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2.7 Conclusion

This chapter has drawn attention to the pervasiveness of ICT in manufacturing by pointing to the way in which it is embedded in corporate management systems as well as in design, production equipment, and distribution systems, and in manufactured products and associated services. There are few activities in a manufacturing environment that are not impacted in some way by ICT. However, in drawing attention to the pervasiveness of ICT, it is also apparent that the presence of ICT is not always easy to discern.

Whilst most accounts of ICT intensity in industry are based on counting ‘screens’ (and numbers of people using them), such an approach will generally understate the level of ICT application, adoption and use in manufacturing as the technology is often embedded in devices, equipment, machinery and products. There are few screens or keyboards – but many processors represented as programmable logic controllers, communications devices, robots, sensors , and more recently, RFID devices.

In addition, many manufacturing businesses, particularly in the high technology areas, develop their own hardware, software and services applications in-house to meet their own specific and customer requirements. This means that much ICT activity is ‘hidden’ from the view (and from official statistics) of the more general ICT sector. The ICT is hidden because it is an input in the production of manufactured products and the services that those products deliver.

At the same time, however, manufacturing companies seek to acquire ICT capability from the ICT sector where capability is available. As will be discussed later in the report, this requires an ICT sector, and particularly a software and services sector, that is capable of addressing the special and unique requirements of Australian manufacturing.

In this environment, modern factories are becoming less oriented towards manual, mechanical and electrical applications and more to the automatic, electronic and digital. In these circumstances a better way to understand the pervasiveness of ICT in manufacturing might be to estimate the capacity of programmable processing units – rather than the number of computer screens. This could help to improve our understanding of how important ICT is to industry and our ability to use it in contributing to enhancing Australian manufacturing performance. It also has implications for the way we think about the skills required in a manufacturing environment.

The development of ICT in manufacturing has followed two distinct paths. One has followed a concern with resource planning and control, customer relationships and relationships with other businesses along the supply chain. This path has had a strong financial and corporate management foundation. Another path has developed with a focus on production management – with a strong engineering orientation.

Separate cultures have emerged around each approach with the result that businesses have sometimes found it difficult to achieve effective integration of systems on an enterprise wide basis and in ways that contribute to enhanced productivity and profitability. The interviews demonstrated, however, that investment in ICT is being approached on the basis of the contribution that it will make to bottom line performance and other indicators of corporate success.

Whilst there has been a tendency to see ICT as ‘infrastructure’ – like electricity and other production inputs, it is important to appreciate the unique nature of ICT through the way in which it supports the generation, transfer, processing and application of knowledge. The critical issue in a manufacturing environment is the way in which this knowledge is captured and used to improve all forms of business process, create new products and service offerings, and develop strong and long-term relationships with customers. The productivity and performance enhancing aspects of ICT that flow from this are addressed in the next chapter.

Back to 2.6 The knowledge base of ICT investments | Table of Contents | Forward to 3 ICT, productivity and business performance

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  • Last modified: 5 February 2008, 10:30am