ECONOMIC AND STRATEGIC JUSTIFICATION OF AMT INFERENCES FROM INDUSTRIAL PRACTICES

Organizations vary greatly in their approaches and success in justifyi ng investment in advanced manufacturing technology (AMT). This study i nvestigates usage of various justification approaches by US manufactur ers and examines the impact of such practices on the ultimate performa nce of AMT projects. Responses from a survey mailed to 584 plants in t he US were used to test four propositions concerning AMT justification practices. We first discover that the majority of plants are not util izing the more sophisticated justification techniques that are being t outed by many researchers. Significantly, firms using hybrid justifica tion strategies which include both economic and strategic justificatio n approaches were found to attain higher levels of success from their AMT projects than plants that used only one method. However, once a pl ant used a hybrid justification method, preference for either strategi c or economic criteria had no impact on the level of success of the pr oject. Not surprisingly, plants using the more complex manufacturing t echnologies were more likely to have multiple functional departments i nvolved in the justification process. Finally, the composition of inte r-departmental teams for planning, justification and installation acti vities have an impact on the success of the AMT project.