Management and the Robogate Technology - Essay Example

?Question a Product-mix flexibility refers to the process of customizing the output structure to demand. Thus product-mix flexibility enables the management to minimize the effects of demand segmentation and segment share volatility by varying production capacity to manufacture varying levels of output. Therefore the relationship between product-mix flexibility and capacity utilization is that the two factors are directly related. A higher degree of product-mix flexibility leads to a higher degree of capacity utilization. Because the company is able to vary output according to demand, idle capacity is minimized. As a result capacity utilization is maximized. By implementing the strategy of product-mix flexibility, the company is able to manufacturing a range of different products by using the same equipment. As a result the management is able to recoup the maximum return from the investment made in the equipment. In this manner the utilization rate of the production line is maximized. Thus product-mix flexibility is directly related to capacity utilization. Higher levels of product-mix flexibility reduce the production lines’ sensitivity to demand fluctuations. By implementing a flexible manufacturing system (FMS), the production line is able to maintain a mix of products that is able to adapt to any changes in the demand structure. In order to implement the strategy of product mix flexibility, the management has to introduce the technology of the flexible manufacturing system. The FMS facilitates the building of a production line that can produce a range of different products with minimal changes required in the same. Because the same technology is able to produce different products depending upon demand structure, the capacity of the technology is utilized to maximum extent possible. If a company is to maximize its profits, then its product mix has to be market-driven. This requires flexible mass production. Because this system is able to change in response to demand changes, capacity utilization is stabilized. Question b The Robogate technology created a manufacturing system which was capable of processing two or more models in a random sequence. The traditional production system could only produce one specific model on the same line. The Robogate technology created a robotized production system which was able to produce multiple models on the same lines. This was the innovation introduced by Fiat’s management. By implementing the Robogate technology, Fiat aimed to create a flexible production system which would be able to achieve product-mix flexibility according to market demand. The technology was developed in-house. It was deployed in the spot-welding shop and was so named because the nine welding stations were called gates. The deployment of Robogate signaled Fiat’s quest for increasing production flexibility. The production limit for Robogate technology deployed at Rivalta and Cassino was set at 1400 cars per day. However it could vary the output levels between different models, Uno and Ritmo at Rivalta, Regata and Ritmo at Cassino. By allowing production managers to process a range of cars in a random sequence, the Robogate technology aimed to incorporate market-driven fluctuations into capacity utilization. However whether this innovation enabled the company to maximize capacity utilization is questioned by the author in this article. The technology was certainly able to minimize the cycle-time of finishing but capacity utilization still fluctuated as before in the traditional system. The problem with implementing the technology was that the production philosophy was still defined according to the traditional system of cycle-time minimization rather than flexibility maximization. As a result, the Robogate technology failed to increase the rate of capacity utilization. But aside from that question, the superiority of the Robogate technology over other techniques was overwhelming. The Robogate itself was flexible. However because the platform and body welding lines upstream were still model-specific, it failed to stabilize the capacity utilization rate at the optimal level. Question c Although the implementation of the Robogate technology was motivated by the need to adopt the flexible manufacturing system, it failed to make Fiat any more flexible in the 1980s than it was in the 1970s. The article presents findings from other research works which seemed to support the theory that the company achieved more flexibility by adopting the Robogate technology. However some parts of the production line were still model-specific. As a result, it was not possible to shift surplus production according to marketing demand. The definition of production flexibility specifies that the company should be able to stabilize capacity utilization by varying product mix according to demand fluctuations. However this did not happen at Fiat. The article presents data which confirm that over-/under-utilization of plants, as occurred in the traditional system, was still the methodology used to respond to demand changes. The problem with implementing robotics was that the Fiat management continued to define efficiency according to the traditional system. Therefore the focus of the technology was cycle-time minimization rather than flexibility maximization. For example, the platform and body-welding lines upstream of the Robogate were still model-specific because they were extremely efficient in terms of the cycle time. As a result the overall functioning of the system was still the same, that is to say, inflexible. As stated in the article, the selection of the Robogate technology was still motivated by the will of the production engineers to achieve cycle time minimization without any particular attention given to flexibility. This was the same product oriented approach applied in the 1970s. Therefore the massive deployment of robotics in the 1980s did not make the company any more flexible. The production paradigm was still governed by cycle time minimization. Plants were over-/under-utilized. As a result there were significant fluctuations in capacity utilization. Therefore flexible mass production as envisioned did not occur in the 1980s. Question d Fiat maximized speed by deploying the Robogate because it led to cycle time minimization. The management had aimed to implement the flexible manufacturing system by deploying the Robogate. However the evidence in the article is that although the technology enabled the company to speed up production, it did not minimize spare capacity as defined in the flexible manufacturing system. Because the existing production system was extremely efficient in terms of the cycle time, only selected stages were robotized. As a result, shifting production from one model to another was limited. The traditional production system emphasized upon line specificity and this philosophy remained during the 1980s when the Robogate technology was incorporated. Therefore efficiency was still defined in terms of cycle time minimization. In other words, production managers continued to focus upon speed rather than upon capacity utilization. For this reason the platform and body-welding lines upstream of Robogate were still model-specific. As stated in the article, some researchers have claimed that the implementation of the Robogate technology led to the implementation of FMS at Fiat. However management focus was still upon speeding up production and the Robogate technology was clearly aligned to speeding up production. As a result, regardless of whether the production lines were robotized or traditional, there were identical fluctuations in capacity utilization. Therefore the deployment of robotics did not introduce any greater flexibility than there was in the traditional production system. The Robogate technology continued to define efficiency in terms of cycle time minimization so that the traditional philosophy based upon speeding up production was unchanged. By deploying the Robogate, the management might have introduced some degree of flexibility, but remaining model specificity in other production lines limited the effect of flexibility. As a result, the Robogate only served to maximize speed by minimizing the time cycle. Question e Discontinuity in management and organization occurs when there is a shift in the pattern of goals and assessment criteria set by the management. However there is no evidence of such a shift occurring with the implementation of the Robogate. On the contrary, the article presents evidence of continuity and path dependence in terms of localized and path-dependent selection of new techniques. The findings suggest that the deployment of robotics from 1972 onwards was inspired by the same goals and assessment criteria as the selection and deployment of inflexible automated technology in the past. For example, the deployment of robotics was still focused upon cycle time minimization as in inflexible production before. Therefore the production paradigm remained unchanged. There would have been managerial discontinuity if the company had actually shifted to the flexible manufacturing system. However there is no such evidence and the management continued to use the same goals and assessment criteria when it came to measuring efficiency. There is a paradigm shift between Fordist mass production and flexible mass production. There is no evidence of such in the deployment of robotics at Fiat. The management continued to measure efficiency in terms of cycle time. But flexible mass production is defined by capacity utilization stabilization. However the plants continued to be over-/under-utilized. According to the definition of flexible mass production, capacity utilization should be stable because the same production line is able to process different models. This would tend to offset segment share volatility so that the rate of capacity utilization would stabilize. This is a departure from the traditional system of production management in which each production line could process only one model so its utilization rate would vary depending upon market demand. Since this continued to be the case after the deployment of robotics, the technological change was continuous and path dependent. There is no evidence of managerial discontinuity. References Maielli, G. (2005) “Spot-Welding Technology and the Development of Robotics at Fiat, 1972- 1987. A Case of Production Management Discontinuity?” Business History, Volume 47, N 1 (January). Read More