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Int J Adv Manuf Technol (2007) 34:1144–1152

DOI 10.1007/s00170-006-0681-5

ORIGINAL ARTICLE

An empirical research for CNC technology implementation


in manufacturing SMEs
Tufan Koc & Erhan Bozdag

Received: 14 June 2005 / Accepted: 22 May 2006 / Published online: 25 August 2006
# Springer-Verlag London Limited 2006

Abstract The aim of this research is to investigate whether 1 Introduction


CNC technology affects the firm performance and to
determine the manufacturing parameters and competitive CNC machine tools are among the most popular forms of
priorities that are affected by the adoption of CNC manufacturing equipment in existence today [1]. Sun [2]
technology. In order to understand the effect of CNC found in an international research including eighteen
adoption on firm performance, CNC user and non-user different countries that CNC technology is one of the most
firms were investigated statistically to determine any commonly used technologies. The use of CNC machines
significant difference between them. Then, the investigation continues to increase, becoming visible in most metalwork-
was carried out on the effect of CNC technology on ing and manufacturing industries. The popularity mostly
manufacturing parameters and competitive priorities. For comes from solving problems by making manufacturing
this purpose a sampling pool including 100 SMEs (small more flexible through increasing the machine’s part cutting
and medium sized enterprises) was investigated. Thirty- time and reducing downtime. These capabilities stem from
eight of these SMEs had previously implemented CNC many devices that can be used to streamline the operation
technology. Our findings show that CNC implementation of CNC machine tools and to enhance the CNC setup
makes a significant difference on firm performance. Similar activities and the operators ability to operate the CNC
results were also found in the analysis on manufacturing machine on the shop floor. Some examples of these devices
parameters and competitive priorities indicating that firms are special work holding devices, tool storage devices,
gain significant benefits. However, surprisingly no signif- automatic tool changers, tool life management systems,
icant difference was found with respect to delivery automatic loading devices and probing systems.
performance and volume flexibility between the two groups It is through manufacturing systems that firms ensure that
of firms. the organization can deliver the products that meet the
competitive priorities (e.g. quality, cost, early delivery,
Keywords CNC technology . Manufacturing parameters . flexibility). The effective deployment of CNC machines as
Firm performance . SME advanced manufacturing technology (AMT) has been widely
recognized in recent years as a means of enhancing these
competitive priorities and firm performance. As a result,
customers choose their product over competing alternatives
on a sustainable basis and this will provide a basis for the
survival and success of these firms today and in the future.
T. Koc (*) : E. Bozdag
Department of Industrial Engineering,
Istanbul Technical University,
80680 Macka, Istanbul, Turkey 2 Theoretical background
e-mail: koctu@itu.edu.tr
E. Bozdag The positive contribution of AMTs to firm performance in
e-mail: bozdagc@itu.edu.tr terms of either sales increase or profitability has been
Int J Adv Manuf Technol (2007) 34:1144–1152 1145

widely accepted in literature. Handfield and Pagell [3] 3 Research design


stated that investments in AMT such as CNC technology
provide resources that enable a firm to respond to rapid In this section we address four issues: the aim and scope of
market change and adapt to shorter product life cycles by the study, method and survey design, execution, and data
designing and producing high quality, custom designed analysis.
products. McDermott et al. [4] found that both main market
firms as well as niche firms pursued investments in CNC 3.1 The aim and scope of the study
equipment. Sun et al. [5] emphasized the importance of
CNC machines first and then proposed a growth pattern As seen in the related literature, despite the clear definitions
from simple and stand alone CNC machines to complicated and objectives of CNC use, there is considerable confusion
and integrated systems for Chinese manufacturing SMEs surrounding the role and business value of CNC machines.
(small and medium sized enterprises). Dean and Snell [6] In addition, the decision makers in SMEs usually base their
found a positive relationship between AMT investment decisions for the adoption of CNC technologies on intuition
and financial performance in the immediate time span in and the information from similar applications in the
their longitudinal analysis. Agreeing with these results industry since there is no sufficient information base
Gordon and Sohal [7] found that firms with greater invest- reliable on this particular issue. Therefore the primary aim
ments in AMTs show higher performance in profitability. of this paper is to explore the effect of CNC technology
Vonderembse et al. [8] emphasized the integration of stand adoption on firm performance. The study intends to identify
alone AMT to improve the manufacturing performance. the variables that explain the popularity of CNC technology
Jonsson [9] found in his research that high investors in and provide empirical data that can be used by manufac-
AMT show greater performance in sales growth and profit. turing firms. In order to achieve this objective an
Diaz et al. [10] emphasized that companies lacking AMT investigation for the significant differences in relation to
would have fewer strategic options and a narrower scope of firm performance, manufacturing parameters and competi-
action. This could lead them in failing to develop new tive priorities between the CNC user firms and non-user
capabilities and in turn they may lose competitive advan- firms were carried out and the results were discussed.
tage. On the other hand, there is also some other research,
which disagrees with the positive contribution of AMTs on 3.2 Method and survey design
firm performance. Boyer et al. [11] found that there were no
differences in performance in terms of growth, profitability Most of the research discussed in the literature review
and flexibility on the basis of each firm’s investment pattern emphasizes that integration of CNC technology leads to
related to AMTs. Swammidas and Kotha [12] observed no firm performance improvement. Therefore the research
direct impact of AMT investments on firm’s financial firstly will examine if there is a significant difference
performance. Chung [13] indicates that 50–75% of AMT between the CNC user and non-user firms in relation to
adoptions fail regarding expected benefits like flexibility, firm performance. The result of this investigation is
quality, and reliability. expected to provide implications for the firms that consider
The literature has also recently tended to place emphasis on investments in CNC technology. For this purpose Anova
CNC technology adoption by small and medium sized was employed. Secondly, the research will focus on the
enterprises (SME). Various difficulties in CNC adoption are benefits of internal manufacturing operations. It will
identified in the literature. Some of the reasons suggested for examine the difference between the two groups of firms
these difficulties are lack of capital investment funds, in relation to manufacturing parameters that are the basic
satisfaction with present operations, lack of time to investigate drivers of firm performance. From this examination we
new systems, lack of knowledge of available technology [14], intend to determine the manufacturing parameters that are
lack of technical expertise and lack of external linkages for influenced significantly by the adoption of CNC technolo-
learning [15]. Gunesekaran et al. [16] state that SMEs’ gy. For this purpose Manova was applied. Thirdly, the
efforts to adopt these technologies, that are relatively research will focus on business requirements since the
expensive compared to traditional ones, for performance alignment between business requirements and the capabil-
improvement, may be hampered by the firms’ rather limited ities of CNC technology is important for the success of
financial resources. In addition to this, Park [17] suggests CNC adoption. The two groups of firms will be investigat-
that lack of absorptive capabilities to internalise AMT due to ed for the effect of CNC adoption on competitive priorities.
managerial deficiencies and organizational obstacles are From the results we will try to determine which competitive
reasons for disappointing performance in SMEs. In spite of priorities differ significantly by the adoption of CNC
all these difficulties, these firms strive for CNC adoption to technology. For this purpose Manova was applied. Finally,
improve their competitiveness. the results of these investigations will be discussed.
1146 Int J Adv Manuf Technol (2007) 34:1144–1152

In order to carry out the statistical analysis, a research Delivery performance Product delivery on time and earlier
questionnaire was prepared based on the relevant literature. than competitors is extremely important for competitive
The questionnaire used to collect the data is given in advantage. Early delivery makes firms benefit from
the Appendix. The questionnaire is concerned with the four technology leadership advantage, which will endure even
groups of variables in the following areas: after a competing alternative is available by converting its
product to an even better or cheaper one through using
1. Manufacturing parameters
improved manufacturing technology.
2. Competitive priorities
3. Firm performance
Flexibility The industry progress market requirements
4. Availability of CNC technology in the firm
change rapidly and firms apply strategies to satisfy specific
In this research, the commonly accepted manufacturing customer needs. These needs are usually related to the change
parameters according to recent literature were used [2, 18, in both product variety and product quantity. Therefore firms
19]. They can be seen below: should be flexible enough to respond to such changes in the
1. Product design performance market by improved manufacturing technology.
2. Production planning performance After the preparation of the questionnaire we wanted to
3. Machine set up performance conduct a series of exploratory interviews with manufac-
4. Part inspection performance turing managers of three firms to ensure the uniformity of
5. Material handling performance understanding of survey items. We found out that they had
6. In process waiting time difficulty in defining firm performance. In the related
7. Manufacturing time utilization literature there are several performance measures such as
8. Maintenance performance sales growth, market share growth and profitability [23].
9. Defective part production However, we agreed with managers to use profitability
10. Tool utilization (profit/investment) to measure firm performance because
11. Fixture utilization this measure was easy to understand and quite common
12. Manufacturing space utilization among firms [24]. In addition, the firms stated that they
13. Raw material inventory need could easily reach the industry average of profitability value
14. Work in process inventory need through the data base of organized industrial zones and
15. Finished product inventory need compare with their profitability performances.
16. Capacity utility ratio
17. Batch size constraint
3.3 Execution
Manufacturing parameters are internal competencies related
to manufacturing operations. These competencies are utilized For this study we sought a relatively diverse sample of
to create value for the customers. The value to increase small and medium sized plants that serve as suppliers to
customer satisfaction is defined by competitive priorities. large scale companies in Turkey. The researchers randomly
Therefore the association between competitive priorities and selected the firms to represent the sample for this
manufacturing parameters requires investigation. The compet- investigation. The criteria for sample selection were
itive priorities in this study were selected as cost, quality, organization size and industry type. Although there are
delivery performance, and flexibility as they were suggested in numerous definitions and criteria to classify firms by size,
manufacturing literature [2, 20–22]. These priorities that were in this research, firms with less than 250 employees were
defined by Schlie [22] and the way manufacturing technology considered as SMEs. The industry types selected for this
influences them is described briefly as follows: study were discrete product manufacturing industries as
indicated in Table 2. The reason for this selection is that
Cost Cost is one of the basic determinants of why they are the users of CNC technology of interest to this
customers choose one product over competing alternatives. study. These firms have job shop process environments
Improved manufacturing technology plays an important characterized by low volumes and customisation respon-
role in affecting the cost structure of a product through siveness. Their product and process specifications as well
more efficient manufacturing operations with less waste. as operational conditions are generally arranged and
frequently changed by their large scale customers. The
Quality Quality of a product is affected by manufacturing operational conditions include competitive priorities such
technology through the factors such as product design, as product cost, product quality, delivery performance,
tightness of tolerances, inspection performance, material product variety flexibility and product volume flexibility, as
choices, and so on. briefly outlined above.
Int J Adv Manuf Technol (2007) 34:1144–1152 1147

Personal interview was selected as the data collection Table 2 Percentage of population in the sample by industry type
method. The production managers were targeted as
Industry subdivision Percent of companies
respondents to survey in firms. This was mainly because
they were the ones involved in the manufacturing process Fabricated metal products 20
as well as having good information related to a broad range Machinery and mechanical equipment 25
of firm related areas including manufacturing operations Electrical material and equipment 12
Instruments and related products 8
and competitive success, thus improving the quality of the
Transport equipment 18
information gathered. The present sample consists of 100
Miscellaneous manufacturing 17
manufacturing SMEs, which provide usable responses to Total 100
the questionnaire addressing manufacturing parameters,
competitive priorities and firm performance. Of the 100 items. The alpha reliabilities were 0.83 for manufacturing
firms, 38 have CNC technology and the remaining 62 firms parameters and 0.72 for competitive priorities suggesting
do not. Tables 1 and 2 present the distribution of the the measures were reliable because they surpass the 0.7
respondents by firm size and industry type, respectively. threshold recommended by [25] and could be used with
confidence in the present study. In addition to the
3.4 Data analysis measurement of reliability of the instrument, measurement
of validity is also important to show that it correctly
In order to collect the data, manufacturing parameters were measures survey items. The content validity measure was
operationalized using a five-point Likert-type scale (1=very used for the instrument’s adequacy for measurement. For
low to 5=very high). Respondents were asked to indicate this study we followed two methods to assure content
the degree of emphasis that their firms attached to the 17 validity. Firstly, we reviewed extensive literature discussed
manufacturing parameters compared to their competitors. above related to the subject concerning each category of the
Competitive priorities were also operationalized using the survey. Also, we developed the measurement instrument, as
same five-point Likert-type scale. Respondents were asked discussed in the method and survey design section.
to indicate the degree of emphasis that their firms attached Secondly, to assure the adequacy of the instrument we also
to the five items of competitive priorities compared to their conducted exploratory interviews with some production
competitors, i.e. cost, quality, delivery performance, prod- managers of three manufacturing companies as stated in the
uct volume flexibility and product variety flexibility. Firm method and survey design section. We were informed the
performance was also operationalized using the five-point subject that the survey aimed to measure was very
Likert-type scale. Respondents were asked to indicate the important and the items selected to assess the innovative-
degree of emphasis that their firms attached to firm ness of the survey were sufficient.
profitability performance compared to the industry average. The data were collected from randomly selected firms to
For the use of CNC technology in a plant, a dichotomous ensure the independence of the respondents. The assumption
variable was utilized that expressed either the existence (1) particularly important to Anova is the homogeneity of the
or absence (0). variance of the dependent variable between the two groups.
Before using the measurement instrument for the In order to examine this assumption the Levene statistic test
analyses, the instrument had to be first tested for its was employed for the first analysis (in Section 4.1). For the
reliability. The internal consistency was measured using second and third analyses (in Sections 4.2 and 4.3.), the
the Cronbach’s alpha reliability coefficient for each set of correlation among all dependent variables was examined by
Bartlett’s test for sphericity. Then, the dependent variables
Table 1 Distribution of the respondents by firm size
were assessed collectively by testing the equality of the
Number of Number of Percent Cumulative entire variance/covariance matrices between the groups. In
employees companies percent order to test this assumption Box’s M test was employed.
The results of the tests employed for the data analysis were
0 ≤ 25 11 11 11
given in each section below (in Sections 4.1, 4.2. and 4.3)
26 ≤ 50 24 24 35
51 ≤ 75 13 13 48 and it was assured that the assumptions were met and the
76 ≤ 100 16 16 64 data could be used for the analyses.
101 ≤ 125 11 11 75
126 ≤ 150 4 4 79
151 ≤ 175 4 4 83 4 Results and discussions
176 ≤ 200 10 10 93
201 ≤ 225 4 4 97
In this section, the empirical relationship between the CNC
226 ≤ 250 3 3 100
user and non-user firms is investigated in relation to firm
1148 Int J Adv Manuf Technol (2007) 34:1144–1152

profitability performance, manufacturing parameters and significantly different at p<0.027. The variance/covariance
competitive priorities and the results discussed. matrices of the groups were not different since Box’s M
statistic was greater than 0.05. Then, Anova was carried out
4.1 The effect of CNC adoption on firm performance to indicate whether significant difference existed between
the two groups of firms in relation to the manufacturing
In order to understand the effect of CNC use on firm parameters. Table 4 details the statistical associations.
profitability performance, the statistical association between The Anova results in Table 4 suggest that seven
CNC user and non-user firms was investigated to find out if significant differences exist between the CNC user and
there was a significant difference in relation to firm non-user firms in relation to different manufacturing
performance. For this purpose Anova was employed. The parameters. These parameters are part design performance,
homogeneity of variance of the dependent variable between machine set up performance, in process waiting time, tool
groups is an important assumption to Anova. For this and fixture utilization, work in process inventory need and
reason the Levene statistic was applied and the result batch size constraint.
indicates no difference (sig.=0.13) ensuring that the unequal There is a significant difference between the CNC user
group sizes did not impact on the sensitivity of the and non-user firms in relation to product design perfor-
statistical tests of group differences. mance. The product design process includes activities from
The result reveals that there is a significant difference identifying customer needs to transforming them into
between the two groups of firms in relation to firm product specifications [26]. Product specifications are con-
performance as indicated in Table 3. Firms that use CNC strained by manufacturing system capabilities. Some
technology show a significantly greater firm performance features of CNC machines such as programmability,
than non-users. Handfield and Pagell [3] also find similar automatic control of machining process, adaptive control,
results in their research and they state that investments in tool magazine, automatic tool changing system and inspec-
AMT such as CNC provide resources that enable a firm to tion feature help improve the product design performance.
respond to rapid market change and adapt to shorter Machine set up performance was also found significantly
product life cycles by designing and producing high quality, different between the two groups of firms. The set up
custom designed products and in turn improve perfor- process includes activities such as understanding machining
mance. Vonderembse et al. [8] also emphasize the integra- operations on the part, selecting the sequence of operations,
tion of stand alone CNC machine tools to improve the setting the speeds and feeds, preparation of fixtures and
financial performance of firms. In parallel with this, tools, loading the part, and adjustment of location and
McDermott et al. [4] claim that both main market firms as height, which are carried out to prepare machines for
well as niche firms pursue investments in CNC equipment manufacturing. The CNC machine tool reduces most of
for performance improvement. these activities by means of features such as selecting
speeds and feeds, making rapid moves between surfaces to
4.2 The effect of CNC adoption on manufacturing be cut, using automatic tool changing, monitoring tool
parameters wear, conveying chips, controlling coolant, in-process
gauging, and loading and unloading the part [27] thus
The aim of the investigation of the differences between the causing dramatic reductions in set up time. The finding of
two groups of firms in relation to manufacturing parameters Lagace and Bourgault [28] is also similar with our finding
was to find out the manufacturing parameters significantly in that the set up program seems to have the highest rates of
affected by CNC adoption. For this purpose Manova was improvement in the future in SMEs where CNC technology
applied. The correlation among all dependent variables is used intensively. McDermott et al. [4] also state that
was examined and significant degree of intercorrelation SMEs invest in CNCs to reduce set up costs and increase
was found by Bartlett’s test for sphericity (sig.=0.000). responsiveness.
The mean vectors of the two groups of firms were Another significant difference between the two groups of
examined with Pillai’s criterion and they were found firms concerns in-process waiting time. The decrease in non-

Table 3 The association between CNC user and non-user firms on firm performance

CNC non-user CNC user F Sig.

Mean Std. dev. Mean Std. dev.

Firm performance 3.414 0.817 3.895 0.764 8.369 0.005


Int J Adv Manuf Technol (2007) 34:1144–1152 1149

Table 4 The association between CNC user and non-user firms on manufacturing parameters

Manufacturing parameters CNC non-user CNC user F Sig.

Mean Std. dev. Mean Dev.

Product design performance 3.371 0.814 3.757 0.723 5.643 0.019


Production planning performance 3.419 0.801 3.486 1.044 0.129 0.720
Machine set up performance 3.194 0.765 3.676 0.884 8.191 0.005
Part inspection performance 3.194 0.807 3.378 0.893 1.123 0.292
Material handling performance 3.500 0.864 3.757 0.955 1.892 0.172
In process waiting time 3.323 0.937 3.730 0.652 5.412 0.022
Manufacturing time utilization 3.613 0.797 3.811 0.967 1.216 0.273
Maintenance performance 3.129 1.032 3.027 0.986 0.234 0.630
Defective part production 3.403 1.016 3.514 1.387 0.207 0.650
Tool utilization 3.274 0.793 3.676 1.056 4.618 0.034
Fixture utilization 3.468 0.824 3.811 0.908 3.720 0.057
Manufacturing space utilization 3.484 1.083 3.568 1.015 0.145 0.704
Raw material inventory need 3.339 0.809 3.514 1.017 0.890 0.348
Work in process inventory need 3.113 0.727 3.486 0.870 5.276 0.024
Finished product inventory need 3.210 0.926 2.946 1.026 1.734 0.191
Capacity utility ratio 3.710 0.965 3.973 0.833 1.906 0.171
Batch size constraint 3.226 0.931 3.622 1.037 3.847 0.053

value added activities like set up and material handling leads significant differences between CNC user and non-user
to reduction in waiting time. Similarly, tool and fixture firms in relation to competitive priorities. For this purpose
utilization was also found to be significantly different between Manova was applied. The correlation among all dependent
the two groups of firms. The flexibility and versatility of the variables was examined and a significant degree of
CNC machine tools enable it to approach the workpiece from intercorrelations was found by Bartlett’s test for sphericity
many angles and with various speeds and tools to accomplish (sig.=0.000). The mean vectors of the two groups of firms
a large number of manufacturing operations without moving were examined with Pillai’s criterion and they were found
the workpiece to an additional fixture [29]. The ability to significantly different at p<0.05. The variance/covariance
leave the part on the same machine for other subsequent matrices of the groups were not different since Box’s M
processes with the same or other tools and same fixtures statistic was greater than 0.05. Then, Anova was carried out
provides an important advantage for CNC machines by to indicate whether significant differences exist between the
increasing the utilization of tools and fixtures. two groups of firms in relation to each competitive priority.
The work in process inventory need is another factor, Table 5 details the statistical associations.
which was found to be significantly different between the two Table 5 shows the significant differences between the
groups of firms. Usually, potential problems such as machine users and non-users of CNC in relation to competitive
breakdown, long set up time and quality problems in priorities. Cost, product quality and product variety
production encourage firms to hold inventory. On the other flexibility were found to be significantly different between
hand, holding inventory is costly since it requires infrastruc- the two groups of firms.
ture such as warehouses, containers, additional space, etc. There is a significant difference between the users and
[30]. CNC technology helps the solution of these problems non-users of CNC in relation to cost. This result is also in
and contributes to the reduction of the WIP inventory. line with the work of Das and Narasimhan [31] who find
Similarly, the features of CNC technology reduce the that CNC machines are used to reduce cost in low volume
importance of batch size constraint that was also found to job shop environments. Integrating several complementary
be significantly different between the two groups of firms. machining processes in one CNC machine tool, requiring
less tool, fixture and labour, reducing scrap and rework are
4.3 The effect of CNC adoption on competitive priorities some of the reasons for the increase in operational
efficiency that leads to cost reduction.
In addition to firm performance and manufacturing param- Product quality is another factor that was found to be
eters, respondents were also asked about the performance of significantly different between the two groups of firms.
their firms in terms of competitive priorities. From the data Vonderembse et al. [8] and Bessant [32] state that as
collected, an investigation was carried out to find out the manufacturing systems evolve, the emphasis that the
1150 Int J Adv Manuf Technol (2007) 34:1144–1152

Table 5 The association between CNC user and non-user firms on competitive priorities

Competitive priorities CNC non-user CNC user F Sig.

Mean Std. dev. Mean Std. dev.

Cost 3.129 0.757 3.447 0.891 3.635 0.059


Delivery performance 3.548 0.862 3.816 0.692 2.618 0.109
Product quality 3.871 0.914 4.421 0.599 10.877 0.001
Product volume flexibility 3.790 0.908 4.053 0.899 1.982 0.162
Product variety flexibility 3.452 1.082 4.026 1.000 7.040 0.009

customer places on capabilities changes, i.e. product quality 5 Conclusions


becomes more important than product cost. In traditional
machines, the quality of operations is highly dependent on This research aimed to contribute to the development of
the operator’s skill and experience. Operators and the more accurate and realistic understanding of the usefulness
methods in manufacturing are the major sources of of CNC technology in manufacturing as well as to provide
variation, both of which introduce some process irregular- data for firms considering the adoption of CNC technology.
ity. However, in the CNC machining environment, the Specifically, investigation was carried out on samples of the
operator’s skill is replaced by the skill of computer-based CNC user and non-user firms and focussed on selected
operations. Supporting our finding, Asfahal [29] claims that characteristics associated with manufacturing parameters,
the elimination of these sources of variation is possible by competitive priorities and firm profitability performance.
the use of CNC machines resulting in higher quality. In Statistical analysis was established for this purpose and firm
addition to this, performing many operations in a single performance was found to be significantly different
fixturing of a workpiece brings up greater uniformity and between the two groups of firms indicating that the
quality than a series of special purpose or traditional introduction of CNC technology is associated with suc-
machines that require several refixturings of the workpiece. cessful profitability performance. Secondly, analysis of the
Another finding of this research is that product variety results indicates that there were significant differences
flexibility was found to be significantly different between between the CNC user and non-user firms in relation to
the two groups of firms. The firms that use CNC different manufacturing parameters. These parameters are
technology have higher variety flexibility than the others. part design performance, machine set up performance, in
Variety flexibility is the ability of a machine to perform process waiting time, tool and fixture utilization, work in
different combinations of operations of different products process inventory need and batch size constraint. Thirdly,
economically and effectively. It permits the production of a significant differences were found between the users and
greater number of highly differentiated products. It enables non-users of CNC in relation to competitive priorities. Cost,
a firm to enhance customer satisfaction by providing the product quality and product variety flexibility were signif-
kinds of products that customers request in a timely manner icantly different between the two groups of firms.
[33]. Lefebvre et al. [34] state that SMEs face an increasing On the other hand, it is particularly interesting to see
demand for flexibility. These firms encounter quite volatile that delivery performance was not found to be signifi-
demands and strive to be flexible enough to respond to the cantly different between the two groups of firms. This
changing demand. According to Bessant and Hayword suggests that firms that implemented CNC do not always
[35], CNC is appropriate for such an environment. Because perceive delivery performance improvement. In other
CNC machines decrease set up time, lot size, inventory words, CNC alone does not provide firms with better
level and reduce manufacturing lead time, the factory delivery performance. The reason may be either respon-
operations become more flexible in responding to the dents are not aware of this benefit which stems from
changing market demand [30]. Similarly, Swamidas and CNC use or the time for shipment (from factory to
Kotha [12] claim that CNC machines are compatible with a customer) is so long that reduction in manufacturing lead
jobshop process environment, characterized by low vol- time (from raw material to final product) loses its
umes and customisation responsiveness. Handfield and importance in respondents’ perceptions. Another interest-
Pagell [3] also support this view and state that investments ing point is that the difference in defective part
in CNC machines provide resources that enable a firm to production was not found to be significant between the
respond to rapid market change and adapt to shorter two groups of firms. One possible explanation may be
product life cycles by designing and producing high quality, that because defects are sorted out before they ever reach
custom designed products. the market respondents do not perceive defective part
Int J Adv Manuf Technol (2007) 34:1144–1152 1151

production as an important factor that affects firm B. Manufacturing parameters


performance. These are only possible explanations and
the reasons, particularly for these two cases, may be Please indicate the degree of performance given to the following
worth investigating in future research. manufacturing parameters by your organization compared to
As industry advances, the products available to your main competitors (1=very low to 5=very high).
customers are becoming more individualized. There are – Product design performance
more special options and features to meet the particular – Production planning performance
needs of the customer. They have increasingly started to – Machine set up performance
require firms to supply a wide variety of products with – Part inspection performance
good quality and at low cost. Evidently this suggests a – Material handling performance
volatile market environment for firms where use of – In process waiting time
customization and new product introduction capabilities – Manufacturing time utilization
would be a preferred strategy for pursuing market – Maintenance performance
performance. Especially the SMEs that work as suppliers – Defective part production
for large scale companies seem to face increasing – Tool utilization
requirements by their customers. Therefore, without – Fixture utilization
upgrading their manufacturing capabilities none of them – Manufacturing space utilization
seem to have a chance to be considered by their – Raw material inventory need
customers to work with. Therefore the findings of this – Work in process inventory need
research are particularly useful to the management of the – Finished product inventory need
firms that are in the planning phase of CNC implemen- – Capacity utility ratio
tation. They can use the information for the alignment of – Batch size constraint
the requirements of their business and the capabilities of
CNC technology for a successful CNC technology
adoption. C. Competitive priorities
There are limitations of this research. First of all, the
empirical research discussed here covers only one Please indicate the degree of performance given to the
country and small scale suppliers of large scale following competitive priorities by your organization com-
companies. Therefore, the applicability of its results to pared to your main competitors (1=very low to 5=very high).
firms from other countries should only be assumed with – Cost
great care. Moreover, since the survey focussed on – Quality
SMEs, the results cannot easily be applied to large scale – Delivery performance
companies. – Product volume flexibility
Future work can be done to research factors such as – Product variety flexibility
labour skill, expertise, integration in manufacturing, and
their significance in improving the effectiveness of CNC
D. Firm performance
implementations. Another direction for future research
would also be the use of CNC technology in large scale
Please indicate the relative position of your organization on
companies and a subsequent comparison of the relation-
profitability performance compared to your main compet-
ships with the CNC technology use in SMEs. This
itors (1=very low to 5=very high).
may help to understand the growth pattern of automation
and establish better manufacturing and automation – Profitability
policies.

Appendix
References
List of indicators included in the questionnaire
1. Lynch M (1995) Managing computer numerical control opera-
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