Manufacturing flexibility in the justification of advanced automation investments

Abstract

A substantial amount of literature pertaining to flexibility has accumulated over the last decade. Nevertheless, there are several strategically important issues underlying this concept which are not understood properly, Understanding flexibility is made difficult by its multidimensional nature. Based on a detailed review of the literature we classify the conceptual frameworks on formalizing flexibility as: • type based understanding • change based understanding. We suggest the change based approach can provide a greater understanding of flexibility to managers whose knowledge about technological details is limited. Thus we expand Suresh’s (1990.b) capability-ease definition to provide a basis for the understanding. There have been a prevailing discussion between researchers on how flexibility relates to system performance. In fact type based and change based approaches are two different ways of determining relevant performance measures associated with flexibility. We suggest a framework capability-ease approach for the analysis of relevant performance measures. If it is followed by a task force capability-ease approach can contribute to a greater understanding of flexibility which leads to the selection of more appropriate performance measures. It is well recognized that for the future of manufacturing, flexibility is a crucial concept. However flexibility investments have been difficult to justify because of their high initial costs and strategic implications. Over the last few years incremental implementation of flexible technology has been suggested as a remedy for the investment justification problems, because it leads to lower annual capital outlays. We develop a m ixed-zeroone, nonlinear program m ing, m ultim achine, m ultiperiod, replacem ent model for incremental implementation of flexible automation. Capability and ease notions are adapted for modeling flexibility and a reclassification of costs is considered. Thus some specific aspects of designing flexibility are modeled in contrast to machine-level equipment replacement problem.