Business Horizons / May-June 1989 The Automated Factory: Justification and Implementation Mohsen Attaran 80 Mohsen Attaran is a professor of opera- tions management at California State Uni- versity, Bakersfield. Factory automation can make production smoother, faster, and more cost-effective. Its implementation is the key to realizing these benefits. T he factory of the future seems finally to be realizing the long- hoped-for production wonders of customized and diversified prod- ucts. This factory also provides flexible processes that optimize resources; as a result, lead times are getting shorter, inventories are dropping, machine utili- zation is increasing, and quality, con- sistency, and performance are improv- ing. All these results have already been achieved in the U.S. by firms utilizing various forms of factory automation. However, as the automated fac- tory advances quite rapidly in the U.S., disillusionment with automation has surfaced. One technology after another has been denounced by users after reportedly failing as the long-sought cure-all. Disaffections started with materials requirements planning (MRP) and MRP II, moved to robots, and were even expressed in a study that found that 75 percent of the firms surveyed claimed not to have realized cost im- provements from their computer-aided design (CAD) systems. Even flexible- manufacturing systems (FMS) have been criticized for not living up to expectations. These problems lead to the follow- ing questions: What does this mean to management? Is the automated factory a fad? Should manufacturers avoid investment in new process technolo- gies? What are the internal and exter- nal effects of these new technologies? What are the adaptation obstacles? How can we ensure a successful implemen- tation of the automated factory? The following cases present instances in which American firms capitalized on the advantages of advanced manufac- turing technologies. A firm can expect both external and internal benefits from an automated factory, but it can also find certain obstacles to adaptation. Certain steps, however, can aid in implementation and help derive the maximum benefit from the FMS invest- ment. Allen-Bradley At the 45,000 square-foot facility in its Milwaukee headquarters, Allen-Bra- dley is using computer-integrated manufacturing (CIM) operations to build motor starters and electrical con- tactors for the world market. The firm implemented the new technology when the company had to switch the product line from electromechanical to solid- state in 1979. CIM has reduced direct