Submission for IEEE Jamaica Conference, August 2000
GEM 99:09:17(a) rev 2k:06:10c, web adapted 03:06:02
ABSTRACT: The application of the Mechatronics-based product/process design philosophy and information, communication and control technologies to create sociotechnically sound, computer-integrated manufacturing systems is critical to the development of a competitive advantage for manufacturing industries in Jamaica. If that advantage is to remain sustainable, it must primarily rest on a strategy of innovation in current and emerging industries. In turn, these emphases will require a stress on mechatronics in engineering education; the development of a national programme of technology-focused enterprise incubators; the mobilization of our universities to support education, research and training; and the development of an adequate national institutional venture capital capability.
CONTENTS
INTRODUCTION:
Software elements are now just as much a component of a product or process
system as any mechanical fastener. That is, information, communication and
instrumentation and control technologies are increasingly embedded in products,
processes and systems. Thus, we may appropriately extend the general usage
to “Information, Communication and Control Technology,” IC2T,
rather than the European “ICT” or the more common American “IT.”
More importantly, mechatronics, computer integrated manufacturing systems, sociotechnical work systems, and mass customisation product and process strategies are rapidly reshaping manufacturing competitive advantages for the twenty first century. Therefore, as we explore strategies towards sustainable — that is, export-led — industrial renewal for Jamaica, these factors must be applied to our future competitive strategy.
Globally, industrial practice is moving to the mechatronics paradigm, a systems-oriented design philosophy that stresses the synergistic performance of processes and products that integrate precision mechanisms and electronics under computer control. [1] Typical examples include: computer-controlled industrial sewing machines, robots, page printers and digital photocopiers, disk drives, automobile engine management systems, and satellites.
Mechatronic systems therefore use sensors and actuators, under robust computer control, to manage the interaction of mechanical (or, more broadly, dynamical) subsystems with the system’s environment. Common control strategies used in these systems include PID, Fuzzy Logic, Neural Networks, Discrete State Control, and Distributed Control. [2]
Distributed control strategies typically may use microcontroller-based PID controllers and programmable logic controllers (PLCs) to distribute smart control locally. These controllers are then linked into computer-integrated manufacturing systems (CIMs) through the integrative power of industrial Local Area Networks, such as the Manufacturing Automation Protocol (MAP) IEEE 802.4 Token Bus network. [3]
The resulting CIM thus potentially “links all aspects of the business — from quotation and order entry through engineering, process planning, financial reporting, manufacturing and shipping — in an efficient chain of production.” [4] In short, CIM applies IC2Ts and mechatronics to develop and deliver custom products "with the same speed and low [unit] cost as mass production methods," in lot sizes as small as one. [5 – 6]
Thus, products and processes are tending towards mass customisation, through integrating the customer ordering and customer service processes into the actual CIM process, so that manufacturing can be tailored to the specific needs of specific customers, with a minimum lead time between order-taking and delivery of the resulting product to customers who are, in principle, “anywhere.” As NCPA summarises Dell Computers’ operations:
The Internet allows Dell to find out what each customer wants, instantly and cheaply. Continuous-flow manufacturing cuts the cost of customizing: 35 cargo doors line both ends of Dell's new Round Rock manufacturing facility. On one side, suppliers deliver components throughout the day. On the other, workers load finished products onto trucks. Actual assembly takes five minutes. Even adding time for loading software and testing for quality, the whole process takes just four hours. By economizing on spare parts, product inventory, delivery and every other step of the process, the company provides a customized product at a competitive price. No wonder Michael Dell has been lauded as the Henry Ford of mass customization. [6]
As a direct result, "[f]actories incorporating such technologies are no longer 'factories of the future' but 'factories with a future.'" [7]
A second major trend, sociotechnical systems based on team-oriented work structures, opens up further possibilities for industrial renewal, through developing new technical and social process architectures that are both more satisfying for workers and more cost-efficient.
The key contention of sociotechnical systems practitioners is that industrial systems are at once technological and social. Therefore, an optimal system design strategy will seek to achieve the best balance of social, organizational, technological and environmental factors that achieve improved productivity and satisfaction. [8]
This systems approach may best be illustrated by the case of Volvo's Kalmar and Uddevalla car assembly factories, as described by Newstrom and Davis:
q In the early 1970's, Volvo built a new 60,000 unit/year car assembly plant in Kalmar, Sweden, "incorporat[ing] technical, managerial and social innovations that better served the needs of employees," to achieve "increased satisfaction and productivity as well as reduced turnover and absenteeism,” against a backdrop of significant industrial unrest in Volvo’s other factories.
q The key social innovation was the use of "teams of fifteen to twenty-five workers for each major task . . . Each team has its own work area, and . . . is given substantial autonomy . . . [being] completely in charge of allocation of work among members and setting the rhythm of its work."
q As "sociotechnical" implies, these teamwork-oriented social changes implied significant change to the technical organisation of the assembly process. "There is no assembly line. Teams obtain a car from a buffer zone when they want one, moving it to their workplace on a [specially designed] trolley. When work is completed, the car is placed in the next buffer zone . . . allow[ing] each team to work at its own pace as long as it can meet production requirements. Teams handle their own material procurement and manage their own inventory."
q The result has been increased job satisfaction, with "both assembly and office workers' costs [being] the lowest in the company."
The results were sufficiently impressive and enduring that, in the late 1980’s, Volvo developed a second generation of sociotechnically aware plants at Uddevalla. Six new plants were built, each with eight seven-to-ten man teams and a task cycle time of up to three hours. "Each self-managing team produces about four cars per day [i.e. about 1,000 cars per year] and controls their own hiring, scheduling, and quality-control activities . . . jobs were [also] carefully designed to allow over 80 percent of the car to be assembled while in comfortable positions in order to reduce stress, fatigue, and injury." Thus, "[a]bsenteeism has been cut in half (to 8 percent), the quality of the finished product receives international acclaim, and efficiency is better there than at Volvo's other plants." [8]
Similar approaches have been integrated into the wider automotive industry, for instance the joint Toyota-GM New United Motor Manufacturing, Inc. (NUMMI) venture in Fremont California, which was based on a GM auto assembly plant that had “a long history of labor-management conflict, poor quality, and extremely high absenteeism.” As Newstrom and Davis summarise, the results “are somewhat mixed. Absenteeism, at 2 percent, is strikingly low due to a tough policy. Worker output is as much as 40 percent above the US average for auto plants. Layoffs have been avoided even when sales were low, thanks to Toyota’s ability to shift production of some of its models to the plant. However, the pace of the assembly line remains high, and there is some fear of job security and some dissatisfaction among some workers.” [8]
Clearly, given Jamaica’s long and as yet unfinished history of industrial conflict and low productivity, sociotechnical production systems should play a key role in our industrial renewal thrust.
The third critical issue in triggering industrial renewal in Jamaica is the development of sustainable — therefore unique and hard to duplicate — competitive advantages for our industries, within the wider context of the global challenge of sustainable development.
First, sustainable development reshapes our GDP-growth oriented view of national development by adding the constraint that we must not sacrifice the welfare of the disadvantaged or of future generations, or so foul our common nest, the Earth, that it bites back. Therefore, in considering development, we must factor in the biophysical (i.e. ecological), economic and socio-cultural environments as important sources of income and stocks of wealth, which we must husband and enhance if possible.
In addition to the general challenge of environmental sustainability, there is the specific challenge of the sustainability of competitive advantages. In the 1940’s, Joseph Schumpeter, in Capitalism, Socialism and Democracy [9], put forward the concept that capitalist economies are subject to “a perpetual gale of creative destruction” as technological changes and innovations, as a byproduct of creating new wealth, undermine the value of older industries as their income expectations erode. As Peter Drucker develops the argument:
Classical economics considered innovation to be outside the system . . . Schumpeter insisted that, on the contrary, innovation — that is, entrepreneurship that moves resources from old and obsolescent to new and more productive employments — is the very essence of economics . . . . In the economy of change and innovation, profit . . . is the only source of jobs for workers and of labor income. The theory of economic development shows that no one except the innovator makes a genuine “profit”; and the innovator’s profit is always quite short-lived.[1] But innovation . . . is also “creative destruction.” It makes obsolete yesterday’s capital equipment and capital investment. The more an economy progresses, the more capital formation will it therefore need . . . capital formation and productivity are needed to maintain the wealth-producing capacity of the economy and, above all, to maintain today’s jobs and to create tomorrow’s jobs . . . . The question in Schumpeter’s economics is always, Is there sufficient profit? Is there adequate capital formation to provide for the costs of the future, the costs of staying in business, the costs of “creative destruction”? [10]
Thus, one or a few successful innovative firms (established by risk-taking entrepreneurs and venture capitalists in the hope of enjoying super-normal profits in new markets for innovative products) dominate an emerging product market. As growth accelerates, due to meeting the needs of more and more customer groups, their super-normal profits attract new entrants[2]. Eventually, shakeouts occur when growth begins to slow as markets saturate. [11]
In
the resulting slow-growth mature market, competitors focus on cost leadership
or on product differentiation, to dominate specific market segments. Such
a mature industry tends to become increasingly lacking in innovativeness as
its leading executives and managers begin to lose the flexibility of their
youth and as the inertia of bureaucracy and office faction politics begins
to dominate decisions. This opens the way for a new round of creative destruction
as innovative products based on newer technologies emerge. [11] (An alternative
trajectory, too rarely pursued, is that the leading firms may foster entrepreneurial
management and so retain their innovativeness.)
However, the dynamics do not stop there. First, firm competitive strategies and firm resources and competencies shape each other, so that a virtuous or vicious circle of mutual reinforcement can easily emerge, to the benefit or detriment of the firm. A further factor is the Icarus Paradox [12], whereby the very innovative factors that gave great success, when pressed beyond the limits of their environment — often, through inertia — can suddenly become the causes of failure, failure which can set in with little advance notice in today’s rapidly changing world.[3]
A quick review of the past several centuries of Jamaica’s industrial history will show that we have repeatedly fallen victim to this dynamic: sugar, bananas, bauxite, tourism, import substitution and light manufactures. That is, we need to explicitly recognize and plan for the temporary nature of present competitive advantages, especially those based on resources and specific technologies. For, the very super-normal profits that we enjoy from them while they last are the incentive that leads others to innovate alternative products that take away our advantages.
Thus, innovation must be a critical element of our national competitive strategy. Further, the most durable source of competitive advantage rests in the synergistic performance of the key people in innovative firms — as the West Indies Cricket Team has again recently demonstrated, individual brilliance is not enough: it is the teamwork that counts. Then, to gain the fruit of the advantage, one has to hire the whole team. Thus, our advantage is “naturally” preserved.
IV. Towards a Sustainable Competitive Advantage for Jamaica
For new industries, the logic is:
q Mass customisation strategies allows us to respond to customer needs for tailored products in near-real time, with low unit costs.
q IC2Ts, mechatronics and CIM architectures enable us to develop smart and efficient Flexible/Agile Manufacturing Systems that allow efficient production, with lot sizes as small as one. This makes mass customisation feasible.
q This approach will therefore allow us to bring the voice of the potential customer into the product development and manufacturing process, leading to the provision of products and services well adapted to customer needs and wants, delivered in good time to meet their expectations, with good quality and a high degree of uniqueness.
q This enhancing of value will also reduce the sensitivity to price and the need to exploit scale economies through classical mass-production (as opposed to mass customisation) strategies[4].
q Sociotechnical plant designs that exploit the power of teams also help to open the door to efficiency on a relatively small scale.
q However, it is a truism that new industries are highly risky, largely due to the inexperience of the entrepreneurs and managers who start them. Consequently, over the past several decades, the Business Incubator[5] has emerged, often tied to a locality or to a university or research centre.
The critical issue for established industries is to overcome their characteristic resistance to change, in light of their increasing vulnerability to the cutting-edge of the Icarus Paradox and the process of creative destruction. The logic is:
q Firms with established hierarchies usually reward conformity, so that their leadership levels tend to be locked into traditional modes of thinking and working. That is, such firms are naturally vulnerable to change, thus to the effect of the gale of creative destruction, as may be inferred from the continual turnover in the global list of highly successful firms.
q However, when idea originators can find idea champions, who in turn attract sponsors in middle management positions, and further take shelter under the wings of godfathers in the upper ranks of a firm, successful innovation becomes possible.
q A further critical input is incubation, the provision of a sheltered reservation where the innovation can be developed to a point where it is ready for the market. For instance, the original IBM PC was developed by a team that moved away from New York, IBM’s headquarters, to a site in Florida.
q U.Tech has the only established School of Engineering in the island. It should therefore seek to foster industrial renewal through providing up-to-date, world-class engineering education, at professional, technologist and technician levels. Its programmes should be accredited locally and accorded “substantial equivalency” recognition by international accrediting bodies. Curricula should emphasise mechatronics, IC2T’s and CIM, and should also develop adequate entrepreneurial management skills, stressing competitive advantage in light of the global challenge of sustainable development. [14]
q Industrial renewal consultancies and the incubation of a new generation of globally competitive industries are equally important targets for this School, if we are to avoid simply issuing graduates with certificates and sending them out to seek jobs in an ever-shrinking market. This will require the further development and expansion of the entrepreneurship initiatives and incubation centers attached to U.Tech, and the active integration of industrial consultancies into present student project schemes and university research programmes. Similar initiatives should be undertaken by our other universities.
q Our industries need a considerable capability in the management of innovation, the process that brings new products and processes to the market successfully. Thus, entrepreneurial management should be an integral part of the education of all engineers in Jamaica (and of managers and public administrators, generally). A course or seminar in this area should be a mandatory requirement for initial professional development and/or a course in engineering degrees accepted for the professional registration of engineers in Jamaica.
q Since public administrators and regulators will play a key role in developing and implementing the policy and legal/regulatory frameworks that facilitate (or, may hinder) industrial renewal, the Government should develop a capacity to support industrial renewal, especially in light of the impacts of the UN environmental conventions we are a party to.
q The development of a Government ISO 14000 Environmental Management Systems standard support unit would also be a great help; it could be based in the Bureau of Standards.
q Research into technologically oriented enterprises, competitiveness and sustainable development should also be emphasized. Specific areas of focus for our universities should include industrial policy and sustainable development, the economics of IC2T’s and that of industrial organisation.
q Venture capital will be needed to support such initiatives. Thus, we need an effective institutional framework capable of appraising projects, providing technical assistance as necessary, helping to oversee incubation initiatives, and supplying such venture capital. One possibility would be to establish a joint venture between the Caribbean Development Bank [CDB], one or more local financial institutions, the universities and the Government, as this would lend significant credibility to the initiative and would also attract significant extra-regional support.
CONCLUSION: Mechatronics, IC2Ts CIM, sociotechnical work systems, entrepreneurial management education, enterprise incubation and industrial renewal projects and consultancies, and venture capital initiatives, closely tied to the research and consultancy efforts of our universities would go a long way to meeting the national challenge to achieve sustainable competitive advantages for Jamaica’s industries in the context of the wider, global challenge of sustainable development.
1. Mechatronics Laboratory, Bogazici University. “UNESCO Chair On Mechatronics and Mechatronics Laboratory” http://mecha.ee.boun.edu.tr/ (June 2000.)
2. M.O. Efe, E. Abadoglu and O. Kaynak, "A Novel Analysis and Design of a Neural Network Assisted Nonlinear Controller for a Bioreactor," Int. Journal of Robust and Nonlinear Control, v.9, 1999, pp.799-815. http://mecha.ee.boun.edu.tr/~efe/PDF/JRobustNonlinearControl.pdf. (June 2000.)
3. Halshall, F. Data Communications, Computer Networks and Open Systems. 3rd Edn. (Wokingham, England: Addison-Wesley, 1992), pp.699 – 701.
4. Searle et. al, “Computer-Integrated Manufacturing System Goes Beyond CAD/CAM,” Control Engineering, Feb. 1985, p. 50. [Cited: Bateson, R.
Introduction to Control System Technology. 6th Edn. (Upper Saddle River, NJ: Prentice Hall, 1999), p. 50.]
5. Laudon, K. & Laudon, J. Management Information Systems, 5th Edn. (Upper Saddle River, NJ: Prentice-Hall, 1998), p. 23.
6. National Center for Policy Analysis. “The Right Stuff: America's Move to Mass Customization.” (NCPA Policy Report No. 225 June 1999) http://www.ncpa.org/studies/s225a.html (June 2000).
7. Kaynak, M. O., "The Age of Mechatronics," IEEE Transactions on Industrial Electronics, 43 (1) [1996], pp. 1 - 2.
8. Newstrom, J. & Davis, K. Organisational Behavior: Human Behavior at Work. 9th Edn. (NY: Mc Graw-Hill, 1993), pp. 358 – 361.
9. Schumpeter, J. Capitalism, Socialism and Democracy, 3rd Edn. (NY: Harper & Row, 1975), pp. 81 – 86.
10. Drucker, P. The Frontiers of Management. (NY: Plume/Penguin, 1999), pp. 109 – 111.
11. U.S. Small Business Administration's Office of Advocacy. “The New American Evolution: The Role and Impact of Small Firms. http://www.sba.gov/ADVO/stats/evol_pap.html#Innov (June 2000).
12. Hill, C. & Jones, G. Strategic Management: an Integrated Approach. 4th Edn. (Boston, MA: Houghton Mifflin, 1998), pp. 133 – 134.
13. Schuyler, G. “Business Incubators: A Review.” (Kansas City, MO: CELCEE), DIGEST Number 97-4 [April 29, 1997] http://www.celcee.edu/products/digest/Dig97-4.html (June 2000).
14. Richard de Neufville “Technology/ Management/ Policy the Emerging Curriculum for Engineering.” (Austin, Texas: Third International Conference on Technology Policy and Innovation, August 1999), http://www.utexas.edu/depts/ic2/austin99/abstracts/16_neuf.htm (June 2000), pp. 1 – 4.
Gordon Mullings holds an MSc, Physics, UWI Mona [1994] [and an MBA, HWU: 2003]. His interest in the intersection of mechatronics, sociotechnical work systems and sustainable competitive advantage arose from curriculum development work undertaken in the School of Engineering, U.Tech, Jamaica. At the time of presentation of this paper, he worked as a Project Officer, University of the West Indies Centre for Environment and Development.
[1] That is, economic profit. If one reckons the “normal” returns available to capital in alternative investments (i.e. its opportunity cost) as a cost to an enterprise, then such “normal” profits — which are of such a level that there will be no net incentive to enter or leave an industry — give zero economic profit. [One can also consider the cases of monopoly and oligopoly as situations where there may be a net positive economic profit.]
[2] Providing that entry barriers are not insuperable.
[3] In the classical story, Daedalus the inventor sought to escape captivity by King Minos of Crete. He provided a hi-tech solution, by inventing wings made of feathers and wax. With those wings, he flew away to freedom with his son, Icarus. However, Icarus flew so well that he flew too high and the Sun melted the wax; the boy plunged to his death in the Aegean Sea below.
[4] Thus, small firms can be very competitive in the global age.
[5] Such incubators typically provide mentoring, training, financial support, and critical consultancy, staff and office services, seeking to graduate successful industries after several years. They have in many cases been able to move the five-year survival rate for startups from about 20% to sometimes in excess of 80%. Cf. http://www.nbia.org/info/fact_sheet.html [13]