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Current and Future Patterns of Using Advanced Manufacturing Technologies

Hongyi Sun

Dept of Manufacturing Engineering

& Engineering Management

City University of Hong Kong

83 Tat Chee Avenue, Kowloon

Hong Kong

e-mail: mehsun@cityu.edu.hk

Phone: (852) 2788 9587, Fax: (852) 2788 8423

Biographical information, Hongyi Sun

Hongyi Sun holds a Bachelor degree in Computer Science from Harbin University of Science
and Technology, a Master degree in Engineering Management from Harbin Institute of
Technology (HIT), both in China, and a Ph.D. in Industrial Management from Aalborg
University in Denmark. Dr.Sun was a lecturer at HIT in the 86-90 period. He was an
Associate Professor at Stavanger College in Norway in the 94-98 period. Currently he is an
Assistant Professor at the Department of Manufacturing Engineering & Engineering
Management, City University of Hong Kong. His teaching and research areas include
manufacturing/operations strategy, quality management, technology management and
comparative study. Hongyi Sun has published articles in International Journal of Production
Economics, International Journal of Human Factor in Manufacturing, International Journal of
Technology Management, International Journal of Quality and Reliability Management,
International Journal of Computer Integrated Manufacturing, Integrated manufacturing
Systems, Total Quality Management, TQM magazine, International Journal of Management,
Education + Training, and Journal of Engineering Education.

The reference of this paper should be:

Sun, Hongyi (2000) "Current and Future Patterns of using Advanced Manufacturing Technologies",
Technovation, The International Journal of Technological Innovation and Entrepreneurship, Vol.20,
No.11, pp.631-641.
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Current and Future Patterns of Using Advanced Manufacturing Technologies

ABSTRACT: This article records the findings from the survey about the pattern of current uses and future
tendency of Advanced Manufacturing Technologies (AMT). The empirical data come from the project International
Manufacturing Strategy Survey (IMSS) which covers eighteen countries. It was found that CAD, MRP, LAN, and
CNC machines are the most popular AMTs used now. It seems that there is a sequence of adopting AMT, namely
from simple to complicated. Green field and fully integrated CIM systems seem to be rare. In three years, the uses
of CAPP and shared database will significantly increase, which indicate the increase in integration level of
manufacturing system. However, the main configuration of manufacturing will be standalone, islands of
automation, and limited integration. Fully computerised integration in manufacturing system will unlikely be the
main model in the near future. Regarding the relationship between AMT uses and performance improvement seems
to be complicated and a couple of different patterns are identified. Practical implications, limitations and future
research are also discussed finally. Key words: AMT, patterns of uses, performance, and survey

1. Introduction
Advanced Manufacturing Technologies (AMT) refers to computer aided technologies used in manufacturing
companies. Noori (1990) defined AMTs as new technologies which are used directly by the firm in the production
of a product. Youssef (1992) and Burgess and Gules (1998) distinguish hard-based and soft-based AMTs. Hard-
based AMT refers mainly to physical technologies used in engineering, processing and administration. While soft-
based AMT covers Total Quality Management (TQM) and Just In Time (JIT). This research will look at those
AMTs, in which computer systems and/or computer-controlled equipment are involved. For example, in a Flexible
Manufacturing System (FMS), both hard equipment and a computer control system are involved. In a Material
Requirement Planning (MRP) system, only a computer system is involved. Other soft AMTs like TQM and JIT, in
which computer systems may not necessarily be used, are omitted in this research.

The need to achieve cost efficiency, quality, and flexibility without trade-off is necessary, and has imposed a major
challenge to the manufacturing industry in the nineties and beyond. The manufacturing issues under the challenges
are as follows (Goetsch 1990, p.305; Ferdows and De Meyer 1986; Bessant 90 etc.):

1 Reduction of lead time to satisfy customer.

2 Getting new product to market more quickly

3 Flexibility to adapt to changes in market.

4 Improvement of product quality.

5 Reduction in cost.

6 Customer service.
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AMT has widely been regarded as a new and valuable weapon to rise to the challenge proposed by the new market
situation to manufacturing industries (Hunt, 1987; Noori, 1990). In the past 20 years, AMT has been widely used by
manufacturing companies all-over the world. However, world-wide research found that not all AMT perform as
expected. Some AMT perform very bad and leads to a total failure. Some AMTs performs "satisfactory", but did not
produce the full benefits. Other AMTs perform well on the shop floor level, while the business performances of the
companies were not improved (Voss, 1988). All these problems have caught the attention of both researchers and
practitioners. Since the beginning of the 1980s, management of technology, especially implementation of AMT has
been a hot topic (Gerwin, 1982; Voss, 1988). Other researchers investigated in the relationship between the uses of
AMT and performance improvement. The relationship was investigated conceptually (Macbeth, 1989, p.71; Bishop
and Schofield, 1989, p.44), by case studies (Sohal, 1996; Sun, Hjulstad and Frick, 1997;) or by survey (Sun 1996,
Small, 1998). However, there is a big gap in recent literature about the patterns of AMT uses and the future
tendency of its uses. This research aims to investigate these based on the empirical data from eighteen countries.
The pattern or sequence of AMT adoption, the future tendency of AMT uses, and their contributions will also be
investigated. The research will contribute to identifying the configurations of current and future manufacturing
systems.

This article is structured as follows. After this introduction section, literature review and research framework will
be introduced in the second section. Research method and empirical data will be described in the third section. The
analysis results will be presented in the fourth section. Conclusions and implications will be discussed in the last
section.

2. Advanced Manufacturing Technology and Computer Integrated Manufacturing

AMT are the main technical components of Computer Integrated Manufacturing (CIM) systems. Although a CIM
system contains many AMT such as Computer Aided Manufacturing (CAM), Computer Aided Design (CAD) and
Computer Aided Process Planning (CAPP), it is more than a group of advanced and automated technologies. CIM
is the term used to describe the modern approach of manufacturing (Haywood, 1990). The main feature of CIM is
the total integration of all manufacturing functions, including design, engineering, planning, control, fabrication,
and assembly etc. through the use of computers. So CIM is a comprehensive measure of computerised integration
and information sharing in a manufacturing system. According to the CIM wheel model by Society of
Manufacturing Engineer (SME), there are one business and four technical components of a CIM system (Goetsch
1990). The four technical components are planning and controlling, information resources management, product
and process definition, and factory automation. The four components and relevant AMTs involved are described
below (Groover, 1987; Goetsch, 1990; Singh, 1996; Kotha and Swamidass, 1998).

The planing and controlling component includes such element as planning/scheduling and controlling of facilities,
materials, tools and shop floor activities. Hardware and software are available to automate each of the elements.
MRP, as well as Manufacturing Resources Requirement (MRP II), is an important concept with a direct relationship
to CIM. MRP involves using the bill of materials, production schedule, and inventory record to produce a
comprehensive, detailed schedule of the raw materials and components needed for a job (Chase and Aquilano,
1997). As other manufacturing technologies have evolved from automation to integration, MRP has also developed.
The new version of MRP, known as MRP II, goes beyond determining materials requirement to also encompassing
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financial tracking and accounting. MRP II is particularly well suited to the integrated approach represented by
CIM.

Information recourses management is the nucleus of CIM. Information, updated continually and shared
instantaneously, is what CIM is all about. One of the major goals of this nucleus is to overcome the barriers that
prevent the complete sharing of information among all other CIM components. The AMTs used for this purpose
include Shared Databases (Shared DB), Wide Area Network (WAN), and Local Area Network (LAN). Each of these
represents different levels of information integration and sharing. In addition to these standalone and islands of
automation technologies, the term CIM is also a comprehensive measure of computerized information sharing.

The product and process definition component of the CIM wheel contains three elements: design, analysis and
simulation, and documentation. This is the component where products and process are designed, engineered, tested
through simulation, and documented through drawing specifications and other tools. Standalone technologies
include Computer Aided Design (CAD) which can be used to automate the drawing and analysis process and
Computer aided Engineering (CAE) which can automate the simulation and analysis process. The islands of
automation in this component is Computer Aided Process Planning (CAPP) which aims to link design, engineering
and manufacturing processes by converting design parameters into processing codes.

The factory automation component contains those elements that are associated with fabricating and assembling
products, for example, material handling, assembling, inspecting and testing, and materials processing (i.e.,
fabricating). The AMT technologies suited to these elements include Numerical Control/Computer/Direct
(NC/CNC/DNC), Computer-aided inspection/testing/tracking (CAI/T/T), Computer-Aided
Manufacturing/FMC/FAS (FMS/FAS), Automated parts loading/unloading (APL/U), Automated tool changes
(ATC), Robotics (Robot), Automated Storage/Retrieval Systems (AS/AR), and Automated Guided Vehicles (AGV).

AMTs are also classified according to the degree of automation and integration. Bessant and Haywood (1988)
suggested four levels of integration. They are standalone, islands of automation, archipelago of automation (i.e.,
partial integrated) and the full integrated systems.

Standalone AMT refers to single machines or equipment that are not directly connected with other machines or
systems by computers. NC machine is a typical example of standalone AMT in fabrication and a single CAD is a
standalone AMT in design process.

An island of automation refers to a special group of automated machines that work together but have no direct
communication with other machines and systems outside their group. FMS is a typical island of automation is
manufacturing. Island of automation exists also in design, engineering and process planning processes.

Integration refers to the connection of at least two different functions by computer. For example A CAPP can link
design and engineering processes by converting design parameters into manufacturing plan and codes. MRP II
system can link design, manufacturing and finance functions to dynamically update the changes of raw materials or
components. Integration varies from partially integrated to full integrated.

Combining the four CIM components (Goetsch 1990) and levels of integration (Bessant and Haywood 1988), the
sixteen AMTs are illustrated in table 1.
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(Insert table 1 about here)

This research will look at the current and future sues of AMT, the degree of AMT payoff as well as their relation
with the company's performance improvement. The research intentions are reflected in the following research
questions.

Question-1: To what extent have AMTs been used?

Question -2: Are there any sequences or patterns of using AMTs?

Question -3: To what extent will these AMT be used within the next three years?

Question -4: What will be the main configuration of manufacturing systems in the near future?

Question -5: How are the payoffs of AMT?

Question -6: Are there any relationship between AMT uses and performance improvement?

3. Research Method and Empirical Data

3.1 The survey

The research reported in this paper is based on the data from the International Manufacturing Strategy Survey
IMSS. IMSS was initiated by London Business School and Chalmers University of Technology and is being co-
ordinated by Instituto de Empresa in Spain. A worldwide researcher network in more than 20 countries carried out
the survey.

The questionnaire was first designed by Swedish team in 1980s and modified for the first international survey in
1992-1993 period. It was modified again for the second round of survey based on the experiences from 20 countries
in the first round of survey. The questionnaire was discussed in a workshop participated by IMSS researchers. For
details of the IMSS project, please refer to the book by Lindberg, Voss, and Blackmon (1998).

The questionnaires were sent to companies in individual countries, separately, in the period from 1997 to 1998. The
methods of data collection vary from country to country. In some countries, post survey was used, while in others,
on-site interview was employed. All the data were sent to the co-ordinator in Spain and then distributed to all
participants. As a participant of the IMSS project in Denmark, Norway, China and Hong Kong, the author has the
right to use the data for the purpose of teaching and research.

Data from 18 countries were available when this research was conducted. The participating countries and the
sample size (in parentheses) are as follows: Argentina (31), Brazil (27), China (30), Denmark (27), Finland (14),
Hungary (38), Italy (71), Japan (29), México (29), Netherlands (29), New Zealand (32), Norway (13), Perú (8),
South Korea (50), Spain (33), Sweden (27), the UK (24), and the US (41). Altogether the sample size is 556.

The sizes of the 556 sampled companies vary. Since the standard for small, medium and large size companies vary
from country to country and this project includes 18 countries, the sampled companies were divided into five classes
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according to their size: <100 (14%), 101-500 (40%), 505-1500 (26%), 1001-3500 (11%), and >3000 (6%)
employees. Missing data occupies about 3%.

The companies joined the survey are in the International Standard Industry Classification (ISIC) 38 group.
Example products in ISIC 38 industry include metal products, machinery, electrical machinery apparatus,
appliances and suppliers, transport equipment, professional and scientific measuring and controlling equipment,
and photographic and optical goods. Companies in ISIC 38 industries adopted more AMT than others (Waterson et
al, 1997).

3.2 AMT uses and payoffs

The above mentioned questionnaire covers 300 variables about strategy, practice and performance. The research
reported here focuses on the uses, payoffs and contributions of AMT. The AMTs measured in this survey are listed
in table 2. The degree of use, the relative payoff, and the adoption of the AMT within next three years are measured.
The measures are all at 1-5 scale, which ranges from 1: None, 2: Little, 3: Some, 4: Much to 5: Very High.

(Inset table 2 about here)

3.3 Performance

Performance improvement is measured by the percentage of changes in the past three years. It covers twenty four
items as shown in table 3. Factor analysis was conducted with a view of reducing data and identifying factors of
performance. The result is that the twenty-four items converged into one performance factor (PF). Data analysis
will use this performance factor in stead of individual items.

(Insert table 3 about here)

4. Results and discussions

The results from this research will be presented in the following parts, corresponding to the current uses of AMT,
the expected uses of AMT in three years, and the relationship between AMT uses and performance.

4.1 The current uses of AMT

4.1.1 Individual AMT

Based on the means of current uses, the sixteen AMTs are ranked as shown in the column of "AMT uses in 1998"
in table 4. According to the rank by means, the top five AMTs are CAD, MRP, LAN, CNC, and shared Database.
These AMTs are more commonly used than others. For example, 80% of sampled companies used CAD from some
to a lot. The six AMTs at the bottom are AGV, AS/AR, CIM, robots, and automated tool change. These AMTs are
rarely used by the sampled companies. For example, 18% companies used AGV from some to a lot while 76% did
not used have AGV at all.

4.1.2 Automation and Integration level

With regard to integration levels, standalone technologies are more commonly used. Among the top five commonly
used AMTs, four are recognised as standalone. They are CAD, CNC, MRP, and LAN. The second popular
technologies are those in the stage of islands of automation, such as FMS. Partially and fully integrated
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technologies such as CAPP, WAN and automated material handling and transportation technologies such as AGV
etc. are least used. This indicates a sequence of adopting AMT, i.e., from simple, standalone, islands of automation
to integration. This is useful for those companies, which did not have any AMT at all and start to think about where
to start. Companies can start with CAD in engineering, CNC in manufacturing, and MRP in administration.

According to this pattern, it can be found that the most commonly used technologies are relatively simple and
standalone technologies, while the less commonly used AMTs are complicated and advanced. This also indicates
that fully integrated and automated factories are still not a reality. Taking the measure of "CIM" as an example,
only 5 of the sampled companies claimed they use CIM at a full scale while nearly half of the companies did not
implement any CIM at all.

4.1.3 CIM components

The commonly used AMTs (i.e., the top five) are found in all the four CIM components as shown in table 5.
However, based on the average degrees of uses in the four areas, the ranks are: planning and control, design and
engineering, information resources management, and factory automation. The lower average score of AMTs used in
factory automation is mainly due to the low uses of automated material handling and transportation technologies.
The more uses of AMT in design and information management indicates that companies pay more attention to
product varieties and the speed of product development, which may reflect the tendency of shorter product life cycle
and technology development in the international market. In each of the CIM component, there seems also to be an
adopting sequence from simple, standalone, islands of automation, to integrated systems.

(Insert table 5 about here)

4.2 Expected use in three years

4.2.1 Individual AMTS

Compared with AMT uses in1998 expected AMT uses in three year will all increase as illustrated in figure 1. The
differences between 2001 and 1998 are all significant at a level of 0.001 as shown in table 4. This is promising for
companies both producing and using AMTs. The top 6 AMTs will be adopted by companies within the next three
years are CAD, LAN, shared Database, MRP, and MRP II, as shown in table 4. The top fives according to their
ranks are the same as they are in 1998. However, within the top five, LAN and shared Database increased much
more than others. They become number two and number three. Both for the moment and within the next three
years, CAD is ranked very high, which indicates that product design and development are emphasised. This is
explainable considering the demanding on shorter time of product development by the market nowadays. Those
AMTS for handling and transporting materials will still be at the bottom in three years.

(Insert figure 1 about here)

4.2.2 Level of integration

Although all increase, the degrees of increase in AMT uses vary. Considering the current uses and changes in three
years, AMTs can be divided into three groups, namely I, II, and III as shown in figure 2.

Group I includes those advanced material handling technologies such as robots, AS/AR, Auto PL/U, Auto TC,
AGV. These technologies ranked very low in 1998 and the changes are also rather lower relatively. These
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technologies are the main components of highly integrated manufacturing system, especially in material handling
and transpiration integration. This implies that, in the near future, the materials handling and transporting will still
be far from fully computerised integration.

Group II includes those widely used AMT such as MRP, CAD and NC machining tools and LAN. These are typical
standalone AMTs. Their uses in 1998 are quite high. However, their increase in three years will relatively be low.

Group III includes those technologies in the stage of islands of automation such as FMS and CAE etc. These
technologies are used in the medium degree. However, the increase of their uses in three years will be on the top
among the three groups, especially CAPP and shared database.

It is expected that the integration level will be increased in three years. This can be demonstrated by the increase in
uses of AMT that connecting more than one function such as shared database and CAPP. In a summary island of
automation and partially integrated manufacturing systems will be main configuration in the near future.

(Insert figure 2 about here)

4.2.3 The components of CIM systems

Comparing 1998 and 2001, uses of AMTs in all the four CIM components will increase as illustrated in figure 3.
For all the four CIM components, the differences between 2001 and 1998 by t-test values are 15, 10, 17 and 17, all
significant at the level of 0.001 as shown in figure 3 and table 6. The differences in information management and
design and engineering are bigger than in other two. Since information sharing is the main feature of CIM system,
the increase in information management may indicate that in the future, not only individual AMT uses increase, the
level of integration will increase as well. Increase in uses of design and engineering reflects the companies will
continue to emphasise product development.

(Insert table 6 about here)

In 1998, AMT uses in the four CIM components are significantly different. The paired sample t-tests (significant
levels) between the four CIM components are 3.3 (0.001), 7.3 (0.001) and 7.5 (0.001). However, in 2001 the
differences will be smaller. The paired sample t-tests (significant levels) are 0.16 (0.87), 1.7 (0.09) and 9.4 (0.001).
The numbers of t-tests and significant levels are shown in figure 3. Except for in factory automation, the degree of
AMT uses in other three components are similar. This means that AMT uses in these three components are more
evenly used in the three CIM components. However, the AMT uses in factory automation will still be lower. The
above evidences indicate that in the near future, although companies will move further towards CIM, full
integration in factory automation will still be lagging behind.

(Insert figure 3 about here)

4.3 AMT and performance

In this section the relationship between the use of AMT in 1998 and the payoffs and performance improvement will
be investigated. Payoffs of AMT are measured by two means. The first is to ask the mangers to subjectively evaluate
the payoff of AMT at a 1-5 scale (cf., section 3.2). The second is to investigate the empirical relationship between
the degree of uses of AMT and the improvement of business performance such as cost reduction, quality
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improvement etc. (cf., section 3.3). The relationship will be discussed for individual AMTs, the four CIM
components and the level of integration.

4.3.1 Individual AMTs

The ranks of AMTs in terms of payoff are shown in table 7. The five AMTs which are on the top in terms of payoff
are CAD, LAN, MRP, CNC and shared database. The five AMTs at the bottom are CIM Computer-Integrated
Manufacturing, Robotics, Automated tool changes, AS/RS Automated Storage/Retrieval Systems, and AGV’s
Automated Guided Vehicles.

The degree of payoffs is correlated with the degree of uses. The correlation coefficients vary from 0.80 to 0.98 and
the significant levels are all less than 0.001. It can be concluded that managers believe that the more AMTs are
used, the higher will payoffs tend to be. From this finding, it can be proposed that, in order to get more benefits
from AMT, companies should invest AMT to great extents. The finding proposes a simple linear relationship
between the uses of AMT and the payoffs. However, based on the correlation and ANOVA test of the relationship
between the uses of AMT and the improvement of business performance, several different patterns of relationships
are identified, which are discussed below.

4.3.1.1 The ladle-shape relationship

The relationship between the uses of FMS/C, CIM, MRP and performance improvement is like a ladle shape curve
as shown in figure 4. From none to some degree of AMT uses, performance improvement does not increase and
even drops. There seems to be a lead-time between implementation and benefit show up. This indicates a learning
curve effect in the process of implementing this type of AMT technologies. Companies should not be frustrated at
the slower showing of benefits from these technologies.

(Insert figure 4 about here)

4.3.1.2 The bell-shape relationship

The relationship between the uses of CAD, CAPP, CAE and performance improvement is like a bell shape curve as
shown in figure 5. From none to some degree of AMT uses, performance improvement increases. However, from
some to very much degree of AMT uses, performance improvement decreases, which seems to be strange. The
explanation may be that, when technologies are implemented to a great extent while organization and human sides
are not innovated accordingly, the success rate of AMT tends to be lower. This has been demonstrated by many
researchers (Voss 1988; Bessant, 1990, Sun, 1994). This is also true for design technologies (Twigg and Voss 1992).
This group of technologies is all used in design and engineering. So it is suggested that when AMT in design are
implemented to high extents, organization and human development should also be considered. In other words,
AMT uses should be in a balance with the development of human side (Meyers and Goes, 1988; Sun, 1994)

(Insert figure 5 about here)

4.3.1.3 The irregular relationship.

The relationship between performance improvement and the uses of Shared database and Computer Aided
Inspection and Testing are up and down, showing an irregular pattern. It is very misleading if the relationship is
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significant according to simple linear correlation analysis. For example, simple linear correlation reveals a
significant correlation between the degree of uses of shared database and the improvement in performance.
According to the logic of conventional management research the conclusion can be draw as " the more this
technology is used, the higher will the improvement in performance". However, if looking at the scatter plot as
shown in figure 6, it will be found that the curve is irregular.

(Insert figure 6 about here)

4.3.1.4 No relationship at all

For some AMTs, there is not any relationship at all, neither by correlation nor by ANOVA test. Half of the AMTs
belong to this group. However, it should be mentioned that no negative relationship was found, neither. So it does
not mean that these AMT are not contributing. They may contribute in some companies, but not in others. The
relationship may be rather complicated. Future research may have to look at the methodology on relationship
between AMT and performance improvement

4.3.2 CIM components and performance improvement

Individual AMT, whose relationship with performance improvement show certain patterns, are found in all the four
CIM complements, for example, CAD in design and engineering, MRP in planning and control, shared database in
information management and CAI/T/T in manufacturing. Looking at the average AMT uses of the four CIM
components, planning and controlling AMTs have a significant correlation with the improvement of performance,
as shown in table 6. The average uses of AMTs in design and information management are also correlated with
performance improvement. However, there is no significant correlation between performance improvement and
AMTs uses in fabrication and assembly. Maybe this is due to the low uses and low payoffs of those automated
material handling AMTs. Since the integration level in material handling and transportation is still low,
contribution is more individually rather than collectively. With the increase in integration level, the contribution of
CIM components may be more obvious. The result, on the one hand, verified the CIM wheel model by SME and, on
the other, provides another way of investigating AMT uses and performance improvement.

4.3.2 Level of integration and performance improvement

It was found that relationship between performance improvement and most of the standalone and islands of
automation show certain patterns (linear, ladle or bell). However, there is not any obvious general pattern about the
relationship between performance improvement and those advanced and integrated material handling and
transportation AMTs such as AGV, AS/AR, Robots etc.

In summary, the relationship between AMT uses and contribution are much more complication than expected. The
implication for methodology is that simple linear correlation bears great danger in drawing conclusion about the
relationship of any two variables. Simple correlation may lead to simplistic conclusion such as "the more is an
AMT used, the higher will be the improvement of performance". However, in most cases of AMT, such pattern of
relationship does not exist. Conclusions from simple linear correlation may be misleading. For example, simple
relationship reveals a significant positive correlation between the use of MRP and performance improvement, which
implies that the more MRP is implemented, the higher the improvement of performance. However, the real
relationship is like a ladle shape, which implies that at the beginning stage of implementing MRP, the performance
may not be improved much.
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5. Conclusions and Implications

5.1 Conclusions and Contributions

This research revealed that CAD, MRP, LAN, and CNC machines are the most popular AMT. It seems that there is
a sequence of adopting AMT, namely from simple to complicated. Fully integrated and green field CIM seems to be
rare. In three years, the uses of CAPP and shared database will significantly increase, which indicate the increase in
integration level of manufacturing system. However, the main configuration of manufacturing will be standalone,
islands of automation, and limited integration. Fully computerised integration in manufacturing system will
unlikely be the main model in the near future.

Regarding the relationship between AMT uses and performance improvement seems to be complicated than
expected and reported in references. Simple linear correlation and ANOVA are the conventional method for
investigating the relationship between two variables. In this research, both methods and scatter graph were used. A
couple of difference patterns of relationship between AMT uses and performance improvement were identified and
methodological issues and practical implications are useful.

The contribution of this research include: 1) reveal the extent and patterns of AMT uses, 2) reveal the tendency of
AMT uses in the next three years, and 3) reveal the relationship between AMT uses and performance.

5.2 Practical Implications

The results on the pattern and tendency of AMT uses and contribution will be of reference to companies either
using or producing AMTs. The benchmark table (for example, table 4, 5 and 6 can help a company locate its
position in AMT uses.

It seems that there is sequence from simple, standalone, islands of automation to integrated AMTs. This may be a
guide for companies that have not implemented AMT yet. Companies normally started with CAD in design and
engineering, MRP in planning and control, LAN in information sharing and management, and NC in factory
automation. AMT will be mainly in in the stages of standalone and island of automation. Fully integrated
manufacturing systems are not likely in place in the near future. The adoption process is a step by step and
evolutionary. Neither vendors nor governmental organisations should promote fully integrated and green-field
manufacturing systems as in the 1980s.

Regarding the relationship between AMT uses and contribution, managers' subjective evaluation seems to support a
linear relationship between AMT uses and performance improvement. However, statistic analysis reveals several
difference patterns of relationship between AMT uses and performance improvement. First, managers should be
noticed that the relationship could be much complicated than expected. Second, for some AMT technologies, there
is a learning curve effects. It really takes time before the benefits show up. Finally, AMT uses should be
accompanies by organisational and human development.

5.4 Limitations and future research

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Among the sampled companies, the percentage of small companies is rather small (cf., section 3). This implies that
the results of this research should be limited mainly to large companies. Future research can be conducted either
with only small companies or to compare the small and large companies.

Since the data sample of each country are not large enough to represent each country, this research only focused on
identifying the overall pattern and tendency of AMT uses and contribution. In future research, the differences in
each country should be investigated so that the relationship between national context and AMT uses can be
identified and companies in different countries can learn from each other. This information will also be of reference
for those companies that would like to establish companies or joint ventures in other countries/regions.

This research has revealed that the relationship between AMT uses and performance improvement is rather
complicated. This suggests that future research should not only reply on simple linear correlation to investigate the
relationship between AMT uses and contributions. This research also revealed that the managers' subjective
evaluation of AMT payoffs were different from that revealed by statistical analysis. Future research should provide a
list of AMT payoffs and ask managers to select.

Technology develops constantly. That implies that future research on the same topic will be use to identify the
patterns and tendency of AMY uses and contributions. The IMSS project, on which this research is based, will
repeat in the year of 2000. Results from the new data will be reported later.

In a final summary, although fully integrated manufacturing systems will not in reality in the near future, the uses
of all types of individual AMTs will increase. Research in both technical areas and management areas should be
enhanced to meet the development of AMT uses.

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Table 1 AMTs in the four components of a CIM system

CIM components and their AMTS
Level of
integration Design and Plan and control Information Fabrication and
Engineering management assembly
CAD MRP LAN NC/CNC
From standalone to integrated

CAE MRPII WAN CAI/T/T

CAPP Shared DB FMS/FAS
CIM APL/U
ATC
Robot
AS/RS
AGV
Paper prepared for publication in TECHNOVATION -16-

Table 2. The measurement of 18 AMTs

AMT Current use Payoff Future use

1 CAD Computer-Aided Design 12345 12345 12345
2 MRP Material Requirements Planning 12345 12345 12345
3 LAN Local Area Network 12345 12345 12345
4 NC/CNC/DNC Numerical Control/Computer/Direct 12345 12345 12345
5 MRPII Manufacturing Requirements Planning 12345 12345 12345
6 Shared DB Databases 12345 12345 12345
7 CAE Computer-Aided Engineering 12345 12345 12345
8 CAI/T/T Computer-aided inspection/testing/tracking 12345 12345 12345
9 CAM Computer-Aided Manufacturing/FMC/FAS 12345 12345 12345
10 WAN Wide Area Network 12345 12345 12345
11 APL/U Automated parts loading/unloading 12345 12345 12345
12 CAPP Computer-Aided Process Planning 12345 12345 12345
13 ATC Automated tool changes 12345 12345 12345
14 Robotics 12345 12345 12345
15 CIM Computer-Integrated Manufacturing 12345 12345 12345
16 AS/RS Automated Storage/Retrieval Systems 12345 12345 12345
17 AGV’s Automated Guided Vehicles 12345 12345 12345
Paper prepared for publication in TECHNOVATION -17-

Table 3 Performance items and factor analysis

Performance items Factor I Communalities
Market share 0.92 0.84
Customer service 0.97 0.94
Customer satisfaction 0.97 0.95
Conformance to specification (manufacturing quality) 0.96 0.93
Product variety 0.96 0.92
Speed of product development 0.93 0.86
Number of new products developed 0.92 0.84
Profitability 0.90 0.81
Return on Investment 0.95 0.90
Average unit manufacturing cost 0.97 0.93
Materials and overhead total costs 0.97 0.93
Manufacturing lead time 0.95 0.91
Equipment changeover time 0.98 0.96
Procurement lead time 0.97 0.95
Delivery lead time 0.97 0.94
Inventory turnover (sales / inventory) 0.89 0.80
On-time deliveries 0.96 0.93
Supplier quality 0.97 0.95
Employee satisfaction 0.98 0.95
Worker/direct labor productivity 0.98 0.95
Work place safety 0.96 0.91
Energy consumption 0.98 0.96
Product recyclability 0.97 0.95
Waste/by-product recyclability 0.96 0.93
Eigenvalues 21.94
% of Variance 91.40
Cumulative % 91.40
Paper prepared for publication in TECHNOVATION -18-

Table 5 AMTs used in the four CIM components

Rank Design and Plan and Information Fabrication

Engineering control management and assembly
1 CAD
2 MRP
3 LAN
4 NC
5 MRPII
6 Shared DB
7 CAE
8 CAI/T/T
9 FMC/FMS
10 WAN
11 Auto PL/U
12 CAPP
13 Auto TC
14 Robotics
15 CIM
16 AS/RS
17 AGV
Average 2.77 2.99 2.49 2.15
Paper prepared for publication in TECHNOVATION -19-

Table 6 Expected uses of AMT in the four CIM components in 2001

Rank Design and Plan and Information Fabrication

Engineering control management and assembly
1 CAD
2 LAN
3 Shared DB
4 MRP
5 MRPII
6 NC
7 CAE
8 CAI/T/T
9 FMC/FMS
10 CAPP
11 WAN
12 Auto PL/U
13 CIM
14 Robotics
15 Auto TC
16 AS/RS
17 AGV
Average in 2001 3.36 3.35 3.35 2.63
Average in 1998 2.77 2.99 2.49 2.15
2001-1998 0.59 0.36 0.86 0.48
t-test(2001-1998) 15* 10* 17* 17*
Correlation with 0.26 0.31 0.26 0.14
performance
improvement (0.05) (0.01) (0.05) (0.31)
Note: *:at the significant level of 0.001
Paper prepared for publication in TECHNOVATION -20-

Table 7 The degree of payoffs of AMT

AMT Statistics Percentage of responses Correlation ANOVA

Rank Mean None Little Some Much High Use PF# t-test (p)

CAD 1 3.66 8 8 24 31 29 0.83 0.20 4.5(0.003)

LAN 2 3.35 14 11 22 29 23 0.88 0.09

MRP 3 3.33 14 12 25 26 23 0.84 0.29** 2.8(0.04)

NC/CNC/DNC 4 3.28 14 12 25 28 20 0.85 0.09

Shared DB 5 3.07 18 15 24 27 16 0.83 0.29** 2.4(0.06)

MRPII 6 3.02 22 13 25 24 16 0.87 0.22

CAE 7 2.97 22 16 22 26 15 0.86 0.33** 3.4(0.02)

CAI/T/T 8 2.95 20 16 28 23 14 0.85 0.21* 2.6(0.05)

FMC/FAS 9 2.89 25 11 26 26 12 0.86 0.21 3.3(0.02)

Auto PL/U 10 2.58 33 16 23 18 10 0.88 0.00

WAN 11 2.57 35 16 20 18 12 0.89 0.19

Auto TC 12 2.49 35 18 18 19 9 0.87 0.04

CAPP 13 2.49 30 22 24 18 6 0.80 0.11 2.9(0.03)

Robotics 14 2.48 37 14 21 19 9 0.89 0.02

CIM 15 2.43 37 16 24 14 9 0.87 0.24* 2.2(0.78)

AS/RS 16 2.14 50 15 14 14 7 0.89 0.06

AGV 17 1.85 66 7 10 10 7 0.89 0.17

Note: *: p<0.1, **: p<0.05, #PF: performance factor