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Rapidly changing global markets, unprecedented increase in product flexibility requirements and shorter product life cycles require more efficient technologies that can help reduce the time to market, which is considered to be a crucial factor to survive in today's highly volatile market conditions. Rapid prototyping technology (RPT) has the potential to make remarkable reductions in the product development time. However, its fast development pace combined with increasing complexity and variety has made the task of RPT selection difficult as well as challenging, resulting in low diffusion particularly at SME level. This paper systematically presents (i) Low RP adoption issues and challenges (ii) Importance of SMEs and the challenges they are facing to highlight the magnitude of the problem (iii) Previous work in the area of technology selection and adoption and finally offers an adoption framework which is exclusive for the adoption of RP technology by considering the manufacturing, operational, technology and cost drivers for a perfect technology fit into the business.
Rapid Prototyping (RP) exhibits unique characteristics and can have potential impact on all business functions, which demands a methodological approach for the evaluation and adoption of the technology. The main focus of this study is to propose a framework that facilitates the RP adoption from strategic to operational level to ensure complete and effective implementation to obtain the desired objectives, with a special emphasis on SMEs.
Keywords: Rapid prototyping, Technology adoption, SMEs, Technology Selection, Competitiveness
(Received; Accepted ;)
The changes in the global economic scenario have posed considerable threats to many companies, especially SMEs as they strive to stay competitive in world markets. This change in paradigms demands more flexibility in product designs. These challenges combined with increased variety and very short lead times has a great impact on the business of small to medium companies in securing a significant proportion of markets in which they operate. The conventional approaches and technologies are struggling to meet business needs. Consequently, manufacturers are searching for more efficient technologies, such as rapid prototyping that can help embrace the challenges. A critical activity for small companies is the decision-making on the selection and adoption of these advanced technologies. The SME's task becomes more difficult because of the absence of any formal procedures (Ordoobadi et al., 2001). An advanced technology can be a great opportunity for a business but it can also be a threat to a company. A wrong alternative or too much investment in the right one can reduce the competitive advantage of a company (Trokkeli and Tuominen, 2002). The changing picture of the competition requires synchronization between business and new trends, which demands unique and effective solutions. These solutions should be designed to support them by keeping in view the specific nature of SMEs and ought to be simple, comprehensive and very practical so that they remain an effective part of the global value chain.
To meet these global challenges, the design and manufacturing community is adopting the RP technology to remain efficient as well as competitive. The RP technology has enormous potential to shrink the product design and development timeline. Despite these great advantages, the adoption of RP at SMEs level is significantly low. A survey of 262 UK companies showed that 85% do not use RP. Lack of awareness of what the RP technology offers and how it can be successfully linked into the business functions are the key factors holding back this sector from the RP technology adoption. The majority of the groups who indicate that RP is irrelevant are unaware of what impact it can have on their business (Grenada, 2002). The condition is even worst in developing countries. Laar highlights the sensitivity of the issue by arguing that many engineers and R&D people are still unaware of the future implications of this technology, (Laar, 2007). This is a major concern in view of the fact that technical departments are ignoring the RP/RM when it has already entered into world leading markets and has the potential to completely change the way we do business. Kidds argues that RP technology facilitate new strategies, methods and approaches and failure to understand the complete features offered by technology can end up in wrong investment decisions (Kidds, 1997).
Technology selection is concerned with the selection of the best technology among a number of alternatives, leading to complex decision making due to increased complexity and range (Rudder et al., 2008). Selection of the technology on the basis of technical parameters only can limit the effectiveness of the adoption as the selected technology will have a direct impact on different business functions. Therefore, the link between technology and business functions must be considered carefully before selecting a particular option. The situation poses more difficulties when the decision-makers find themselves unable to integrate the theory and practice because they lack the ability to match their exclusive problem with the applicable theory to devise an effective solution (Tate, 1996).
This paper contributes to the engineering profession by proposing a new system based approach for the adoption of RP technology for small to medium companies. The proposed approach is an integrated adoption model, which links the selected technology with all business functions of the company to ensure an effective and more realistic decision. It systematically identifies the issues and challenges, and then combines the technology drivers with the business functions for a seamless technology penetration.
2. SMEs ROLE AND ISSUES
The strategic importance of small and medium enterprises in the development of the economy is widely accepted in both developing and developed countries (Abdullaha , 2000). The SMEs play an important role in the development of the national economy of any country. The UK economy consist of 99 % SMEs, so out of the 4.8 million UK businesses, less than 1 % are large corporations, i.e., corporations with over 250 employees (Rowe, 2008). The share of SME employment accounted for 70% of total employment and the product share for over 46% in South Korea (Lee, 2000). In Malaysia, SMEs accounted for about 48% of the manufacturing sector (Abdullahb , 2000). There are about 118,648 SMEs in Thailand representing around 98% of the total firms in the manufacturing sector (Suthiphand et al., 2000). China is fast becoming the largest economy in the world and SMEs are a key element in China's economy accounting for 99% of total number of firms and 69.7% of overall employment (Tang, 2007). The above statistics clearly show the role of SMEs in the global economy and the consequential contribution in labor absorption, poverty alleviation and revenue generation.
2.1 Management Issues
It is imperative to consider the unfolding dimensions of the SME infrastructure before moving into any technology related issues. The main reason is that any solution suggested may lose its effectiveness if made without considering the environment in which it is going to be implemented. This is particularly important for SMEs as they differ from that of large companies in many respects and any solution designed for large companies may not fit the needs of the small companies. There are a number of reasons for that; (a) Education level at SMEs is very low (b) Most managerial positions are acquired based on experience and they often lack professional qualifications (c) R&D culture is absent due to financial constraints (Ahmad et al., 2008). Most of these issues are common in many countries. In Malaysia, management abilities, R&D and technological capability in particular are constraints on innovation and high value added activities in the small and medium sector (Peter, 2000). SMEs in Korea are economically weak units facing lack of technical competitiveness, money, skilled labor force, management and market awareness (Abdullahb , 2000). Management problems in SMEs are largely due to the fact that many of their entrepreneurs lack high levels of education and professional training and they perform poorly in many areas of production and quality control (Abdullaha , 2000) .
2.2 Technical Challenges
Emerging technologies and markets present tremendous challenges and opportunities for firms seeking a competitive edge from them (Thukral et al., 2008). With the increased complexity of products, the product life cycles and time to market are shortening. In this changing scenario, the capacity building of SMEs can play a vital role particularly during the product development cycle, as the process can be regarded as a gateway to international markets if it meets the market attributes. To ensure long term success, the manufacturers are required to concentrate on both markets and technology (IEA, 2009). Design and development of the products is one of the critical activities, which largely determine the success and position of the company in the market. A typical product development cycle is shown in Figure 1, where the prototyping is placed at the heart of the complete cycle. This is a gateway to the customers and manufacturing at the initial stage and requires several iterations before the formal manufacturing can be started. A greater control and success at this stage ensures not only a satisfied customer with all the requirements incorporated but also reduces reworks and time to market at later stages. Compression of time with complete customer satisfaction at this stage increases the ability of the firm to hold a reasonable market share. Reliance on the traditional methods and inability of the small firms to recognize the benefits offered by the technology like rapid prototyping is holding back this sector to play a critical role in world markets, where several firms are worried about losing business with multinational corporations. Many large companies still import their components, rather than purchase from local SMEs supplies. The main reason is the high price and low quality of the locally produced components (Abdullaha , 2000). A recent UN document stresses that production capacities should be placed at the heart of national policies. There are a number of obstacles faced by firms which limit their growth and relations with the global value chain and one of them is the ability of SMEs to compete (UNCTAD, 2006). The Institute of Engineers Australia indicated that the long term success of manufacturing requires attention on both markets and technology (IEA, 2009). Emerging technologies can play a considerable role in this regard.
Rapid prototyping is an additive manufacturing process which builds a part layer by layer in contrast to previous methods which use subtractive methods, by using material like wax, metal, several types of plastics, paper etc. The inherent capability of this technology has made it an ideal candidate for producing prototypes using a range of materials available. The developed parts can be used for a wide range of applications like functional testing; form-fit analysis or the parts produced can even be used as the end product, based on the material and equipment used. Stratasys stated that 32 of the parts on its large format fused deposition modeling (FDM) system were produced via FDM (from another RP machine) resulted in savings of $100,000 of tooling cost and reduction in lead time of up to six weeks (Design News, 2008). Another great advantage of the technology is direct tooling application and all these benefits have great effect on the design-manufacture cycle with a significant impact on the lead time and the cost of the product which leads towards enhanced
Figure 1. Role of RP in product development cycle
RP technology is not for large firms only, it also offers tremendous potential for SMEs to pursue and create new opportunities (Kidd, 1997). Despite the common thread between the problems of these companies like limited design and manufacturing capabilities and the benefits offered by the technology, still only a small proportion of industry currently use this technology and this is particularly true for small to medium size companies (Ahmad et al., 2009). The general consent is that less than 20% of the design and product development community use rapid prototyping. In the manufacturing engineering discipline the level of use is far less. Keeping in mind its immense potential, it is difficult to understand why few companies use it (Grimm, 2004). There are many reasons for this low diffusion but the one which largely contributes towards the problem is the lack of awareness of how to successfully adopt this technology. The absence of a complete adoption mechanism is one of the major reasons for SMEs being unaware of the strategic benefits offered by this technology.
3. REAL LIFE CASE EXAMPLE
The principal author was involved in a project with a company, which manufactures fiberglass products. The company offers a wide range of products like shelters, pipelines, chemical plant equipment etc. and have decades of manufacturing experience. The manufacturing facility was located around 50 km from the design facility.
The particular project was about the development of consoles for mail delivery vans. The technical feasibility and process capability assessment were some of the primary steps involved in the design and manufacturing of the product. It took around two months to develop the first prototype and the customer was invited to the facility to examine the prototype before manufacturing started. The customer suggested a number of modifications, which reinitiated the iterative design and development process costing a sizeable amount of money and time.
The author also received an opportunity to work with UNIDO (United Nations Industrial Development Organization) for the Cluster Development programme in Pakistan. The objective of which was, to increase the competitiveness and market share of the SMEs. The key representatives and policy makers of organizations like SMEDA (Small and Medium Entrepreneur Authority), PSIC (Punjab Small Industries Corporation), EPB (Export Promotion Bureau of Pakistan) and many more participated in the programme for about two years. One of the reports presented by SMEDA, regarding the diagnostic study of the automotive cluster, revealed that the most critical issue the cluster faced was the development and time to develop new products. Due to the lack of control on these issues, this sector was seriously facing the challenge of losing market share. The size of the cluster in Figure 2 clearly shows the critical importance of this sector.
Number of Units
Approximately 1600 units (400 in organized sector, 1200 small scale unorganized one)
About 500,000 (Organized sector provides employment to 120,000 people whereas unorganized sector employs 380,000
Revenue to GOP
Rs. 8 Billion (By organized sector only)
Rs. 72 Billion
Contribution to GDP
Rs. 25 Billion
Foreign Exchange Saving
Rs. 279 Million
Rs. 699 Million
Figure 2. Industry Statistics (Source: Cluster Diagnostic Study SMEDA)
Discussion with the key people revealed that not a single RP system existed in the cluster. Lack of awareness on issues like what they need to do and how they can do it were the main reasons behind this.
Yearout et al. (2008) highlights a similar problem of losing a $12M client, as one of the serious problems among others was the attainment of dimensional accuracy. Such issues can be negotiated and determined at the very early stage with the help of RP technology, where form fit analysis and a physical prototype can facilitate reaching a mutual compromise between customer and manufacturer.
This is a common problem faced by SMEs, where technology like rapid prototyping can play a significant role in reducing the design-manufacture cycle. This can have a critical impact on the competitive position and market share by increasing the ability to design more in a shorter period of time. Customer inputs can be incorporated at the initial stage which can be useful to meet the challenges of increased customization and greater flexibility.
However, the issue is again the same as discussed previously concerning how such companies utilize the technology effectively from strategic to operational level with limited or no knowledge about the technology and its capabilities?
4. THE EXISTING FRAMEWORKS
Technology selection is concerned with choosing the best option from a number of available alternatives. The selection and justification involves a number of factors, which are decisive for the growth of the business in increasingly demanding circumstances (Rudder et al., 2008). Voss suggests that an effective technology adoption programme must consist of three phases mentioned in Figure 3.
GO/NO GO WORKING
Figure 3. Voss Life-cycle model of the implementation process
The first phase represents the consideration of factors which are critical for implementation. The second phase consists of installation and commissioning with the final phase incorporating the further evaluation for improvements (Voss, 1988).
Kengpol and Brien proposed a data structure and a decision model which consolidates both the qualitative and quantitative variables (Kengpol and Brian, 2001). The model provides a technology selection mechanism by providing technical, manufacturing and financial parameters. It integrates the cost benefit analysis with the decision making model and provides some models to quantify the benefit loss due to early/late launch of the product and is more inclined on financial gains. Ruder, Pretorius and Maharaj (Rudder et al., 2008) propose a technology selection framework which links core competencies with the selection of the technology. It identifies the core competencies first and then links them with the technology selection process. Another framework which uses the filter concept is described by Shehabuddeen and colleagues (Shehabuddeen et al., 2006). The model incorporates the filter concepts and uses several outer and inner organizational factors for the selection of the technology which also includes financial and regulatory parameters. A summary of the previous research in the area of technology selection is given in Figure 4.
Focus on technology selection based on organizational competencies and business objectives.
Focus on technology selection decisions based on the supply chain and risk perspective
Based on Scanning, Selection , Acquisition and adoption cycle for the technology selection
Trokkeli et, al
Generic Technology Selection Guide
Framework developed for the acquisition of any technology based on the core competencies of the organization
Advanced Manufacturing Technology (AMT)
Technology acquisition decision based on technical, manufacturing and financial parameters
Figure 4. Summary of the technology research
There is a plenty of work in the selection of advanced manufacturing technologies, like robotics, flexible manufacturing systems etc. Due to the high cost involved, these frameworks are based on the economic attentions or conventional investment rationalization methods and are designed for large companies. Moreover, they target the specific selection process only and lack an integrated and systematic approach for the effective adoption (Shehabuddeen et al., 2006). On top of that, there is no clear academic tradition of study of the total process of implementation (Voss, 1988). The author also adds that most practitioners and researchers concentrate only on the technical aspects of the technology selection and do not capture market and business information. Management need to understand how the technology manifests itself in the business process and what impact it can have on the manufacturing as a whole (Pretorius & Wet, 2000). Most of the information available to managers regarding technology selection is in segmented form rather than integrated form (Small & Yasin,1997).
5. NEED FOR A RP ADOPTION FRAMEWORK
Emerging technologies pose significant challenges to classical technology assessment (Fleischer et al.,2005). Different technologies offer different competitive advantages and for an effective adoption, technology drivers must be identified first, which should match later with the business and market requirements. The technology planning is a tour of unfamiliar customer needs, competitor abilities and many begin this tour with no idea, the complex path is poorly communicated and technical staff get lost or focus their expertise in incorrect directions (Koen, 1997).
Previous researches in the area of technology selection has been concerned with Advanced Manufacturing Technology (AMT) and are for the large companies due to high investment cost. These frameworks do not fit for the selection and adoption of RP technology as the technology exhibits different cost structures and life cycles with a dominant impact on product development which is not a clear focus of previously developed models. Even the performance drivers of the new product development process are not clearly defined and there is no adequate research on that (Anand et al., 2008). RP technology has a great impact on new product development and introduction. Studies which limit the applications to the selected technology are necessary (Small & Yasin,1997). In this scenario, where on one side the product development process is not structured while on the other side the technology has great impact on new product introduction cycle & markets.This becomes very challenging for an organization to link an emerging technology with the market, business and manufacturing. Market dynamics and unique RP characteristics are critically important and the nature of SMEs demands solutions which are clear, practical and exclusive for rapid prototyping adoption.
6. PROPOSED RP ADOPTION FRAMEWORK
A study by Baines (Baines, 2004) concludes that the wrong technology or even the right technology but poorly implemented can be disastrous. A complete acquisition process is very critical for the effective technology adoption. A conceptual framework for RP adoption is presented which also considers the models proposed by Farooq and Shehabuddeen (Farooq, 2007; Shehabuddeen et al., 2006). The structure of the framework is based on the critical factors which play a major role in the technology selection process. These factors have been extracted from literature and assessed and refined by receiving expert opinion from industry and academics. The common factors are grouped together to form the building blocks of the framework. Four key elements have been identified namely identify, analyze, compare and specify.
The developed framework has the capability to cover all aspects that need to be considered in the implementation process as urged by Voss (Voss, 1988). These include pre-installation planning and justification as well as purchasing, commissioning and evaluating the technology under consideration. The description of the phases identified can be seen in Figure 5.
The framework begins by first evaluating the markets and competitors. This provides an excellent starting point, by giving an overview of the current strength and weaknesses of business, real challenges and the requirements of the current and future markets. Competitor comparison is a critical starting activity which helps to benchmark where you stand compared to your competitors and to set goals for the future by overcoming the current identified gaps (Wheelwright and Clark,1992).
Once the competitor and market position are determined, this information serves as input to the second phase which deals with the analysis of the internal capabilities, requirements, strategic position and current link of the technology with the strategy, assessment of the current performance, operational and cost parameters. A framework to link the marketing strategy and the current and potential technology can be a great tool at this stage for an integrated business plan.
Abundance of technological alternatives and complexity of the receiving company have made the technology selection a complex task. Selection of the technology is a critical task, which involves a lot of information from inside and outside of the organization. Limited knowledge of the user company makes this task much more difficult especially in the case when technology is emerging. This step evaluates the technology based on financial and operational parameters identified in the earlier stages. Analytical Hierarchy Process (AHP) is a significant tool, which can provide a means for integrating economic and noneconomic, qualitative and quantitative factors and has enormous potential to devise a solution based on the necessities of the user company.
Once a technology has been identified in the previous step, the evaluation of the selected technology and its link with the manufacturing strategy of the company is established. It also includes the detailed risk analysis and opportunities it can offer. Adjustment of the business strategy, impact assessment of the technology on the business operations and human resource requirement are the critical points to consider at this phase before a technology deployment decision is taken. The cycle continues with the regular expert reviews and exploitation of the benefits after the deployment of the technology. This can create a new world of opportunities which are even not realized during the initial phases.
Figure 5. Proposed RP based technology adoption framework
The success of the technology selection and deployment is based on several factors, which must be identified during the implementation phase. These factors may be organizational, technical or operational. An effective technology adoption requires a lot of information about the technology, markets and business. The presence of a formal technology adoption process is scarce and it is rare to find a manufacturing strategy formulation method in the case of SMEs. The critical importance of this sector in the economy requires solutions which are solely designed for them by considering their resources and capabilities. Development of a systems based technology adoption framework is one step forward in this direction, allowing for additional practical solutions to be considered at a later stage. The unstructured technology acquisition process, reliance on traditional processes and inability to meet the market requirement forms the basis of this development.
The proposed framework systematically identifies the business problems and links them with the selected technology attributes to ensure that the selected technology fully penetrates into the business and is completely exploited. The specific problems of this sector are identified in the first stage. The suitability of the previous models for application in SMEs has been studied and the factors which are not relevant or are very complex to understand were eliminated. In particular there is now only limited focus on the financial justification, as the cost of the technology is much lower than the technologies mentioned in previous researches. A strong link between the technology and strategy is established to ensure the consideration of critical factors before a final decision can be made. Research is continuing to convert the framework into a practical approach which will not only help SMEs in the technology acquisition process, but will also ensure an effective technology fit with the business, to ensure increased competitiveness and better market share.