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INNOVATIONS, INVARIANCES AND ANALOGIES: COMMENTS ON THE LIFE CYCLE THEORY AND THE FORECASTING OF FUTURE

MANAGEMENT OF TECHNOLOGY

SOHE PRELIMINARY EFFECTS AND CONCLUSIONS

4. A systems approach to the study of technology management will permit an analysis of the relations between system

3.2. INNOVATIONS, INVARIANCES AND ANALOGIES: COMMENTS ON THE LIFE CYCLE THEORY AND THE FORECASTING OF FUTURE

TRENDS IN FLEXIBLE PRODUCTION AUTOMATION

Dr. Jukka Ranta

Electrical Engineering Laboratory Technical Research Centre of Finland Espoo, Finland

1. INTRODUCTION

Modern p r o d u c t i o n automation, i n c l u d i n g f l e x i b l e p r o d u c t i o n systems, i s (FMS) u s u a l l y considered as a major i n g r e d i e n t o f t h e s o l u t i o n t o many s t r u c t u r a l problems of t h e manufacturing i n d u s t r i e s . I t has sometimes had a dramatic i n f l u e n c e on p r o d u c t i o n economy: d e l i v e r y times, Lead tines, storages, c a p i t a l use, u t i l i z a t i o n r a t e etc. (Bessant et.al., 1985, Horn et.al. 1985).

However, f l e x i b l e p r o d u c t i o n systems and advanced p r o d u c t i o n automation u i t h computer i n t e g r a t e d manufacturing (CIH) have so f a r been a p p l i e d m a i n l y by l a r g e and/or t h e most p r o g r e s s i v e companies. The d i f f u s i o n o f FMS (and CIH) concepts has been r a t h e r slow and i n f a c t t h e f l e x i b i l i t y o f FHS has n o t always been as g r e a t as expected (Jaikumar 1986). Thus

i t can be p r o j e c t e d t h a t t h e u t i l i z a t i o n o f FHS, and o f p r o d u c t i o n automation i n general, depends on t h e development o f t h e t e c h n i c a l p r o p e r t i e s o f FM-systems o r on t h e f l e x i b i l i t y o f f e r e d by t h e

technology i t s e l f , and on t h e o t h e r hand t o a g r e a t e x t e n t on how t h e b e n e f i t s can be r e a l i z e d d u r i n g t h e a p p l i c a t i o n d e s i g n o f t h e

p r o d u c t i o n automation system.

Because t h e r e a l i z a t i o n o f t h e p o t e n t i a l b e n e f i t s o f FMS seems t o be more a s o c i a l o r an o r g a n i z a t i o n a l q u e s t i o n than a pure t e c h n i c a l question, i t seems u o r t h w h i l e t o study FHS i n c o n t e x t o f t h e i n n o v a t i o n management. Furthermore t h e concept o f f l e x i b i l i t y has a wider meaning t h a n a p r o d u c t i o n technology

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r e a l a t e d i n t e p r e t a t i o n . F l e x i b i l i t y seems t o have a c e n t r a l r o l e when an assessment o f d i f f e r e n t company i s made. Horeover t h e t e c h n o l o g i c a l l i f e c y c l e concept i s i n t e r e s t i n g t o b e discussed from t h e p o i n t o f t h e view o f FH-systems development.

I t i s t h e r e f o r e a l s o r e a l i s t i c t o r e l a t e FM-systems and modern

p r o d u c t i o n automation t o t h e concept o f p r o d u c t i o n f l e x i b i l i t y and a l s o t o e s t i m a t e uhat k i n d of t e c h n o l o g i c a l advances ( i n c l u d i n g

o r g a n i z a t i o n a l i n n o v a t i o n s ) a r e needed t o i n c r e a s e p r o d u c t i o n

f l e x i b i l i t y and uhat i n n o v a t i o n s a r e necessary t o a s s i s t r e a l i z a t i o n o f t h e b e n e f i t s d u r i n g t h e design o f FH-systems.

The second i n t e r e s t i n g q u e s t i o n i s t h e r o l e o f t h e small and medium

There seems t o be a one-to-one correspondence between t h e l i f e c y c l e phase and t h e p r o d u c t i o n technology (or R + D, marketing). T h i s

correspondence i s u s u a l l y used i n a s t r a i g h t f o r u a r d manner as t h e b a s i s o f a s t r a t e g y formation.

There has been c o n s i d e r a b l e c r i t i s i s m o f t h e one-to-one correspondence between the s t r a t e g y and t h e l i f e c y c l e phase (Dowdy et. a1 1986, Olleros, F-J., De Bresson e t al., Voss, C.A. 1985, Hac Donald 1985).

Mensch e t al. (Mensch 1985, Hensch et. a l 1986) p o i n t e d o u t t h a t t h i s simple correspondence can lead t o wrong p o l i c y o p t i o n s emphasized t h a t r e a l l i f e i s d i f f e r e n t from t h e model: even i n mature i n d u s t r i e s p r o d u c t i n n o v a t i o n s dominate. There are attempts t o make so-called r a d i c a l product i n n o v a t i o n s i n order t o g a i n r e a l c o m p e t i t i v e power by a r a d i c a l improvement i n t h e product (or by a so-called "take-off"). I n general, r a d i c a l i n n o v a t i o n s

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both i n t h e product and t h e p r o d u c t i o n

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a r e a t o o l which a mature i n d u s t r y can use t o de-mature (see Dowdy e t at. 1986). The r a d i c a l i n n o v a t i o n s u s u a l l y lead t o s i g n i f i c a n t changes i n market dominance.

T h i s r a i s e s t h e question: what i s a mature i n d u s t r y o r product? Or: do we need d i f f e r e n t models f o r i n d u s t r i a l e v o l u t i o n and product

i n n o v a t i o n ? Should we t a l k o f product generations, so t h a t each g e n e r a t i o n has i t s oun l i f e cycle? Can a s p e c i f i c i n d u s t r i a l branch or p r o d u c t ever be mature i n t h e sense o f t h e l i f e c y c l e modet?

What we need i s a new e v o l u t i o n model, w i t h the a i d o f which we can search f o r t h e i n v a r i a n c e s and t h e common l o g i c w i t h i n t h e dynamics o f p r o d u c t (or i n d u s t r i a l ) e v o l u t i o n .

F i r s t l y we must n o t e t h a t t o each product (or i n d u s t r y ) we can r e l a t e p r o d u c t technology, p r o d u c t i o n technology, o r g a n j z a t i o n and management technology and ma.rketing ( o r market segmentation) technology. Thus we d e s c r i b e t h e technology r e l a t e d t o a product o r an i n d u s t r i a l branch as a f o u r dimensional dynamic system. I n n o v a t i o n s can be made w i t h respect t o each a x i s o f t h e system: r a d i c a l innovations on any a x i s can g i v e c o m p e t i t i v e power t o t h e innovator.

Secondly t h e technologies i n t h e d i f f e r e n t axes have d i f f e r e n t l f f e c y c l e phases, r a k i n g t h e system i n t e r a c t i v e and dynamic. Thfs b a s i c p r o p e r t y a l s o includes the f a c t t h a t i n n o v a t i o n s on any a x i s opcn

p o s s i b i l i t i e s o r c r e a t e p o t e n t i a l f o r new i n n o v a t i o n s on t h e o t h e r t h r e e axes. U s u a l l y the product o r i n d u s t r y evolves i n a continuum o f succeeding innovations i n t h e d i f f e r e n t dimensions.

One b a s i c problem i s t h a t t h e c l a s s i c a l l i f e c y c l e theory does n o t take i n t o account t h e s o c i a l needs and t h e s o c i a l (and economic) c o n t e x t i n which t h e new technology i s introduced. T h i s s o c i a l context s e t s p r i o r i t i e s and goals and m o d i f i e s t h e dynamics of the e v o l u t i o n of t h e technology and has an i n f l u e n c e on t h e d i f f e r e n t phases o f t h e l i f e cycle; e.g. d i f f e r e n t o r g a n i s a t i o n a l i n n o v a t i o n s are needed i n d i f f e r e n t s o c i a l contexts. The s o c i a l c o n t e x t can b e t t e r be taken i n t o account through o r g a n i z a t i o n a l and m a r k e t i n g innovations.

2.2. I n v a r i a n c e s and analogies

D.T. Jones from t h e Sience p o l i c y research u n i t of t h e U n i v e r s i t y o f Sussex (Jones 1985) analysed t h e automobile i n d u s t r y i n t h e f o r e g o i n g c o n t e x t (as a f o u r dimensional system) and concluded t h a t t h e

i n d u s t r y i s by no means a mature i n d u s t r y . The reasons can s h o r t l y e x p l a i n e d as follows:

The automobile i n d u s t r y reached i t s m a t u r i t y i n the terms o f t h e l i f e c y c l e model a t an e a r l y stage ( s t a n d a r d i z e d products, common p r o d u c t i o n technology). A f t e r that, Japanese i n d u s t r y made p r o d u c t i o n innovations, o r g a n i z a t i o n and management i n n o v a t i o n s and developed a new, e f f i c i e n t way t o produce standard cars and a t t h e same time t o guarantee h i g h q u a l i t y of t h e products. The Japanese i n d u s t r y was able t o c r e a t e r e a l c o m p e t i t i o n power. The development o f p r o d u c t i o n technology opened t h e way t o f l e x i b i l i t y , o r t h e economic means t o produce d i f f e r e n t models and v e r s i o n s i n s m a l l batches. T h i s development opened p o s s i b i l i t i e s o f marketing innovations, which t o g e t h e r w i t h t h e i n c o r p o r a t i o n o f modern e l e c t r o n i c s l e d t o product i n n o v a t i o n s o r t o a new up-scale segment o f t h e cars, o r t o a new concept o f l u x u r y cars. This development a l s o gave new p o s s i b i l i t i e s t o small European manufacturers.

The whole concept of t h e automobile i n d u s t r y i s s t i l l i n a s t r o n g developmental stage and we can expect i n n o v a t i o n s on each axis, which w i l l lead t o f u r t h e r i n n o v a t i o n s on t h e o t h e r axes. I n p a r t i c u l a r we can expect r a p i d development o f t h e management and o r g a n i z a t i o n

technologies, because t h e f l e x i b i l i t y r e q u i r e s a new k i n d o f s k i 11s and knowledge on t h e p a r t o f t h e p r o d u c t i o n workers. (Brbdner 1985, Toikka 1986, H y b t y l i i n e n 1986). I t i s a l s o q u i t e apparent that, a t l e a s t i n Europe, i t i s d i f f i c u l t t o g e t workers f o r l e s s q u a l i f i e d t a s k s and t o work i n a poor work environment. This s o c i a l c o n t e x t r e q u i r e s a new k i n d o f approach t o work o r g a n i z a t i o n .

The development o f t h e semiconductor i n d u s t r y has been r a t h e r s i m i l a r (Ernst, 1983, B e l l 1986, Business Week 1986, Dosi 1984). The b e g i n n i n g was c h a r a c t e r i z e d by a r a p i d product i n n o v a t i o n phase, u n t i l t h e

standard products <microprocessors, memories, standard l o g i c ) dominated t h e markets. A f t e r t h a t t h e r e was a p e r i o d o f r a p i d growth o f

p r o d u c t i o n i n n o v a t i o n s (Business Week 1986, G u t e r l 1984), which lead t o a new k i n d o f market balance and t o a dominance o f producers o f

standard products which c o u l d compete by p r o d u c t i o n costs, product q u a l i t y and h i g h a v a i l a b i l i t y . As i n the case o f t h e automobile

i n d u s t r y t h e development o f p r o d u c t i o n technology (and d e s i g n methods) opens p o s s i b i l i t i e s f o r improved f l e x i b i l i t y ; i.e. f o r e f f i c i e n t design and p r o d u c t i o n o f s o - c a l l e d custom design components. Besides t h e f l e x i b i l i t y m a r k e t i n g i n n o v a t i o n s are needed f o r c o m p e t i t i v e power i n t h e custom design business.

Market segmentation opens p o s s i b i l i t i e s f o r a new, p r o f i t a b l e business, and p r a c t i c e seems t o show that, a t l e a s t i n t h e f i r s t stage, t h e r e are o t h e r producers dominating t h e custom design business than i n t h e mass market areas. The balance between t h e USA, Japan and Europe seems t o be r a t h e r s i m i l a r t o t h a t i n t h e automobile i n d u s t r y . We can a l s o expect new k i n d s o f p r o d u c t i n n o v a t i o n s because o f t h e b e t t e r p r o d u c t i o n and design methods (GaAs, o p t o e l e c t r o n i c s etc.).

The above tendencies can a l s o be detected i n r o b o t i c s and NC-machinery.

The development and p r o d u c t i o n o f standard robots and NC-machines are dominated by companies which can compete w i t h p r o d u c t i o n c o s t s and h i g h q u a l i t y . Again, t h e r e e x i s t p o s s i b i l i t i e s , e.g. s p e c i a l robots,

which s a t i s f y t h e p a r t i c u l a r needs o f c e r t a i n market segments. I t i s i n t e r e s t i n g t o n o t e t h a t even i n the heavy process i n d u s t r i e s , such as paper making, the above l o g i c i s s t i l l apparent: t h e market (and product) segmentation from standard papers t o f i n e papers and s p e c i a l

(coated) p r i n t i n g papers, which has r e q u i r e d a l o t o f p r o d u c t i o n and market innovations, I s one evidence o f t h i s l o g i c .

What can we conclude?

There seems t o be an i n v a r i a n t l o g i c o f t h e product (or i n d u s t r y ) evolution, uhich can be u s e f u l i n a n a l y s i n g t h e f u t u r e trends o f f l e x i b l e manufacturing systems, i n e s t i m a t i n g market balances and i n e v a l u a t i n g new business p o s s i b i l i t i e s . T h i s l o g i c can be described as f o l l o w s .

I n t h e f i r s t phase t h e product ( o r i n d u s t r y ) e v o l u t i o n seems t o obey t h e c l a s s i c a l l i f e c y c l e model

( c o n c e p t i o n - i n t r o d u c t i o n - growth-maturity). During t h i s phase t h e d i f f e r e n t t e c h n o l o g i c a l a l t e r n a t i v e s compete w i t h each other. B e f o r e t h e m a t u r i t y stage we f i n d t h e s t a n d a r d i z a t i o n o f p r o d u c t s and p r o d u c t i o n methods. During t h e m a t u r i t y stage a l o t o f p r o d u c t i o n and o r g a n i z a t i o n i n n o v a t i o n s are made, u h i c h u s u a l l y lead t o a new market balance and t o a dominance o f new producers. Furthermore these p r o d u c t i o n and

o r g a n i z a t i o n i n n o v a t i o n s c r e a t e a new p o t e n t i a l f o r product and market innovations. Uhen t h e standard products are known, i t i s e a s i e r t o recognize t h e a p p l i c a t i o n s where they can be used. S p e c i a l needs and t h e means o f s a t i s f y i n g them a r e a l s o more e a s i l y recognized. Both market and product innovations

l e a d t o market segmentation and product d i v e r s i f i c a t i o n . A f t e r t h a t t h e product-production -organization-market-system

evolves as a h i g h l y dynamic i n t e r a c t i v e system. The

segmentation process a l s o means t h a t those producers which are a b l e t o apply t h e technology (product, production) t o s p e c i f i c customers' needs, o r which a r e a b l e t o make product and marketing i n n o v a t i o n s a t t h e same time, w i l l win a b e t t e r market share and a l s o make p r o f i t s . T h i s w i l l lead t o a new balance i n t h e markets.

Ye can describe t h i s b a s i c l o g i c by the f o l l o u i n g v i s u a l i s a t i o n . (Fig. 1).

many a l t e r n a t i v e products and p r o d u c t i o n methods i n t r d u c t i o n

grou h

Y

m a t u r i t y

I

standardization, volume p r o d u c t i o n

p r o d u c t i o n innovations, neu p o t e n t i a l f o r product and market i n n o v a t i o n s f l e x i b i l i t y

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p r o d u c t i o n

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I s e g m e n t a t i o n f i c a t i o n

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Fig. 1. I n t e r a c t i o n o f d i f f e r e n t i n n o v a t i o n axes

2.3 Extension of t h e b a s i c concept

I t uas s t a t e d p r e v i o u s l y t h a t t h e l i f e cycle model makes no assumptions about t h e r e l a t i o n s h i p s between technolgy, economy and s o c i a l c o n t e x t

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t h e e v o l u t i o n o f a technolgy through i t s l i f e c y c l e s occurs

independently o f t h e s o c i a l c o n t e x t . Houever, i t i s necessary t o widen t h e concept so t h a t t h e i n f l u e n c e of the s o c i a l and economic f a c t o r s can be taken i n t o account.

Perez (1984) and Dosi (1984) used t h e terms t e c h n o l o g i c a l style, t e c h n o l o g i c a l form o r t e c h n o l o g i c a l t r a j e c t o r i e s t o d e s c r i b e t h e

technology

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economy ( s o c i e t y ) p a i r as a dynamic system. The concept o f t h e t e c h n o l o g i c a l form o r s t y l e corresponds t o t h e s t a t e concept i n t h e t h e o r y o f dynamic systems. The s t a t e o f the system d e s c r i b e s t h e

p r e v i o u s h i s t o r y o f t h e system and, t o g e t h e r w i t h t h e e x t e r n a l c o n t r o l s and influences, determines t h e f u t u r e dynamics.

O r i g i n a l l y Perez (1984) and Dosi (1984) attempted t o e x p l a i n t h e

phenomena u h i c h i n economic terms can be measured as t h e s o - c a l l e d long cycles. Houever, uhat i s e s s e n t i a l i s t h a t t h e t e c h n o l o g i c a l form ( s t y l e ) i n c l u d e s n o t o n l y t h e b a s i c technolgy but a l s o t h e u t i l i z a t i o n forms (products organization, management concepts etc.) and u t i l i z a t i o n area (products, i n d u s t r i a l branches etc.). The b a s i c idea i s t h a t c e r t a i n b a s i c i n n o v a t i o n s have a g r e a t p o t e n t i a l t o c r e a t e neu economic values, n o t o n l y i n t e c h n i c a l and product terms b u t a l s o i n terms o f t h e a p p l i c a t i o n s i n t h e widest sense throughout s o c i e t y . The s u c c e s s f u l a p p l i c a t i o n o f t h e ideas and concepts a l s o r e q u i r e s neu o r g a n i z a t i o n a l and managerial concepts, so t h e d i f f u s i o n o f the neu technology c l e a r l y means a neu t e c h n o l o g i c a l form o r s t y l e .

I n t h e b a s i c concept t h e r e a r e s e v e r a l important f a c t o r s : t h e m o t i v e branches, uhich produce t h e key f a c t o r s and t h e key technology, and t h e c a r r i e r branches, u h i c h a r e m a i n l y responsible f o r t h e u t i l i z a t i o n o f t h e key factor, t h e i n t r o d u c t i o n o f t h e key f a c t o r s i n t o t h e

products, t h e production, t h e o r g a n i z a t i o n and t h e management p r a c t i c e . I t i s i n t e r e s t i n g t o n o t e t h a t t h e b a s i c idea o r t h e framework i s n o t o n l y a p p l i c a b l e i n t h e s o c i a l and economic context, b u t a l s o i n a n a l y s i n g o f t h e development an i n d u s t r i a l branch o r a s p e c i f i c technology.

Perez (1984) forecasts t h a t t h e coning t e c h n o l o g i c a l form o r t h e next form t o come I s r e l a t e d t o t h e f e x i b i l i t y ( o r t h e f l e x i b l e p r o d u c t i o n ) and i n f o r m a t i o n technologies. T h i s means t h e r e i s a s p e c i a l i n t e r e s t t o analyze f l e x i b l e manufacturing and i t s f u t u r e a p p l i c a t i o n .

3. FLEXIBLE PRODUCTION AUTOMATION: THE LIFE-CYCLE MODEL AND FUTURE TRENDS

3.1 F l e x i b l e p r o d u c t i o n automation: c a r r i e r s and motive branches

I f ue apply t h e basic idea above then ue must d e f l n e t h e motive branches and t h e c a r r i e r branches.

The c a r r i e r branches are b a s i c a l l y t h e manufacturing i n d u s t r i e s , f o r example uorkshops, metal product i n d u s t r i e s , t h e automobile industry, uood product industries, t h e c l o t h i n g industry, u h i c h are a l l t r y i n g t o f i n d o u t neu management concepts, t o improve d e l i v e r y times, t o s h o r t e n l e a d times, t o improve u t i l i z a t i o n r a t e

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o r increase t h e f l e x i b i l i t y . The b a s i c ideas are a l s o i n t r o d u c e d t o t h e o t h e r branches, such as process i n d u s t r i e s (paper making, s t e e l industry, f i n e chemicals etc.)

The motive branches are e l e c t r o n i c s and i n f o r m a t i o n t e c h n o l g i e s i n g e n e r a l (computers, s o f t u a r e engineering, communication).

The i d e s of t h e concept can bee seen

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i n a p p l y i n g e l e c t r o n i c s and software i n machine c o n t r o l s

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i n a p p l y i n g software and computer technologies on t h e l e v e l o f manufacturing systems

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i n t h e search f o r neu o r g a n i z a t i o n a l forms, work content, s k i l l p r o f i l e s , u h i c h are t h e p r e r e g u i s i t e s t o a c h i e v i n g t h e b e n e f i t s o f t h e neu p r o d u c t i o n concepts.

3.2 P r o d u c t i o n automation: t h e s t r u c t u r e and the business

A s t r u c t u r i z e d model o f p r o d u c t i o n automation i s presented i n F i g u r e 2.

Fig. 2. The l e v e l s o f p r o d u c t i o n automation

The e s s e n t i a l p o i n t i s t h a t t h e r e i s no single, w e l l designed p r o d u c t i o n automation technology, b u t i t combines many d i f f e r e n t

t e c h n i c a l products and u t i l i z e s a h i g h Level o f i n t e g r a t i o n . I t i s a l s o e s s e n t i a l t h a t software e n g i n e e r i n g p l a y s a major r o l e on the systems l e v e l and t h a t o r g a n i z a t i o n i n n o v a t i o n s and marketing i n n o v a t i o n s (understanding s p e c i a l needs) a r e t h e key f a c t o r s i n the s u c c e s s f u l design o f a p p l i c a t i o n s .

T h i s i n t e g r a t e d system aspect o f the p r o d u c t i o n automation makes i t d i f f i c u l t t o develop "a L i f e - c y c l e model" f o r f l e x i b l e m a n u f a c t u r i n g automation. A system concept ( C I M o r FMS) a r e s t i l l a t t h e emerging stage, b u t i t can u t i l i z e mature technologies as

components and c l e a r l y r a d i c a l i n n o v a t i o n s and t a k e - o f f s i n t h e mature components (robots, NC-machines) can have a major r o l e i n f u t u r e trends.

The FMS o r C I M systems can be considered as products and as p r o d u c t i n n o v a t i o n s . However major d i f f i c u l t i e s a r i s e when i t i s noted t h a t FMS and CIM-systems mean p r o d u c t i o n i.nnovations f o r many i n d u s t r i a l

branches. The successful a p p l i c a t i o n o f FMS o r C I M o r o f t h e concept o f f l e x i b i l i t y r e q u i r e s major o r g a n i z a t i o n a l i n n o v a t i o n i n p r a c t i c e . The FMS and t h e CIM-system are always special, customized systems designed t o f u l f i l u s u a l l y very s p e c i a l needs

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t h e r e e x i s t no u n i f i e d , s t a n d a r d FMS o r CIM-technologies. For t h i s reason a p p l i c a t i o n know-how

(marketing i n n o v a t i o n s ) i s e s s e n t i a l i n t h e systems p l a n n i n g and t h e p r o j e c t d e l i v e r i e s . Again we can conclude t h a t f l e x i b l e p r o d u c t i o n automation has a very i n t e g r a t i n g n a t u r e and t h a t the f u t u r e t r e n d s and e s p e c i a l l y t h e d i f f u s i o n o f FMS- and CIM-technologies w i l l depend on many f a c t o r s

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on many t e c h n i c a l components, o r g a n i z a t i o n a l f a c t o r s and a p p l i c a t i o n design c a p a b i l i t i e s ( B u l l i n g e r e t a l . 1985).

The i n t e g r a t i n g n a t u r e and a l s o t h e emerging n a t u r e o f t h e FMS- and CIM-concepts a l s o r e f l e c t t h e f a c t t h a t as business areas, FMS and C I M a r e v e r y d i v e r s i f i e d : t h e r e a r e s p e c i a l i z e d vendors f o r NC-machines, robots, AGV's etc. I n a d d i t i o n t h e r e i s a new emerging business:

systems i n t e g r a t i o n and systems engineering, which i s s o f t w a r e o r i e n t e d b u t which r e q u i r e s deep knowledge o f a c e r t a i n a p p l i c a t i o n area.

The l a c k o f common standards a l s o p r o v i d e s p o s s i b i l i t i e s o f going { n t o business w i t h s p e c i a l i z e d , i n t e r f a c e

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and communication o r i e n t e d software. Furthermore t h e r e are c o n s i d e r a b l e p o s s i b i l i t i e s f o r small, high-tech firms, which a r e s p e c i a l i z e d i n very narrow technology areas such as s p e c i a l sensors, s i g n a l processing, image p r o c e s s i n g etc.

( B u l l i n g e r e t a1. 1985, Bessant e t a1. 1985, M i l l e r 1985).

F i n a l l y i t h o u l d be noted t h a t each i n d u s t r i a l branch (metal products, e l e c t r o n i c s , c l o t h i n g ) r e q u i r e s i t s own s p e c i a l a p p l i c a t i o n knowledge which, i n general, i s n o t t r a n s f e r a b l e from one branch t o another.

3.3 The concept o f f l e x i b i l i t y

F l e x i b i l i t y i s u n d e r s t o o d i n t h i s paper t o mean an a b i l i t y t o adapt t o changing customer needs (see Ranta 1986, Toikka 1986, Recent

t r e n d s

...

1986, Slack 1983, O'Grady e t a1 1986). The a b i l i t y t o adapt i n c l u d e s b o t h l o n g and s h o r t term changes: t o adapt t o r a p i d d e l i v e r y requirements o r t o adapt t o long-term market changes.

I n a d d i t i o n t o t h e a d a p t a b i l i t y , and p a r t i c u l a r l y i n t h e manufacturing i n d u s t r i e s , t h e concept o f f l e x i b i l i t y a l s o i n c l u d e s requirements r e l a t e d t o process performance and p r o d u c t i o n economy, such as

-

s h o r t e r l e a d times

-

decreased storages

-

improved u t i l i z a t i o n r a t e

-

b e t t e r q u a l i t y .

Thus as a measure o f f l e x i b i l i t y we can use on the one hand performance and economical i n d i c e s and on t h e o t h e r hand " a d a p t i b i l i t y power". The l a t t e r p r o p e r t y i s v i s u a l i z e d i n F i g u r e 3.

production o i e c e s

l o r '

*

8 0 0 p a r t f a m i

Fig. 3. The b a t c h s i z e and p a r t f a m i l y s i z e

Thus t h e e s s e n t i a l measures a r e t h e p r o d u c t i o n c a p a c i t y and t h e p a r t f a m i l y size. The f l e x i b i l i t y , o r t h e a d a p t a b i l i t y , i s c l e a r l y increased i f t h e p a r t f a m i l y can be increased w i t h o u t l o s s i n b a t c h s i z e o r p r o d u c t i o n c a p a c i t y . Moreover, t h e f l e x i b i l i t y o r t h e a b i l i t y t o make d i f f e r e n t p a r t s a l s o r e f l e c t s t h e a b i l i t y t o adapt t o f u t u r e changes i n t h e markets

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t h e g r e a t e r t h e f l e x i b i l i t y t h e l e s s i s t h e r i s k o f t h e investement.

Ye can t h e r e f o r e measure t h e development o f f l e x i b i l i t y and a p p l i c a t i o n t r e n d s w i t h r e s p e c t t o b a t c h s i z e and p a r t f a m i l y s i z e ( o r i n more general: p r o d u c t i o n c a p a c i t y and product mix). T h i s means t h a t i n t h e manufacturing i n d u s t r i e s one measure o f t h e performance o f a

p r o d u c t i o n system i s t h e a b i l i t y t o make p a r t s o f d i f f e r e n t shapes and s i z e s i n s m a l l batches; o r t o assemble t h e p a r t s o f d i f f e r e n t s i z e s and shapes.

With respect t o d e l i v e r y times and customer needs t h e a b i l i t y t o adapt t o d i f f e r e n t l e a d times i s one important f a c t o r o r a measure of

o f f l e x i b i l i t y .

1 9 6

Technical trends, o r new c h a r a c t e r s and a b i l i t i e s o f robots,

NC-machines etc, can extend t h e c a p a b i l i t i e s o f a p r o d u c t i o n system and a l s o increase t h e f l e x i b i l i t y . On t h e o t h e r hand, t h i s decreases t h e economic b a r r i e r s t o t h e a p p l i c a t i o n o f FMS and can c o n s i d e r a b l y ease t h e d i f f u s i o n o f FMS.

3.4 Technological components: t r e n d s and p o s s i b i l i t i e s

Software e n g i n e e r i n g

Software engineering o r software systems have a key r o l e i n system i n t e g r a t i o n . This has many performance consequences, i n p a r t i c u l a r i t has a g r e a t impact on t h e r e l i a b i l i t y and a v a i l a b i l i t y o f a system. On t h e o t h e r hand t h e software systems can a l s o improve t h e f l e x i b i l i t y .

On t h e software s i d e standards w i l l p l a y an important r o l e . Today, customizing and i n t e g r a t i o n o f t h e systems are c a r r i e d out w i t h t h e a i d o f software. Each system r e q u i r e s

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i n p r i n c i p l e

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b a s i c software and communication software modules which must be developed s e p a r a t e l y f o r each system. T h i s i s nowadays a s i g n i f i c a n t cost f a c t o r and i s i n f a c t a l s o a major e n t r y b a r r i e r f o r newcomers t o t h e system i n t e g r a t i o n business (FMS and CIM-systems). I t a l s o increases a l s o t h e c o s t s o f t h e s p e c i f i c a p p l i c a t i o n s (see a l s o Horn e t a1 1985). The standard modules

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b o t h f o r communication and b a s i c functions, which c o u l d be used i n many a p p l i c a t i o n s , can remarkably decrease t h e development c o s t s o f a system.

I n g e n e r a l i t i s d i f f i c u l t t o i d e n t i f y a l i f e c y c l e model f o r software products. But we can say t h a t t h e s t a n d a r d i z a t i o n o f t h e b a s i c software modules corresponds t o t h e m a t u r i t y stage o f the product Life-cycle.

The s t a n d a r d i z a t i o n u s u a l l y means cost decrease and thus opens p o s s i b i l i t i e s f o r newcomers and s p e c i a l i z e d systems.

Thus, i f e.g. t h e MAP-development i s t o succeed, we can expect t h a t i n a d d i t i o n t o the s t a n d a r d i z a t i o n i t w i l l p o s s i b i l i t i e s o r p o t e n t i a l f o r cost e f f e c t i v e means t o r e a l i z e s p e c i a l i z e d systems a r c h i t e c t u r e s , o r i n o t h e r words t o increase t h e f l e x i b i l i t y i n t h e systems

development process i t s e l f (as w i l l u s u a l l y happen a t t h e mature stage). T h i s means t h a t :

the economic b a r r i e r s f o r neu e n t r i e s u i l l decrease, t h e s p e c i a l purpose systems o r t h e subsystems can be economically realized, uhich means the c r e a t i o n o f new

business segments and increased d i v e r s i f i c a t i o n o f t h e system products,

the technology oriented, s p e c i a l i z e d subsystems o r system ( s i g n a l processing, image processing) can be economically r e a l i z e d as a p a r t of t h e standard system; t h i s again means neu growing market segments,

i n a longer p e r s p e c t i v e a11 these trends r e f l e c t on t h e a p p l i c a t i o n s o f FRS: economic b a r r i e r s u i l l s l o u l y decrease, a p p l i c a t i o n areas u i l l extend and the concept o f f l e x i b i l i t y u i l l broaden w i t h respect t o p a r t f a m i l i e s (shapes and s i z e s )

.

NC-machines are key components o f t h e FMS f o r the p a r t manufacturing o f m e t a l and wood products. The NC-business has many i n d i c a t i o n s o f a mature i n d u s t r y (Horn e t a l . 1985, EEC 1985): standard products, c o s t c o m p e t i t i o n and new market balance, i n which the winners seem t o be e f f i c i e n t producers ( u i t h respect t o c o s t s and product q u a l i t y ) .

However, a t t h e same t i m e t h e r e are analogous trends and signs as i n t h e automobile i n d u s t r y : i n c o r p o r a t i o n o f electronics, software f u n c t i o n s and the f l e x i b i l i t y o f p r o d u c t i o n processes oeen a neu p o t e n t i a l f o r s p e c i a l purpose machines, which u i t h t h e i r h i g h performance s a t i s f y t h e needs o f a s p e c i a l a p p l i c a t i o n . A f t e r many years t h e r e i s a g r o u i n g c l a s s o f small manufacturers which have b u i l t up a c o m p e t i t i v e power based on s p e c i a l segments and customized

machines. Moreover, we can expect t h a t t h e p r e v i o u s l y described t r e n d s i n software engineering u i l l ease t h e customizing process. and open new p o s s i b i l i t i e s f o r product development.

On t h e systems l e v e l important aspects o f NC-machines are: new

measurement technologies, f i x t u r e s and p a l l e t changers, t o o l and uork p i e c e s changers. The development i n a l l these aspects means an

i n c r e a s i n g l e v e l o f f l e x i b i l i t y and i n c r e a s i n g performance measures o f FM-systems.

One r a d i c a l i n n o v a t i o n which c o u l d change t h e whole p i c t u r e i s l a s e r p r o c e s s i n g . I f t h e t e c h n i c a l r e l i a b i l i t y of l a s e r s i n c r e a s e s t h e y c o u l d become an e f f e c t i v e means o f i n c r e a s i n g f l e x i b i l i t y ( m i l l i n g , d r i l l i n g and t u r n i n g b y t h e same t o o l ; no t o o l maintenance and d r i f t ;

f l e x i b i l i t y o f software; a p p l i c a b i l i t y t o d i f f e r e n t m a t e r i a l s ) . T h i s c o u l d be a r e a l q u a l i t a t i v e change from t h e p o i n t s o f view o f b o t h p r o d u c t i o n and t h e NC-machine business. I n g e n e r a l we can c l a i m t h a t o p t i c s could, i n a wide sense, be t h e t e c h n o l o g y which n e c e s s i a t e s a new t e c h n o l o g i c a l f o r m i n t h e m a t e r i a l p r o c e s s i n g and p o s s i b l e a l s o i n i n f o r m a t i o n p r o c e s s i n g .

R o b o t i c s

Robot m a n u f a c t u r i n g shows some o f t h e same t e n d e n c i e s as t h e NC-machine i n d u s t r y : t h e r e a r e i n d i c a t i o n s o f a mature i n d u s t r y . The s o - c a l l e d s t a n d a r d r o b o t s a r e a n area i n which c o m p e t i t i o n i s h i g h l y c o s t - o r i e n t e d . There have been remarkable changes i n t h e market balance:

many f a c t o r i e s have been c l o s e d down and t h e r e a r e o n l y a few s t r o n g manufacturers. A t t h e same t i m e new p o s s i b i l i t i e s and p o t e n t i a l have been c r e a t e d i n s p e c i a l i z e d r o b o t i c s f o r v e r y narrow a p p l i c a t i o n s b y a d d i n g s p e c i f i c t e c h n i c a l p r o p e r t i e s (speed, accuracy, i n t e r f a c e s , s i g n a l processing, image p r o c e s s i n g ) w i t h t h e a i d o f e l e c t r o n i c s and s o f t w a r e e n g i n e e r i n g . S p e c i a l i z e d r o b o t s have a l s o opened p o s s i b i l i t i e s f o r s m a l l m a n u f a c t u r e r s .

The e f f e c t s o f r o b o t s seem t o have two m a j o r trends. F i r s t , t h e r e a r e many s t a n d a l o n e a p p l i c a t i o n s o f s t a n d a r d robots, such as p o i n t and a r c h welding, p a i n t i n g and o t h e r s u r f a c e f i n i s h i n g t a s k s etc. The d i f f u s i o n o f r o b o t s seems t o depend m a i n l y o n t h e c o s t s o f s t a n d a r d r o b o t s . Thus, because t h e i r c o s t s a r e d e c r e a s i n g and t h e i r e f f i c i e n c y i s i n c r e a s i n g we can expect a steady d i f f u s i o n o f t h e s t a n d a r d

a p p l i c a t i o n s . The second main a p p l i c a t i o n t r e n d i s t h e use o f r o b o t s a s a p a r t o f m a n u f a c t u r i n g systems (FMU, FMS, FMS, assembly systems etc.).

The t e c h n i c a l f e a t u r e s and t h e performance o f r o b o t s a r e e s s e n t i a l f o r t h e s e a p p l i c a t i o n s . The c a p a b i l i t i e s o f t h e r o b o t s can have a

T

r e p a r k a b l e i n f l u e n c e o n t h e f l e x i b i l i t y and t h e techno-economical performan_ce measures o f FMU, FMS and FMS and a l s o o f assembly c e l l s and systems. I n p a r t i c u l a r r e l i a b i l i t y , accuracy, speed, f l e x i b l e g r i p p e r s and i n t e l l i g e n t i n t e r f a c e s ( t a c t i l e sensors, v i s i o n , o t h e r s i g n a l

processing) p l a y an important r o l e . New achievements i n these areas always mean new p o s s i b i l i t i e s on t h e systems l e v e l and a l s o increase t h e f l e x i b i l i t y .

S p e c i a l machines

I n manufacturing areas such as t h e c l o t h i n g industry, e l e c t r o n i c s and a l s o t h e metal product industry, t h e r e are many s p e c i a l machines. They a r e a a i n l y dominated by t h e t r a d i t i o n a l producers. However, s i g n s o f d i v e r s i f i c a t i o n are clear. E s p e c i a l l y i n t h e c l o t h i n g s e c t o r new p o s s i b i l i t i e s are created by e l e c t r o n i c s , software e n g i n e e r i n g and r o b o t i c s . New e n t r i e s have occurred and w i l l c o n t i n u e t o occur

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t h e

p r o d u c t i o n technology w i l l experience r a d i c a l changes i n t h e near f u t u r e .

Orgnization, s k i l l s , t r a i n i n g

The new forms o f p r o d u c t i o n o r g a n i z a t i o n and t r a i n i n g methods seem t o be e s s e n t i a l f o r r e a l i z a t i o n o f t h e b e n e f i t s o f modern p r o d u c t i o n automation (Ranta 1986, H y b t y l h i n e n 1986, Brbdner 1985, Bessant 1985).

New o r g a n i z a t i o n and management i n n o v a t i o n s are r e q u i r e d t o b r i n g t h e a v a i l a b i l i t y o f t h e system t o t h e accepted l e v e l . T h i s can be a remarkable d i f f u s i o n b a r r i e r because o f resoursecs which i s required.

The r e s u l t s o f t h e comparative s t u d i e s made by Jaikumar (Jaikumar 1986) c l e a r l y show t h e s i g n i f i c a n c e o f o r g a n i z a t i o n and management p r a c t i c e . Moreover, new t r a i n i n g , organization, management s o l u t i o n s have a c t i v e l y t o be searched and those which are i n n o v a t i v e and n o t bound w i t h o l d habits, w i l l win a c o m p e t i t i v e advantage.

4. THE ROLE OF SMALL AND MEDIUM SCALE INDUSTRIES

The r o l e o f s m a l l and medium s c a l e e n t e r p r i s e s i s very i n t e r e s t i n g

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concerning b o t h product i n n o v a t i o n s and p r o d u c t i o n innovations.

One g e n e r a l hypothesis i s t h a t because o f t h e i r f l e x i b i l i t y t h e s m a l l and medium s c a l e i n d u s t r i e s are able t o make r a d i c a l innovations. I n a s m a l l country, where t h e home markets are small, s u c c e s s f u l product

development and product c o m e r c i a l i z a t i o n seen t o r e q u i r e a t i g h t s p e c i a l i z a t i o n and a u o r l d - w i d e o p e r a t i o n i s u s u a l l y t h e r e f o r e required. T h i s i n c l u d e s major r i s k s f o r t h e small company, u h i c h i s technology- ( o r design-) o r i e n t e d and based on p r o d u c t innovations.

The product development process i n c l u d e s not i n c l u d e o n l y the t e c h n i c a l product innovations, but a l s o r e q u i r e s many marketing i n n o v a t i o n s and l a t e r on p r o d u c t i o n innovations. T h i s i s t r u e wether t h e p r o d u c t s a t i s f i e s a q u i t e new need (or perhaps must even generate new needs) represents a r a d i c a l i n n o v a t i o n i n a n a t u r e branch, where t h e market s i t u a t i o n i s s t a b i l i z e d and dominated by uell-known s u p p l i e r s . I n both cases a considerable e f f o r t i s r e q u i r e d t o rake t h e p r o d u c t known and accepted. The achievement o f a balanced growth, which t h e

technology-marketing-production development requires, can be c r i t i c a l f o r s n a l l - and medium s c a l e e n t e r p r i s e s (see Ranta 1986b).

I n t h e a p p l i c a t i o n o f modern p r o d u c t i o n technology (FMS, C I M ) t o managing t h e r e l a t e d o r g a n i z a t i o n and management i n n o v a t i o n s can be g r e a t problem f o r a s m a l l company because o f resources and s k i l l s which a r e needed t o make an assessment. Moreover t h e modern p r o d u c t i o n system can remarkably i n c r e a s e p r o d u c t i o n c a p a c i t y which r e q u i r e s new

marketing and s t r a t e g y p r i n c i p l e s .

ADVANCED PRODUCT M I X OR S O L I D OPERATION M I N C I R E S

P R O W C T PROFILES.

I

ORODUCTION DESIG'I

&up PRODUCT D E S I G H

FlRST

f

t

SECWI) C R I T I C A L C R I T I C A L

PHASE PUASE

Fig. L. The s t a b l e growth o f a technology-oriented e n t e r p r i s e

To put t h e Idea f u r t h e r we d l v l d e t h e s m a l l and medlum s c a l e enterprises I n t o t h e f o l l o w l n g b a s i c categories: product o r l e n t e d f i r m , p r o d u c t i o n o r l e n t e d f i r m and g e n e r a l i s t f l r m . Each o f them r e q u i r e s own type o f s t r a t e g y and moreover a strategy, which d i f f e r s c o n s i d e r a b l y from t h e l i f e c y c l e concept.

Product o r i e n t e d f I r m

A small company, which i s p r o d u c t i o n oriented, t y p l c a l l y manaps

product technology, i.e. can develop t h e products and i t s technology and has a good t e c h n o l o g i c a l knowledge. T y p i c a l examples o f t h i s k i n d o f companies a r e s p e c i a l i z e d h i g h technology companies o r design product companies.

T h e i r problem and s t r e n g t h a t t h e same time are j u s t product o r i e n t a t i o n . Because o f t h a t t h e y have knowledge t o make a t e c h n o l o g i c a l renewal process. Because o f l i m i t e d i n t e l l e c t u a l and m a t e r i a l resources they have u s u a l problems w i t h m a r k e t i n g and manufacturing. Because o f s p e c i a l i z e d product they are o p e r a t i n g i n a narrow market segment which r e q u i r e s a w o r l d wide marketing network. To b u i l d up t h i s o r g a n i z a t i o n r e q u i r e s much more resources t h a n t h e t e c h n o l o g i c a l development work and q u i t e

d i f f e r e n t knowledge and s k i l l s . T h i s can be overhelming f o r a s m a l l company.

Q u i t e analogous problem i s t o develop a manufacturing process which r e q u i r e s f i n a n c i a l resources and q u i t e d i f f e r e n t s k i l l s and knowledge than t e c h n i c a l product development.

B a s i c a l l y t h e problem analogous t o emerging i n d u s t r y ( O l l e r o s 19861, although a product o r i e n t e d f i r m can be i n a mature business ( l i k e ready-made c l o t h ) .

A s t a b i l e s t r a t e g y c o u l d be as f o l l o w s :

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s p e c i a l i z a t i o n and d i v e r s i f i c a t i o n according t o the own product imago

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development o f t h e o r g a n i z a t i o n and t h e marketing network

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u t i l i z a t i o n o f a c o m p e t i t i v e advantage r e l a t e d t o p r o d u c t technology t o develop p r o d u c t i o n process and t o c r e a t e cost c o m p e t i t i o n

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a concept c a l l e d a design product o f long runs

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manage t h e renewal and growth groduct.ion o r i e n t e d f i r m

T h i s k i n d o f a company, t y p i c a l l y , manage a c e r t a i n manufacturing technology, which o f f e r s a c o m p e t i t i v e advantage r e g a r d i n g t o cost and q u a l i t y . T h i s can be a s t r o n g base t o operate as a h i g h q u a l i t y p a r t s u p p l i e r . However, t h i s r e q u i r e s a continuos development o f manufacturing technology and c l e a r focusing. The company can be even a high-technology f i r m

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t h e manufacturing can base on u t i l i z a t i o n o f h i g h technology. A problem can be, as above, marketing and s e l l i n g capacity. A s o l i d s t r a t e g y could be as f o l l o w s :

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d e f i n i n g o f o p e r a t i n g p r i n c i p l e s and f o c u s i n g

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developing o f manufacturing and b u i l d i n g - u p o f customer r e l a t i o n s h i p s

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renewal o f manufacturing and extension o f t h e o p e r a t i o n

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managing t h e marketing and growth; b u i l d up o f a own s e l l i n g o r g a n i z a t i o n

G e n e r a l i s t f i r m

A s t r a t e g y seems t o q u i t e i n d e f i n i t e

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o r " t o make a l l possible".

S t r a t e g y o p t i o n s are as f o l l o w s :

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t o be a g e n e r a l i s t

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t o become a product o r i e n t e d company

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t o become a p r o d u c t i o n o r i e n t e d company

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