A model for the assessment of new technology for the manufacturing enterprise

A model for the assessment of new technology for the manufacturing enterprise
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  Technovation 20 (2000) 3– A model for the assessment of new technology for themanufacturing enterprise M.W. Pretorius  * , G. de Wet  Department of Engineering and Technology Management, University of Pretoria, Pretoria 0002, South Africa Received 18 February 1999; received in revised form 19 April 1999; accepted 4 May 1999 Abstract Modern technology plays a key role in the ability of manufacturing enterprises to compete as world class manufacturers. Managersneed to make complex decisions regarding applicable technologies in order to gain optimal return on technological investment. Amodel was developed to assess the impact of manufacturing technology on the productivity and competitiveness of the enterprise.The approach taken by the model is to view the manufacturing enterprise as a manufacturing system in which different dynamicprocess structures exist. A framework is defined by the hierarchical structure of the enterprise, the business processes and thefundamental business functions. This creates a 3-dimensional space in which the business processes can be mapped. From therelationship between technology and process, the impact of new technology on the enterprise can be projected onto the 3-dimen-sional framework.Proven world class manufacturing methodologies can be assessed by the model. These typically include automated manufacturing,production management and concurrent engineering systems. Ultimately, the model can be a useful tool for developing or evaluatingtechnology strategies for the enterprise.  ©  1999 Elsevier Science Ltd. All rights reserved. Keywords:  Management of technology; Technology assessment; Manufacturing technology 1. Introduction Multi-dimensional analysis in the World Competi-tiveness Report (Garelli, 1992–95) identified world classtechnology as a key factor in global competitiveness. Acomparison between the results for Domestic EconomicStrength and Science and Technology in the reportsshows a direct relationship between the two factors. Thisrelationship defines a technology growth path as shownin Fig. 1. Two alternative growth scenarios are pointedout in the figure. Scenario A represents a high rate of investment in technology without a correspondinggrowth in economic strength. This scenario typicallypoints to problems in the technology strategy. ScenarioB, on the other side, represents a high growth in econ-omy supported by a relatively low investment in tech-nology. A typical Scenario B strategy would be to * Corresponding author. Tel.:  + 27-12-420-3882; fax:  + 27-12-362-5307.  E-mail address: (M.W. Pretorius) 0166-4972/99/$ - see front matter  ©  1999 Elsevier Science Ltd. All rights reserved.PII: S0166-4972(99)00092-9 Fig. 1. The ideal technology growth path. acquire technology from outside the country and userelatively cheap labour to create jobs. This is howevera short-term strategy for the creation of wealth, with thelonger-term objective to invest the profits in tech-nology development.  4  M.W. Pretorius, G. de Wet / Technovation 20 (2000) 3–10 Technology plays an important role in the ability of manufacturing enterprises to compete in internationalmarkets. In order to make optimal technological invest-ment decisions, management need to understand howtechnology manifests itself in the business process andwhat impact it has on the manufacturing enterprise asa whole. This paper investigates the nature of modernmanufacturing enterprises and proposes a model for theholistic assessment of the benefit of utilising differenttechnologies in the enterprise.Wheelwright (1985) identified four phases in which astrategy for a manufacturing enterprise can be developedand implemented and which correlates well with thetechnology growth strategy in Fig. 1. In this strategy hepoints out an internal/external neutral orientation and aninternal/external supportive orientation as cornerstonesfor strategic growth of the manufacturing enterprise.Three distinct tendencies can be identified in modernmanufacturing strategies. First, is the growing impor-tance of information technology in manufacturing,second is the ability of the manufacturing enterprise tobe flexible towards new market requirements and thirdis the extent to which modern manufacturing strategiesgrew from simple process choices to cover the activitiesover the complete business cycle. These tendencies areimportant for the evaluation of new technology for themanufacturing enterprise.Porter (1985) emphasises technological change as aprimary force behind competitiveness. His value addingchain concept provides a solid base for the implemen-tation of technology in all facets of business and not onlyas isolated technology islands within the enterprise. Heidentified various technologies within each phase of thevalue adding chain that must be used in a synergisticway to optimise productivity. The impact of new tech-nology should be measured against the requirements of modern world markets. These requirements include lowproduct prices, high product quality, short product lead Table 1The impact of new technology on world class market requirements times, product variety and environmentally friendly pro-ducts. A projection of these requirements onto the manu-facturing enterprise reveals characteristics like lowmanufacturing costs, high process quality, short processlead times, process flexibility and environmentally fri-endly product designs and processes. New technologyshould impact positively on these factors (see Table 1). 2. The manufacturing enterprise as a system In order to investigate how technology manifests itself in the business process, the enterprise is considered amanufacturing system. The assessment model isdeveloped from the characteristics of a manufacturingsystem. By applying the principles of process theory tothe systems framework, a dynamic structure is definedin which technology can be assessed.Blanchard and Fabrycky (1981) defines a system as acombination of elements forming a complex whole andwhich, as a result of interrelationships between theelements, performs a purposeful system function.Amongst others, a system possesses three importantproperties, namely a  hierarchy , certain  fundamental sur-vival functions  and a  life cycle .The  hierarchy  of a system contains the relativerelationships between the system elements in terms of itssupra- and sub-ordering. In a manufacturing enterprise, asimplistic hierarchy could be defined as consisting of unit, operational, organisational and business levels.These levels would typically correspond with materialflow, information flow and money flow chains withinthe organisation. A detailed analysis of the hierarchicalstructure of cybernetic manufacturing systems, revealsproperties like   specific  input and output relationships  that existbetween the different levels of the hierarchy;  5  M.W. Pretorius, G. de Wet / Technovation 20 (2000) 3–10 Fig. 2. The definition of a process.   feedback cycles  that exist between the different levelsof the hierarchy;   a total control function that forms a  closed cycle across all the levels of the hierarchy;   a  complete  set of activities to fulfill the system func-tion exists within the hierarchy.McPherson (1980) defined the general concept of a protosystem in which he specified the minimum,  fundamental functions  needed for a system to survive. These subsys-tems include operations (transformation), information,management (coordination) and support. If the supportprocess itself is analysed in terms of the process defi-nition in Fig. 2, the main element in the support functionis identified as measurement. For the purpose of definingthe technology assessment model, the fundamental func-tions of a system can thus be summarised as transform-ation, information processing, measurement and coordi-nation.In fulfilling its system functions, the various activitieswithin a system build up to a complete system  life cycle .The common properties a generic life cycle would pos-sess include value adding activities, interactivitybetween the phases in the life cycle, feedback cycles, Fig. 3. A basic framework for technology assessment. completeness of activities, a closed loop from market tomarket and logic within its sequence of activities. Everybusiness has to define its own business life cycle accord-ing to the applicable market requirements. For the pur-pose of the technology assessment model, a generic busi-ness life cycle is assumed, which includes the phases of marketing, product design, process design, production,distribution and service. 3. Defining the basic framework for the assessmentmodel Using the system characteristics of hierarchy, funda-mental functions and life cycle, a basic framework asshown in Fig. 3 can be defined. From this framework,the analyst is able to answer the following questions:   Which basic functions need to be done by the manu-facturing system in order to satisfy the market require-ments?   When is the right point in time to perform a specificsystem function to ensure optimum results?   Where in the system hierarchy should the varioustasks be performed in order to be the most effective?Interpretation of the basic framework can be done asfollows: a transformation function exists within eachphase of the business life cycle, thus forming a chain of transformation activities across the life cycle dimension.At the same time, a specific set of responsibilities regard-ing the transformation functions exists within the hier-archy, for each phase of the business cycle. Exactly the  6  M.W. Pretorius, G. de Wet / Technovation 20 (2000) 3–10 same interpretation can be done for the other fundamen-tal functions of information processing, measurementand coordination. In summary, a 3-dimensional structureexists, consisting of chains of transformation, infor-mation, measurement and coordination functions acrossthe business life cycle. A network of responsibilities toperform these functions can at the same time be pro- jected onto the chains of fundamental functions from thehierarchical structure. 4. The dynamic structure of the framework In order to be characterised as a world class manufac-turing system, the enterprise needs to possess cyberneticsystem properties. These include properties like internalfeedback mechanisms, openness towards environmentalinfluences from world markets and adaptability regard-ing the strategic objectives of the manufacturingenterprise.A new market requirement would trigger the dynamicstructure of the manufacturing enterprise to perform aseries of activities to satisfy this requirement accordingto world class standards. As all the activities within thebusiness life cycle are manifested in processes, the pro-cess structure within the enterprise thus needs to beoptimised. A basic process as was defined in Fig. 2, isa sequence of events with certain dependencies betweeneach other. Processes can be integrated in two differentways. First, they can be integrated in series where certaininput–output relationships exist. Second, the integrationcan be a parallel link where certain input–input and out-put–output relationships exist. Automation technologycreates the possibility for processes to be integrated inparallel in such a way that the one process is totallyabsorbed into the other process, with the effect of areduction in events that must take place to produce theoutput, see Fig. 4.Referring back to the 3-dimensional framework, it isclear that the fundamental functions are executedthrough various process chains namely the transform-ation processes, information processes, measurementprocesses and coordination processes. The dynamics of the manufacturing enterprise can thus be seen as a 3-dimensional structure of processes with specific relation-ships between each other. Looking at the element in Fig. Fig. 4. Integration of two processes. 3 as an information activity in the production phase atunit level in the hierarchy, different relationships withother elements in the 3-dimensional space can be ident-ified, namely with:   elements in the previous phases of the informationlife cycle, e.g. process design,   elements in the later phases of the information lifecycle, e.g. distribution,   elements in the other fundamental functions, i.e.transformation, measurement and coordination,   elements in the various hierarchical levels of oper-ation, organisation and business.When integrating different processes, these relationshipsshould be kept in mind. 5. The impact of technology on the processstructure Technology is a combination of means, such as hard-ware, software and skill, associated with a specific fieldof technical competence. It is created by people toenhance human capability. The generic building blocksof technology can be identified as people, systems andprocesses. These building blocks relate to the dimensionsdefined in the technology assessment framework, namelypeople versus hierarchy, processes versus fundamentalfunctions and systems as employed in the business lifecycle phases.New technology manifests in the fundamental func-tions of the manufacturing enterprise, leading to a funda-mental technology classification of transformation tech-nology, information technology, measuring technologyand coordination technology. These technologies need tobe present in all the phases of the business life cycleand do have interfaces with the various elements in thehierarchy. In order to optimise the dynamics of the pro-cess structure in the framework, the integration of differ-ent technologies should be considered.The integration of different technologies is animportant step in optimising productivity over the totalbusiness life cycle. Integration of technology requiresdetailed analysis of the relevant characteristics of theapplicable technologies. Characteristics that should beanalysed, include:   S-curve analysis to determine the maturity in termsof life cycle of both the individual and integratedtechnologies,   technology trends in material characteristics, perform-ance, cost and structure,   readiness of the different technologies in terms of development status and testing in products for theworld markets.  7  M.W. Pretorius, G. de Wet / Technovation 20 (2000) 3–10 Different technologies can be associated in four ways.First, a dependent association can exist where one tech-nology is dependent upon another technology. Second,two technologies can be supplementary to each other,e.g. machining technology versus measuring technologyin terms of accuracy. Third, different technologies canbe fully independent with no relationship between them.Fourth, two technologies can be competitive to eachother and the one technology can thus replace theother one.An important part of the technology analysis is therelationship between a technology and the enterprise.Two analytical techniques can be used to quantify thisrelationship. The Technology Space Map quantifies thetechnological capability of people in the enterprise usinga mapping of the life cycle phases, the product break-down and the organisational structure as evaluation para-meters. Second, the Technology Balance Sheet andIncome Statement (de Wet, 1989) is an analytical tech-nique to quantify the relationships between technology,processes, products, markets and return on investment.Using the results of these two analytical techniques, thefactors that influence technology transfer can also beevaluated. These factors include technology levels,knowledge areas, the objectives of technology transferand product information.The impact of new manufacturing technology on theprocess structure, due to the integration of technology,and thus integration of processes, can be summarised as:   a reduction in the number of processes in the differentphases of the business life cycle,   shorter process and process lead times,   processes of higher quality, i.e. higher accuracy,reliability, etc.,   more cost effective processes,   processes are more environmentally friendly.An impact on the technology assessment framework thatalso has an effect on the dynamics of the process struc-ture, is the synchronisation factor between the funda-mental functions of the manufacturing enterprise. Theprinciples of concurrency and timing are importantaspects influencing the synchronisation. The principleholds that at any specific time, all resources (includinginformation) would be available to any element in the3-dimensional framework and through proper schedul-ing, the timing of process execution would be optimal.Technology plays a major role in synchronising the fun-damental functions through concurrency and timing.The total effect of new technology on the enterpriseframework is illustrated in Fig. 5. Through theimplementation of relevant new technology, a highersynchronisation effect on the fundamental functioncauses shrinkage in the business life cycle and coupledwith it, a time shift in process execution. The change inthe business cycle automatically causes a change in theenterprise hierarchy in that it is simplified and thus alsoshrinks. The effect that changes in the hierarchical struc-ture of the enterprise have on the capability requirementsof people must be linked to appropriate recruitment andtraining programs.In Table 1, an overview of linking the impact of tech-nology on the framework to the world class manufactur-ing requirements, is shown. 6. Application of the assessment framework In order to illustrate the application of the technologyassessment framework, the redesign of a laser manufac-turing cell is briefly discussed.A study was done on an application where a com-puterised, 5-axis robotised laser cutting cell replaced acomplete plate material preparation production line. Thepreparation cycle consisted of a conventional flame pro-file cutting process, a follow-up welding preparation pro-cess, a cleaning of the cutting edges necessitated by theflame cutting and a marking process for bending anddrilling the plates. Between each process a manual hand-ling operation to move the plates was necessary. Investi-gations proved long lead times, quality problems, non-competitive costs and unhealthy working conditions dueto the cutting processes to be the order of the day. Vari-ous material preparation technologies were available onthe market to improve the current production line. Thequestion was however to which level of automation thecompany should invest in new technology and howshould the replacement technology be integrated into theother existing technology systems within the company.Given that the specific company was situated in a coun-try with a developing economy, the impact on the peoplehad to be analysed thoroughly.In summary, the steps in the analytical process, donefor each of the alternative available technologies, wereas follows: Step 1 . The material preparation process was brokendown into all its various sub-processes and structuredas part of the complete business cycle of the company. Step 2 . The input and output relationships betweenthe processes in the material preparation functionitself were analysed and the interface specificationdetermined. This analysis included the transform-ation, information, measurement and coordinationactivities and the current level of synchronisationbetween the fundamental functions in the materialpreparation department, as shown in Table 2. Step 3 . The relationships of the material preparationprocesses with all the other phases in the businesscycle were now analysed and relevant interfacesspecified. These included, for example, specifications
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