The Value of Advanced Manufacturing Supplier Support

The Value of Advanced Manufacturing Technology Supplier Support

Companies use Advanced Manufacturing Technology (AMT) to achieve higher performance on multiple competitive dimensions and to drive business outcomes. However, some AMT adoption processes fail to deliver desirable outcomes. This is due to challenges like technical, human, and process capability misalignment, infrastructural problems, and integration failings for example.

We conducted research to examine the value of AMT supplier support by testing a model that relates the need for support with the actual support received, and the impact of support on implementation, operational, and business success.

The Value of Advanced Manufacturing Technology Supplier Support

Research Overview

Current research is expanded by simultaneously testing the relationship between those factors in a single model, with the hope to uncover more about the recent adoption of a specific subset of AMT. Firms adopting new manufacturing technologies benefit from collaborative relationships with manufacturing technology suppliers, suggesting that the service capabilities of technology suppliers should be critically evaluated during supplier and AMT selection.

A company adopting AMT may secure supplier support to overcome such challenges. Buyer/supplier cooperation to achieve successful implementation is important, not only to control costs and mitigate adoption problems, but because installation success may also impact technology performance. Despite the challenges of adopting AMT and the potential importance of collaborative supplier and buyer relationships, current research into the importance of such relationships for the purchase and installation of AMT is somewhat limited.

Defining Advanced Manufacturing Technology

AMT refers to a range of computer-controlled technologies and organizational processes used to develop and produce a product. AMT is categorized by function: stand-alone systems, such as computer aided design (CAD); intermediate systems, such as computer numerically controlled (CNC) machines; and integrated systems, such as enterprise resource planning (ERP).

Other researchers have classified AMTs using somewhat different technology categories: design technologies, such as CAD; administrative technologies, such as electronic data interchange (EDI); and manufacturing technologies, such as CNC.

Our research focused on a subset of AMT: computerized numerical control (CNC) machines, direct numerical control (DNC) machines, material working lasers, and robots. This AMT subset is referred to as Shop Floor Manufacturing Technologies (SFMT) for our research.

Advanced Manufacturing Technology + Supplier Support = Success

We developed and tested a Supplier Support Technology Adoption Model to determine the value of AMT supplier support and found that supplier support facilitates successful technology adoption. Further, we found that technology implementation success was associated with eventual operational success, which in turn was positively associated with business performance success. These results suggest that companies should definitely evaluate the need for supplier support before selecting an AMT.

Firms adopting AMT may realize operational and long-term business success, but there are AMT implementation challenges where the benefits of AMT aren’t always achieved. Also, though AMT has improved plant and firm performance, the rate of change was as big of a factor as expected. Integration challenges, infrastructural issues, and planning mistakes are potential causes of AMT performance challenges.

Factors of Successful Advanced Manufacturing Technology Implementation

Investment in SFMT requires a considerable commitment of financial and organizational resources. This commitment is an important strategic decision designed to improve an organization’s competitive position and to generate economic performance improvements. Our research found that supplier collaboration influences the success of SFMT adoption and subsequently the performance of a firm. Given our understanding of the importance of implicit knowledge to the successful transfer of a given technology, perhaps success in the transfer of SFMT is enhanced with increased inclusion of the unspoken attributes of said technology through hands-on collaboration between AMT supplier and buyer.

Supplier participation in AMT implementation increases the possibility that AMT adopters will realize the strategic advantage they envisioned when pursuing AMT. Adopters of technology, particularly those that compete on time to market, for example, should evaluate not only their internal infrastructure to determine its ability to adopt new technologies, but also evaluate external resource facilitating factors, like technology supplier support. This suggests that prior to making a technology investment, adopting firms may want to improve their technology supplier evaluation processes to include dimensions now commonly found in direct material and component supplier assessment criteria. Such factors might include, but aren’t limited to:

  • AMT supplier willingness to collaborate
  • Cultural alignment
  • Communication and team skills
  • Trust
  • Supplier knowledge of materials processing
  • Prior training and support experiences with the supplier
  • Supplier field service effectiveness

Conclusion

Research indicates that adopting companies will conduct extensive evaluations of the technology itself, but it’s not clear if AMT supplier support capabilities are proactively evaluated by adopting firms. AMT suppliers that have excellent installation support services may develop a competitive advantage through such services and should market the benefits of such services to potential adopters. The technology itself may become more of an bid qualifier, while attributes such as service support, responsiveness and collaboration capabilities increasingly become purchase order winners.

-Sime