Altered Industrial Structures

The technological changes will impose new and different ways of doing business. The producer who views automation technology as merely another cost reduction tool will have missed the real opportunity. One of the new types of enterprises likely to emerge is the general purpose machine shop, with numerically controlled machine tools, robots for handling materials, and a CAD parts design capability. This new job shop will respond quickly and reliably to a wide variety of requirements, with a rapid flow of totally different jobs on different machines. Since virtually all the costs of operation are fixed and largely sunk, the central objective will be to maximize flow through the system. As long as capacity is available, the incremental cost associated with adding one more order is the material cost plus the costs associated with order preparation, maintenance and utilizes. The strategic management of such a shop will be vastly different than that for the current conventional one.

Once computers begin to specify parts fabrication requirements in a standard language and automated facilities exist to turn these specifications into a part, the facilities need not be within the same enterprise, and the generalized job shop is fostered. He envisions a science fiction fantasy in which a design engineer draws and specifies a part on a CAD video screen, entering the result into a regional clearing house for a bid. Within seconds, an acceptable bid is made by one of several generalized job shops and an electronic contract is formed. Within perhaps a week, the contract number of parts is delivered, having been fabricated at the shop with just the right machines and capacity availability required to minimize costs.

Another organizational modification may be forged by a CAD link to the customer. When GM bought Electronic Data Systems it hoped to design a paperless operating system in connection with its SATURN project. One scenario was described that envisioned the customer sitting at a terminal in the showroom designing the car desired in terms of all the options available – colors, fabrics, engine size, transmission, and so on. The on line terminal transmits the custom order to the factory, where it goes into production without further order preparation o delay, based on the design specifications already available in the computer. Since the lead times are all reduced to a minimum, the customer’s car can be delivered in perhaps two weeks. A fantasy? Not necessarily, for all the technology required I already available. But the new and different interface with the customer coupled with assembly line automation provides a new market force that fosters product variety and customization because of a CAD/CAM linkage.

Finally, there may be a dramatic shift in manufacturing location; we may even manufacture some products in space. Here are some products, pharmaceuticals for example, for which zero gravity makes possible a purity not attainable on earth. Again technology makes possible an advance in manufacturing undreamed of in the past.

Future Non-manufacturing Systems:

The great diversity of non-manufacturing operations makes generalizations difficult, so we will focus on a few areas as we did in discussing process technologies in non-manufacturing operations.

High Customer Contact Systems:

Many of the service oriented systems of interest will be affected by computer networks that can be used by both individuals and companies and by conversion to a virtually cashless society based on electronic funds transfer. Of course, electronic funds transfers are already common within the banking system, but we are concerned with a more persuasive system available to all who might have funds to transfer, including individuals. Presumably to use the system, some sort of computer terminal will be available to the user.

The availability of such basic systems makes possible a massive change in the way many forms of business are conducted. Instead of going to many places of business, as is done currently, communication takes place via computer link to shop and pay for many items. The current public acceptance of catalog ordering is a step in this direction, but instead of mail ordering and paying by credit card or check, one would simply select the vendor from the terminal, browse through the vendor’s video catalog, select items, and pay by electronic funds transfer. At the vendor’s end, after automatic verification of funds, the order would be picked by an automated system and shipped, the shipping label being printed as a part of the system.