Technological Changes in

Operations Management
Madhuri Hebbalkar
AIMR, Sankeshwar
 Points to be discussed

• Classification of technology
• Automation
• Overview of manufacturing activities
• Artificial intelligence
• Electronic data interchange
 Most of the organizations adopted new technologies
in the manufacturing process to

» improve the productivity

» reduce labor cost
» improve material handling
» Manage inventory
» Provide safe work environment
• Organizations which invested more on
technologies are showing greater performance
than the others with less investment in
technology.

• Since the investment in technology is very

expensive, it should be done with consideration

• To remain competitive, technological up gradation

is essential.
 Concepts

 Technology is a set of processes, tools, methods

and equipment used to produce goods and services

 Technology: Know how, physical things and

procedures used to produce parts and services

 Advanced Technology: Application of the latest

scientific or engineering discoveries to the design
of production and operations processes
Difference between technique and technology

Technique Technology
It is the totality of It is the organization
methods rationally and application
arrived at and having knowledge for the
absolutely efficiency achievement of
practical purposes
 Examples of technology

• Manufacturing/ production technology

• Design technology
• Computer technology
• Communication technology
• Nuclear technology
• Satellite technology
• Space technology
• Missile technology
• Laser technology
Technology can be classified as:
• Manual technology
• Mechanized technology
• Automated technology
• Current technology
• Appropriate technology
• State-of-the-Art technology
• Advanced technology
• Obsolete technology
• Capital-intensive technology
• Labour-intensive technology
 • Manual technology
• Use of muscular power to do the work
• Mechanized technology
• Use machine power in place of muscle power, first step
towards automation
• Exam: power operated tools, tool- changing devices,
• Automated technology/ automation
• Any form of equipment or machine which will carry out a
present program or sequence of operations and at the
same time measure ad correct its actual performance
• Current technology
• It is any technology currently used by a firm in its
operations
• State-of-the-Art technology
• Modern technology which has been adopted by many
developed countries in the world. This technology will
enable the firm to produce state – of- the- art products
using the state- of- the- art designs
• Advanced technology
• The latest technology based on the scientific or
engineering discoveries and used in design and
production process
• Appropriate technology
• It is the technology which meets the requirements of
time, place and objective of a firm at a particular point
of time
• Obsolete technology
• It is an out dated technology which has been replaced by a
superior technology
• Capital-intensive technology
• Involves huge investments in capital assets such as
equipment & machinery, materials handling and storage
systems, information handling (storage and retrieval
systems), communication systems and office automation
equipments
• Labour-intensive technology
• Do not involve huge capital investment
• Makes use of abundant man power available in the
country
• Ex.; in India, textile and mining industries adopt labor-
intensive technologies
 Choice of Technology
Choice of technology depends on:
(i) Internal Factors:
Product life-cycle,
Technology life-cycle,
Plant capacity and
current technology
(ii) External Factors:
Government policies & regulations
Market Scenario
 Production Technology (or Manufacturing
Automation)

 Some of these advancements in production technology are:

(i) Numerical control and computer numerical control (NC and CNC)
(ii) Automated process controls
(iii) Vision systems (automated inspection systems)
(iv) Robots
(v) Automated identification systems (AIS)
(vi) Automated storage and retrieval system (ASRS)
(vii) Automated guided vehicles (AGV)
(viii) Automated flow lines
(ix) Automated Assembly Systems
(x) Flexible manufacturing systems (FMS)
(xi) Computer integrated manufacturing (CIM)
(xii) Enterprise resource planning (ERP)
 Design Technology

i. Computer-aided design (CAD)

ii. Computer-aided design and manufacture (CAD/CAM)
iii. Standard for the exchange of product data (STEP)
iv. Virtual reality technology
i. Ex. 3- D layouts of everything from restaurants to
amusement parks
 Management of Technology
 Management of technology links R & D, engineering and
management to plan, develop and implement new
technological capabilities that can accomplish corporate
and operations strategies

 It means identifying technological possibilities that

should be pursued through R & D, choosing from both
internal and external sources the technologies to
implement and then following through their successful
implementation as products, processes and servicesc
 Technology Strategy
 How technologies should be chosen and how these
choices link with strategy to create a competitive
advantage are to be examined

 Technology strategy deals with more than just

technological choice. It also deals with whether an
organisation should be a leader or a follower in
technological change and how to evaluate radically new
technologies when conventional financial analysis
won’t do the job.
 Automation

• In the past, automation meant the replacement of human

effort with machine effort, to save labor costs.
• Today, automation means integrating a full range of advanced
information and engineering discoveries into operations
processes for strategic purposes.
• Today, automation is applied not only for labor cost savings,
but also for:
– Improved quality
– Faster production and delivery of products/services
– Increased flexibility
 Automation
• It is a technology that performs a task or set of tasks based on
programmed commands.
• It is used to control , monitor and manufacturing activities.
• It includes a set of procedures, guidelines based on which
machines can automatically perform activities performed by
humans.
• This in conjunction with automatic feedback and control , do
not require human support.
• Most of the systems use computers as the productivity is
higher.
• Computers use advanced control algorithms to optimize the
process and improve the reliability of the results.
 Advantages

Improvement in productivity-
• machines can perform repetitive and monotonous
tasks continuously without loss in productivity
• are capable of producing more units than humans in
a given time period.
Efficient use of materials-
• increased process control makes more efficient use
of materials, resulting in less wastage.
contd
Improvement in the quality of the product-
automated machines generally perform the
various manufacturing process with lesser
variability than human workers which results in
greater control and consistency in product quality.
Reduced factory lead-time:
– automation enables organizations to process a
typical production order expeditiously
 contd

Improvement in work environment for the

workers
• They help safeguard workers against the
hazards of the factory environment.
• Due to automation ,there is a reduction in the
average number of working hours per week
for the worker.
 Disadvantages

• Negative feedback from the employees

• High initial investment
• Higher level of maintenance needed
• Less flexible- less customized
• Requirement of technical manpower
 Overview of manufacturing activities

• Choice of business, territories and products

are based on the needs and preferences of
their target customers.
• To find out the market requirement
• Technical and engineering analysis
• Production process begins with a series of
activities
 contd

• Engineering drawing are initially drawn for

each component of the product
• These individual components are tested to see
the technically compatibility with the other
components of the products
• A prototype of the product is made to test the
performance of the product
 contd

• Organizations can identify shortcomings, defects,

faults in the products through the prototype testing
• The product design is revised till it satisfies the
requirements of all performance evaluating
parameters
• Once the product structure is finalized, the
components are produced ,assembled, fabricated
accordingly
• In co-ordination with these activities, the purchase
department obtains requisite quotations for
materials required
• Quality department develops methodologies to
monitor the quality of the product and
manufacturing process.
• Product starts only after the necessary equipment
and machinery is installed and raw material is
obtained.
• During the process, equipment maintenance, raw
material sourcing, quality control and packaging are
carried out as and when required.
 Software Systems for Automation

• Three “complex” computer-based systems

– Computer-Aided Design and Computer-Aided
Manufacturing (CAD/CAM)
– Computer-Integrated Manufacturing (CIM)
– Enterprise Resource Planning (ERP)
 CAD
• Computer aided design- ( CAD)
• It is a technique used for designing product and process on a
computer terminal
• The designer working with a CAD system creates the lines and
surfaces that form the object (product, part, structure etc) and
stores this in the computer database
• The CAD system , generate detailed drawings required to create a
product and various views of an assembly and its components.
(wire frame model in 3d space)
 contd

• The use of CAD system in product design enables production

engineer and marketing personnel to view the items and
suggest changes in the design before the commencement of
production

• Few of the top- end CAD packages allow testing at the

drawing stages, thus eliminating the need of costly prototype
testing at the initial stages of production design

• It provides comprehensive tools for improving design process.

• Initially, CAD systems - simply electronic drawing boards - more
commonly called computer-aided drafting systems because
they only automated the drafting stage of a product's design

• Nowadays, CAD is capable of automating most of, if not the

entire, design process

• Two main categories of CAD— 2D CAD and 3D CAD systems

.
 2D CAD
• Two-dimensional CAD providing different views of the
product in various 2D planes
• They fail to portray product properties, such as volume,
surface area and center of gravity
• But using 2D CAD is generally faster than manual drawing,
and it's easier to use than 3D CAD
• It's suitable for products with very simple geometries
 3D CAD

• 3D CAD depicts product designs in three dimensions,

providing a virtual prototype.
• 3D CAD software uses one of three modeling methods

- Wire frame modeling

– surface modeling and

– solid modeling.
Wireframe modeling-
– The simplest of the three
– shows the part shape using interconnected line
elements that convey information about edges, corners
and surface discontinuities
Surface modeling –
– It depicts the outside part geometry and in so doing,
clears up some of the ambiguities of wire frame
models
solid modeling-
– It is the most sophisticated form of 3D modeling
defines both the exterior surface and the interior
volume and mass of an object
 Advantages of CAD
• Increase in productivity
• Improvement in the quality of the product or
process design
• More standardized products and design
documentations
 Automation in controlling
processing equipment

• Automation is used to control activities involved

in the manufacturing process.
• It offers a set of procedures and equipment that
automatically performs those activities that
were supposed to be performed by humans.
• Exa- steel industry
 Computer aided manufacturing (CAM)
• In CAM, computers are used either directly to
control the processing equipment or indirectly to
support manufacturing operations
• the use of computers to indirectly support
manufacturing operations is often referred to as
indirect CAM
• The use of computers to directly control the
processing equipment is referred as direct CAM
 CAM
• Indirect CAM –involves capturing data
regarding the flow of items through automatic
means such as bar coding, and using this
information in planning and scheduling
production activities.
• Application- for activities such as capacity
planning, purchasing, inventory control,
quality reporting and so on
 CAM

• Direct CAM- it links computers directly to one

or more machines such that the production
processes are monitored and controlled by
computer signals
• It is widely used in several kinds of
manufacturing activities
 CNC-computer numeric controlled
• CNC machines-key elements of CAM
• These are controlled by software instructions in the
memory of a computer
• These machines are equipped with a screen and
keyboard for writing and editing numerically
controlled programs at the machines
• They store operational instructions on their on-
board computers which control their operations.
• They can change the type of operation to be
performed based on the process requirements
without any human support.
 Benefits of using CAM
• Reliable information inputs
• Consistent product quality
• Reduction in labor costs
• Better control and management of equipment
and materials
• Improvement in production rate
 Disadvantages of CAM

• High cost is involved in implementing CAM

• Any error in the computer program can result
in the production of many erroneous parts.
• Require skilled machine operator
 Flexible manufacturing system
• It is a form of flexible automation in which
several machine tools are linked to the
material handling system
• A central computer controls all aspects of the
system
• It is effective in producing different items that
have similar processing requirements
 Components of typical FMS
• An automated loading system to load
materials.
• Two or more machining centers, which are
automated to change tools by themselves
• A system to move materials in between
machining centers
• An unloading system
• A central computer integrates the whole
process
 Functioning of FMS
• The automated material handling equipment moves
the requisite materials to the appropriate work-
center
• Machines at these centers are pre-programmed to
select, position and perform specific operations with
many tool options
• Once the machine processes a particular batch, the
central computer signals the details of the next job
and each machine repositions and retools
accordingly.
• In the mean time , the processed parts are
automatically transferred to the next machining
center in its route
• It is used by those production organizations in which similar
components are used to produce all the products or
different products manufactured on variations of the same
design

• Advantages of FMS
• Reduced the direct labor
• Shorter response time
• Consistent quality of products
• Better control over the manufacturing processes

• Disadvantage-
• Huge capital investment
Typical FMS
 Flexible Manufacturing System (FMS)
X
Pallet
Transfer Tools
X
System
X X Machine 1

Workpiece X
in queue X Tools
X
X Machine 2
Pallet with
X Computer
workpiece X Tools
attached X
X Machine 3
X
Load Unload
Parts Worker
 Computer integrated manufacturing
(CIM)
• It refers to a computer application that connects various
computerized systems into a single multiple functional system
Exa - budgeting, CAD/CAM, process controls, group
technology systems, MRPII, financial reporting system etc are
linked together
• It represents the highest level of integration in manufacturing
• Main objective- to reduce direct cost( labor, material) and
indirect cost (material handling and inspection)
 Components of CIM
Business CAD CAM
activities
procurement Engineering PLANNING CONTROL
Order entry analysis
Capacity planning Process-
Payroll Drafting controls
design
Billing etc Materials planning Shop floor
review
control
Computer-aided Computer-
process planning aided
inspection

Manufacturing activities-
Materials handling, fabrication, assembly,
inspection
 Computer Integrated Manufacturing (CIM)

• Incorporates all manufacturing-related

functions
ASRS Process
Controls

Automated GT
Assembly Systems

CAD/CAM MRP II
CIM is
• Capable of controlling and coordinating every phase of
production
• Does not have a fixed process structure
• Varies from organization to organization depending on the
fundamental requirements
• It combines database systems, manufacturing equipment and
sub – systems together in a single integrated system
• So the organizations are able to transform in product ideas
high quality products in minimum and at minimum cost
 Functioning of CIM
• It takes the details of product design from a CAD system and
customer order information systems
• Uses this information to create purchase orders, work
instructions, tooling requirements etc
• Then it develops schedules for production equipment and
coordinate the activities and flow of materials throughout the
manufacturing unit
 Functioning of CIM

• It tracks the movement of the product in production units,

monitors product quality and tool wear
• It stores the data for future analysis
• It keeps track of all inventory items( raw material, spares and
components, semi finished goods and finished products)
• Automatically purchase orders will be released when
necessary
 Advantages of CIM
• Reduction in operating cost
• Improvement in quality
• Reliable delivery performance
Exa- Motorola, Sony, Toshiba
( integrated their design, sales, scheduling,
manufacturing, purchasing, accounting
systems by using CIM)
 Disadvantages of CIM

• High cost of implementation

• Lack of standardized interfaces between the
various CIM components
• Slow acceptance of standardized
communication protocols to support
integration
 Artificial intelligence (AI)
• The term AI was first used by John McCarthy
• Today this term is frequently applied to the branch of
computer science
• It is a branch of computer science that focuses on the
development of intelligent machines that work and behave
just like human beings
• Computers, equipped with AI have a capacity to perform tasks
commonly associated with the higher intellectual process
characteristics of human being such as the ability to reason,
discover meaning, generalize, or learn from past experiences
 Artificial intelligence (AI)
• Systems with AI
– Manipulate symbols
– Can assume and simulate inductive reasoning by
comparing available data to ideal models
– Can reason and draw conclusions even when the data
is incomplete
– More flexible than conventional control systems
• Divided into two categories
– Augmentation: AI which helps out humans in their
day to day activities
– Automation: AI which functions on its own without
human intervention
 Examples of AI in Supply chain
• Self Driving cars: Google & Tesala
• Self organized factory: Siemens (automatic
conversion of orders and demand into work
orders and incorporation into production
processes)
• Danone (food company): uses AI to analyze
the demand planning gains
• IBM with Watson Supply chain aims at
increasing chain visibility
 Expert systems

• These are the programs designed to provide users the

expertise of professionals in a particular field
• It can be viewed as “ computerized consultants” for decision
making
• It consists of an inference engine , which is a program that
enables the system to evaluate the rules in the knowledge
base
• It recommends a decision based on expert knowledge
• Expert systems are constructed by obtaining this knowledge
from a human expert and coding it into a form that a
computer may apply to similar problems
 Expert systems

• It makes use of facts, knowledge, rules to diagnose

problems and suggest solutions
• A single inference engine can be used to drive
different knowledge bases as the code of the
inference engine is separate from the knowledge base
• These systems have been applied in credit & loan
approval, production scheduling, process control
design for manufacturing, repair services and
maintenance activities
 Components of an expert system

user
Professionals or
problem solution experts

Front – end interpreter

Inference engine
Procedural reasoning Knowledge
controller base
 Robotics
• It is an automation technology
• Based on two related technologies
numerical control
teleoperators

• Numerical control – it is a method of controlling machines by

means of numbers coded on punched paper, tape or other
media
• Teleoperators – it is a mechanical manipulator that is
controlled by an individual from a remote location
 Robotics

• Examples –
• In automobile industry, use of computer controlled one armed
robotic devices for tasks like lifting, welding, assembling parts,
spray painting of automobile bodies

• Assembly lines – high performance robots with built- in sensors

• A large number of electronic firms employ robots to sort or test

finished products

• Robots in manufacturing-operations involved are

material handling
processing operations
assembly and inspection
 Robotics

• Materials handling – the application of robots include

transfer of materials from one location to another , loading,
unloading
• Movement range is from simple operations of (lifting and
placing items) to complex operations (placing items based on
calculations)
• Robots equipped with tools like gripper are employed to load
and unload
 Robotics

Processing operations-
• These operations include activities like spot welding, continuous
arc welding, spray painting etc
• These operations involve the manipulation of a tool by a robot to
perform a particular action
 Robotics

• Assembly and inspection-

• Since most of the operations on an assembly line are
repetitive, use of robots have been increased
• Robots are used in inspection of production processes and
products
• Robots with sensors are used to check the consistency in the
quality of the product
 Robotics

Robots can be employed for the jobs where

• Repetitive and same basic work motion in every cycle

• Operations are hazardous and uncomfortable for a worker
• Tasks requires the part or tool that is heavy and difficult to
handle
 Electronic data interchange
• It is a system in which standardized forms of electronic
documents are transferred between the two computer
systems.
• Customers and suppliers or departments within the
same organization can share and transmit information
electronically in real time using EDI
• Ex. - sharing of information between various
departments of an organization
 Types of Manufacturing Automation

• Automatic Identification Systems (AIS)

– Sense and input data into computers
– Use bar codes, radio frequencies, magnetic
stripes, optical character recognition, machine
vision
– Data read from products, documents, parts, and
containers
– Used in warehouses, factory floors, retailing,
wholesaling
– Example – scanner at grocery store checkout
 Types of Manufacturing Automation

• Automated Process Controls

– Use sensors to obtain measures of performance
– Compare measures to standards
– Might use “expert system” to determine if/what
process adjustment is necessary
– If necessary, change settings of process
– Long used in chemical processing, petroleum
refining, paper production
 Automated Production Systems
• Automation technology becoming more
sophisticated
• Focus has shifted away from individual
machines
• More common are whole systems of
automated machines linked together for
broader purposes
 Automated Production Systems

• Automated Flow Lines

– In-line, automated processing machines linked by
automated material transfer
– Perform without need for human attendance
– Used to produce an entire component
– Also called fixed automation or hard automation
– Used when product demand is high and stable
 Automated Production Systems

• Automated Assembly Systems

– Automated assembly machines linked by
automated material transfer
– Operations are component insertion and joining
– Produce major assemblies or complete products
– Often use standard (lower cost) robots
– Product design appropriate for assembly by
humans is not fitting for automated assembly
 Redesigning Products for Automated Assembly

• Reduce the amount of assembly required

• Reduce the number of fasteners required
• Design components to be automatically delivered and
positioned
• Design products for layered assembly and vertical insertion of
parts
• Design parts so that they are self-aligning
• Design products into major modules for production
• Increase component quality to avoid machine jams
 Automated Production Systems

• Flexible Manufacturing Systems (FMS)

– Kits of materials/parts for a product are loaded on
the materials-handling system
– Code is entered into computer identifying product
and its location in the sequence
– Each production machine (without a worker):
• Receives settings/instructions from computer
• Automatically loads/unloads required tools
• Carries out its processing instructions
– Product automatically transferred to next machine
 Automated Production Systems

• Automated Storage & Retrieval Systems (ASRS)

– Receive orders for materials from anywhere in operations
– Collect the materials from locations in warehouse
– Deliver the materials to workstations in operations
– Three major elements of ASRS are:
• Computers and communication systems
• Automated materials handling/delivery systems
• Storage and retrieval systems in warehouse
 Automated Production Systems
• Automated Storage & Retrieval Systems (ASRS)
– Main benefits of ASRS are:
• Increased storage capacity
• Increased system throughput
• Reduced labor costs
• Improved product quality
 Software Systems for Automation
• Enterprise Resource Planning (ERP)
– A complex set of software programs
– Integrates most of the business functions in an
organization
• Accounting
• Human resources
• Purchasing
• Production
• Logistics
• E-Business
 Software Systems for Automation
• Enterprise Resource Planning (ERP)
– Five leading ERP software companies are:
• SAP ( their “R/3” software is top seller)
• Oracle
• J.D. Edwards
• PeopleSoft
• Baan
– Can take several years and $millions to implement
(Chevron spent $160 million over five years)
 Automation in Services
Example
• Airlines – air traffic control, passenger reservation
• Banks – ATMs, computerized bank statements
• Gas Stations – automated payment (pay-at-the-pump)
• Health Care – MRI system, AGVS for waste disposal
• Grocery Store – self-service checkout stations
• Real Estate – web based house-for-sale tour video
 Automation in Services
• Trend developing toward more-standardized services
and less customer contact
• Service standardization brings trade-offs:
– - Service not custom-designed for each customer
– + Price of service reduced, or at least contained
• Banking industry is becoming increasingly automated
• Service firm can have a manual/automated mix:
– Manual - “front room” operations
– Automated - “back room” operations
 Degree of Customer Contact in Services
and the Use of Automated Equipment
Degree of
Customer Contact
High Manual Operations

Mechanized Operations
Automated
Operations
Low
Capital
Low High Intensity
 Facts of Robotics

• India has built a six-legged robot with tennis

balls for shoes to be used in case of accidents
at nuclear power plants.
• Indian defence firms and aeronautic
companies have also shown an interest in the
robot
 Practical usage of Robots
• Maruti Udyog Ltd. at Gurgaon is employing robots for welding
purposes
• Bharat Electronics Ltd. is having pick and place robot for
coating of television tube. This robotic system made possible
to achieve 92% yield in the coating process.
• Bhabha Atomic Research Center, Trombay, is using a mobile
robot for maintenance and servicing of atomic reactor. They
also developed a 5-axis articulated robot to impart training in
robotics to the staff.
 Practical usage of Robots

• Central Machine Tool Institute, Bangalore, has

developed a 4-axis hydraulic cylindrical manipulator
for loading, unloading prismatic objectives. They
have also developed FMS based on robotic system
comprising of CNC lathe, conveyors and DC motor
driven 4 axis arm
• Larsen Turbo Bombay is using machine loading robot
at their Pawai plant
• Bhilai Steel Plant, Indian Railways and many other
would very soon employ robots for their use
A general purpose robot, acts as guide
during day and security guard at night
An intelligent AGV drops-off goods without
needing lines or beacons in the workspace
A laparoscopic robotic surgery
machine
A Pick and Place robot in a factory
Industrial Robots
Robots
• Thank you