JOURNAL OF OPERATIONS MANAGEMENT

Vol. 5. No. 1. Fehruar? 1985

Achieving Factory Automation Through

Group Technology Principles

NALLAN C.SURESH*
JACK R. MEREDITH*

EXECUTIVE SUMMARY

This article illustrates the use of Group Technology (CT) principles for integrating the various
elements of Computer Integrated Manufacturing (CIM). Several observations are made regarding
the current state of batch manufacturing in the U.S. in light of these principles. Following a brief
historical background, the various elements of CT are described as they occur in the manufacturing
cycle. Since the main prerequisite to CT is part family identification, the various classification and
coding systems for identifying part families, and also non-codification systems, are briefly described.

The benefits of design rationalization and variety reduction are then explained in the context of
CAD, CAM, and CAPP. Next, cellular manufacturing, currently the major problem area in the
U.S. regarding GT, is discussed. The discussion includes new production technologies and concepts
such as economies of scope. Materials management and operation scheduling are discussed next,
highlighting the GT/MRP interface. The effect of CT and other new technologies on quality is
then addressed and the significant impacts here are noted. Next, the effects on related areas such
as personnel and accounting are described, including worker satisfaction, incentive schemes, and
cost tracking.

Last, an assessment of the current status of batch manufacturing is undertaken. Academic

approaches, as well as industry crusades such as just-in-time (JIT) production, are reviewed and
the current problems in adopting cellular layouts are addressed.

INTRODUCTION

A considerable amount of technological change has been occurring in the manufacturing

environment of late. As a result, it has been particularly difficult for manufacturing
managers to get a balanced perspective and clear understanding, free of acronyms and
labels, of new manufacturing technologies. Although, as frequently stated these days, it
may be time once again to get back to basics, it is difficult to identify those managerial
concepts that have to be relinquished in this new environment and those that should be
retained. After several years of being conditioned to use MRP (material requirements
planning) and lot sizing techniques, to find that our global competitors are not using
these techniques is extremely disconcerting to manufacturing managers.
This article provides a perspective for using group technology (GT) principles as a
vehicle for integrating the various elements of Computer Integrated Manufacturing (CIM).

* University of Cincinnati, Cincinnati, Ohio

Journal of Operations Management 151

Additionally, several observations are made regarding the current state of batch manufac-
turing in the U.S. in the light of these principles.

HISTORICAL BACKGROUND AND DESCRIPTION

Group technology was developed as a formal discipline in the USSR by Mitrafanov

and others in the early 19.50s. The impetus for the development of GT seems to have
been the necessity for the Soviets to hastily move their machine tools eastward during
the German advance of World War II and the subsequent codification of these tools and
experimentation with new layout forms. The first textbook on GT, authored by Mitrafanov,
appeared in the Russian language in 1958 [ 141.
Since then, the implementation of GT has been primarily in European countries such
as Germany and the United Kingdom. Most of the literature on GT in the English
language has come from the UK in a terminology very different from the terminology
found in the U.S. While GT implementation has been extensive but hesitant in the U.K.,
the implementation in Japanese companies during the 1970s has been much more
complete, innovative, and in line with concepts originally proposed by pioneers such as
John Burbidge. Yet, GT is still regarded as a new concept in the U.S. and its diffusion
has been very slow. Once again, the computer industry seems to be taking the lead in
propagating this concept in the context of CAD/CAM systems, as it did with MRP
concepts during the 1960s and 1970s.
GT is a manufacturing philosophy based on the principle of grouping similar parts
into families, which leads to economies throughout the manufacturing cycle. In the design
and process planning stages it enables significant variety reduction and standardization.
In the production stage it enables the achievement of mass production economies in a
batch production situation through part-family oriented cellular manufacturing. Since the
new, highly automated manufacturing technologies also use the part-family approach,
GT can help bridge the CAD/CAM functions and provide a guiding philosophy for
implementing Computer Integrated Manufacturing (CIM). The fundamentals of GT have
been well documented elsewhere (e.g., see [4, 1 1, 141) and will not be repeated here.

ELEMENTS OF GROUP TECHNOLOGY

Since the impact of GT is felt throughout the manufacturing cycle, a “grouping” of

this knowledge into the following areas is possible:

1. Part family identification

2. Engineering design rationalization and variety reduction
3. Process planning
4. Cellular manufacturing
5. Materials management and operation scheduling
6. Quality control
7. Other areas: costing systems, personnel, etc.

Figure 1 gives a schematic of these areas, which are discussed in detail in the following
sections.

152 APES
 FIGURE 1

I Part Family Identification

I

CAD / Cm / CAPP GROUP LAYOUT PERIOD BATCH

CONTROL (MRP)

Part Family Identification

The objective of identifying part families is essentially to effect economies resulting

from similarities throughout the manufacturing cycle. This is of significant value in
intermittent production situations where the economies of mass production are absent.
Part families result in savings in design, process planning, tooling, and above all, in the
actual production process. Also, considerable savings result in the downstream areas of
warehousing, shipping, and in the field. As commonly seen in actual implementations of
GT, these benefits are very synergistic. Thus, the basic rationale for GT is economies of
scope when economies of scale are absent. This is illustrated in Figure 2 below. Economies
of scope, incidentally, has come to be identified with new production technologies [9],
but this is an inherent characteristic of any part family-oriented manufacturing approach,
fully automated or otherwise. Note that volume is still the source of economy. Under
economies of scale, volume is built through lot-sizing on an item-by-item basis, whereas
under scope, volume is attained across several components.
One of the misconceptions about GT is that it is synonymous with “classification and
coding systems.” These systems were initially the main approach to identifying part
families, but during the late 1960s it became clear that one can arrive at part families
without recourse to involved classification and coding systems. For example, the “pro-
duction flow analysis” (PFA) method developed by Burbidge [3] can develop group
layouts on the shop floor without a coding system. A substantial number of firms in the
UK and Japan have taken this approach. The payoff from this method is also much
faster, as evidenced recently by Rockwell lnternational in their Dallas plant [ 131. The
advantage of classification and coding systems is that they lead to design rationalization
and variety reduction in the upstream areas and facilitate computerization and effective
usage of CAD, CAM, and CAPP data bases, as will be discussed in the next subsection.
Without going into extensive detail, we will briefly describe the common classification

Journal of Operations Management 153

 FIGURE 2
Functional Layouts, Lot-sizing, Lot-by-lot Completion of Operations etc.

COMPONENT 1
CLIENT 2
CDlPONENT 3
COMPONENT 4
CLONIC 5
COMPONENT 6
COMPONENT 7
CORONET 8
COMPONENT 9 t I
UMPONENT 10 I 1

Group Layouts, Lot-for-lot Ordering, Overlapped Operations etc.

COMPONENT 1
COMPONENT 3
C~PONE~ 7

COMPONENT 2
ATONES 6 PART FAMILY 2 ECONWI ES OF SCOPE
CCWONENT 8

COMPONENT 4
C~PONENT 5
COMPONENT 9
COMPONENT 10

and coding methods currently in use. Numerous coding systems exist: Brisch (U.K.),
Opitz (West Germany), MICLASS (TNO, Netherlands), CODE (MD%, U.S.), and SAGT,
to name a few. These coding systems are often classified into “monocodes” (hierarchicaf),
or “polycodes” (faceted). But this classification is only of academic interest since almost
all codes are a combination of the two. The US Air Force is currently attempting to
develop a generic classification and coding system, called GTCC.
Codes can also be classified as emphasizing either design aspects or process features.
But codes such as MICLASS/MULTICLASS, which is probably the most popular in the

154 APICS
U.S., attempt to incorporate both design and manufacturing aspects and for this reason
are quite long, running more than 30 digits. This code, developed by TN0 of Holland,
is now marketed by the Organization for Industrial Research, located in Boston.
Classification and coding involve a lot of preliminary groundwork and, for this reason,
have not been very popular. But this investment can be partially recovered when a
company adds a CAD system which requires the data to be keyed into the data base in
any case. Non-codification methods, such as PFA [3], involve a matrix manipulation for
forming cells of machines and the part families to be machined in them. The major
consideration behind the choice of the method for identifying part families is: How fast
must the payoff be? This assumes, of course, that the technical factors, such as the length
of the code, its manufacturing applicability, its ease of computerization, and so on, have
all been addressed.
Errors during codification are a major problem and semiautomated approaches are
currently being developed. In many ways, this is similar to the creation and maintenance
of data dictionaries in EDP installations.

Design Rationalization and Variety Reduction

The implementation of GT codes enables considerable savings in this area. In the

engineering phase, the design for a new part initially requires an investigation into whether
a similar part has been designed before. This would help to standardize the parts
manufactured by the firm. But this requires considerable memory on the part of the
design engineer in recalling a similar part.
Also, in Western countries, given the high turnover of technical personnel, design
proliferation is a way of life. Thus, identifying critical attributes for each part type, coding,
and storing them in the data base helps in subsequently retrieving the data on the basis
of these codes. This is an area of great savings potential, as shown in Figure 3, and the
benefits start very soon. Also, in conjunction with a CAD system, which brings down the
engineering lead time and increases productivity, GT results in better, more reliable, and
more maintainable designs, and also enables standardization benefits.

Process Planning

Group technology principles are utilized in Computer Aided Process Planning (CAPP)
under two types of implementation: the Generative Method and the Variant Method. In
the Generative Method, the process planning logic is stored in the system as a knowledge
base, together with the various algorithms that define the technical decisions. This is
similar to a Decision Support System. Then, taking into account the production processes
available within the firm, every new drawing is analyzed from its fundamentals in order
to arrive at a process plan.
Obviously, this is a very difficult system to realize. Computer Aided Manufacturing-
International (CAM-I) has developed CAPP software that has been implemented at firms
such as Lockheed-Georgia. One well-known system, GENPLAN, is not a truly Generative
system but comes closer than most other systems.
The Variant Method, on the other hand, is easier to implement and more popular. It
involves using the code to retrieve the process plan of a similar part designed earlier and
then making a minimal amount of modification to it.
The benefits of CAPP, identified in Figure 4, include lower process planning lead

Journal of Operations Management 155

 FIGURE 3

NUMBER OF
SHAF’ES

0 1 2 3 4 5 6 7 o
Number of Heeks of Engineering Design With Ciy

times, greater accuracy and consistency, routing standardization, and above all, considerable
savings in tooling investments. The same CAPP principles are used in tool design and
tooling standardization. The impact of CAPP is also felt on the shop floor when the
routings become more standardized. Figure 5 illustrates these advantages for the case of
General Dynamics, where the routings became considerably simpler after CAPP imple-
mentation.
Figure 6 depicts GT as the interface between the design engineering and process
planning stages, a potential solution to the CAD/CAM interface problem.

Cellular Manufacturing

The benefits of cellular manufacturing are the major reasons for adopting GT. This
aspect, therefore, was the first to be implemented in practice. The “group layout,” as it
came to be called, offers tremendous advantages. In job shops, the layout of the machines
is traditionally on the basis of process specialization, i.e., similar machines are kept
together. But in a group layout it is based on the products, better known as “part-family”
specialization. As noted by Burbidge [5], this is perhaps the most radical change in batch
manufacturing since the days of the Industrial Revolution. This difference is illustrated
in Figure 7.
At first sight, part-family layouts might seem inappropriate in intermittent and one-of-
a-kind situations. But on reflection, it will be found that true, one-of-a-kind situations

156 APICS
 FIGURE 4

Impact of CAPP

-2 -1 0 1 2

PRODUCTIONLEAD TIME
PROCESS PLANNING
LEADTIME
I%~H~NE L~II_IZATION
PRODUCTQUALITY
DIRECTLAWRUTILIZATION
UNIFORMITYOF PROCESSPLAN:
COSTESTIMATING PROCEDURES
kw~/Bu~ DECISIONS 1

PRODWTSTANDARDIZATION
CRITICAL/NOR SKILLS
~TERIAL STANDARDIZATION
PRODUCIBILITVOF PARTS
PLANT LAYOUT
MATERIALS HANDLING
PROWTI~N SCHEDULING
CAPACITY
PLANNING
-

+2 : Significant Beneficial Impact; -2 : Significant Adverse Impact

(Source: American Machinist, Aug. 1981)

are extremely rare. The use of group layouts has been found to be applicable even in the
shipbuilding industry in the U.K. [8].
The difficulty of redesigning existing job shops for cellular manufacturing seems to be
stalling the implementation of this aspect of GT in the U.S. In many ways this is similar
to the predicament faced by many British companies during the 1960s. Almost all the
techniques for designing cells have come from the UK, but the creation of cells has
always been more of an art. There is a noticeable lack of consulting expertise in the U.S.
in regard to this, when one compares the situation in England where pioneers like
Burbidge and several others assisted numerous companies in changing their layouts.

Journal of Operations Management 157

 FIGURE 5

Current Routings for 150

Very Similar Parts

Standardized Routings for

150 Very Similar Parts

(Source: Organization for Industrial Research, Inc.)

158 APICS
 FIGURE 6

/G / MANUFACTURING

Geometric Tool Tool

Modeling Design Making

GROUP TECHNOLOGY Machine

Design
Shop
Process
Planning Inspect ion
Drafting
N/C Assembly &
Programming Test

(Source: CAD/CAM, Ed. Khalil Taraman, CASA/SME, Dearborn, MI., 1980)

FIGURE 7

FUNCTIONAL LAYOUT GROUP LAYOUT

‘-I---
l
A
on
I II_

TURNING II GRINDING
a FINE BORING

MILLING A BORING rltr SHAPING

DRILLING I3 WELDING n HOBBING

I2

Journal of Operations Management 159

 The benefits of cellular manufacturing are well known. One of the major benefits is
the throughput time reduction. In functional layouts, the queuing times account for as
much as 95% of the cycle time, with the rest being taken up by move, setup, operation,
and stage-by-stage inspection. With GT, the throughput time is less than or equal to the
total operation time, depending on the degree of overlap of operations in the GT cell.
Since all the operations are conducted in more or less adjacent machines, overlaps are
easy to accomplish, as shown in Figure 8. This also has implications for just-in-time
production; given the small and predictable throughput time, production can be performed
just prior to the date of need. Note that the lead time also becomes more predictable, as
opposed to functional layouts where delivery promises have to be given well in advance
and include safety lead time, forecast errors, and so on.
This has other important benefits as well. Work-in-process (WIP) inventories go down
drastically, which decreases both the floor space needed and working capital requirements,
increases shop floor visibility, and so forth.
An important facet of functional layouts is the fact that the various operations for a
given product are performed in different work centers. In other words, there is an
operations-wise division of responsibility. This is in sharp contrast to GT, in which all
the operations occur in a single cell and control over jobs is extremely simple. Thus,
logistical complexity and expediting problems of the conventional functional layout are
reduced drastically; paperwork is virtually unnecessary, items can be traced quickly,
inventory records are more accurate, and so on.
There are other significant differences. Because all operations are done within the cell
and there is generally a part-family orientation in the thinking, there is automatically an
incentive to standardize the tooling relating to part families and reduce setup times. This
typically arises spontaneously instead of having to be encouraged and the setup time
reductions are often considerable. There is also commonly a significant capacity increase-
15% is a conservative estimate frequently used in the U.K.
The implementation of GT on the shop floor is mainly through the creation of 1)
group layouts, 2) GT flow lines, or 3) machining centers using composite parts. The
difference between a GT flow line and a group layout is that in the flow line the routing
of all parts within the cell are similar, whereas in the group layout the routings may
involve different paths in the cell. In the U.S., the use of stand alone, complex machines
has been extensive and has contributed to the current difficulty in establishing cells
starting from the present functional mode of operation.
Last, the part-family orientation prevalent in the GT setting enables a balanced
approach to automation. It becomes profitable, after creating various cells, to adopt a
progressive approach to automating the factory. This has generally been the case in Japan.
More than the level of technology, the key difference between the U.S. and Japan in
nonrepetitive manufacturing situations has been the more streamlined and balanced
automation in Japan.
One of the major impediments facing the automation industry in the U.S. is the
justification problem. Companies are finding it difficult to justify automation within, say,
a time frame of four years. Many explanations have been given, most commonly the
outcry against myopic financially-dominated acquisition policies. As noted in [ 181,
however, a major problem is that we are simply trying to force-fit islands of cellular
automation into conventional manufacturing settings and, hence, the benefits are not

160 APES
 FIGURE 8
Throughput Time with Functional Layout: 8 Weeks

OPN , WORK WEEK NO,

No, CENTER 1 2 3 4 5 6 7 8
I
1 TURNING Q IOIT]

H
2 MILLING 1 Q 101 T1

3 DRILLING I Q lolq

4 DEEIJRR ,lIIqlql
L I I I I I I

Throughput Time with Group Layout: 2 Weeks

E 3

4
2
GROUP NO,

Legend: Q: Queuing Time

X

(Source: Reference 4, p. 13)

$” ml

T: Transport Time 0: Setup & Operation Time

only marginal but also difficult to measure. Simply by creating a cell that produces some
part families at a faster rate while the rest of the shop follows conventional job shop
procedures creates imbalances of marginal benefit.
The justification problems should thus not be too surprising. On the other hand,
creation of semiautomated cells, even without a formal codification system, has in many

Journal of Operations Management 161

instances led to paybacks of less than a year. Rockwell International, cited earlier, is an
example of this.

Materials Management and Operation Scheduling

Given the short cycle operations found in group layouts, what type of materials
management systems should be employed? In the U.K., one of the first effects to be
noted was the inapplicability of classical methods such as reorder points (“stock control”
in British terminology). This led to the development of MRP-type methods involving the
explosion of a master schedule using the bills of material. This roughly coincided with
the MRP movement spearheaded by the computer industry and APICS (American
Production and Inventory Control Society) in the U.S.
In the U.K. this method was referred to as the “flow control” method. Later, this was
refined to the “period batch control” (PBC) method. It has been shown [ 15, 171 that the
PBC is simply an MRP system, but with small bucket sizes and lot-for-lot ordering. Thus,
short cycle flow control was advocated as the most suitable method for managing
materials in this kind of just-in-time manufacture. Companies such as Serck Audco in
the U.K. naturally evolved to this state after implementing GT, but the results in England
never reached what was predicted by the proponents of PBC, such as John Burbidge.
However, the full implementation of these practices did occur in Japan. It is worthwhile
considering whether this has anything to do with the basic management tenets of the
Western world.
There is currently a concern among many American companies as to whether MRP
concepts have, with the advent of GT and the just-in-time philosophy, perhaps become
outdated. But it has been shown [ 15, 171 that an MRP system is not only compatible but
ideal for cellular manufacturing. Also, it is now realized [ 12, 171 that the failure rate of
MRP in functional layouts is essentially due to the inherent complexities of this
environment.
The implementation of MRP in a GT context is generally much easier because of the
following factors [ 17, p. 831:
l Manufacturing lead times are much shorter and more predictable.
l The Period Batch Control (i.e., lot-for-lot) form of ordering, as the Japanese have
adopted, is more appropriate.
l Work flow is more ordered and streamlined than in process layouts, resulting in
easier control with less documentation and expediting requirements.
l Reduced WIP and other inventories contributes to greater accuracy of inventory
records, still a problem with functional layout based MRP systems.

The basic requirements of MRP such as BOM structuring, the realism of the master
schedule, etc. are unaffected. Also, production smoothing plays a minor role in master
scheduling because of reduced changeover costs. And the absence of independent
component lot sizing in the product structure makes capacity requirements planning
much easier.
There is another major difference as well. Priority planning subsequent to order issue
is obviated in group layouts. In functional layouts, with their distinction between operation
priority versus job priority and all their other attendant complexity, it is difficult to
control the operations and the tendency has thus been to computerize this confusion

162 APES
through “shop floor control” (SFC) systems. Once again, before rushing headlong into
computerized approaches, it is wise to get back to basics. In group layouts, SFC is easier
because almost all the operations are carried out in a single cell. Also, there is no
distinction between operation priority and job priority-they are one and the same, with
all the machining done just before actual need. Figure 9 shows the schematic of a GT-
based MRP system.
Economic lot sizing persists in many firms. The pitfalls of economic lot sizing however,
have come to be known very widely:
l In conventional EOQ-type models, as well as those used for dependent demand in
an MRP framework, the setup cost is assumed to be fixed. This is simply invalid in
a GT context, and cellular manufacturing in general. Also, new production technologies
have enabled the quick downloading of programs and tool changeovers which has
drastically reduced setup times. Therefore, EOQs of 1 are not an unrealizable dream
anymore.
l Even with conventional models, it has always been realized that the cost function is
insensitive near the EOQ. Even reducing the quantity by half results in very marginal
cost increases.
l The basic philosophy of item-by-item lot sizing is based on suboptimization. By
calculating the economic quantities on an item-by-item basis imbalances in the
system are created that result in inacceptably high opportunity and other costs.
l The excess inventories created add to quality, storage, obsolescence, and other costs.

Quality Control

Quality improvements with GT have been striking. Because of overlapped operations,

a defective part is identified almost immediately after it is machined. This is in great
contrast to the typical functional layout that involves stage-by-stage machining and
inspection based on sampling plans. Significant scrap reductions also result from the
reduced lot sizes in GT. Japanese implementations of GT commonly aim to perfect these
practices.
The term “quality at the source” arises from this type of operation. Even though GT
proponents have only pointed out the better quality of products manufactured in this
setting, the Japanese have integrated the Deming and Feigenbaum concept of “total
quality control” synergistically with GT concepts.
It is also interesting to note why the Japanese do not use lot sampling plans [ 161:
l MIL-STD-IOSD, MIL-STD-414D, and the Dodge-Romig tables are all based on
percentage defects that are simply too high in the present state of global competition.
Presently, competitors are dealing in terms of a defect per 10,000 or 100,000 items.
l Since material transfers are in sublots, no stage-by-stage inspection of lots is possible.

Impacts on Other Areas

In conventional job shops, costing systems are geared to the work center approach.
Every cost center has an overhead rate that is charged to a particular component
separately from the labor rate. But in GT, and even conventional settings, the proportion
of direct labor has decreased due to increasing automation, invalidating the allocations
of overhead based on direct labor. Also, since in cellular manufacturing the cells are the

Journal of Operations Management 163

 FIGURE 9

//

Raw
Imp. Material
Stores EIEI c
F
Suppliers
GT Cells
El
4

\ --- Purchase

-----------7
“Master I

(Source:Reference17)
cost centers, a different costing and management control system is required. This has
been clearly observed in many British firms changing over to GT.
GT also impacts the Personnel/Human Resources area. In GT, operations are largely
conducted in a single cell, which leads to a skill requirement of breadth, rather than
depth. Also, the part-family approach apparently leads to greater job ~tisfa~tion. This
aspect has been noted in Japanese factories by many U.S. writers but, strangely, has not
been traced to cellular manufacturing and the part-family concept. Similarly, for incentive
schemes, group incentives have been found to be preferable to individual incentives,
which should not be surprising.

AN ASSESSMENT OF BATCH MANUFA~URING TODAY

The U.S. is currently in the peculiar situation of being one of the major bastions of
the functional mode of manufacturing, and at the same time, the center of virtually all
of the newly introduced technologies rooted in part family-oriented manufacturing such
as CAD, CAM, CAPP, and FMS. These new manufacturing technologies are increasingly
pointing out the need for total-systems approaches. ~anufactu~ng cannot be viewed as
a set of isolated subsystems anymore but must be treated as a single sequential set of
integrated activities. For the sake of convenience, using a divide and conquer approach,
we have organizationally and academically fragmented these activities. Even outside the
firm there has been institutional divisionalization. For example the Society of Manufacturing
Engineers focuses on upstream manufacturing functions, while APICS focuses on such
areas as production and inventory functions. This has led to the deveiopment of myopic
principles, practices, “crusades,” and, of course, numerous acronyms. Unfortunately,
most manufacturing firms lack the managerial insight and background to foster practices
based on synthesis and a total systems viewpoint.
Upon reviewing the recent industry crusades, a significant departure from such systems
as MRP and MRP II may be noticed. Current emphasis (e.g., see [lo]) is on zero
invento~es, just-in-time, flexible automation, and so on. These newly endorsed manufac-
turing practices are essentially derived from Japanese manufacturing methods. Unfortu-
nately, they seem to have been somewhat hastily compiled and constitute a perpetuation
of the subsystem approach of the past. They can be very confusing to manufacturing
managers, for several reasons.
For one thing, having been indoctrinated into MRP principles for so long, this apparent
shift in focus is disturbing. Of course, current wisdom states that the classic p~n~iples
are not outdated; the new principles simply have to be added on. Yet there really has
not been a coherent linkage between these new concepts and the ones endorsed up until
now. Also, many of these newly advocated practices do not constitute rational objectives
unless and until we depart from the present functional mode of operation.
Consider, for instance, the directive “develop flexible, multipurpose workers.” This
essentially stems from the fact that this has been observed in Japanese companies. As we
mentioned earlier, in cellular manufacturing scheduling flexibility requires that workers
have a wide breadth of skill because all operations are confined to the cell and there are
invariably more machines than workers. This is a spontaneous result of switching over
to a cellular mode of operation. To practitioners operating in a functional mode, this
directive really does not constitute a rational objective. Similarly, it can be seen that

Journal of Operations Management 165

 setup time reductions, material handling in small lots, and so on are all spontaneous
results of this altered approach to manufacturing.
Essentially, the various characteristics of cellular manufactu~ng have been mistaken to
be the objectives rather than the characteristics of the outcome. The directive “maximize
the use of group technology” in the context of just-in-time inventories illustrates this.
While identifying and pursuing a subset of a larger philosophy, the former is being
advocated in order to realize the latter. Essentially, this is putting the cart before
the horse.
Creating the conditions to achieve the desired goals is preferable to merely preaching
the goals. But in APICS’ JIT crusade, there has not been a strong movement toward
changing the layout to a cellular form, as illustrated in their definition [I] of GT: “GT is
a manufacturing philosophy based on the sameness of parts . . . and it anticipates a
cellular mode of equipment layout.” The suggestion is that the layout change is the last
alteration to be expected. This is misleading, especially if one observes the GT implemen-
tations overseas.
In the great majority of cases, the reason for adopting GT has been to achieve the
benefits of group layouts more than anything else. The layout change, it should be
realized, is applicable for a much wider range of nonrepetitive manufactu~ng than what
one usually imagines. One has tended to focus solely on the repetitive situation found in
such countries as Japan.
A recent survey [I I] of 20 firms that have adopted GT revealed that GT is still in the
very early stages of implementation in the U.S., especialty when conside~ng cellular
layouts. There is an urgent need to realistically address this problem. Currently, research
is directed toward redesigning the pure job shop; however, the real problem is to design
a cellular layout starting from a functional mode of operation that utilizes not only
general-pu~ose equipment but also expensive machine tools and complex machining
centers. It should be remembered that most of these techniques for cell design emanated
from the U.K. at a time when even the machining center concept was new. The US. is
faced with a slightly different problem.
Research, however, seems to be focusing instead on extensions or alternatives to
Burbidge’s PFA method, usually through mathematically refined approaches reminiscent
of the purely quantitative phase of academic research.
Academic approaches have typically been characterized by problems and models of
narrow scope and definition. They have also been driven by “researchability” more than
real world needs [2]. The focus has frequently been on subsystems and optimization
based on limited and solely quantitative criteria rather than the reality of the situation at
hand. This can be seen in lot sizing, for example.
The “lot size algorithm industry” [I!?] is still thriving in the U.S., whereas many of the
EOQ-type concepts have been invalidated long ago elsewhere. For example, in the U.K.,
early proponents of GT found this lot-sizing obsession difficult to break through and
brought out several classic articles highlighting the myopic features of item-by-item lot
sizing. The “Dragons in Pursuit of EBQ” series f7] and “The Case Against the EBQ” [6]
are two examples. Unfortunately, the widespread availability of computers has encouraged
the extensive misuse of these algorithms. In industry, computer power has also prompted
the design of elaborate shop floor control systems for the functional mode of operation,
thereby computerizing these inefficient methods of production.

166 APICS
 When considering new technology, managers are advised to step back in time and
perspective, and take a long-range view before plunging into the “automate or evaporate”
impulsiveness so currently in vogue. By adopting simplicity of operation as a goal, and
group technology principles as the philosophy to attain it, factory automation will proceed
more naturally while its benefits accrue to the firm.
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167