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close this bookInformation Technology in Selected Countries (UNU, 1994, 148 p.)
close this folder1: Development of information technology in Ireland
View the document(introduction...)
View the document1. Introduction
View the document2. Historical perspective
View the document3. Government policy and the role of key institutions
View the document4. Development of the electronics industry
View the document5. Development of the software industry
View the document6. The telecommunications infrastructure for it
View the document7. Manufacturing applications of information technology
View the document8. IT applications in the service sector
View the document9. The impact of IT on employment
View the document10. Education and training in information technology
View the document11. Summary and implications for developing countries
View the documentAppendix A: IT-related courses in tertiary-level institutions in 1987/88
View the documentAppendix B: EOLAS innovation support programmes
View the documentReferences

7. Manufacturing applications of information technology

The general assumption in discussions relating to the tapping of IT in the manufacturing process is that the technology is sought as a massive labour-saving device. In reality, this is rarely the prime motivation. Other factors are among the reasons cited for using information technology. such as:

(1) to increase the volume of output;
(2) to increase the quality or consistency of output;
(3) to improve safety by the elimination of hazardous or physically strenuous operations;
(4) to improve the working environment;
(5) to economize on stocks of intermediate products by improving the flow of production;
(6) to save on materials; (7) to improve control;
(8) to increase information flow.35

lT Use In Manufacturing

As the industrialization process has progressed, three distinct spheres of production have emerged, requiring different forms of specialization. These spheres are design (usually within research and development facilities), manufacture (the shop-floor production), and coordination (in the office). Each has been subject to some degree of gradual automation, but it is the manufacturing sphere that has been most fully mechanized.36

Internationally, the diffusion of computer-based technology has occurred in all three spheres, often independently and at quite different rates and creating different impacts. The first impact of micro-electronics was made in the coordination sphere. In the United Kingdom the first mainframe was used by the British baking firm J. Lyons and Company in the early 1950s to assist in providing an information base for coordinating activities. In 1958, the Irish Sugar Company introduced Ireland's first computer for the sugar beet accounting stores and to perform a variety of trial field analyses. Such applications did not immediately create a huge demand amongst other companies in the United Kingdom or Ireland. It was not until the 1970s, and the advent of falling computer prices, reduced size, and increased reliability and backup support, that adoption of computers became commercially viable.

Initially, computers began to diffuse through each sphere in an isolated manner. In manufacture, numerically controlled (NC) machine tools became widespread in the 1970s, despite a slow rate of development over the previous two decades. These were followed by other types of NC equipment, including automatic testing equipment, robots, machining centres, and transfer lines. Within the design sphere, the early mainframe batch-processing computers rapidly gave way to more flexible computers with interactive graphics systems, used in design and drafting. A similar pattern emerged in the coordination sphere as remote mainframe-based batch-processing procedures were replaced by flexible interactive mini and micro-based systems. The rate of innovative diffusion of computers was rapid in the 1970s, particularly in manufacture with a shift towards computer integrated manufacturing (CIM). This involved a linking of individual machines, which were each controlled by micro-electronic devices, to form a common digital logic. From this emerged flexible manufacturing systems, in which NC machine tools, NC tool changers, NC testing equipment, and NC transfer lines were combined.36

Also in the 1970s, computers began to take on a more important role in the design and coordination spheres. Computer-aided design (CAD) and drafting technologies (CADD) became widespread. A similar trend is emerging in the office arena with attempts to integrate office procedures and link together multi-purpose workstations with personal computers for input, storage, processing, presentation, and transmission of information. The aim now in manufacturing is to integrate production across each of the three spheres - towards computer-aided design/manufacturing and computer integrated manufacturing.

Applications in Irish Manufacturing Industry

The Design Sphere

Specialized manufacturing CAD equipment diffused most rapidly in the electronics industry during the 1960s and early 1970s, after which it became important in the engineering industries. In most OECD countries the market grew at a rate of 50 per cent per annum. In the mid-1980s, business graphics and architecture and civil engineering applications of CAD experienced most growth. In a plant-level study undertaken in the United Kingdom in 1984, it was estimated that 10 per cent of manufacturing establishments were using CAD. By the early 1980s it was expected that more than half of all electronics sector firms in the United States and Western Europe were using CAD systems.36

In Ireland, a total of 45 companies or 8 per cent of respondents to the Survey of Computer Usage in Ireland 1986/87 had adopted CAD applications. A further 7 per cent expected to install them by the end of 1987. Of the CAD users, almost 50 per cent were in the banking and finance industrial category, which includes business services such as software houses, architectural firms, and engineering consultancies.8

Computer-aided engineering (CAE) applications were installed in just 4 per cent of respondent companies.

The Coordination Sphere in Office Automation

The need for coordination was created by the division of labour within industrial plants and has become more and more complex. At the onset of the Industrial Revolution, coordination involved coordinating tasks, often highly specialized, within one factory. As the division of labour has become more international, the scope for coordination has widened. It involves the manipulation of information, which has to be gathered, processed, presented, and transmitted. Prior to the micro-electronics age this was performed using more basic technology: typewriters, paper-based filing systems, adding machines, and dictaphones. Although slow to spread initially, the growing cost-effectiveness and extensive range of applications are causing a transformation of the coordination sphere.

In Ireland in 1986/87, among information technology users the most commonly installed applications were word processing (61 per cent) and spreadsheets (55 per cent). Market penetration was expected to rise to over 80 per cent in the next five years. The next most prevalent systems were database and graphics applications, each with 22 per cent market penetration, which was predicted to rise to 33 per cent over the next five years. Desktop publishing was used by 4 per cent, which was likely to double within five years, while local area networks reported a 9 per cent market penetration. For electronic mail, in-house use was confined to only 11 per cent of technology users, and public EIRPAC users were only 5 per cent of the total.8 The banking and finance sector and "other manufacturing," which includes the public sector, were more likely than other sectors to use electronic mail systems.

Business Management Applications

A parallel development in Ireland, as in other countries, has been the rapid growth in business management applications, particularly in the accounting, sales, inventory, payroll, and personnel areas. According to the 1986/87 survey, almost two-thirds of computer users had installed applications covering accounts receivable, accounts payable, and general ledger. An average annual projected growth rate of 15 per cent was anticipated over the next five years. Payroll and invoicing applications were used by over 50 per cent, with an average annual growth rate of 13 per cent expected. The highest projected growth rate, of 18 per cent, was expected for fixed asset accounting applications.8

Personnel management systems were used in only 13 per cent of the companies, although a further 13 per cent anticipated their use. Almost 44 per cent of respondent firms were using inventory control applications and 35 per cent had purchasing applications. Sales analysis/forecasting applications were installed by 46 per cent of companies.8

The Manufacturing Sphere

Within manufacturing, the data for computer applications indicate that the manufacturing sector in Ireland continues to be active in adopting computer applications.

The most commonly installed application was that for bill of material processing, used by 13 per cent of respondents and planned for adoption by a funkier 9 per cent. Like several other applications, it was most likely to be used and sought by manufacturing companies in the mechanical, electronic, and instrument engineering category and in other manufacturing (which in eludes food, drink, textiles, footwear and clothing, printing, rubber, and plastics).

Material requirements planning applications were in use by 8 per cent of firms, with anticipated use by an additional 12 per cent of companies. Other applications that were used by at least S per cent of respondents were: master production/scheduling applications (7 per cent), capacity planning (S per cent), works order processing (8 per cent), and process control (5 per cent). With the exception of bill of materials, process control, and numerical control, all applications were experiencing growth rates in excess of 100 per cent, but on a relatively low installed base.

Numerical control applications were installed in very few plants, representing less than 2 per cent of respondents. Only 1 per cent had computer integrated manufacturing systems. Less than 1 per cent of respondents had made use of robot control applications. In 1986, these were installed in only three companies, one in the "other manufacturing" category, one in the distribution trades, and one in banking and finance.

As yet, computer-based manufacturing applications are relatively underutilized in Irish companies compared with the higher adoption of automated office procedures and other coordination applications.

A summary of the use of computer-based applications in Ireland in 1986 is set out in figures 1.4 and 1.5. These emphasize the number of Irish employees, across all sectors of the economy, who have exposure to computer applications. These data confirm that the pattern of innovative IT applications in Ireland is occurring in three phases:

(1) early adoption of accounting-based and other coordination applications relating to payroll, ordering, stock control, and invoicing;
(2) later adoption of office procedure coordination applications, particularly for word-processing and spreadsheet applications;
(3) slower adoption of manufacture applications, particularly of design and engineering-related functions.