Capital investment appraisal of advanced manufacturing technology

Abstract

Concern has been expressed that UK organizations are lagging behind their competitors in the adoption of advanced manufacturing technology. It has been suggested that it is not the shortcomings of the technology that is resulting in the rejection of AMT projects but possibly the inappropriateness of the economic evaluation methods used in its appraisal, the difficulties in evaluating the potential benefits and the criteria used to assess management performance. A postal survey, addressed to large UK manufacturing organizations, into the ‘state of the art’ of investment appraisal of AMT projects has identified that there is concern that the traditional financial appraisal techniques may be inappropriate for appraising long-term projects. This research also identified the concern over the difficulties experienced in appraising AMT projects and supports the argument that a short-term business philosophy may exist in some major UK manufacturing companies. Areas for further academic research are highlighted.

Notes

AMT is a term applied to any form of manufacturing process which embraces a computer control system, from the basic numerically controlled machine tools to fully computer-integrated flexible manufacturing systems.