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Manufacturing and Service Technologies

Organiza(on Theory and Design Twel%h Edi+on Richard L. Da%

Service and Manufacturing Technologies

•  Technology refers to the work processes, techniques, machines, and ac+ons used to transform input into outputs

•  Technology influences organiza+onal structure •  Understanding technology helps dictate how organiza+ons can be designed for efficiency

•  Core technology relates to the transforma+on process to provide goods/service

•  Non-core technology is not directly related to the primary mission of the organiza+on

Core Transforma+on Process for a Manufacturing Company

Pressures Affec+ng Organiza+on Design

Core Organiza+on Manufacturing Technology

Manufacturing Technologies include ● Traditional Manufacturing Processes ● Contemporary Applications ─ Smart factory ─ Lean manufacturing

Manufacturing Firms

•  Technical complexity defines the extent of mechaniza+on of the manufacturing process

•  Three basic technology groups defined by Woodward: – Small-batch and unit produc+on – Large-batch and mass produc+on – Con+nuous-process produc+on

Woodward’s Classifica+on Based on System of Produc+on

Rela+onship between Technical Complexity and Structural Characteris+cs

Strategy, Technology, and Performance

•  Strategy, structure, and technology need to be aligned

•  Successful firms have complementary structures and technologies

•  Failing to adopt a new technology or failing to realign strategy can lead to poor performance

The Smart Factory

•  Also called computer-integrated manufacturing, flexible manufacturing systems, digital factories, advanced manufacturing technology, and agile manufacturing

•  Smart Factory subcomponents – Computer-aided Design (CAD) – Computer-aided Manufacturing (CAM) – Robots – 3-D Prin+ng (Addi+ve Manufacturing)

Smart Manufacturing Technology vs. Tradi+onal Technologies

Lean Manufacturing

•  Highly trained employees at every stage of produc+on

•  Sigma Six ─ Cuts waste and improve quality ─ Incorporates technological elements •  Kaizen ─ con+nuous improvement •  Paved the way for mass customiza<on

– Using mass-produc+on technology to quickly and cost-effec+vely assemble individual goods for customers

Performance and Structural Implica+ons

Flexible manufacturing allows diverse products to be made on one assembly line

ü  Computer-aided cra%smanship ü  More efficient

ü  Increased produc+vity ü  Decreased scrap ü  Customer sa+sfac+on

Comparison of Organiza+onal Characteris+cs

Core Organiza+on Service Technology

•  Service technologies are different from manufacturing technologies and require different organiza+onal design – educa+on, banking

•  Intangible output •  Simultaneous produc+on and consump+on •  Labor and knowledge intensive •  Direct interac+on between customer and employee •  Importance of human element •  Quality of service cannot be directly measured

Core Organiza+on Service Technology

Trend Toward Lean Services

•  Customer expecta<ons are rising •  Expecta+ons have required that service firms must become lean, too – Cut waste – Improve customer service

•  Adopt con+nuous improvement approach

Structural Characteris+cs of Service Organiza+ons versus Product

Organiza+ons

Designing the Service Organiza+on

•  Service organiza+ons are not necessarily large •  O%en small loca+ons, close to customers •  Service organiza+ons require technical core employees – close to customer

•  Service customers interact directly with technical employees

•  The skills of technical employees need to be high •  Employees need knowledge, awareness, and interpersonal skills

•  Decision making is o%en decentralized

Non-Core Departmental Technology

•  Every department in an organiza+on has a produc+on process – Variety: frequency of unexpected and novel events

– Analyzability: ability to apply standard procedures

•  Rou+ne vs. Nonrou+ne Dimension •  Engineering Technologies •  Cra% Technologies

Framework for Department Technologies

Department Design

•  Overall design is either organic or mechanis+c •  Design characteris+cs vary depending on work unit – Formaliza+on – Decentraliza+on – Employee skill level – Span of control – Communica+on and coordina+on

Rela+onship of Department Technology to Structural and Management Characteris+cs

Workflow Interdependence Among Departments

•  The extent to which departments depend on each other for resources or materials

•  Low interdependence means that departments can do their work independently

•  High interdependence means departments depend on each other

Interdependence and Management Implica+ons

Interdependence of Departments Involved in the Flight Departure Process

Structural Priority and Implica+ons

ü Reciprocal interdependence should receive first priority

ü Reciprocal ac+vi+es should be grouped together

ü Poor coordina+on will cause poor performance

ü Organiza+ons should be designed to address interdependence

Coordina+on for Interdependence

Rela+onship of Interdependence and Team Play Characteris+cs

Sociotechnical Systems

•  Sociotechnical systems approach recognizes the interac+on of technical and human needs

•  An organiza+on func+ons best when the social and technical systems are designed to fit one another

•  People are resources and should be provided with appropriate skills, meaningful work and suitable rewards.

Sociotechnical Systems Model

Design Essen+als

v Key research notes that technology and structure can be co-aligned v Service technologies differ in a systema+c way from manufacturing technologies v It is important to apply the correct management system to a department

Design Essen+als

vInterdependence among departments dictates the amount of communica+on and coordina+on required in design vNew technologies are enriching jobs to make organiza+ons a happier place to work v Sociotechnical system theory akempts to design systems that meet technical and human aspects