While computerized and equipment based advanced manufacturing technologies (AMT) are typically sourced from external vendors, plants also develop proprietary process technologies in-house. In a study, my co-author and I present internal process technology development (IPTD) as a construct that captures this internal means of process technology development, and investigate the individual and interaction effects of IPTD and externally sourced computerized and equipment-based AMT on manufacturing plant performance. Our results indicate that IPTD is positively associated with quality, delivery, and process flexibility, but it is not significantly associated with cost efficiency or new product flexibility. The indicated relationships between the use of specific types of AMT (process, design, and planning AMT) and manufacturing plant performance and between IPTD–AMT interactions and manufacturing plant performance suggest context specificity. In addition, the findings suggest the existence of complementarities as well as the redundancies among IPTD–AMT relationships.
Manufacturers must consider both internal and external means of manufacturing technology development.We observed that while depending upon the focus of the concerned technology, the use of externally sourced computerized and equipment based AMT leads to improvement in specific areas of manufacturing performance; IPTD also results in improvement in several areas of manufacturing performance. The results motivate the need for the development of proprietary equipment and dedicated technologies as a part of the overall technology development in a manufacturing plant. The in-house development of technologies must fit in the framework of existing process capabilities in a plant and be congruent with the improvement in current work methods. A judicious process innovation effort that takes into account work methods, infrastructural upgrades, and existing technology capabilities exerts a positive impact on cost efficiency, product quality, delivery capability, and process flexibility. The importance of using externally sourced computerized and equipment-based AMT is also highlighted in our findings. Managers must use caution while evaluating the performance implications of using externally sourced AMT. It is important to understand the specific relationship between multiple dimensions of AMT and the different measures of manufacturing performance. This enables targeting the externally sourced AMT toward improving appropriate manufacturing plant performance, and ensures a more prudent evaluation of the benefits of using computerized and equipment-based process AMT, design AMT, and planning AMT. Thus, choices of AMT considered should be strategic choices and related to the competitive priorities of the firm.
On the factory floor, it is indeed difficult to isolate the performance implications of the interaction effects of IPTD and the use of computerized and equipment-based AMT sourced from external vendors. Yet, in this study, we provide some insights regarding the potential complementarities and redundancies between internal and external sources of developing technology. We contend that AMT acquisition decisions and IPTD decisions must take into account the potential synergies that may exist between them. Some externally sourced AMTs complement the internal process technologies, and the potential synergies between these technologies lead to improvement in some dimensions of manufacturing performance. Meanwhile, caution must be taken with regards to the interaction effects of internally developed process technologies and externally sourced computerized and equipment-based process AMT. The redundancies between these could adversely affect delivery and process flexibility of
manufacturing plants.
Source:
Nair, A. and Swink, M. 2007. “Linking internal process technology development and the use of AMT with manufacturing plant capabilities – An examination of complementarities and redundancies,” IEEE Transactions on Engineering Management, Vol. 54, Iss. 4, 742-755.