Deployment of Robotics - Fiat - Essay Example

Fiat Case Study – Deployment of Robotics Introduction This paper is aimed at analysing the influence of robotics, mainly Robogate technology, in Fiatduring the 1980s. Along with analysing the reasons and effects of development and deployment of Robogate technology, the paper discusses the arguments made by many that deployment of robotics led to a discontinuity in management and organization and hence departed from Fordist Production. Product Mix Flexibility and Capacity Utilisation Product mix flexibility is a type of manufacturing flexibility and one of the most important competitive factors for a manufacturing firm. It enables a firm to adapt the structure of output to the structure of demand. That is, product mix flexibility is the ability of a firm to align its output with respect to the actual demand for the product in the market. Product mix flexibility allows a firm to produce a wide range of products with presumably low changeover costs. A firm achieves product mix flexibility when it is able to produce a range of products in a random sequence in the same line. As it can be seen, product mix flexibility reduces the changeover costs of a firm and enables it to achieve cost efficiency. Product mix flexibility also affects capacity utilisation. Product mix flexibility achieved results in minimizing the effects of segment share volatility and demand segmentation on capacity utilization. Therefore, product mix flexibility results in increase of capacity utilization as it increases the overall output. On achieving product mix flexibility, a firm is able to increase the output that is produced by the installed equipment when compared to the output in the absence of product mix flexibility. Innovative Features of Robogate Technology The deployment of Robogate technology in the spot welding shop was one of the main initiatives of Fiat to shift to flexible mass production. The main innovative feature of Robogate technology was that robots executed the entire welding process. The main idea behind Robogate technology was to make the processing of two more different cars in a random sequence possible and it was achieved. This technology robotised the system for bodywork assembling and became the mainstay of automation of production. An important feature of Robogate technology was the flexibility that it brought to the entire process. Even though the entire welding process was executed by robots, it allowed for a balanced mix of human intervention and automation in the whole process of production. This was essential to control the quality of the final output. Fiat more flexible in the 1980s or 1970s Literature prior to this article argues that Fiat was more flexible in the 1980s than in the 1970s. Loke and Negrelli have even gone on to suggest that Fiat did not reach its potential flexibility as there was great demand for Uno model. They argue that the system was indeed flexible but it was not used to full potential. Bonazzi has gone a step further and said that the production system was flexible in the 1980s but the performance with respect to cost efficiency was sub-optimal. The findings of this article argue otherwise. Flexibility was no greater in 1980s than it was in 1970s irrespective of the implementation of Robogate technology. Utilisation rate of both traditional and robotised production lines have been used to test flexibility and the results show that flexibility of production lines was limited even in those which were robotised. The main reason for this, identified in the article, is that introduction of robotics was path dependent and localised. The efficiency of different plants, irrespective of being manual or robotised, averages between 0.85-0.90 while there decrease in the time cycle in robotised plants. The use of Robogate technology has brought down the time cycle but had had no impact on the capacity utilization rate. Therefore, even though it is argued that implementation of new technology was aimed at maximising flexibility it was not the case with Fiat. The use of technology resulted in cycle time minimisation and not flexibility maximisation. Hence, the Fiat was not more flexible in the 19890s than in the 1970s. Robogate’s contribution to Maximising speed Yes deployment of Robogate helped Fiat maximise speed. The use of technology in the 60s was mainly aimed at increasing the speed. But technology stagnation led to slow down of productivity. Fiat could no longer continue increasing its productivity speed without making developments in its technology. This is when company decided to invest heavily in robotics and the Robogate technology was developed. Robogate technology not only allowed Fiat to produce a wide range of cars on a single line in random sequence but it also positively impacted the speed. Robogate technology brought down the cycle time by a great margin when compared to other technologies. The effect of Robogate technology can be understood by the differences in cycle time between different technologies (Table below). It can be seen that cycle time in plants where Robogate technology is implemented is on an average at 0.40 while in other plants where it is on an average at 2.6. This shows that in the absence of Robogate technology Fiat would not have achieved the speed that it achieved overall and hence the deployment of Robogate technology has helped Fiat maximise the speeds. Deployment of Robotics - Departure from Fordist production or Continuity and path dependence? Theoretically speaking the deployment of robotics should have brought about discontinuity in management and organization and, therefore a departure from Fordist production. According to Fordist mass production, cost efficiency was measured with respect to time cycle minimisation. By deploying flexible manufacturing systems (achieving flexible mass production) maximisation of flexibility was possible along with achieving cost efficiency. Hence, it was argued that a shift from inflexible mass production required a shift in thinking from the management, i.e. change in strategic goal and replacement of routine operations with new ones. With respect to Fiat, shift from inflexible to flexible mass production had to be accompanied by a change in the parameters to measure efficiency. In the Fordist system, demand was believed to be constant and continuous increase, and cycle time minimisation was used to measure efficiency. On the other hand, erratic demand for specific products was the assumption of flexible mass production. Therefore, stabilization was possible producing a wide range of products in a random sequence on fixed lines. That is, in a flexible manufacturing system efficiency is measured by the utilization rate stability. Hence, theoretically, it was assumed that there was discontinuity in management. But in reality this is not the case as shown in the article. The introduction of new technology was not driven by a strategy to maximise efficiency through flexibility maximisation but it was driven by the need to maximise efficiency which was expressed through cycle time minimisation. Therefore deployment of robotics was aimed at minimising cycle time and not maximising flexibility. This is evident as Robotics was deployed only in those processes where the traditional approach did not help in cycle time minimisation. The rest of the process was not changed and left as it is. This approach is consistent with Fiat’s earlier product oriented approach (Fordist approach). Therefore, there was continuity and path dependence in the approach to deploying robotics. Conclusion It can now be concluded that deployment of robotics was not a departure from Fordist production but was in continuity and path dependence from the ideology of 60s. Robogate technology was not implemented by the engineers at Fiat to maximise flexibility but to maximise time cycle minimization and in turn maximise efficiency. Also Robogate technology helped Fiat increase the speed of production in its plants. Read More