Objectives for adopting advanced manufacturing systems: promise and performance
| Date | 01 May 1998 |
| Published date | 01 May 1998 |
| Pages | 129-137 |
| DOI | https://doi.org/10.1108/02635579810213134 |
| Author | Michael H. Small |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
[ 129 ]
Industrial Management &
Data Systems
98/3 [1998] 129–137
© MCB University Press
[ISSN 0263-5577]
Objectives for adopting advanced manufacturing
systems: promise and performance
Michael H. Small
Assistant Professor of Management, Department of Management,
University of New Haven, West Haven, Connecticut, USA
Presents the results of an
exploratory investigation of
the level of importance that
firms place on several busi-
ness and technical objectives
when they are considering
AMT adoption. Mail survey
data obtained from 125
manufacturing firms in the
USA that had adopted a wide
variety of AMT are used in
this analysis. On average,
these firms had placed the
highest levels of importance
on improving product quality,
reducing manufacturing
leadtimes, reducing per unit
production costs and improv-
ing responsiveness to chang-
ing customer needs. Lower
levels of importance were
reported for the market-
based objectives of increas-
ing market share and gaining
earlier entrance to market. In
addition, although firms had
also ascribed lower levels of
importance to the organiza-
tional adaptation benefits of
developing an integrated
organization and developing
management expertise, they
were satisfied that implemen-
tation of the technologies had
a positive influence on
achieving these benefits.
Exploratory factor analysis
revealed that the 15 benefits
that were investigated in this
study can be viewed as repre-
senting three interdependent
dimensions: technical/opera-
tional objectives, total quality
management-based objec-
tives, and business or mar-
keting-based objectives.
Introduction
Over the past two decades there has been a
shift in the basis of competition in manufac-
tured product markets. Firms that previously
focused almost exclusively on lower costs
have adjusted to a focus that places just as
high and often higher premiums on quality
and flexibility. Adjusting to these changes has
often been made easier through the adoption
of advanced manufacturing technologies
(AMT). These systems represent a wide vari-
ety of modern, mainly computer-based sys-
tems which provide adopting firms with the
potential to: gain earlier entrance to market,
respond more quickly to changing customer
needs and offer higher quality products with
improved consistency and reliability. More-
over, these systems have been credited with
the ability to offer an even more extensive
range of benefits which have been classified
by various authors as: manufacturing, non-
manufacturing, strategic, tactical, technical,
intangible and general benefits. Small (1993)
identified 81 distinct but often interrelated
benefits that have been attributed to the adop-
tion of AMT.
In practice, however, firms appear to be
judging the success of their systems on the
achievement of a few important benefits.
Jaikumar (1986) and Inman (1991) found that
many of the firms that reported successful
implementation of AMT were not exploiting
the full benefits offered by these systems.
Given the fact that even firms within the
same industry emphasize different corporate
strategies, and corporate and marketing
objectives it is expected and understandable
that individual firms that adopt the same type
of AMT may emphasize different benefits. Yet
many empirical studies assess the perfor-
mance of AMT adopting firms on the basis of
the achievement of a few performance objec-
tives such as improved market share,
improved flexibility, and increasing return on
assets without first assessing whether these
objectives were the most important consider-
ations for the firms. For example, increasing
national and global competition has often led
to decreasing market shares for some firms.
Typical responses to such threats have
included corporate downsizing and adoption
of both manufacturing and information tech-
nologies combined with improved emphasis
on the firm’s distinctive competencies. Such
changes often make these firms more effi-
cient, effective and competitive. However,
they may never achieve nor expect to achieve
previous market share levels. Gauging the
success of such firms and such technologies
on the basis of improvements in market share
may not be entirely reasonable or prudent.
In this study we make the assumption that
firms implement AMT to obtain certain spec-
ified benefits. We also assume that there will
be some hierarchy in the levels of importance
that each firm places on the benefits that it
considers to be important. While one firm
might consider improving profits as its most
important objective another firm may place
more emphasis on reductions in manufactur-
ing leadtimes. If this is indeed the case, it
would be more reasonable to assume that a
firm will assess the success of a technology by
first considering the extent to which the tech-
nology has been able to produce those bene-
fits for which it was adopted. Unplanned
positive outcomes that can be traced to the
implementation of the technologies can then
be viewed as unexpected positive benefits.
This study has four main purposes. First,
we seek to determine if firms are indeed
ascribing different levels of importance to
several of the more popular benefits that have
been attributed to the operation of AMT. A
second purpose is to determine if these firms
are achieving different levels of satisfaction
on the attainment of these benefits. We then
seek to ascertain if there is any correlation
between the level of importance and the level
of satisfaction with achieving these benefits.
Finally, we use exploratory factor analysis to
determine if the benefits under investigation
can be reduced to a smaller number of under-
lying factors. The major aim of the factor
analysis exercise, however, is not to effect
data reduction but to ascertain which objec-
tives are highly intercorrelated.
The findings of this study should be useful
to managers, researchers and academics.
This study offers several contributions to the
AMT implementation and performance liter-
ature. Valid and reliable AMT adoption objec-
tive scales are developed. The results of this
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