A longitudinal study of a flexible manufacturing cell

operation
Amrik S. Sohal
Department of Management, Monash University, Victoria, Australia
Paul Fitzpatrick
Department of Management, Monash University, Victoria, Australia
Damien Power
Department of Management, Monash University, Victoria, Australia
Introduction
This research is a retrospective look at the
experiences of Dowell Remcraft and its
implementation of cellular manufacturing at
its suburban Melbourne operations. The case
study approach is a follow-up to the case
study analysis conducted by Sohal et al.
(1993); on Dowell's initial successful
implementation of cellular manufacturing
using JIT principles and computer
numerically controlled technologies in 1988.
The research is a ten-year synthesis of
flexible cell manufacturing experience and
reveals that careful planning and
implementation are not the only component
of ongoing success in a flexible cell
environment and that careful management of
inputs, layouts and human resources is
required to ensure strategic benefits from the
manufacturing infrastructure.
Similar themes have been evident in other
case study investigations into the use of
manufacturing cells. In a case analysis of
Steward Inc., an international manufacturer
of nickel zinc ferrite parts, implementation of
manufacturing cells resulted in immediate
improvements in performance (Levasseur et
al., 1995). The biggest hurdles to overcome for
the implementation team at Steward Inc.
were cell design and change resistance. Other
case studies on the implementation of
manufacturing cells consistently show these
factors as being the largest obstacle to
overcome (see, for example, Nandkeolyar et
al. (1998); Collett and Spicer (1995); Kumar
and Hadjinicola (1993)). Despite this, the
human element of cellular manufacturing
(CM) has been largely overlooked by most
researchers (Huber and Brown, 1991). The
overwhelming source of CM literature has
been on technical issues such as
classification methods, physical
arrangement methods for reducing set-up
times and design of work flow sequence.
Increased manufacturing competition
faced by most manufacturers in developed
economies has made them more receptive to
new manufacturing techniques. As a result
cellular manufacturing, a facet of group
technology, over the past two decades has
received considerable attention from
academics. The Journal of Operations
Management devoted a whole Special Issue
(Vol. 10 No. 1, 1991) to the subject such has
been the interest in the area.
Cellular manufacturing was defined by
Shafer and Rogers (1991) as the application of
group technology principles to production.
The incorporation of various manufacturing
technologies such as CNCs, CAD, FMS, CIM
and re-programmable robots has created the
opportunity to produce flexible
manufacturing cells, thus making changes in
traditional relationships between product
and process.
Traditional views of manufacture, such as
the necessity to process unique products as
projects, produce similar product variants in
batches and produce, via continuous flow,
standardised product offerings (Samson,
1991), have all been shown to be outdated and
incompatible with a changing environment
and ever changing consumer demands.
Cellular manufacturing (CM), on the other
hand, aims to achieve efficiencies in
production by exploiting similarities
inherent in the production of parts.
CM aims to obtain efficiencies associated
with mass production in a less repetitive
batch environment. This is achieved by
grouping together functionally dissimilar
machines in close proximity to one another,
which are dedicated to the production of a set
of parts with similar processing
requirements. These groupings of machines
are what are referred to as machine cells or
just simply cells (Shafer and Rogers, 1991).
Chakravorty (1996) argued that cellular
manufacturing is most useful to
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# MCB University Press
[ISSN 0957-6061]
Keywords
Cellular manufacturing,
Human resource management,
Case studies, Australia
Abstract
Presents the experiences of a
medium-sized Australian
manufacturer with cellular
manufacturing over the past ten
years. The case study reveals that
careful planning and
implementation are not the only
component of ongoing success in
a flexible cell environment and
that effective management of
inputs, layouts and human
resources is required to ensure
strategic benefits over a long
period of time. Provides a
summary of the initial planning
and implementation of the flexible
manufacturing cell (FMC), which
was considered by management to
be successful. The subsequent
decisions taken by the company
are then described, which resulted
in the poor utilisation of the
system. The recent actions taken
by the manufacturing manager to
enhance the performance of the
FMC are then discussed.
Concludes with a list of the
lessons learned and the critical
success factors in implementing
and managing FMC.
organisations that have achieved satisfactory
levels of quality and price of their finished
products and other criteria such as lead time
reduction and due-date performance become
crucial for maintaining a competitive
advantage. It is when this situation occurs
that cellular manufacturing is most
important. The major objective of CM is to
reduce set-up times. By reducing set-up times
the productive capacity of the factory is
effectively increased, because more time is
available to engage in productive operations.
A reduction in lot sizes reduces work-in-
process and finished product inventory
levels. CM also aims to produce parts within
a single cell; achieving this greatly simplifies
shopfloor control. This affords the
opportunity to enhance accountability,
responsibility and autonomy of the workers.
As a result of this fundamental re-
organization of production facilities that is
required for CM, the need to re-align human
resources to support this change becomes
apparent. In particular, it becomes apparent
that employees operating in this
environment will need to be multi-skilled (i.e.
in order to be able to operate functionally
dissimilar machines or perform groups of
previously separate operations), and that
there will be a requirement to invest in the
necessary education/training programs to
support this.
A review of the literature does reveal a
relative absence of longitudinal or ``follow-
up'' case studies that have charted the
progress of an organisation after they have
implemented CM and had it operational for
many years. There follows a case analysis of
Dowell Remcraft's experience with
implementing CM and their experience with
it, as it has become an ongoing fixture in the
organisation's operations.
Dowell Remcraft and cellular
manufacturing 1988
Established in 1965, Dowell Remcraft has
operated as a manufacturer of timber
windows and door frames, catering for a
large customer base consisting of many small
home builders and renovators. This client
base meant that many varieties of window
frames had to be offered and consequently
the varied product offerings often meant that
demand was inconsistent and varied greatly
among different product offerings.
Initially the company was set up as a sole
proprietorship (then known as Remcraft)
with its factory located in the outer
Melbourne suburb of Bayswater. As a sole
proprietorship it built a large clientele;
however, its growth was constrained by a
lack of capital and equipment. In 1978
Remcraft was acquired by Dowell Australia
Ltd, a large manufacturer of aluminium
window and door frames. The company's
name was subsequently changed to Dowell
Remcraft Windows.
In 1988 Dowell Remcraft was acquired by a
major Australian company, Boral Ltd, which
added the company to its Home Building
Products division. By this time the factory's
output had reached 450 frames a day and had
already had its floor space expanded to 12,000
square metres. The total site was spread over
an 11-acre plot, comprising three factory
buildings and employing 190 people in total
with 160 working in the factory and dispatch
sections.
The beginning of 1986 signaled increasing
competition for Dowell Remcraft. The
company was weighed down by outdated
manufacturing technology and was set to lose
market share. Production processes were
labour-intensive, requiring manual input
and supervision throughout. Tooling-up and
change-over times for various components
ranged from one to two hours to four to six
hours.
Compounding these problems was the long
change-over times that necessitated batch
sizes of 1,000 components. While these
components were used frequently, demand
sometimes remained static and subsequently
stock was held on average for two to three
months, with some components being stored
for up to four years. Total inventory value
amounted to A$1,000,000. Despite the large
inventories the company still experienced
stock-outs and stock obsolescence for some
components, requiring costly and time-
consuming re-set-ups and delivery delays.
In an effort to address these issues, the
manufacturing manager attended a course on
modern manufacturing technologies and
techniques. The course emphasised the use of
just-in-time (JIT) manufacturing with
particular emphasis on the kanban inventory
control system. Together with the general
manager and the support of the chief
executive officer the manufacturing manager
embarked on a new manufacturing strategy
incorporating many principles of JIT.
Management felt that JIT would work
towards significantly reducing its work-
in-progress and raw material inventory
and provide greater control over the
component production process.
New production equipment was deemed
necessary to complement the JIT strategy
and to improve and streamline operations.
Preliminary investigations revealed that ``off
the shelf'' equipment would not achieve the
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objectives that management were pursuing.
This necessitated a trip to the USA and
Europe by the manufacturing manager to see
what specialist equipment design and types
were available. It was recognised that the
trend overseas was towards significant stock
reduction, using computer numerically
controlled (CNC) flexible machining lines,
and that Dowell Remcraft had to replace its
existing ``slow change-over'' individual
pieces of equipment with the CNC machines
which would be integrated into a linked,
flexible production line.
Equipment proposals were considered
from three major European suppliers. After
careful consideration it was decided to
purchase the new equipment from an Italian
manufacturer. Essentially the new
equipment amounted to a fully enclosed
flexible manufacturing cell (FMC).
It was soon realised that considerable
modifications had to be made to the new
equipment to adapt it to Dowell Remcraft's
requirements. In order to ``minimise teething
problems'' the entire production line was
assembled and tested at the supplier's factory
in Italy. Timber blanks were sent from
Australia along with the manufacturing
manager and first line supervisor to ensure
that Dowell Remcraft's specifications were
adhered to. As a result of these tests some
elements of the system, especially tooling,
had to be redesigned. After almost a year of
pre-installation planning and conversion, the
equipment arrived at the Melbourne plant in
December 1989. The total cost of the
equipment is shown in Table I.
Prior to the installation of the new
manufacturing cell (1987-1988) extensive
training was undertaken in JIT principles.
All second-level supervisory staff attended a
short course to recognise how they could
contribute in their own areas of production.
Formal meetings were established for all
supervisors to discuss current problems and
future strategies.
To ensure the successful incorporation of
JIT into the shopfloor culture and pave the
way for the smooth implementation of the
manufacturing cell, representative trade
unions were consulted and reassured that
there would be no retrenchments of existing
staff. The unions were assured that a
programme of retraining would be embarked
upon and the company would allow natural
attrition to reduce staff members.
One month was set aside for the
installation of the new equipment. This was
complicated by the fact that the old manual
system had to run concurrently to satisfy
existing orders. Despite careful planning the
implementation did run into a few problems.
There were communication difficulties with
the equipment suppliers and some
specifications were misunderstood. At the
time of installation the original computer
memory overloaded after 38 profile designs
were stored in the database. The original
specification was to handle over 240 profile
designs.
To overcome this problem Dowell Remcraft
employed the services of local computer
software company, Databars of Australia Pty
Ltd. Working with the parent company's data
processing manager and local management,
Databars Australia created a customised
systems solution.
This customized solution included a local
area network (LAN) of microcomputers
using a commonly used relational database
and barcode input. Barcoded kanbans, each
with a unique identification number cross-
referenced in the computer system, enabled
quick identification of component part
including batch size, profile, material and
length combination. These parameters can be
changed at any time on the computer system.
Data input to the equipment is via barcode
input into the LAN. The LAN communicates
data to (and from) the new equipment. The
system is able to provide management with
information including running time,
downtime, cause of downtime, batch sizes
and other performance data.
Table II shows the cost benefits obtained
from the FMC over the first two years of
implementation.
Specifically the FMC provided the
following benefits: Table I
Costs of new technology
A$
SCM system 1 line complete 964,466
Leitz tooling 86,312
Cutter head cleaning machine 6,407
Multi CNC morticer 90,111
Omega CNC milling machine 58,267
Installation, electrical, air, cranage
(est)
20,000
Total 1,225,563
Table II
Savings from new equipment
A$
Work in progress stock reduction 910,000
Finished stock reduction 84,000
Interest savings in stock reduction
(A$910,000 at 17.5% )
159,250
Wage savings on employee reduction 330,000
Total annual savings 1,483,250
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.
change-over and set-up times from
production of one component to another
reduced from five to six hours to 90
seconds;
.
average batch size reduced from 1,000
components to 50 components;
.
stockouts or shortages reduced to nil;
.
stockholding reduced by over 50 per cent;
.
employment level reduced by 19 people;
and
.
quality of the finished product improved
significantly.
Management considered that a significant
factor in the success of the implementation
had been the attention paid to the human
element of the project. The barcoded kanban
ticket simplified complex tasks and
component tracking for front-line workers.
Profiles identified from the barcode that
require manual tool changes are prompted to
the operator by the computer.
The interface between the CNC equipment
and the computerised kanban control has
been central to the overall functioning of the
system. The interface developed jointly with
Databars Australia did not form part of the
equipment supplied by the Italian supplier;
without this addition the new equipment
would not have been able to perform one of
its critical specifications, namely the
handling of a large number of profile designs.
As a result of the interface the total
implementation had the potential to deliver
sustained high returns on investment and
initial results indicated that this was the
case. The common technology employed
(IBM computers, Novell Network, Paradox
relational database) is used widely in
industry, allows for continual upgrading of
equipment and ensures the ready availability
of staff trained and experienced in the
technology.
Careful selection of achievable objectives
and getting several morale boosting
successes on the board in the first few
attempted tasks was extremely important.
Team building was also enhanced by the
common successes and the resultant post-
mortems on the failures. Fear of failure was
actively discouraged and an atmosphere was
established, where even seemingly ridiculous
ideas could be put forward and tested by ``the
team''. It was to a careful balance between the
technology aspects, commercial aspects and
human aspects that management attributed
the success of its new technology
implementation. Despite the initial
difficulties with the CNC computer, the end
outcome proved to be a very successful
exercise for Dowell Remcraft.
The Dowell Remcraft experience
the last ten years
Successfully leveraging the benefits of FMC
for the long term requires a careful,
considered, long-term approach to
management decisions. Dhavale (1995) noted
that cellular manufacturing can take nine
months or even longer to begin realising
benefits. These benefits in some instances
can only be achieved when a plant has been
converted to a focused factory that includes
several cells.
The heavy investment in FMC technologies
is likely to create an environment where
there will be pressure for quick results.
Dhavale (1995) argues that ongoing
management decisions regarding the FMC
need to consider both intangible and tangible
benefits to reduce the risk of ill informed,
one-dimensional decision making.
The theme of comprehensive approaches to
management of FMC was addressed by
Maffei and Meredith (1994). Their research
noted that, for the most part, the consensus
on early experience with manufacturing cells
had attributed failure of them to technical
aspects. Surmounting any problems was an
extremely difficult task, requiring a highly
technical perspective. However, the
literature addressing the topic of technical
problems has found that addressing these
problems has not generally resulted in
achieving the potential benefits of FMC
(Hayes and Wheelwright, 1984; Skinner, 1985;
Meredith, 1986; Hayes and Jaikumar, 1988;
Hill, 1989; Majchrzak, 1988; Gerwin, 1988).
Alternatively these authors indicated that an
appropriate organisational support system
must be developed in order to achieve
maximum benefits from an FMC. The critical
element in any support system developed to
maintain an FMC is the human element.
Shop level employees are the most critical
component for management, who must
ensure the ongoing utilisation of their
expertise especially in relation to
maintenance, planning and scheduling.
Successfully integrating FMC operations and
other organisational departments can help
realise non-production benefits. An example
of how the FMC can have benefits beyond its
manufacturing scope is in the area of
marketing. The FMC can foreseeably be used
as a selling tool. This, however, is dependent
on salespeople successfully understanding
the benefits of FMC. Attempting to use FMC
as a selling tool by sales staff without their
full comprehension has the potential to
create embarrassing situations for sales staff,
if queried in depth (Maffei and Meredith,
1994).
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Initial experience at Dowell Remcraft
indicated that the introduction of the new
technologies was a wise strategic investment,
early reports indicating improvements in
various indicators of performance. Certain
events, however, soon drove up the costs of
operating the system and limited the possible
benefits to the business that early results
indicated may have been possible. These
shortcomings were a result of failing to
sufficiently understand the very nature of the
system and the careful and considered
management approach with a focus on
human issues that was required to achieve
the highest possible benefits.
Cell layout and housing
Cellular manufacturing by its very nature
requires carefully considered physical
layouts to ensure that efficiencies in
manufacture can be achieved. The
importance of correct layout is evident, when
a review of existing literature reveals that
design and layout issues dominate CM
literature (Huber and Brown, 1991).
Engineering cells in a virtual environment
were also suggested by Noaker (1995) as being
critical to the efficient operation of the cell
and ensure that potential benefits can be
achieved.
Despite the importance of careful cell
formation, upon receiving the new system
from Italy, the equipment was located in one
corner of the factory without any apparent
regard to the different sizes of components
and the general flow of materials. It was soon
realised that the proper positioning of the
FMC would have been in the centre of the
factory with parts and supporting technology
set around the cell.
As a result of this oversight material flow
was hindered and some alterations to the
building had to be made simply to allow
larger components to be processed. Plans
were drawn up to relocate the FMC to a more
appropriate position at an estimated cost of
A$200,000. This figure represents a 16.5 per
cent increase in the total costs of the new
manufacturing system. (Refer to costs of new
system in Table I.)
Management has attributed this oversight
to a failure to involve shopfloor staff in the
initial seeking-out of more modern
manufacturing techniques and in the final
decision-making process. The focus of the
involvement of staff had been on training in
new manufacturing methodologies, rather
than in the actual decision-making process.
Although the company identified the need to
train employees in these new techniques, the
value of their input into the decision-making
process had been ignored. Subsequently
management now actively seek out shopfloor
staff input in any operational decision, an
outgrowth of the operations meetings that
were required after further staff were trained
in the use of the FMC.
HR and training issues
Managers at Dowell Remcraft attributed
their early FMC implementation success to
the careful attention that they paid to the
human issues involved. A lot of time and
money was spent upon initial
implementation of training and people
issues, and as a result management believed
that the FMC would run successfully.
However, after the cell's initial
implementation it appears that Dowell
Remcraft's focus on the human element had
lost momentum. Management ignored the
need for the ongoing training of personnel
and subsequently failed to incorporate
enough shop level staff in initial knowledge
building exercises. This manifested itself as
elementary human resource oversights that
significantly limited the effective use of the
system. On implementation only one person
in the company was trained to operate the
FMC. This limited the use of the equipment
to one shift and its operation was totally
reliant on this particular employee, leaving
the business at great risk, if that employee
were to become ill or unwilling to work. As a
result, overtime costs blew out in periods of
high demand.
This oversight was partly attributable to
the intense involvement of the
manufacturing manager in the
implementation of the cell. Owing to the
complexity, size and cost of the new system
the manufacturing manager was responsible
for driving and overseeing the cell's
implementation. As a result, line level staff
were overlooked and subsequently many
operational areas, including manpower and a
lack of skills and understanding of the new
system, were not considered.
The initial experiences post-
implementation with a lack of sustained shop
level staff training led to a lack of continuity,
a reduction in focus on human resource
importance, and decreased employee
involvement. This indicates a lack of long-
term thinking and understanding of the
importance of staff at all levels serving as
knowledge resources. The valuable exchange
of knowledge was not actively encouraged,
manifesting itself as a loss of momentum in
terms of people issues, resulting in a
workforce that was under-skilled in the use
of the FMC.
One approach open to Dowell Remcraft to
gain the greatest benefit from its staff with its
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FMC and any other new manufacturing/
technology investment was to create a
complementary match between the technical
and social systems. Planning, job analysis,
training, reward structures and employee
relations must all make a difference and
complement the desired objectives of the
FMC (Huber and Brown, 1991). This is
particularly important because it ensures
ongoing attention and maximum utilisation
of human resources and negates the chance
of any destabilising influences that some
research has revealed. Klein's (1989)
observations from case analysis of cellular
manufacturing and JIT implementation at an
electronics firm found that changes had the
exact opposite effect to what was expected.
The change was intended to increase worker
autonomy and interdependence, facilitating
increased motivation; however, employees
complained of increased scheduling
pressures and felt overwhelmed by the
increase in co-worker interdependence.
Making changes to an organisation's social
system, Huber and Brown (1991) argue, is a
means of avoiding such problems.
Recent evidence from the company
indicates that the importance of the social
system has been recognized. Interviews with
five staff involved in the operation of the cell
during 1998 indicated that the group working
in this area functioned as a self-managed
team. Under the guidance of an area
supervisor the FMC was scheduled, run and
maintained by this group with a high degree
of autonomy. All interviewees stressed that
they had a mandate to organize their
workplace and to make all relevant
operational decisions. Weekly team meetings
were held, and this forum provided an
opportunity not only to discuss issues, but to
make decisions and, more importantly,
implement them. Any changes to operating
procedures are logged in a common manual
and communicated to everyone involved to
ensure that changes become standard
practice. In fact, it was evident that all the
standard operating procedures currently
being used to operate the cell had been
written by this group over the previous three
years. It was also evident that the group had
instigated a formal program of multi-skilling,
with five operators being trained in the use of
the FMC to redress the problem of over-
reliance on one operator. The responsibility
of the group went beyond the day-to-day
functioning of the FMC and now included
purchasing, inventory control, cost control
and maintenance. It was also apparent that
the cell would be able to be run for long
periods of time without direct intervention
from the supervisor, and that there had been
a significant devolvement of responsibility to
the operators.
The current production manager is now
confident that the factory can cater to
demand without over-relying on resources
(overtime costs have been reduced) and that
the weekly meetings have ensured
commitment to changes in operating
procedures. There is now a sense of
ownership among staff in relation to change
identification and implementation.
Maintenance of manufacturing technology
The computer control for the manufacturing
cell was housed in a standard personal
computer sitting next to the machinery that
it operated. A failure on behalf of
management to take into account possible
environmental conditions resulted in a
number of unforeseen problems. The
temperature of the factory environment was
not regulated and thus during the summer
months, when temperatures above 38

C are
consistently reached, the computer would
malfunction, leading to downtimes for many
days. The manufacturing manager estimated
the loss of productivity due to computer
crashes at around 15-20 per cent.
Owing to the close proximity of the PC to
the cutting machines, dust from the cuttings
would infiltrate the hardware and cause the
parts to depreciate prematurely. This
problem was solved by protecting the
computer with a plastic cover. Nonetheless a
new industrial computer was purchased to
avoid further computer crashes and
downtimes associated with the PC's fragility.
This cost the company A$120,000.
Sourcing parts for the cutting machine, as
the machine aged, proved to be very difficult,
as these were only available from its place of
manufacture, Italy. The delays were cause for
concern, because, if parts were not ordered
long enough in advance, the business would
either have to cease operations or sacrifice
quality. Eventually a relationship was
developed with a local supplier who could
quickly engineer parts to manufacturer
specifications for use in the FMC.
While painstaking investigation and
preparations were made for the selection and
implementation of the FMC, it appears that
not enough follow-up, in-depth research was
conducted to understand the ongoing FMC
requirements in relation to parts and
servicing. Such a failure has the potential to
be a very costly oversight, when considering
that the cell is the most crucial component of
the factory, an investment that required an
outlay of over A$1 million. An investment of
this magnitude and importance requires an
organisation to look at the total package
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being offered, looking beyond the technology
and considering support packages and after-
sales servicing options, which may provide
for a more comprehensive and valuable
investment.
Utilisation of manufacturing technology
In 1993 a business decision was made that a
high proportion of the timber used in
manufacturing would be sourced from
overseas. Instead of purchasing raw timber
and processing it, Dowell Remcraft would
purchase pre-machined wooden components
from Malaysia. This decision was based on
the premiss that it would be the most cost-
effective supply decision because of the
difference in labour/maintenance and
processing costs between the two countries.
The Malaysian suppliers gave an
undertaking that they could meet the
+/0.2mm tolerances. This meant that only
final processing and assembly would take
place at the Melbourne site.
As a result of this sourcing decision the
utilisation of the new technology fell to 20 per
cent. The importance of maximum utilisation
of FMCs was outlined by Shafer and Rogers
(1991), who argued that realising the benefits
of cellular manufacturing was dependent on
acceptable machine utilisation levels. To
compound the ill-effects of this new
purchasing decision, 60 per cent of the pre-
machined components received from
Malaysia had to go through the FMC again,
as these did not conform to the agreed
specifications. By 1997 this figure had grown
to 75 per cent. Thus with a considerable
amount of ``rework'' being undertaken and
without the FMC being fully operational, the
whole factory lost its JIT capabilities.
Concerned at the adverse effect the new
sourcing decision was having on operations,
Dowell Remcraft sent one of its first line
supervisors to the supplier's factory in
Malaysia. The supervisor reported back to
management that, even though the supplier
had the machine capability to meet Dowell
Remcraft's specifications, the employees did
not have the skills required to operate the
machinery effectively.
Finally, in 1997 a decision was made to
purchase only blanks from Malaysia and that
all detailed machining would take place at
the Melbourne factory. Despite the apparent
failure of this operational decision, the
exercise did enable the factory staff to
develop some valuable skills in reconfiguring
the FMC. Initially the equipment was set up
to process raw materials; however, because
the Malaysian components had been
partially or completely machined, the staff
were required to learn how to rewrite
procedures. This ultimately resulted in an
increased understanding of the FMC and the
way it operated. The whole learning process
was born out of a requirement to look at
existing procedures and to learn how to
successfully reprogram the system. Despite
the disruption that the Malaysian purchase
decision caused, the subsequent problem
solving helped redress some of the earlier
oversights in terms of training and
encouraging the transfer of learning.
Currently the operation of the FMC
consists of 25 per cent of the components with
standard dimensions which are made to
stock and then stored in an assembly area. A
further 35 per cent are customised
components, while 40 per cent are special
components of ornamental window frames
and are re-machined from the standard by
hand.
Management of new technology (FMC)
Initially the change from outdated modes of
manufacture was championed by the
manufacturing manager, who attended
workshops on JIT and made several trips
overseas, seeking out modern manufacturing
techniques. His involvement and dedication
in the identification and implementation of
the FMC ensured its initial success. This
particular manufacturing manager was able
to make the project the focus of the whole
organisation and his first-hand involvement
ensured that he understood the system. The
initial success of the system was also
attributable to the careful attention paid to
human aspects. Unions were consulted,
supervisory staff were sent away on a short
course and the new system was assembled
and given a practice run at the supplier's
factory in Italy.
However, shortly after the implementation
of the system the manufacturing manager left
Dowell Remcraft, taking with him valuable
knowledge on the intricate nature of JIT and
the FMC. This departure also seemed to
signal an abrupt cessation in management
enthusiasm for paying careful attention to
people issues and a switch in focus from
careful consideration of operational
decisions regarding capital infrastructure to
a one-dimensional focus on cost.
A lot of research has been undertaken to
develop a better understanding of advanced
technology implementation problems such as
those experienced by Dowell Remcraft. Kwon
and Zmud (1987) categorised this research
into factors research, process research and
political research. Factor research refers to a
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variety of individual, organisational and
technological forces that are important to IT
implementation effectiveness. Factors
identified from the research as important
have been top management commitment and
appropriate user-designer interaction and
understanding (Cooper and Zmud, 1990).
Process research examines social change
activities and suggests that implementation
success occurs when extensive project
definition and planning occur. Political
research recognises that various stakeholder
interests need to be identified and managed
in the implementation process to ensure
success.
An analysis of these implementation
research streams in isolation seems to
indicate that Dowell Remcraft had
successfully achieved most of these factors.
Political considerations were represented by
union consultation, the project was carefully
defined with pre-set objectives and steps
were taken to modify the system for more
efficient user interaction. Isolated analysis,
however, is not an accurate representation of
the complexity involved in advanced
technology implementation. Recognising this
limitation of existing research, Kwon and
Zmud (1987) developed an advanced
technology implementation model
incorporating all of these research streams,
which was later modified to incorporate post-
adoption behaviors (Zmud and Apple, 1989).
The elements are presented below:
1 Initiation
.
Process. Active and/or passive
scanning of organisational problems or
opportunities and advanced technology
solutions are undertaken. Pressure to
change evolves from organisational
need (pull), technological innovation
(push), or both.
.
Product. A match is found between an
advanced technology solution and its
application in the organisation.
2 Adoption
.
Process. Rational and political
negotiations ensue to get backing for
implementation.
.
Product. A decision is reached to invest
resources necessary to accommodate
the implementation effort.
3 Adaptation
.
Process. The advanced technology
application is developed, installed and
maintained. Organisational
procedures are revised and developed.
Organisational members are trained
both in the new procedures and in the
technology application.
.
Product. The technology application is
available for use in the organisation.
4 Acceptance
.
Process. Organisational members are
introduced to commit to advanced
technology usage.
.
Product. The advanced technology is
employed in organisational work.
5 Routinisation
.
Process. Usage of the advanced
technology is encouraged as a normal
activity.
.
Product. The organisation's
governance systems are adjusted to
account for the new system and this is
no longer perceived as something out
of the ordinary.
6 Infusion
.
Process. Increased organisational
effectiveness is obtained by using the
new technology in a more
comprehensive and integrated manner,
which supports higher level aspects of
organisational work.
.
Product. The IT application is used
within the organisation to its fullest
potential.
Figure 1 is a charted analysis of Dowell
Remcraft's performance in their AMT
implementation in relation to the model put
forward by Zmud and Apple (1989).
After charting close to ten years of
implementation experience at Dowell
Remcraft it appears that management was
unable to follow through and build upon the
strong groundwork that was established in
the initial stages of the project. The extensive
top management involvement in the project
meant that, despite early considerations
given to shopfloor staff (union consultation),
information, knowledge and learning were
not actively pushed down through the
organisation. This problem was compounded
by a high turnover rate of manufacturing
managers. Consequently, only one operator
was trained in the use of the FMC. A lack of
learning and understanding was also behind
the cell layout problem, which added extra
cost to the project through renovations but
also limited the efficiency of the system. A
lack of learning also culminated in the
mistake-riddled purchasing decision of
machined components from Malaysia.
Corrective action has been taken to
address these problems, shown by the
upward sloping curve from 1997 onwards.
However, it seems that, if Dowell Remcraft
had been able to adapt the organisation and
technology optimally in the first instance, it
may have enjoyed greater return from the
infusion of the system for strategic
organisation-wide benefit.
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Key lessons learned and critical
success factors
In concluding, we identify a number of
lessons and critical success factors
associated with CM from this case study.
These are:
.
Careful attention needs to be paid when
designing the cell, taking into account all
possible contingencies, such as material
flow, environmental conditions and
access for maintenance and tool changes.
A variety of modeling and simulation
techniques are available that can be used
to design an optimum manufacturing cell.
.
Ensure that there is clear communication
with the supplier and understand spare
part requirements and their costs over the
life cycle of the FMC. This is particularly
important considering Australia's
geographic isolation and the potential
expensive delays that could be
experienced if waiting for spare parts.
Over 80 per cent of all manufacturing
technology used by Australian
manufacturers is sourced from overseas.
.
Open communication and diffusion of
learning must be emphasised with the
feedback process, consisting of continual
two-way dialogue between management
and line level staff. The momentum of
change and emphasis on human issues
must be reinforced throughout the
implementation process and continue
through to everyday operation to ensure
that economies of learning are realised.
.
Human resources lie at the core of any
change effort, be it the introduction of an
FMC, total quality management or
business process re-engineering
initiatives. Staff need to be multi-skilled to
ensure that relevant resources are
available at peak times, avoiding an over-
reliance on a core group of employees.
Consistently the literature has revealed
the importance that attention to human
issues plays in FMC implementation
success. An in-depth study by Maffei and
Meredith (1994) of six companies using
FMC found that attention to human issues
and not technical issues was what enabled
them to enjoy benefits beyond production
improvements.
.
The environment in which high
technology and other equipment are to
operate needs to be considered at the
planning stage to ensure that the whole
system will operate at an optimum level.
Often regular dialogue between
management and employees can help
identify possible problem areas, noting
any possibilities for upgrades and
enhancing the capabilities of the system.
.
Reinforcing environmental demands of
the factory with potential suppliers,
outlining environmental conditions, is
Figure 1
Performance analysis of AMT implementation process
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Integrated Manufacturing
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necessary, as it may be possible to make
adjustments to manufacturing
components prior to installation.
Operational staff must understand the
optimal operational conditions for any
piece of high technology equipment.
.
All employees need to understand that the
nature and operation of manufacturing
cells and JIT are a shared systemic
relationship. Any alteration to operating
procedures can adversely affect the
smooth operation of the system and
render it ineffective. Each is the key to the
other; they share a recursive relationship
and thus any alteration to one component
can dramatically undermine the
operation of the whole production system.
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Systems
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