automated inspection systems): These are machines orequipments that have been integrated into the inspection of products for controlling

quality. They combine video camera and computing technology to take physical

dimensions of parts, compare the measurements to standards and determine whether

the parts meet quality specifications. Vision systems are also used for visual

inspection in food processing organizations. Automated inspection systems

facilitates 100 per cent inspection which will lead to improved product quality and

reduced inspection costs.

(iv). Robots: Robotics or robotry is a fast developing field of technology in which humanlike machine performs production tasks. A robot is a reprogrammable

multifunctional manipulator designed to move materials, parts, tools or specialized


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devices through variable programmed motions for the performance of a variety of

tasks. Robots are machines which are flexible, have the ability to hold, move and

grab items. They are controlled by microcomputers which when" programmed guide

the machines through their predetermined operations.

Advantages : Robots

(i) do not strike work,(ii) do not mind hot, dirty, dusty weather conditions,(iii) can work at high speeds,(iv) will not sue if injured,(v) can work long hours without breaks,(vi) can be used for welding, painting, assembly work, loading,

unloading, material handling and other repetitive,

monotonous work.

(v). Automated identification systems (AIS): These use bar codes, radio frequencies,magnetic stripes, optical character recognition and machine vision to sense and input

data into computers. These systems replace human beings to read data from

products, documents, parts and containers and interpret the data. An example is the

system used to identify and read the bar code on an item in the check-out counters at

grocery stores. A scanner reads the identification number from the bar code on the

item, accesses a computer data base, and sends the price of the item to the cash

register and updates the inventory data in the inventory system.

(vi). Automated storage and retrieval system (ASRS): Computer controlledwarehouses use ASRS which provide for the automatic placement and withdrawal of

parts and products into and from designated storage places in the warehouse. Such

systems are commonly used in distribution facilities of retailers.

(vii). Automated guided vehicles (AGV): These are automated materials handling anddelivery systems which can take the form.; of mono-rails, conveyors, driverless

trains, pallet trucks and unit load carriers. AGVs are electronically guided and


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controlled vehicles used to move parts and equipments. AGVs usually follow either

embedded guide wires or paint strips through operations until the destinations are

reached.

(viii). Automated flow lines: An automated flow line includes several automatedmachines which are linked by automated transfer machines and handling machines.

The raw material feeders automatically feed the individual machines and operations

are carried out without human intervention. After an item is machined on one

machine on the line, the partially completed item is automatically transferred to the

next machine on the line in a predetermined sequence, until the job is completed.

Major components such as automobile rear axle housings are produced using

automated flow lines.

These systems are also known as fixed automation or hard automation because the

flow lines are designed to produce only one type of component or product. These

systems are suitable for products with high and stable demand because of very high

initial investment required and the difficulty of changing over to other products. But

production systems which provide greater flexibility (for example, Flexible

Manufacturing Systems) are more favoured than fixed automation.

(ix). Automated Assembly Systems: In this system, automated assembly machines orequipments are linked together by automated materials handling equipments.

Examples of automated assembly equipments are robotic welders or component

insertion units which are used to join one or more parts or components or

assemblies. The partially assembled product is moved to the next assembly

equipment automatically by the automated materials handling equipments and this

process is repeated until the whole assembly is completed. Automated assembly

systems require unique product designs which are suitable to these systems, unlike

product designs suitable for manual assembly operations. Some of the principles that

are applied while designing products for automated assembly are:

a) The amount of assembly required must be reduced: For example,use of castings or plastic mouldings (single part) instead of making the


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part by assembling two or more sheet metal parts fastened together by

bolts and nuts or by rivets.

b) The number of fasteners required must be reduced: Joining two ormore parts by welding is preferred to joining by fasteners such as

screws, rivets, bolts and nuts. Product designs should facilitate this.

c) Components must be designed to be automatically delivered andpositioned: Hoppers, slotted chutes, vibratory bowls etc. are used to

feed the parts and orient them to deliver to the assembly equipment

and position in the proper place for assembly to be done automatically.

Product designs should facilitate this.

d) Products must be designed for layered assembly and verticalinsertion of parts: Product design must facilitate build up of assembly

from a base upward in layers and the components inserted vertically

into the assembly.

e) Parts must be designed such that they are self aligning: Designshould facilitate aligning of parts as and when they are inserted into

assemblies.

f) Products must be designed into major modules for production(Modular design): Each module is assembled in an automated

assembly system and then the modules are assembled into the final

product.

g) Quality of components should be high: High quality componentsavoid jams in feeding and assembly mechanisms.

The advantages of automated assembly units are low production cost per unit,

high product quality and higher product flexibility.

(x). Flexible manufacturing systems (FMS): A flexible manufacturing system (FMS)is a configuration of a group of production machines (or work stations) connected by

automated material handling and transferring machines and integrated by computer

system which can give instructions to produce hundreds of different parts in

whatever order specified.


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An FMS is a type of flexible automation system which builds on the programmable

automation of NC and CNC machines. Materials are automatically handled and loaded

and unloaded for machining operations. Programs and tooling setups can be quickly

changed and production can be quickly switched over from one job to another with no

loss of change over time.

Key components of an FMS are:

y Several computer controlled machining centres or workstations having CNCmachines.

y Computer Controlled transport system (AGVs) for moving materials and partsfrom one machine to another and in and out of the system.

y Computer controlled robots for loading and unloading stations,y An automated storing & retrieval system.All above subsystems of FMS are controlled by a control computer with the needed

software. Raw materials are loaded on the AGVs which bring them to the work centres as

par Vie sequence of operations unique to each part. The route is determined by the

control computer. The robots lift the materials from the AGV and places on the work

station where the required operations are carried out. After the completion of operations,

the robots unload the job and place it on the AGV to move the job to the next workstation

as per the sequence of operations.

The FMS is suitable for intermediate flow strategy with medium level of product

varieties and volumes. Also FMs can produce low variety high volume products in the

same way as fixed automation systems.

Advantages:

y Improved capital utilizationy Lower direct labour costy Reduced inventoryy Consistent qualityy Improved productivity

Disadvantages:

y High initial capital investment


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y Limited ability to adopt to product changesy Substantial preplanning, tooling & fixture requirementsy Standardization of part designs needed to reduce numbers of tools requiredy Requires long planning & development cycle to install the FMs

(xi). Computer integrated manufacturing (CIM): Computer integratedManufacturing is a system which acts as a bridge or umbrella to integrate product

design and engineering, process planning and manufacturing using complex

computer systems. It integrates CAD, CAM, FMs, inventory control, warehousing

and shipping. A computer-aided drafting generates the necessary electronic

instructions to run a direct numerically controlled (DNC) machine and any design

change initiated at a CAD terminal can incorporate that change in the part produced

on the shop floor within a few minutes. When this kind of capability is integrated

with inventory control, ware housing and shipping as a part of a flexible

manufacturing system, the entire system is called Computer-Integrated

Manufacturing.

Production &

OperationManagement

(POM)

Computer Aided

Manufacturing(CAM)

Automated Storage &Retreival System

ASRS & Automated Guided

Vehicles (AGVs)

Management

Information System(MIS)

Robots

Top Management

Computer Aided

Design (CAD)


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The CIM systems works as follows:

1. Top management decides to make a product based on market opportunities, thecompany's strengths and weaknesses and formulates its strategic plan based on

competitive advantage.

2. Production/operations management implements the production process, suppliercoordination, material planning, scheduling operations, delivery schedules and cost

controlling functions.

3. Computer-Aided-Design facilitates the design of the product, its quality analysis, planning the manufacturing process, designing tools and fixtures and machine

loading programs.

4. Computer-Aided-Manufacturing allows fabrication of raw materials into parts to besent to the assembly lines.

5. Automated storage & retrieval systems (ASRs) & automated guided vehicles(AGVs) facilitate storage retrieval movement of incoming materials & parts, work-

in-process & finished products.

6. Robots assemble the subunits into final products, test them with automatedequipments & put the finished products into containers for shipment.

7. Management information systems (MIS) integrate all the elements of the computerintegrated systems among themselves & also with the top management of the

organizations.

(xii). Enterprise resource planning (ERP): ERP systems comprise latest comprehensivesoftware packages to automate a number of business processes. These softwares

integrate most of the business functions in an organization ERF systems have

automated manufacturing processes, organized account books, streamlined corporate

departments such as human resources and facilitate business process reengineering.

ERP systems need complex set of software programs and heavy investment to

implement them. Several FRF software packages have been developed by leading

software companies such as SAP, Oracle, J.D, Edwards, People soft and Baan.

The latest development in ERP systems has been the integration of e-business

capabilities.


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E-business uses the Internet to conduct or facilitate business transactions such as sales

purchasing, communication, inventory management, customer service, placing purchase

orders and checking the status of purchase orders etc. ERP software packages were

modified with additional features to facilitate e-business.

AUTOMATION ISSUES

Some of the issues to be deliberated in the use of automation are:

Not all automation projects are successful. Automation is not a substitute for poor management. Some automation projects may not be worth-while based on economic analysis. Some operations are not technically feasible to be automated. Small and start up businesses may not be able to invest for automation projects.

The major area requiring decisions in automation are:

y High tech, mid tech, or low tech production.y Building manufacturing flexibility.y Justifying automation projects.y Deciding among alternatives andy Managing technological change.

These issues are briefly discussed below:

High tech, mid tech or low tech production:One of the issues to be resolved related to high tech, mid tech or low tech

production. This is a serious problem, because there are factories using very old

technology but doing well. There are others with latest technology but performing

poorly. This does not mean that production technology has no impact on a

companys profitability. The following conclusions are relevant in this context:

Automation, however advanced it may be, cannot be substitute for goodmanagement.


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It is not technically feasible to automate some operations. For example, ingarment industry cutting, assembling, sewing are not yet automated.

Some automation projects may prone to be failure. Companies whichembark on automation may poorly manage the implementation of the

automated machinery. Consequently, they probe to be worse off than they

were before automation.

However, it may be concluded that all companies must keep their

production processes updated as production technology advances. To do

otherwise, means that the future of the companies would be in jeopardy, because

they must assume that the competitors will seize the strategic advantage offered

by switching to advanced technology.

Building manufacturing flexibility:Manufacturing flexibility is the ability to maintain or improve market share of a

firm by following:

Delivering customer orders soon after receipt of the orders, even if there isan extraordinary request for a customer for a quick delivery.

Shifting the production quickly from one product to another to match thecustomers product-mix requirements in small batch quantities.

Increasing the production capacity to respond to the peak market demandat any time period.

Developing new products quickly and introducing the same into production quickly and economically to respond to the changing market

needs.

Two types of manufacturing flexibility are:

Volume flexibility which is provided by the use of overtime, finished goods

inventory and designing production processes having variable production rates or

excess capacity. Volume flexibility can be achieved by having enough capacity to

respond to peak market demands.

Product flexibility is provided by having a process focused production system

even though at a relatively higher production cost per unit. Recent advancements


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in production technology have made product flexibility possible with low

production cost per unit.

Justifying investments in automation:Product improvement and product process changes often take a long term (say 5

years or more) even though the product design and manufacture are automated.

The pay back period, net present value, internal rate of return and other capital

budgeting approaches may look inadequate to base major product and process

design or redesign decisions. Such approaches do not consider new facilities and

new production technologies.

Investments in product and process technology innovation must be

considered as long term strategic choices for the company rather than evaluating

the investment decision based on immediate return-on-investment. In this case,

the returns on investment must be considered in terms of improved product

quality, faster delivery of customer orders, increased market share and so on,

which are possible due to innovation in product design and production

technologies.

Deciding among Automation Alternatives:Three approaches used for deciding among automation alternatives are:

Economic analysis which involves cost comparions of processingalternatives using the concepts of break even analysis anf financial

analysis.

Rating scale approach considering the following factors:i. Economic factors such as cash flows, annual fixed costs,

variable cost per unit, average production cost per unit or total

annual production costs st the forecasted production levels with

intention of determining the direct impact on profitability,

ii. Effect on market share,iii. Effect on product quality,iv. Effect on manufacturing flexibility,


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v. Effect on labour relations,vi. Time required for implementation,

vii. Effect on on-going production,viii. Amount of capital required.

The rating scale approach requires decision makers to weigh the factors

for each alternative.

In the relative aggregate scores approach, scores are assigned to eachfactor for automation alternatives and weightages are also assigned to each

factor considered. The weighted scores (product of factor score and its

weight) are computed and aggregated to get the total weighted score for

each alternative. The alternatives which has higher total weighted score is

chosen.

Managing technological change:Any change is resisted and technological change is no exception. Management

will find automating a plant is more expensive and more difficult than expected.

The following suggestions, however, help implement raw projects with lessdifficulty and least resistance.

i. Have a master plan for automation. The plan should indicate whatoperations to automate, when and in what sequence to automate each

area of the business and how the organization and its products,

marketing and other business units will have to change because of

automation.

ii. Recognize that there are risks in automation. Two risks which needrecognition are the risks of radical obsolescence and the danger that

competitors will easily copy new technology.

iii. Have a separate technology department. This unit will disseminateinformation about new technology; become an advocate for new

technology adoption; lead the way in educating and training others


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about new technology and provide technical assistance necessary for

the installation and implementation of advanced technology

equipment.

iv. Allow enough time for learning how to install, tool, debug, programmeand otherwise get an automated machine up to production speed. Do

not rush through the completion of automation projects.

v. Automating everything at once is not wise. Phasing out installation isadvantageous so that what is learnt from one project can be applied to

another project. By allowing plenty of time, frequency of missed

scheduled dates, organization frustration and pressure to compress the

schedule are somewhat reduced.

vi. Realize that it is the people who can make automation projectssuccessful. Educating and training of employees must be an ongoing

activity. Participation of all employees is a must. Union representation

is essential in any automation.

vii. Finally, if companies move too slowly in adopting productiontechnology, they are likely to be left behind. An advice that companies

need to be cautious about automation does not mean that they must go

slow. Any delay in implementation is sure way of giving in to the

competitors.

Advantages and disadvantages of automation:

Advantages:

Increased output and higher productivity. Improved and uniform quality. Reduced costs. Fewer accidents. Better production control. Dangerous and unpleasant tasks can be performed by robots.Disadvantages:

Heavy capital investment.


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Displacement of labour. Loss of suggestions from employees. Design specifications for raw materials can not be relaxed. Cost of shut down of automated plant due to shortage of materials is quite high. Dehumanization.Factories of the future:

The features of factories of the future are:

Stress on high product quality. Greater emphasis on flexibility. Faster execution and delivery of customer orders. Change in production economies fixed costs will become variable and

variable costs will change to fixed costs.

Product will be designed using CAD/CAM which forms the basis for processplanning. Also CIM systems will be extensively used.

Organizational structure changes with line personnel becoming staff personneland vice versa. The main stream activities will be maintenance, quality

assurance, product design and engineering, managing technology change,

software development etc.

The factories of future will be driven by computers used in CIM systems.

MANAGEMENT OF TECHNOLOGY

Management of technology links R & D, engineering and management to plan,

develop and implement new technological capabilities that can accomplish corporate and

operations strategies. It means identifying technological possibilities that should be

pursued through R & D, choosing from both internal and external sources the

technologies to implement and then following through their successful implementation of

products, processes and services.

Technology and the manager:

What should a manager know about technology? One view is that the manager

merely needs to understand what a technology can do, including its cost and performance


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possibilities. An alternative view is that such understanding is not enough, that the

effective manager must also understand how the technology works and what goes on in

the technology black-box.

Technology choice is an extremely important decision and one that is of interest

to managers in all functions. These functions are not only technical in nature, they affect

capital, human resources and information system. Thus all managers should be interested

in the choice of technology and how it affects the business as a whole. Whatever the firm,

managers are less effective when standing at arms length from the technologies that

make up a firms current and future core competencies. They must invest the time to

learn more about these technologies and at the same time develop good sources of

technical advice within the firm.

Role of technology in improving business performance:

Technology is probably the most important force driving the increase in global

competition. Companies that invest in and apply technologies tend to have stronger

financial positions than companies that dont. For example, IBM and Sun Microsystem,

Inc, believe that java technology holds the key to new business opportunities.

As the investment in R & D for technology increases, so does profitability and

new product introductions. A large number of manufacturers world wide have focused

more on process technologies and demonstrated the strong link between financial

performance and technological innovations. Companies with excellent performance in

annual sales, inventory turns and profits had more experience with multiple advanced

manufacturing technologies and demonstrated more leadership in technological change.

At the same time, the relationship between technology and competitive advantage

is often misunderstood. High technology and technological change for its own sake arent

always best. They might create a competitive advantage, be economically justifiable, fit

with the desired profile of competitive priorities, or add to the firms core competencies.


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Role of information technology in production/ operations management:

Information technology is crucial to operations everywhere along the supply chain and to

every functional area. Computer based information technology, in particular, has greatly

influenced how operations managed and how offices work. It makes cross functional co-

ordination easier and links a firms basic processes. In a manufacturing plant, information

technologies can link people with the work centers, data bases and computers.

Components of information technology:

Information is made up of 4 sub- technologies:

Hardware: A computer and the devices connected to it are called hardware. Improved

hardware memory, processing capability and speed have, in large part, driven recent

technological change.

Software: The computer programs written to make the hardware work and to carry out

different application tasks are called software. Application software such as those

provided by Microsoft, Sun Microsystems and others are what computer users work

with. Software is available for use with almost all the decision tools including statistical

process control techniques, forecasting models, production and inventory control systems

and scheduling techniques. Software is essential to many manufacturing capabilities such

as computer aided design and manufacturing, robots, automated material handling,

computerized numerically controlled machines, automated guided vehicles and flexible

manufacturing systems. Software also provides various executive support systems such

as management information systems and decision support systems.

Databases: A database is a collection of interrelated data or information stored on a data

storage device such as a computer hard drive, a floppy disc or a tape. A database can be a

firms inventory records, time standards for different kinds of processes, cost data or

customer demand information.

Telecommunication: Fibre optics, telephones, modems, fax machines etc., make

electronic networks possible. Such networks and the use of compatible software, allow

computer users at one location to communicate directly with computer users at another

location.


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CREATING AND APPLYING TECHNOLOGY

Applying new technologies in ongoing challenges for all organization. The

innovation process focuses technological and scientific efforts on better ways of meeting

needs. There are various ways this can be done. One way for a firm to acquire new

technology is the firms own research and development efforts which create new

knowledge of materials and processes and then apply them to create and introduce new

products and production processes.

The various stages of R&D projects include (i) basic research stage,(ii) applied

research stage and (iii) development stage.

Basic research stage involves work that explores the potential of narrowly defined

technological possibilities to generate new knowledge and technological advances.

Applied research involves work geared toward solving practical problems and its results

more likely to lead actual improvements in products, processes and services

Development involves activities that turn a specified set of technologies into detailed

product design and process. Product and processes are developed taking into

consideration ease of production and marketability.

Technology fusion refers to the process of combining several current technologies and

scientific knowledge to create a hybrid technology. Adding one technology to another

results is synergic effects. For example, in machine tool industry NC, CNC machines arethe result of fusion of electronics and mechanical technologies.

TECHNOLOGY STRATEGY

Because technology is changing so rapidly and because of the many technologies

available, operations managers more than ever must make intelligent, informed decisions

about new product and technologies. Such choices affect the human as well as the

technical aspects of the operation. How technology should be chosen and hoe these

choices link with strategy to create a competitive advantage are to be examined. An

appropriate technology is one that fits corporate and operations strategies and gives and

the firm a sustainable advantage.

Technology strategy deals more than technological choice. It also deals with

whether an organization should be a leader or a follower in technological change and how


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to evaluate radically new technologies when conventional financial analysis wont do the

job.

Technology as a competitive advantage

A new technology should create some kind of competitive advantage. Competitive

advantage is created by increasing the value of product to a customer or reducing the

costs of bringing the product to the market. The most obvious cost-reduction strategy is

that of reducing the direct costs of labour and materials.

On the other hand sales can increase, quality can improve by reduction of

human errors, delivery times can become shorter due to reduced processing times,

inventories can become smaller, the environment might improve-all owing to improved

or new technologies.

Of course, new technology can also have its shortcomings. Investment in new

technology can be forbidding. The investment can also be risky because of uncertainties

in demand and profit per unit. Implementation of new technology may generate employee

resistance, lower morale and increase turnover.

TECHNOLOGY CHOICE

The choice of technology should not only consider net present value of the

investment made but also the effect on consumers, employees and the environment.

When technological alternatives are evaluated, they should be considered with the respect

to the do-nothing alternative. In other words what happens if no investment is made and

the competitors make the investment instead?

To conclude, it may be said that investment should support a comprehensive

technology strategy aimed at achieving or maintaining a competitive advantage.

Managers in all functions should work together to get develop technology strategy that

not only consider issues but human resource effects, financial consideration and market

operations and market impacts. Developing technology strategy on cross functional basis

will ensure that all of these factors are properly considered.


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GUIDE LINES TO IMPLEMENTATION OF TECHNOLOGIES

Managing technology means more than just choosing the right one. It is also implies

supporting the chosen technology throughout its implementation. Managing

technological change well is vital to maintain job satisfaction and positive attitude among

the employees. Some useful guide lines for implementation are related to technology

acquisition; technology integration, the human side and leadership.

Technology acquisition is concerned with the functions of basic research, applied

research and development activities to secure new technologies. The options for

acquiring new technology includes

y Internal resource (own R&d)y Interfirm relationshipy Suppliers.

TECHNOLOGY INTEGRATION

Today cross functional teams are responsible for implementation of new technology by

an approach known as current engineering to bridge the gap between R & D, product

development and manufacturing. This approach is referred to as technological

integration

The human side: technology determines how the jobs are done by the people. When

technology changes, jobs also will change. New technology may eliminate some jobs,

add some jobs, upgrade or downgrade some other jobs. Employee training, education and

involvement help a firm identify new technological possibilities and prepare employees

for the new technologies.

Leadership: managers role in implementing new technologies is a crucial one. They

must hold to tight budgets and schedules, plan implementation projects, continually

monitor the program, assess the risk, costs and benefits of new technologies, have

technical vision, be committed to the project and have everyone focused on

implementation of new technologies. They should act as catalysts to bring-in

technological advancement and implement them successfully.


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MANAGING TECHNOLOGICAL CHANGE

Some of the suggestions to production managers on how to manage changes in

production technology and how to manage the implementation of major automation

projects are given below:

yHave master plan for automationyRecognize the risk in going for the automationyEstablish a new production technology or technology development departmentyAllow plenty of time for the completion of automation projectyDo not try to automate everything at once.yPeople are the key to the successful implementation of automation projectsyCompanies moving too slowly in adopting new production technology, may be

left behind others.

Consequences of Industrial Automation

Industrial automation results in the elimination of workers' jobs; for example

robots replacing welders, painters or NC/CNC machines replacing the machine setters or

operators, AGVs replacing operators driving the material handling equipments and so on.

But in the long-run automation also creates some new jobs in engineering, selling

& servicing new technology products. Workers need to be trained to occupy new job

positions created by automation. However, some white collar and blue collar workers

may lose their jobs and will have to search for new jobs because not all companies

provide for retention or retraining of displaced workers.

DECIDING ON AUTOMATION ALTERNATIVES

Managers, while considering automation decisions, must evaluate automation

alternatives. Economic analysis is an important if not a predominant factor in choosing

among automation alternatives. The various factors to be considered are:

(1)Economic factors: The focus is on cash flows, annual fixed costs, variable cost per

unit, average production cost per unit or total annual production costs at the forecasted


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production levels. But the main intention is to determine the direct impact of automation

on profitability. Break-even-analysis and financial analysis are used for this purpose.

(2)Effect on market share: Some automation alternatives may require product redesign

or product specialization which may affect sales. Even if some alternatives permit more

product variety and greater customer appeal, the net effect of such changes on market

share is difficult to assess.

(3) Effect on product quality: Impact of automation alternatives on product quality is

difficult to measure directly even though scrap rates, market share changes and

production costs may reflect the effect of changes in product quality resulting from

automation alternatives.

(4)Effect on manufacturing flexibility: Measures of product flexibility and volume

flexibility are difficult to develop even though cost of machine change-over, overtime

labour costs and market share changes can be used as measures of the effect of

automation alternatives on manufacturing flexibility.

(5) Effect on labour relations: The number of workers to be laid off, the amount of

training and retraining needed and the availability of skilled workers required to operate

automated equipments are factors affecting the choice of automation alternatives.

(6) The amount of time required for implementation: Different automation

alternatives may require different time durations for implementation because of

differences in technology, availability of competent personnel and different kinds of

changes in the rest of production system caused by the automation alternatives.

(7) Effect of automation implementation on ongoing production: Even while

automation projects are being implemented, regular production must go on because

delivery of products to customers can not be postponed. The extent to which the ongoing

production gets affected depends on the type of automation alternatives.

(8) Amount of capital investment required: Availability of capital for inventory in

automation project is an important factor to be considered because almost all automation

alternatives are highly capital intensive. This factor can be a prodominant consideration

in automation decisions.


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MANAGING TECHNOLOGY IN A GLOBAL ENVIRONMENT

The present global business environment requires a firm to be able to switch products

quickly and economically. It should also be able to coordinate with an international

supply-chain. Organization should have ability and learning as priorities in their

operations to compete m the global market Agile organizations are quick and flexible in

their response to changing customer requirements. Such organizations are learning

organizations that manage change by combining a vision, a participative management

environment and the application of technology. Only agile organization will survive in a

global environment in which technology and economy are fast changing.

Agile companies operating internationally need effective information systems for

managers in any part of the world to communicate and share information.

Understanding technology and how it influences your firm is a demanding task; as is

implemented and managing it. Firms which achieve competitive advantage through

technology are successful because of the following reasons:

y They have strategic vision.y They plan for a more distant horizon.y They have a focused-product line and know their products and customers

exceedingly well.

y They tie strong internal technical capabilities to their strategy.y They build effective organization which can effectively implement the change

necessary for the constructive use of technology.

Effective managing technology can enable production/ operation managers to hit all

three strategic targets-low cost, differentiation and rapid response.


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BIBLIOGRAPHY

y Production and Operations Management by K. Ashwathappa & K. ShridharaBhat, Himalaya Publishing House

report automation

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