How Computerisation and Information Technology Increases Worker Productivity - Literature review Example

?How Computerisation and Information Technology Increases Worker Productivity and Reduces Costs of Production in Manufacturing Industries Review of the Literature In the recent years, there have been great advances in computers and information technology (IT) as well as their applications. Currently, almost all major institutions have achieved some level of computerization or apply various types of information technologies in their production and marketing processes. As from the beginning of 1990s, these technologies have accounted for a significant proportion of capital stock and the percentage has been increasing dramatically. In 1970, it accounted for 6.4% of the US capital stock and in 1988, this figure stood at 19.8% (Roach, 1988). The increase has been more pronounced in the manufacturing sector. In this sector, it grew from 1.6% in 1970 to 10.6% in 1988 (Roach, 1988). Extensive computerization and use of information technologies initiates an interest in knoing why many organizations or institutions have adopted these technologies. Most organizations are profit oriented and this means they not only focus positive returns but also how to obtain good financial rewards. Having this focus, many organizations always seek ways of limiting their costs of production while increasing production at the same time. This paper gives a literature review on how computerization and the use of IT increase worker productivity and reduces costs of production for many organizations, the focus being the manufacturing sector. Computerization and the use of IT in the workplace The term information technology can be defined as the acquisition, processing, storage and distribution of numerical, textual, vocal and pictorial information through a combination of computing and telecommunications (Allen and Morton 1994). It therefore encompasses computer software, computer hardware, information systems, processes, data constructs, programming languages. Machines under IT domain render any data or information in visual format via multimedia distribution. Computerisation or computing refers to the action of utilising and improving or advancing computer software and computer hardware according to Agrawal and Symes (1994). In simple terms, computerisation is any goal-oriented activity benefiting from computer hardware and software. In the case of manufacturing industry, machines are run by computers that manipulate data according to a set of programs or instructions. General examples of utilisation of computerisation and IT manufacturing industries include networking, data management, information databases, and most importantly automation of machines. Like in many organisations, labour productivity in manufacturing industries is calculated by dividing the level of output by the specific level of labour input. Worker productivity is one of the important elements in determining the efficiency of an industry. Impact of computers and ITs on worker productivity and costs of production For many manufacturing industries, information technologies have continuously influenced work and changed the way it is done. One of the main impact of computerization and the use of technologies is the automation of machines. This has allowed manufacturing industries to assign repetitive and non-core tasks to machines while allowing employees to specialize in performing non-repetitive, complex and core duties of the organization. In this case, employees are able to fully utilize their skills and talents in the tasks assigned to them. This means that they offer their best and can handle more work in the area assigned to them. Before the introduction of computers and IT in the workplace, employees would carry out every type of production activity including the most tedious and repetitive tasks. Due to the distances between the physical places of production assigned to these tasks, workers wasted a lot of time moving from one part of the industry to the other. As stated above, automated machines have taken over some of the repetitive and tedious tasks and allowed workers to perform the rest. Under this specialization, employees work from specific points and hence it helps them to avoid wasting time. In turn, this time is used for production purposes and this increases the overall productivity per worker. Division of labour is paramount in the attainment of quality and quantitative production per worker. In this form of specialization, the production of a given product is divided into many separate but interrelated tasks and each task is performed by one person or one work unit. In this type of work design, each worker is limited to their spheres of competency. It also gives workers the authority to perform specific tasks without overlapping with others. Many manufacturing industries have realized increased workers productivity as a result of the application of the principle of division of labour. Computerization and IT have a big impact on division of labour. In some industries, they have encouraged or initiated division of labour and in some of the industries, they have reduced division of labour. Computerization and IT are integrated into the production process and in respect to this, many industries have restructured their production process. Automated machines and computers perform some of the tasks while each worker or work unit is assigned a specific role. This is possible because the presence of computers and IT technologies reduces the amount of work left for the usual number of employees. This makes it to look like the industry has hired new workers and in this case, it is possible to assign one each person or work unit a special task (Allen and Morton 1994). One thing that makes division of labour to increase worker productivity is that each worker gains more competencies in the performance of the assigned tasks and this increases their autonomy and pride in it. It also increases accountability of work and such workers will always strive to ensure they emerge as the best performing workers. This is opposed to cooperate accomplishment of tasks in which hardworking workers hardly get recognized. Such a competition and awareness of individual attention increases productivity among workers. Most manufacturing industries that have adopted division of labour after computerizing their tasks agree through computerization and utilization of IT, output per worker has increased while costs incurred per unit produced have reduced. This is true especially for organizations that conduct mass production. In this case, the combination of the works done by many specialized workers or work units lead to the production of the final product. Allen and Morton (1994) state that in some situations, it has also been found out that computerization and utilization of IT has enabled many manufacturing industries to increase the variety of tasks performed by each worker and consequently, increasing their levels of production. This is the opposite of division of labour. Computerization and IT utilization attains the above-mentioned achievement because they make it easy for employees to transfer their knowledge from one task to another task. In this perspective, every individual employee is required to have a bread perspective of the industry. The new technologies also enable work teams or individual workers to combine various tasks more readily with an aim of meeting the needs of the customers while enhancing productivity. The result of this is an increase in the average productivity per employee. Computers and ITs are faster in accomplishing tasks as compared to human labour and this has been of great importance for manufacturing industries dealing with mass production. Such industries do not have to hire as many casual workers as they would always do. Instead, the existing employees are enabled to deal with any bit of work that cannot be computerized. They also ensure production levels for each day are attained within the normal working hours. In this way, computerization and utilization of ITs can be said to reduce or eliminate overtime payments. This reduces the costs of production for the company. This is true because the amount of money required to maintain the information systems and computers is lesser than that required to pay all workers who have worked beyond their normal working hours. IT has increased efficiency in the management of databases for organizations. The database management system and other ITs make it easy to manage inventory and send information via e-mail or fax (Allen and Morton 1994). In this case, industries do not have to hire many people to handle its database management. A few individuals or one person who is competent on using these technologies is enough. A reduction in the number of workers hired leads to an overall reduction of costs. The mode of operation of these technologies is also cheaper as compared to the traditional ways of handling such tasks. One example is secretary sending e-mails or faxes as compared to posting mails and having a company postman to do it. The integration of computer and IT in many companies have enabled them to dismantle horizontal and vertical barriers to production according to Forester (1985). They have also made supervisory control to concentrate more on work methods instead of concentrating on final products delivered by the company. This is to say that the new designs of production enable organizations to concentrate on how the company’s products and services were being delivered instead of focusing on what services or products they delivered. In this way, managements are able to analyze the current tasks assigned to various workers and how they could be motivated to produce more. Due to the increased attention given to their tasks, workers do not slack around and this leads to an overall increase in their individual productivity (Allen and Morton 1994). Computerization and the use of IT have reduced over-reliance on experts according to Stoyles, Pentland and Demant (2003). This category of employees are usually very expensive to maintain hence companies only need to hire them to train their employees on how certain tasks can be accomplished using the advanced technologies. In this case, the company will have the work they could have been handled by the experts done at a cheaper price. This contributes to a general reduction in the cost of production for such type of organizations as noted by Stoyles, Pentland and Demant (2003). Networked IT systems are very important in understanding the production state of a company at one glance. This is because information n various section of the company are fed to the company’s database and this limits the need for having many supervisors who walk around to monitor the functioning of machines of performances of various work groups (Kirk, 2009). There needs to be only one person working on this system and responding in person only when it is very necessary. This means that ITs are important management tools and their adoption facilitates a resizing of the physical management team and this leads to reduced costs of production. Currently, industries do not need to make extensive research to determine the level of sales recorded by their products. All they need to do it to adopt the bar-coding technology. This technology will enable the company to track how customers purchase their products in a computer database. In this way, the company is also able to know the amount of product stock available in the market. The technology also sends an automatic message reordering a particular product its level drops. This is cheaper as compared to setting up a department to conduct a manual monitoring of product stock in the market. Conclusion There exists a relationship between worker productivity and reduction of costs of production, and computerization and information technology. Due to the application of these new technologies, many manufacturing industries have been able to record an overall improvement in the performance of their organization as well as a reduction of costs of production. These technologies are able to sum up tasks that could have been done by many people or do for many hours. With the help of computers and information technologies, workers of manufacturing industries have been timely in their production and this has reduced the issue of making payments for work done overtime. They have also increased their flexibility hence they can handle more tasks that they could manage to do without computerization and use of IT. It is cheaper to maintain these technologies that to pay human labour hence their incorporation has led to a general reduction in the cost of production. Based on this literature review, it is sensible to conclude that computerization and the use of IT reduces costs of production while increasing worker productivity for many organizations. References Agrawal B. & Symes L. (1994) Future of computerisation in institutions of higher learning. Concept Publishing Company. Allen T. & Morton S. (1994). Information Technology and the Corporation of the 1990s. Oxford. Oxford University Press. Forester T. (1985) The Information technology revolution. MIT Press. Kirk A. (2009) Information Technology. Infobase Publishing. Roach S. (1988) Technology and The Service Sector: America’s Hidden Competitive Challenge. http://www.nap.edu/openbook.php?record_id=764&page=118 [Accessed 24 August, 2011] Stoyles P., Pentland P. & Demant D. (2003) Information Technology. Black Rabbit Books. Read More