The Microprocessor: Just Another Component
| Published date | 01 September 1981 |
| Pages | 17-20 |
| Date | 01 September 1981 |
| DOI | https://doi.org/10.1108/eb057212 |
| Author | Peter Thornton,D. Little |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
The Microprocessor: Just
Another Component
by Peter Thornton and D. Little
By now a great deal has been written about the micro-
processor and its related technology and a great many
management appreciation seminars have been organ-
ised. Yet the fact remains that only 10–15 per cent of
manufacturing companies are actually using micro-
processors and over 50 per cent of managers still seem
to be unaware of what microelectronics can do for
them [1]. Placed in an international context the UK rate
of adoption, adaptation and absorption of micro-
electronics is poor, specialists are being produced
slowly and the Government is providing neither the
strategy nor the support to be found in other OECD
countries. Although there are a few bright spots, the
picture is largely one of unrelieved gloom.
The aim of this article, therefore, is to try yet again to
impress upon managers the advantages of using micro-
electronics and the dangers of failing to do so. While it
is generally known that the application of micro-chips in
pocket calculators and digital watches virtually wiped
out two long established industries almost overnight,
there are many more less well documented examples.
Though less spectacular in global terms, the collapse of
these companies was none the less important to their
managers and employees. The same fate could easily
befall other industries and individual companies which
through ignorance, inaction or complacency fail to
recognise both the benefits and threats inherent in
microelectronics technology.
Clearly, before managers can be expected to take the
risk involved in substituting a new device, no matter
how technologically advanced, for existing control
mechanisms, including those of time-proven design,
they need to be convinced that the replacement will
produce a distinct cost and/or market advantage. Con-
sequently, this article will first outline the general
advantages attributed to microprocessors and then
attempt to relate these to specific activities within the
manufacturing organisation. In particular, attention will
be given to how in practical terms microprocessors
affect the functional areas of product design and
development, production, inventory and service.
Advantages
Recognising that while the microprocessor can be used
for monitoring and recording that it is primarily a con-
trol device, the main advantages associated with its
application fall into five categories:
Cost
Size
Reliability
Flexibility
intelligence
Each of these advantages is worthy of examination in
some detail.
Cost
Microprocessors are cheap. The cost has been falling
steadily at the rate of about 25 per cent a year since
their commercial development in 1971. As a result a
relatively simple device like a single chip 4-bit micro-
computer, (a device which is ideal for controlling a con-
sumer product), with your own control algorithm in-
printed during the manufacturing process, can cost as
little as £1 in bulk. Microprocessors and more
specialised circuits are more expensive. An
8-bit
micro-
processor, for example, will typically cost around £5–6
in quantities over 25. The precise cost of the final
system will vary according to the complexity of the
operation to be performed and the production volumes
involved. As a general rule, however, a system based on
microelectronic components will be cheaper than any
based on logic circuits which it may replace.
Microprocessors are cheap. The
cost has been falling at the rate
of about 25 per cent a year since 1971
In some products, of course, the control element, at
least in cost terms, is a relatively small part of the pro-
duct. Consequently, the substitution of a micro-
processor or related device for an existing control
mechanism is unlikely to lead to a substantial reduction
in total cost. In this situation the microprocessor pro-
vides the manufacturer with the opportunity to offer an
enhanced, more sophisticated product, at around the
same cost. VGL Industries, for example, have
developed a vending machine based on the Mostek Z 80
chip which allows 67 selections of hot, cold, still or car-
bonised drinks from seven ingredient stations, each sta-
tion having the option of mild, medium and strong [2].
Where the control function does represent a major
cost element, as in the case of calculators and watches,
and in some more complex white goods, the cost reduc-
tions can be dramatic.
Size
Microelectronic devices are small. As a naked com-
ponent a micro-chip is smaller than a fingernail and pac-
kaged it is about the size of a piece of Lego. In addition
to the intrinsic values of miniaturisation comes a sub-
stantial reduction in power consumption. In the case of
consumer products this offers compactness and profit-
ability. In an industrial environment it allows computers
SEPTEMBER/OCTOBER 1981 17
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