1. Information technology as a competitive burden
Productive Software’s for Management (PSFM)
Individual Assignment
Eranga Kavirathna
PGMIM09- 0207

2. Information technology as a competitive burden
1. Explain the main idea of the given paper.
This research paper by Timothy N. Warner was published on the book named “Computers in
the human context: information technology, productivity, and people” printed in 1989 MIT
Press Cambridge, MA, USA. The study was based on information technology in
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manufacturing organizations in end 80 century.
Many studies were found that the Information technology have significant influences for
making boost in productivity, increasing the ability to compete, and maintaining sustainable
competitive advantage. However, this paper argues much of those potentials remain to be
achieved. The main idea of this paper is that “Information technology can be a competitive
burden unless a company’s existing production system has already been restructured for
maximum efficiency using conventional means”, which appeared as article title. This paper
tests the role of information technology in manufacturing industry, mainly focused on
industries in North America and Japan in late 80th decade. It compares Information
technology approach with non information technology approach in following manufacturing
backgrounds,
1) Design for Manufacturability
2) Group Technology
3) Manufacturing Cells
4) Just In Time Systems
The paper argues that the better usage of conventional technologies (though these
conventional technologies were no longer use in modern manufacturing industries as
worldwide industries has been adapted IT based manufacturing technologies1) might boost
up the Manufacturing competitiveness than introducing information technology to
production. Warner draws some interesting examples to prove his view point.
The paper also argues that the proper role of IT in a production system cannot be correctly
assessed until the system had been restructured for maximum efficiency using conventional
means. The need for establishing a link between information technology (IT) management
strategies and a firm's competitive strategy has been identified and discussed in the paper.
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3. 2. Critically analyze 3 areas Timothy Warner has identified as ICT has
not proved the anticipated success. Support your answer with at
least one example for each area.
I have chosen following 3 areas for the analysis,
1) Design for Manufacturability
2) Group Technology
3) Just In Time Systems
Before the analysis it is very important to bear in mind that this paper was issued in 1989,
nearly two decades ago. In that context information technology was a quite new approach
to the manufacturing industry. It was a shifting era from conventional technologies to
Information Technology. On the other hand during late 80’s North American manufacturing
industry is little behind in efficiency in contrast to Japanese manufacturing industry. Hence,
many American firms try to throw information technology solution to overcome there
manufacturing inefficiencies. Timothy Warner has observed this scenario and through this
paper he attempts to alert N. American manufactures that the information technology
cannot do miracles unless the firms couldn’t overcome their internal problems or internal
inefficiencies.
Design for Manufacturability
The first critical area that Warner portrays is “Design for Manufacturability”. Here the paper
discuss that the manufacturing firms always try to raise the level of manufacturing
efficiency to become the industry’s low cost producer. Warner identified three (3) strategies
to achieve above goal as follows,
1) Product Redesign
2) Automation
3) Manufacturing control systems
Here he considered the Product Redesign process as a non-information technology
approach. He uses the example of Northern Telecom (USA). The Northern Telecom
implements strategies to become a low-cost telephone producer. It uses above 3 strategies
to accomplished that goal. Warner has been expertly proved that product redesign strategy
has played a major role than automation strategy. He argues that the automation
(Information Technology approach) didn’t significantly affect (Labour content was reduced
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4. only 11 to 9 after automation) to improve efficiency. He shows that the product design is
the critical factor than the automation. In his words “The important thing is to manage what
we might call the internal environment; automation is secondary”. Yes, it is true, because
the “internal environment” is significantly affects its production efficiency.
Although, modern days the information technology is widely used to improve “internal
environment “and it has been empirically proved. Many researchers argues that the
information technology is a must factor for the effective “Product Redesign”2, 3. To redesign
a product the manufacturer needs to address following questions4.
1. What component(s) failed?
2. Precisely what products included the defective component?
3. Do those products need to be removed from work in process or recalled from the
customer?
4. Precisely what process did defective components and products go through?
5. Which people were involved?
6. Was the defect due to bad design, bad material or a bad process?
7. How can the process be improved to detect or prevent such defects in the future?
Siemens4 empathises that digital, information technology based approach to address above
issues. Though the Warner doesn’t aware about information technology based Product
Redesign approach.
Group Technologies
The second area that Warner discussed is manufacturing group technology. He portrays the
example of Job-shop which had a waste of stock due to inefficient resource management.
Job-shop sees this problem arise only because of information processing problem. Therefore
the information technology solution has been introduced to address information processing
task.
Although, the information processing problem is not the only reason. Warner identified that
this problem can easily overcome if Job-shop manufacturing tasks can classified into few
groups. So the fact Warner argued here is this problem can be overcome without
Information technology. He notices that the Computer approach is a very expensive
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5. approach as he says “People who didn’t have the luxury of computer established…” etc.
Anyhow in modern days the computer is no longer a luxury good. Information technology
might be a cost effective solution as Warner latterly mentioned. Therefore it is true that
there must be a “Group Technology” to achieve efficiency.
Just In Time Systems
Timothy Warner sees that the competitive advantage can be gained through minimizing
Uncertainty and complexity. He considers the Material Requirement Planning (MRP) as an
information technology approach. He sees strong different between conventional approach
(Continues flow manufacturing) and Information technology approach (MRP). And he proved
with examples that the MRP approach is not appropriate method in some situations. He
draws the examples of aero craft industry (Boeing) and shows us how can MRP approach is
disadvantage method. Then he empathises the Just-In-Time (JIT) approach in other words
continues flow manufacturing (conventional approach) as a solution. Yes it is true the JIT
method is appropriate for the large scale industries like aero craft. The JIT method reduces
the wastages those are critical factors in low cost manufacturing. What are those wastages
that thrown away by JIT method. Most probably those are the manufacturing inventories.
Inventory can be seen as waste as the stock ties valuable organisational resource such as
space, labour, material and capital. After the Second World War, Japan had much to do to
rebuild their economy and gain a stable footing on production. Along with their strong work
ethic, Japan strived to implement JIT practices to eliminate all the waste associated with
managing materials and keeping inventory costs to a minimum. The Toyota Company
implemented this into their plant and turned the management and accounting principles
around to effectively and efficiently move inventory in and out very quickly while also
concentrating on the manufacturing aspects of their cars. They gained much success and
quickly rebuilt their economy. Many other companies in Japan utilized JIT as well and
helped shape the way that Japan is technologically advanced today. After the first
introduction of JIT by Toyota, many companies around the world followed step, and around
mid 1970’s, it gained extended support and was widely used by many companies in many
countries, including the United States.
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6. 3. Discuss the relevance of the ideas discussed in the paper in the
context of Sri Lanka.
Information technology might be a burden for Sri Lankan manufacturing firms unless
technology didn’t adopt properly into a firm. However this paper based on North American
manufacturing industry and it employs many examples from Japan which is also a highly
industrialized country. So the validity of the story cannot be directly imported into Sri
Lankan context, as Sri Lanka is still absorbing industrialization. Though, Sri Lanka can gain
few lessons from this study as most probably in the context of “Design for
Manufacturability”, “Group Technologies”, “Manufacturing Cells” and “Just-In-Time system”.
Apart from apparel Sri Lanka has many infant manufacturing firms. As Warner mentioned
the proper management of firm internal environment is essential for to gain product
efficiency. Most Sri Lankan firms have low capital investment and Information technology
approaches to their manufacturing might very expensive. Therefore as Warner says Product
Redesigning approaches, Group Classification Technologies and Manufacturing cells
approaches should be addressed before take a move towards Information Technology.
On the other hand high information technology based and automated manufacturing
approaches not suit to Sri Lanka as it is more labour incentive. New technologies might cut-
off the labour requirements.
Above arguments are discussed in related to typical Sri Lankan manufacturing firms.
Although the Sri Lankan apparel industry is far more advanced and it is globally competitive
Sri Lanka has been a successful export manufacturer due to its capability to consistently
anticipate and meet customer expectations. Today, sourcing and retailing is driven by speed
to market.
The JIT method in Sri Lanka
The JIT method has been used recently by Sri Lankan Apparel industry. A retailer or a brand
owner must bring "the right product at the right time" to the marketplace or face the
consequence of carrying a huge inventory and selling products at a deep discount. In order
to "react to fashion", as it is commonly referred to in the industry, many apparel
manufacturers in Sri Lanka offer speed and flexibility by providing a fully integrated service
from design, product development to manufacturing and delivery which done through Just
in time method (JIT).
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7. Apparel manufacturers maintain strong relationships with the supplier base and collaborate
on design and product development and "just in time" manufacturing. Sri Lanka continues
to attract some of the best manufacturers of raw material in the industry. Recently, a
French lace manufacturer known in the industry as the "creator of lace" has decided to
establish a manufacturing facility in Sri Lanka.
Apparel exporters in Sri Lanka are technology driven and have invested in the latest
manufacturing and information technology to increase productivity, lower cost and provide
better customer service. Short manufacturing cycles and flexible manufacturing capabilities,
coupled together with the cluster of world class suppliers, provide the apparel industry of
Sri Lanka an integrated supply chain to meet the demands of the ever changing fashion
industry. Supply chain management solutions such as "Vendor Managed Inventory" are now
increasingly offered by Sri Lankan manufacturers to their customers to ensure minimal
inventory and on-time product delivery.
4. Present at least one argument, opposing a key idea highlighted in the
paper. Support your answer with examples.
During modern days global manufacturing industry has been adopted to New-manufacturing
technologies. The New-manufacturing environment consists of combining technological
advances with strategic management insight to reach a company’s goals and potential.
I can identify several opposing issues highlighted in this paper. Especially regarding Product
Redesigning and Just-In-Time approaches. As I mentioned earlier this paper was published
in late 80’s. Timothy Warner has discussed this paper in the sense of that the Information
technology approach is a high costly approach but it is not true in today. Almost all
manufacturers are now using Information Technology for the product design.
Just-In-Time (JIT) Approach is no longer a conventional approach
Anyhow the paper discussed the Just-In-Time approach as a very convenient way to gain
competitive advantages to a firm. Here Timothy Warner refers JIT method as a non
Information technological (conventional) approach of manufacturing. Though the JIT is no
longer a convention approach as it is now rapidly uses information technology. So now the
JIT is an Information Technology approach. The well known example is Dell.
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8. The Dell model is born from JIT. JIT exposes all kinds of problems in Dell’s management
though reducing different sorts of inventories, and it analyzes the reasons before resolving
the problem to make improvements. And, the pulling production that arranges the
production according to customer demand is one of the most effective ways to reduce
inventory. Dell’s companies in various countries are acting as one. The two are
supplementing each other with no weak area. First the direct business model is continuing
of the pulling production. The traditional IT sales model makes use of distribution channels
to finish the terminal production sale. Under these kinds of circumstances, IT manufactures
mainly rely on market predictions and the sales data to arrange production, which is typical
pulling production. Though the domestic manufactures such as Lenovo, TCL and Hansee
also explore direct sale channels, this is only an accessory attempt. The traditional channels
are still the main approach. However, the direct model of Dell faces directly to the terminal
customers.
As Timothy Warner describes the JIT uses Kanban system for signalling. Instead of that Dell
is using ecommerce application to fulfil that task. Dell has shows a significant success as
Giant in computer accessories field.
Modern day management is aware that reducing costs is a benefit of IT. Company’s goals
are to automate tasks where appropriate. Companies can control their inventory and
production. Chrysler has used IT to implement Just-In-Time (JIT) manufacturing and lean
production to reduce costs5 (Lucas, 1997). Boeing also claims to have reduced costs as well
as improve quality. The new Boeing 777 airliner was the first “paperless airplane” designed
using sophisticated computer aided design programs5.
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9. References
1
Lawless, W. G., "Information Technology (IT) For Manufacturing: Where Has It Been,
Where Is It Heading?”, Journal of Industrial Technology Volume 16. (2000)
2
Hsu, W., Lee, C. S., and Lim, A. “A computer-aided product redesign system for robotic
assembly. Robotica”, 239-249, (May. 1998)
3
C. Poli, R.J. Graves and J.E. Sunderland, "Computer-aided product design for economical
manufacture" Manufacturing 23-25 (1988)
4
Siemens PLM Software, "The way to higher product quality and better warranty
management: Digital manufacturing for product and process traceability", white paper,
www.siemens.com/tecnomatix. (2007)
5
Lucas, H. C. Jr. “Information Technology for Management. Sixth Edition. Leonard N. Stern
School of Business New York University” McGraw-Hill Companies, Inc. 1997
Wynne Hsu, C. S. G. Lee and Andrew Lim (1998), “A computer-aided product redesign
system for robotic assembly”, Robotica, 16, pp 239-249
Warner, T. N. 1989. “Information technology as a competitive burden. In Computers in the
Human Context: information Technology, Productivity, and People”, T. Forester, Ed. MIT
Press, Cambridge, MA, 272-280.
Kelley Wall , “JIT in Internet Technology”,
http://atlas.kennesaw.edu/~kwall/JIT%20paper.do, c Oct, 2003
The gravity of Japan’s Official Development Assistance in Sri Lanka, see:
http://www.lk.emb-
japan.go.jp/eg/contents/Archives/Speeches%20of%20Ambassador%20Suda.htm
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