Factors for evaluating factory automation projects – inferences from an Indian survey

Abstract

Globally, manufacturing facilities are constantly being upgraded in order to provide competitive advantages. Parunndekar observes that Indian manufacturing firms have recognized the importance of automating their production systems to meet the challenges posed by the pluralistic market. However, adoption of such automation projects involves large investments and a strategic management style. Meredith and Suresh state that any financial investment in economic activities requires a justification for the purpose of committing capital. The introduction of automation projects (AP) can, and many would say should, include changes in the prevailing management style and in the organizational culture of a firm. Thus, the decision‐making process with regard to the selection of AP is quite complex, because the commercial success of the firm is highly dependent on the mechanics of such a process. In addition to the obvious quantitative benefits accruing from the introduction of AP, they can offer a large number of qualitative (intangible) benefits. Datta et al. observed that these are generally difficult to quantify. Researchers have attempted to convert the relative importance of qualitative benefits into priority weights (PW) for procedures involving the selection and evaluation of AP. Mohanty states that project selection and evaluation involve decisions that are critical to the profitability, growth and survival of the manufacturing firm in the increasingly competitive global scenario. Such decisions are complex and require analysis of tangible and intangible attributes.