TECHNOLOGY MAGNITUDE AND TECHNOLOGY TRANSFER
Harm-Jan Steenhuis*, Erik J. de Bruijn Technology and Development Group, University of Twente, Netherlands *E-mail:
[email protected]
Abstract International manufacturing frequently involves the transfer of technology across borders. The process of technology transfer presently still has relevant aspects of which the influence is not yet fully understood. A main finding of the study of the transfer of technology process in a high technology industry is that the magnitude of a technology has an important influence on the transfer of technology. Four characteristics related to a technology’s magnitude were found in the research to have an influence. These characteristics link technology magnitude to what is transferred and how it is transferred. These four characteristics explain the differences in the duration of the installation phases of four case studies. Keywords: technology transfer, aircraft industry, technology Introduction Manufacturing increasingly takes place in international networks. One of the characteristics of these networks is that technology is transferred between production sites. In high technology this is always a difficult process. A research project was executed to identify the process of technology transfer. One of the main findings is that the magnitude1 of the technology has a major influence on the length of the installation phase of technology transfer. Methodology The research was set up to identify the phases and the factors that are involved in technology transfer. Technology was considered to be of prime importance and to allow in-depth understanding the study involved one technology (aircraft production). Case studies were executed in accordance with procedures as described by Eisenhardt (1989). Case study selection was based on theoretical sampling. Insights gained in earlier case studies were used to identify later potential cases (snowball sampling, see (Miles and Huberman, 1994 and Verschuren and Doorewaard, 1995)). The research was carried out at the Destination Company (DC, the technology receiving company) since this is where the implementation takes place. During nine months in DCs, approximately 315 interviews were held with 45 different people representing both Source Companies (SC, the company where the technology originates) and DCs. To overcome objections against case study research, notably that the number of variables is larger than the number of cases (Swanborn, 1996), strategies were followed to increase the degrees of freedom of the data: triangulation, member check, and collecting data from other companies for comparisons. Four case studies were carried out (identified as Woodpecker, Swan, Eagle and Albatross). The selection of the four case studies was done in accordance with the variables in Tab.1.
1
The magnitude of technology refers to how much technology is transferred.
CASE
Woodpecker (entire aircraft) Swan (cockpit) Eagle (empennage) Albatross (skin section)
AGE OF TECHNOLOGY approximately 10 years approximately 5 years approximately 1 year approximately 7 years
MAGNITUDE OF TECHNOLOGY large small small small
SOURCE COMPANYAND COUNTRY Birds of the Woods (UK) Forest Birds (Canada) Birds of Prey (UK) Sea Birds (Germany)
DESTINATION COMPANY AND COUNTRY Mountain Birds (Romania) Mountain Birds (Romania) Mountain Birds (Romania) Elegant Birds (The Netherlands)
Table 1: Case characteristics2 The analysis of the cases (Steenhuis, 1998a; 1998b; 1999a; 1999b) led to a process model for technology transfer, see (Steenhuis and Minshall, 1999). Three sequential phases were distinguished: preparation, installation, and utilisation. In the preparation phase decisions have to be taken on what and how to transfer. In the installation phase the result of these choices is shown, in the utilisation phase continuous production takes place at DC. This research deals with the influence of technology magnitude on the installation phase of technology transfer. A model for measuring the magnitude was developed as represented in Fig. 1.
Findings Tab. 2 provides information on the installation phase and the magnitude of the technology.
Planned time period Actual time period Completed Type of technology Type of contract
WOODPECKER approximately 5 years approximately 11 years approximately 80% (project ended) aircraft manufacturing license agreement
SWAN 217 days
EAGLE 225 days
ALBATROSS 232 days
197 days
260+ days
232 days
100%
approximately 90% but on-going empennage assembly supply agreement
100%
cockpit assembly supply agreement
skin panel manufacturing supply agreement
Magnitude technoware
± 74000 tools ± 43000 m2
± 1432 tools ± 636 m2
± 2800 tools ± 1200 m2
inforware (production)
± 96000 drawings ± 167000 A4 planning sheets ± 4000 A4 process specifications
± 125 drawings ± 1290 A4 planning sheets ± 5000 A4 process specifications
humanware
± 184000 (direct) man-hours ± 70000 parts
± 130 drawings ± 825 A4 planning sheets ± 3200 A4 process specifications ± 1147 (direct) man-hours ± 1610 parts
inputs
Table 2: The transferred technologies
2
Names have been altered for confidentiality reasons.
± 775 (direct) man-hours ± 780 parts
± 200 tools (not included are small tools) ± 140 m2 (not included for detail parts) ± 55 drawings ± 500 A4 planning sheets ± 2900 A4 process specifications
± 100 (direct) manhours ± 120 parts
• • • •
• •
drawings process planning sheets process specifications bill of material
• • • • •
product specific detail parts (sub)assemblies materials fasteners non-consumables
MANAGEMENT
number of managers management skills ability to plan ability to control ability to take corrective action ability to motivate ability to use the skills available resources organisation structure organisation culture environment
INFORWARE
PARTS
PRODUCT HUMANWARE
• •
•
number of people technological skills of people ability to operate equipment ability to read documentation ability to work from documentation ability to use the skills (productivity) attitude towards time attitude towards decision making attitude towards responsibility work motivation working conditions
Figure 1: Aircraft Production Technology
TECHNOWARE APPROVED
• •
CHARACTERISTICS • dimensions length height width • performance speed payload • product function • demand
factory buildings/area number of production equipment product specific general
Tab. 2 shows that the larger the technology magnitude, the more time is needed for the installation phase. This seems trivial but the magnitude provides only part of the explanation. The installation phase for the Woodpecker technology transfer was planned to be approximately 6.5 times longer than the installation phase of the Swan and Eagle transfers but the Woodpecker technology was much larger than 6.5 times the magnitude of the Swan and Eagle technologies. The effects of the type of technology and the method of transfer on the magnitude of technology should also be taken into account so that the duration of the installation phase can be explained better. This is important because for example in the Woodpecker case the magnitude of the technology was so large that before the entire technology was transferred, the technology had become obsolete. Tab. 2 shows that the installation phase was the longest for the Woodpecker technology transfer. This itself is not surprising because the Woodpecker technology has the largest magnitude. One of the reasons why the installation phase lasted much longer than planned was because it contained an entire aircraft assembly line, this consists of several workstations, at each workstation a specific workload is carried out. A workstation is defined as a group of activities and for a balanced production line the lead-time for each workstation is the same and equal to the delivery interval (the time period between the delivery of two sequential aircraft). When several workstations are transferred then this can be sequentially or simultaneously, this affects the time period for installing the technology at DC. The more simultaneous activities can be performed, the less time is necessary for installing the technology. The Woodpecker transfer was based on eight sequential phases with an increasing workload for the DC. However, the planning was based on the delivery schedule of the aircraft and used backward integration principles to establish the start dates for production activities. Due to the increasing workload for the DC and learning, see (Steenhuis and de Bruijn, 2000). This in effect meant that many activities were carried out simultaneously (the first activity to be done at DC was the production of detail parts for the seventh aircraft which was part of the third phase). A result of this was that the project became very complex and therefore also difficult to manage. It became hard to keep track of delays in detail parts manufacture and their progressive influence on the manufacture of other detail parts, the subsequent sub-assembly activities, and the subsequent assembly activities. This eventually led to large delays in the programme and, combined with another important factor, the lowering of market demand, in the end of the transfer. The lead-time for the production for the other three cases was less than the delivery interval and thus these involved less than one workstation. Tab. 2 shows that although the Albatross technology seemed to be smaller than the Swan and Eagle technologies, the installation phase lasted longer. The reason for this is that Tab.2 only shows the assembly technology of the Albatross skin section. The production of aircraft is based on two types of technology; detail parts manufacture and assembly. In the preparation phase a choice is made whether to transfer both types of technology or just one type of technology. For the Albatross technology transfer detail parts manufacturing and assembly were transferred. As a result of this, the installation phase lasted longer. The Woodpecker transfer was aimed at increasing technological capabilities with regard to aircraft production at the DC, it therefore also included assembly and detail parts manufacturing. In the Swan and Eagle transfers the SC wanted to transfer some of its work but it was not confident about the technological capabilities of the DC. Therefore the SC decided to transfer only assembly activities. In the Albatross transfer, since DC was a technologically competent company, SC decided to transfer a complete package. The Woodpecker transfer was practically a simultaneous transfer of several activities. This was a consequence of the content of the eight sequential phases. For a large magnitude of technology a choice can be made to first transfer later production stages (assembly), and, after that earlier production stages (detail parts manufacture); this is called an upstream transfer. The opposite is called a downstream transfer. An upstream transfer occurred in the Woodpecker case. The project contained eight phases with an increasing responsibility for the DC. The first phase contained only assembly activities. In later phases detail parts manufacturing was transferred to the DC. Although the Swan transfer involved the transfer of cockpit production technology, originally it included the assembly of approximately 80% of the Swan structure. The increase of work for the DC
was in this case sequentially (and downstream) planned. Only after the successful transfer of a ‘work package’ a next ‘work package’ was going to be transferred. Due to limited market demand for the Swan aircraft, a second work package was never transferred. The Eagle and Albatross transfers included one, small work package and thus the difference between sequential and simultaneous activities had only a minor influence. An overview of the magnitude related factors as identified above is given in Tab.3. Type of technology Woodpecker Swan Eagle Albatross
assembly and detail parts manufacture assembly assembly assembly and detail parts manufacture
Number of workstations multiple
Direction
Order of activities
upstream transfer
essentially parallel
less than one less than one less than one
N.A. N.A. N.A.
essentially sequential N.A. N.A.
Table 3: Magnitude related factors influencing the installation phase
Discussion The magnitude of a technology is an important factor for the duration of the installation phase. Besides the magnitude of technology there are several magnitude related characteristics that influence the installation phase duration. There are important characteristics for what to transfer: the type of technology transferred, and the number of workstations transferred, and for how to transfer: the upstream or downstream transfer, and sequential or simultaneous activities in the installation phase. • The type of technology to be transferred, i.e. detail parts manufacture or assembly, depends on technical and logistical issues. It is technically more difficult to transfer the manufacture of detail parts than assembly because the first involves more complicated know-how. In addition, if a SC is looking for a reliable supplier, then knowledge transferred for a supply contract is only product specific knowledge, it does not include general manufacturing knowledge. DCs in industrially developing countries may lack some of the necessary general manufacturing knowledge. This often means that only the production of simple parts can be economically transferred to a DC in an industrially developing country. It is from a logistics point of view more difficult to transfer assembly work. This is related to traceability in the aircraft industry and the responsibility of airworthiness and certification. • The number of workstations to be transferred gives an indication of the leeway in production. If the amount of work transferred is less than one workstation such as was the case for the Swan, Eagle and Albatross transfers, then there is production leeway so that DC has some flexibility to make up for delays. If the amount of work transferred is equal to several workstations, then there is less flexibility in production for the DC thus delays at one workstation have an effect on the delivery schedule unless somehow extra work (for example by an extra shift) is carried out. • In instances where assembly and detail parts manufacture are both transferred it might be necessary to create a buffer at SC so that delivery schedules can be kept while DC is learning to produce the aircraft. A choice can then be made to first transfer later production stages (assembly), and, after that earlier production stages (detail parts manufacture) or vice versa. In the Woodpecker technology transfer the SC wanted to close its own factory and transfer tooling to the DC. The transfer was tightly planned so that DC could benefit from market potential. A choice was made for an upstream technology transfer, the advantage of this is that DC personnel can get on the spot training (especially important for assembly) by helping to create the buffer at SC. The disadvantage is that besides machines and jigs also intermediary products have to be transferred from SC to DC (for example large fuselage sections or wings as was the case for the Woodpecker transfer, these are expensive to transport). The creation of a buffer for an upstream transfer is less steep (when number of man-hours are set against the aircraft production number) than for a downstream transfer because when detail parts manufacture is transferred, the learning that occurred for assembly can
already be taken into account. When time is limited or when it is difficult to create a buffer, an upstream transfer is most appropriate. However, it must be realised that an upstream transfer can easily lead to simultaneous activities, this makes it more difficult to trace delays and the effects of delays on the delivery schedule. • If more than one workstation is transferred then it is possible transfer some of the technology simultaneous. Although the Woodpecker transfer was sequentially planned, the upstream transfer caused an overlap in many activities so that in effect the eight transfer phases occurred simultaneous. The Swan transfer (including several work packages) was also sequentially planned, but in a downstream way (other work packages included later assembly stages). An effect of this was that it took already so much time to transfer the first work package that it seemed not beneficial to transfer other work packages (there was limited market demand for the Swan). Additionally, it is important to realise that for a stabilised assembly line in aircraft production the lead time of each work station is constant (and equal to the delivery interval). During the installation phase of a technology transfer process the lead time of each work station is not constant because of learning effects. Learning effects are different for different types of work (Titleman, 1957 and de Jong, 1964). Therefore, if a production line is transferred from a SC that already went down the learning curve then an unbalance is created if the work stations are kept in accordance to the SC. This results in inefficiency3 at the DC. If on the other hand the work stations are not kept then a certain amount of learning is lost because the DC will have to find its own balance for production. This also results in inefficiency at the DC. Thus if a large magnitude of technology (consisting of multiple workstations) is transferred then inefficiency will occur at the DC as a result of an unbalanced production line This leads to the following propositions: 1. The larger the magnitude of technology, the longer the duration of the installation phase In addition to this overall effect, there are several disturbances: 2. A combination of detail parts and assembly takes more time to transfer than the transfer of assembly 3. If the number of work stations transferred is not an integer, then there is leeway in the production which provides DC with the possibility to make up for delays. Additionally, the transfer of several work stations leads to an unbalanced line at the DC which results in a lower efficiency at DC than at SC 4. If a buffer needs to be created at SC, then an upstream transfer is preferred when the available time is limited 5. If technology is transferred in a sequential way, then a potential decrease in market demand may result due to the long duration of the install phase. If on the other hand technology is transferred in a simultaneous way, then it might become difficult to trace delays and the effects of delays on the delivery schedule, this can increase the installation time Conclusion The importance of the magnitude of technology was identified for the transfer of technology. Four case studies of transfer of technology in the aircraft industry showed that the larger the magnitude, the longer the duration of the installation phase. Four magnitude related factors were identified that also affect the duration of the installation phase. These are the type of technology, the number of workstations, upstream versus downstream transfer, and sequential versus simultaneous transfer. The literature on technology transfer is mostly ignoring these magnitude and magnitude related factors as is shown in overviews of important factors for technology transfer (Godkin, 1988; Madu, 1989; Reddy and Zhao, 1990). References de Jong, J.R. Increasing skill and reduction of work time. Time and Motion Study. October 1964, p. 20-33. 3
Efficiency is defined as (norm sacrifice)/(real sacrifice), (In’t Veld, 1992). The number of man-hours necessary to produce the product, with a fixed technology, is used as a measure for the sacrifice.
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