

Manufacturing and Service Technologies

Chapter # 7
 Service and Manufacturing Technologies
Technology refers to the work processes, techniques, machines, and

actions used to transform input into outputs
Technology influences organizational structure
Understanding technology helps dictate how organizations can be
designed for efficiency
Core technology relates to the transformation process to provide
goods/service
Non-core technology is not directly related to the primary mission of
the organization
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Core Transformation Process for a Manufacturing Company

3
Pressures Affecting Organization Design

4
 Manufacturing Firms

Technical complexity defines the extent of
mechanization of the manufacturing process
Three basic technology groups defined by Woodward:
Small-batch and unit production
Large-batch and mass production
Continuous-process production

5
Woodward’s Classification Based on System of Production

6
Relationship between Technical Complexity and
Structural Characteristics

 Strategy, Technology, and Performance


Strategy, structure, and technology need to be aligned
Successful firms have complementary structures and
technologies
Failing to adopt a new technology or failing to realign
strategy can lead to poor performance

8
 The Digital Factory
The shop floor has been revolutionized
Computer-aided Design (CAD) 
Computer-aided Manufacturing (CAM)
Manufacturing Process Management (MPM)
Integrated Information Network
Product life-cycle Management (PLM)
Also called computer-integrated manufacturing, flexible manufacturing
systems, smart factories, advanced manufacturing technology, and agile
manufacturing
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Flexible Manufacturing Technology vs. Traditional Technologies

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 Lean Manufacturing

Highly trained employees at every stage of production
Cut waste and improve quality
Incorporates technological elements
Paved the way for mass customization
Using mass-production technology to quickly and cost-
effectively assemble individual goods for customers

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 Performance and Structural Implications


Flexible manufacturing allows diverse products to be made on one
assembly line
 Computer-aided craftsmanship
 More efficient
 Increased productivity
 Decreased scrap
 Customer satisfaction
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Comparison of Organizational Characteristics


 Service Firms
Service technologies are different from manufacturing technologies
and require different organizational design

Education, health care, transportation, and banking all have unique
dimensions

Services have intangible output

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Core Organization Service Technology


 Trend Toward Lean Services

Customer expectations are rising
Expectations have required that service
firms must become lean, too
Cut waste
Improve customer service
Adopt continuous improvement approach

16
Structural Characteristics of Service Organizations
versus Product Organizations


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 Designing the Service Organization

Service organizations are not necessarily large
Often small locations, close to customers
Service organizations require technical core employees – close to
customer
Service customers interact directly with technical employees
The skills of technical employees need to be high
Employees need knowledge, awareness, and interpersonal skills
Decision making is often decentralized
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 Non-Core Departmental Technology


Every department in an organization has a production process
Variety: frequency of unexpected and novel events
Analyzability: ability to apply standard procedures

• Routine vs. No routine Dimension

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Framework for Department Technologies

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 Department Design

Overall design is either organic or mechanistic
Design characteristics vary depending on work
unit
Formalization
Decentralization
Employee skill level
Span of control
Communication and coordination
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Relationship of Department Technology to Structural and Management Characteristics

22
 Workflow Interdependence
Among Departments

The extent to which departments depend on
each other for resources or materials
Low interdependence means that departments
can do their work independently
High interdependence means departments
depend on each other

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Interdependence and Management Implications

24
Interdependence of Departments Involved in
the Flight Departure Process

 Structural Priority and Implications


 Reciprocal interdependence should receive first priority
 Reciprocal activities should be grouped together
 Poor coordination will cause poor performance
 Organizations should be designed to address
interdependence

26
Coordination for Interdependence

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Relationship of Interdependence and Team Play Characteristics

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Impact of Technology on Job Design


Technology impacts:  Job Design
1) Job Design
 Job Simplification
2) Sociotechnical
systems  Job Rotation
 Job Enrichment
 Job Enlargement

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Sociotechnical Systems Model

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 Design Essentials

 Key research notes that technology and structure can be co-aligned
 Service technologies differ in a systematic way from manufacturing technologies
 It is important to apply the correct management system to a department
 Interdependence among departments dictates the amount of communication and
coordination required in design
 New technologies are enriching jobs to make organizations a happier place to
work
 Sociotechnical system theory attempts to design systems that meet technical and
human aspects
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