Technology Investment Decision

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Technology Investment Decision

Manufacturing companies make technology investment decisions based on several factors such as volume and variety requirements with the aim of striking balance between flexibility and cost. Given the continuously evolving technology available today and the uncertain market, companies have to make appropriate decisions. Tangible benefits such as payback period and return on investment are considered. The intangible benefits such as the rapid implementation of the technology also influence the decision making. Usually, a detailed analysis is carried out based on both economic and non-economic methods before any investment decisions are made (Saraçoğlu, Saraçoğlu, and Gözlü 2006).

Based on volume and variety requirements, technology investment decisions are influenced by capacity scalability. It refers to the ability to adjust the output of a given technological system used in production based its reconfiguration (Deif and ElMaraghy 2017). Decision makers have to consider the ability of the system to adapt to large production capacity range before choosing to invest in it. Moreover, the technology being invested in has to adapt to the specified range within the shortest time and incur minimal or no cost at all.

Technology Investment Decision

For a business to effectively match the unique preferences of customers and increase its market share, the technological system used must have the capacity to offer product variety. Additionally, its ability to respond quickly to changes in production volumes is considered when making technology investment decisions (Deif and ElMaraghy 2017). On the other hand, the system that offers a wide variety of products and exhibits dynamic volume response tend to be costly for industries to acquire.

Moreover, such technologies are likely to impact economies of scale negatively. The incremental market share or production volume results in increased operations that make businesses to incur additional expenses. Therefore increased volume of production or variety does not always guarantee economies of scale in the manufacturing industry. To strike a balance between flexibility and cost, technology investment decisions have to consider optimal stagey to meet product volume and variety requirements.

Challenges in Adopting New Technologies in Business Organization
Technology Investment Decision

For organizations to remain competitive in today’s global economy, they find a way to continuously adapt to the changing business environment and meet the need of their customers. To achieve this, businesses have to make changes to their processes. More importantly, they have to adopt new technologies that would give them a competitive age in the market. Although such changes can benefit business organization immensely, they can also result in numerous challenges that must be managed properly to achieve the desired result.

One of the major challenges faced by organizations when adopting new technologies is winning the acceptance of staff. Usually, employees tend to resist new technologies since they feel intimidated and may prefer to continue working as they have been doing before.

Adoption of new technologies can imply that job responsibilities are going to change. Apart from obtaining additional personnel, training may be required. The failure to train staff adequately is a common challenge that organization experience when introducing the new technologies. In most cases, equipping the employee with the necessary skills to utilize the technology is considered as an expense. As organizations develop cold feet towards it, however, they fail to reap maximum benefits.

Technology Investment Decision

Business organizations may find it difficult to implement new technologies because of internal politics. Employees that have certain skills and abilities and as a result hold specific positions may feel threatened by the technological changes being implemented. Adopting of new technologies can also have a negative impact on the relationship. The managers of any organization may also resist the introduction of new technologies if they perceive them as a threat to their work. Additionally, new technologies can have a negative impact on the responsibilities and performance of employees.  Once organizations have acquired a given technology, they face the challenge of adjusting their procedures existing systems to match it. As a result, disruptions become common and the business does not fully benefit from the technology.

Conclusion
Technology Investment Decision

It is evident that computer-aided technologies have become an indispensable and central part of manufacturing industry. In particular, computer aided design (CAD) and computer-aided engineering (CAE) form some of the technologies that are widely used in the design and manufacturing of products. Companies are using these tools to facilitate design innovations during product development cycle. They make it possible to carry out the simulation, which forms an integral part of the cycle. The computer-aided technologies enhance speed and quality in product design and development. They improve speed by eliminating costly mistakes through their powerful simulation features. In the product development cycle, the technologies have been helpful in facilitating innovations in the design resulting in improved quality of the final product. The process of simulation also helps to shorten the time taken to verify a design, thereby enhancing speed. When making technology investment decisions, there is need to conduct a detailed analysis to balance between flexibility and cost. Moreover, businesses have to be ready to address numerous challenges they are likely to face when adopting new technologies. These challenges include resistance from employee and management, equipping the staff with the necessary skills to use the technology, and realigning its internal procedures and systems.

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Reference List

Deif, A.M. and ElMaraghy, H.A., 2017. Variety and volume dynamic management for value creation in changeable manufacturing systems. International Journal of Production Research, 55(5), pp.1516-1529.

Delaney, R. and D’Agostino, R., 2015. The Challenges of Integrating New Technology into an Organization.

Ge, Z.H., Huang, W., Liu, W.H. and Zhai, Z.H., 2011. CAD/CAM/CAE for the parallel indexing cam mechanisms. In Applied Mechanics and Materials (Vol. 44, pp. 475-479). Trans Tech Publications.

Pandey, R., Sharma, N. and Tomar, A.S., 2016. A recent role of CAD/CAM in designing, developing and manufacturing in modern manufacturing technologies. Imperial Journal of Interdisciplinary Research, 2(3).

Saraçoğlu, B.Ö., Saraçoğlu, M.B.Ö. and Gözlü, S.G.S., 2006. Investment analysis of the cad/cam/cim/cae/cal technologies in shipbuilding industry shipbuilding industry.

Vishwas, M. and Vinyas, M., 2016. Application of Computer Aided Engineering in Reducing the Product Development Life Cycle. International Journal, 2, pp.19-22.