Skip to main content
SpringerLink
Log in

A differentiated approach for justification of advanced manufacturing technologies

  • Published:
Advances in Manufacturing Aims and scope Submit manuscript

Abstract

European companies rely on advanced manufacturing technologies (AMTs) in order to succeed in an environment of high labour costs, increasing competition and rising customer expectations. AMT implementation is often a high-risk investment. Many companies experience a misalignment between the installed functionality and production needs. There is a need for decision support in order to take into account all possible advantages and disadvantages of the technology implementation, and ensure that the technology meets the requirements of the production processes. In this article, a differentiated technology justification approach is introduced. The approach suggests a combination of strategic, financial and risk justification methods. The recommended number and type of methods depend on the integration level of the technical system under consideration, ranging from stand-alone machines to large and integrated production systems. The approach was developed based on a literature review and a case study. The application of the approach was presented in a case where several types of pipe bending technology were evaluated.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6

Similar content being viewed by others

References

  1. Chan F et al (2001) Investment appraisal techniques for advanced manufacturing technology (AMT): a literature review. Integr Manuf Syst 12(1):35–47

    Article  Google Scholar 

  2. Baldwin J, Lin Z (2002) Impediments to advanced technology adoption for Canadian manufacturers. Res Policy 31(1):1–18

    Article  Google Scholar 

  3. Goyal S, Grover S (2012) Advanced manufacturing technology effectiveness: a review of literature and some issues. Front Mech Eng 7(3):256–267

    Article  Google Scholar 

  4. Fulton M, Hon B (2010) Managing advanced manufacturing technology (AMT) implementation in manufacturing SMEs. Int J Product Perform Manag 59(4):351–371

    Article  Google Scholar 

  5. Kerr C et al (2013) Key principles for developing industrially relevant strategic technology management toolkits. Technol Forecast Soc Change 80(6):1050–1070

    Article  Google Scholar 

  6. Small MH, Chen IJ (1997) Economic and strategic justification of AMT inferences from industrial practices. Int J Prod Econ 49(1):65–75

    Article  Google Scholar 

  7. Small MH, Chen IJ (1995) Investment justification of advanced manufacturing technology: an empirical analysis. J Eng Tech Manag 12(1):27–55

    Article  Google Scholar 

  8. Small MH (2007) Planning, justifying and installing advanced manufacturing technology: a managerial framework. J Manuf Technol Manag 18(5):513–537

    Article  Google Scholar 

  9. Small MH (2006) Justifying investment in advanced manufacturing technology: a portfolio analysis. Ind Manag Data Syst 106(4):485–508

    Article  Google Scholar 

  10. Small MH, Yasin MM (1997) Developing a framework for the effective planning and implementation of advanced manufacturing technology. Int J Oper Prod Manag 17(5):468–489

    Article  Google Scholar 

  11. Suresh NC, Meredith JR (1985) Justifying multimachine systems: an integrated strategic approach. J Manuf Syst 4(2):117–134

    Article  Google Scholar 

  12. Meredith JR, Hill MM (1987) Justifying new manufacturing systems: a managerial approach. Sloan Manag Rev 28(4):49–61

    Google Scholar 

  13. Naik B, Chakravarty AK (1992) Strategic acquisition of new manufacturing technology: a review and research framework. Int J Prod Res 30(7):1575–1601

    Article  Google Scholar 

  14. Slagmulder R, Bruggeman W, van Wassenhove L (1995) An empirical study of capital budgeting practices for strategic investments in CIM technologies. Int J Prod Econ 40(2):121–152

    Article  Google Scholar 

  15. Karsak E, Tolga E (2001) Fuzzy multi-criteria decision-making procedure for evaluating advanced manufacturing system investments. Int J Prod Econ 69(1):49–64

    Article  Google Scholar 

  16. Cescon F (2010) Investment in new manufacturing systems: an Italian-based empirical analysis. Econ Aziend Online 1(1):13–26

    Google Scholar 

  17. Alkaraan F, Northcott D (2006) Strategic capital investment decision-making: a role for emergent analysis tools?: a study of practice in large UK manufacturing companies. Br Account Rev 38(2):149–173

    Article  Google Scholar 

  18. Abdel-Kader MG, Dugdale D (1998) Investment in advanced manufacturing technology: a study of practice in large UK companies. Manag Account Res 9(3):261–284

    Article  Google Scholar 

  19. Sarkis J, Liles DH (1995) Using IDEF and QFD to develop an organizational decision support methodology for the strategic justification of computer-integrated technologies. Int J Proj Manag 13(3):177–185

    Article  Google Scholar 

  20. Chuang M, Yang YS, Lin CT (2009) Production technology selection: deploying market requirements, competitive and operational strategies, and manufacturing attributes. Int J Comput Integr Manuf 22(4):345–355

    Article  Google Scholar 

  21. Almannai B, Greenough R, Kay J (2008) A decision support tool based on QFD and FMEA for the selection of manufacturing automation technologies. Robot Comput Integr Manuf 24(4):501–507

    Article  Google Scholar 

  22. Rosenfield DB, Beckman SL (2008) Operations strategy: competing in the 21st century. McGraw-Hill/Irwin, New York

    Google Scholar 

  23. Bolwijn PT, Kumpe T (1990) Manufacturing in the 1990s: productivity, flexibility and innovation. Long Range Plan 23(4):44–57

    Article  Google Scholar 

  24. Slack N, Chambers S, Johnston R (2010) Operations management. Pearson Education, Harlow

    Google Scholar 

  25. Tracey M, Vonderembse MA, Lim JS (1999) Manufacturing technology and strategy formulation: keys to enhancing competitiveness and improving performance. J Oper Manag 17(4):411–428

    Article  Google Scholar 

  26. Efstathiades A, Tassou S, Antoniou A (2002) Strategic planning, transfer and implementation of advanced manufacturing technologies (AMT). Development of an integrated process plan. Technovation 22(4):201–212

    Article  Google Scholar 

  27. Abdel-Kader MG, Dugdale D (2001) Evaluating investments in advanced manufacturing technology: a fuzzy set theory approach. Br Account Rev 33(4):455–489

    Article  Google Scholar 

  28. Bayazit O (2005) Use of AHP in decision-making for flexible manufacturing systems. J Manuf Technol Manag 16(7):808–819

    Article  Google Scholar 

  29. Ordoobadi SM, Mulvaney NJ (2001) Development of a justification tool for advanced manufacturing technologies: system-wide benefits value analysis. J Eng Tech Manag 18(2):157–184

    Article  Google Scholar 

  30. Luong LH (1998) A decision support system for the selection of computer-integrated manufacturing technologies. Robot Comput Integr Manuf 14(1):45–53

    Article  Google Scholar 

  31. Kakati M, Dhar U (1991) Investment justification in flexible manufacturing systems. Eng Costs Prod Econ 21(3):203–209

    Article  Google Scholar 

  32. Kaplan RS (1986) Must CIM be justified by faith alone?. Graduate School of Business Administration, Harvard University, Boston

    Google Scholar 

  33. Primrose PL (1991) Investment in manufacturing technology. Chapman & Hall, London

    Google Scholar 

  34. Small MH, Yasin MM (1997) Advanced manufacturing technology: implementation policy and performance. J Oper Manag 15(4):349–370

    Article  Google Scholar 

  35. Sambasivarao K, Deshmukh S (1997) A decision support system for selection and justification of advanced manufacturing technologies. Prod Plan Control 8(3):270–284

    Article  Google Scholar 

  36. Müller KB (2006) Bending of extruded profiles during extrusion process. Int J Mach Tools Manuf 46(11):1238–1242

    Article  Google Scholar 

  37. Groover MP (2008) Automation, production systems, and computer-integrated manufacturing, 3rd edn. Prentice Hall Press, Englewood Cliffs

    Google Scholar 

  38. Slagmulder R, Bruggeman W (1992) Investment justification of flexible manufacturing technologies: inferences from field research. Int J Oper Prod Manag 12(7/8):168–186

    Article  Google Scholar 

  39. Lefley F, Sarkis J (1997) Short-termism and the appraisal of AMT capital projects inthe US and UK. Int J Prod Res 35(2):341–368

    Article  MATH  Google Scholar 

  40. Lowe A, Ridgway K, Atkinson H (2000) QFD in new production technology evaluation. Int J Prod Econ 67(2):103–112

    Article  Google Scholar 

Download references

Acknowledgements

This work has been conducted within the context of the projects effective production of advanced maritime equipment (EFFEKT) and MIX (Sustainable multi-variant manufacturing in semi-process industry) research projects. The authors would like to thank the participants of the projects for providing valuable empirical data. The authors would also like to thank Knut Sørby, Lars Erik Wettervald, and Rune Kringstad Sandøy for providing valuable information about the technological solutions described in the case example.

Author information

Authors and Affiliations

  1. Department of Production and Quality Engineering, Norwegian University of Science and Technology, Trondheim, Norway

    Natalia Iakymenko & Erlend Alfnes

  2. Industrial Management, SINTEF Technology and Society, Trondheim, Norway

    Maria Kollberg Thomassen

Authors
  1. Natalia Iakymenko
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Erlend Alfnes
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Maria Kollberg Thomassen
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Natalia Iakymenko.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Iakymenko, N., Alfnes, E. & Thomassen, M.K. A differentiated approach for justification of advanced manufacturing technologies. Adv. Manuf. 4, 257–267 (2016). https://doi.org/10.1007/s40436-016-0150-9

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s40436-016-0150-9

Keywords

Search

Navigation