Integration and Adoption of Technologies & Systems in Manufacturing

Ponderables (1): The Productivity Paradox The discrepancy between measures of investment in information technology and measures of output (at the firm as well as national levels) observed since the 1970’s – referred to as the Productivity Paradox ”You can see the computer age everywhere but in the productivity statistics” (Solow, Nobel Laurate from MIT)

Understanding the Productivity Paradox: Evolution of General Purpose Technologies Vertical Water Wheel Steam Engine Electric Dynamo (Generator and Motor) Digital Computer (Dispersion of computing and Networking) Ref. Paul David, 1991/2005

.. Ponderables (2): The Innovator’s Dilemma "History has shown that great high-tech companies can ruin themselves by offering (adopting) too much technology in order to please high-end customers (users). "Great IT (user) organizations can make the same mistake, so watch vendors carefully e.g. the currently in vogue massive, enormously complex ERP systems.” (Christensen, HBS)

Innovator’s Dilemma contd. “(ERP) systems vendors may be tempted to add more functionality to their systems. Yet the companies that come out on top may be those that figure out how to simplify the enterprise information problem through organization and process design.“ Extreme integration hasn't always been successful long term, e.g. in Manufacturing itself

[Prof. J.T. Black, Advanced Manufacturing Technology Center, Auburn Univeristy]

To Conclude Simplicity and repetitiveness breed competence Autonomy matters Don’t let power users, vendors, and consultants drag you up-market Methodology before Technology Multi-way awareness and capabilities needed between IT, Manufacturing System Designers, and Manufacturing itself to exploit potential fully

IN PERSPECTIVE... “There is nothing more dangerous nor doubtful of success than implementation of a new system.” –Paraphrased from Machiavelli “Simplify before Automating, Otherwise you Simply Automate Waste” –Shigeo Shingo, JIT Guru

.. On Integration

One Final Quote “We Are All Manufacturers: Making Good, Making Trouble, or Making Excuses.” (Author: H.V. Adolt) P.S. We are all calculators too!

“.. it took several decades for electrification to kick in and have a big economic and productivity impact. Because.. the whole way of doing manufacturing had to be reconfigured. To get all the savings, you needed to redesign enough buildings with small electric motors powering machines of all sizes. Only when there was a critical mass of experienced factory architects and electrical engineers and managers, who understood the complementarities along the production line, did electrification really deliver the productivity breakthrough in manufacturing.” Paul David, quoted in The World is Flat Understanding the Productivity Paradox: The Computer and Dynamo Analogy

Understanding the Productivity Paradox Difficulty of quantifying productivity gains from Information Technology Productivity gains from IT are offset by IT-related costs ^ Gains from IT are offset by costs in other areas ^ Nature of the Technology evolution and adoption process: the Computer & Dynamo analogy ^: Real or opportunity costs