INVESTMENT IN AUTOMATION

From the interviews conducted for this report, the prevalent Japanese view appears to be that the optimum amount of automation depends on many factors, including the country where the manufacturing is being carried out, the nature of the products, and the manufacturing processes being utilized. In general, the feeling expressed by Japanese respondents was that minimum costs could be achieved with less automation in a developing country with low wages. Higher automation is needed in Japan to minimize costs (Fig. 1.1).


Fig. 1.1. Automation vs. cost in Japanese manufacturing.

The consensus among respondents was that the Japanese did over-invest in automation in the late 1980s and early 1990s. However, most felt that investment would continue, particularly in automation technology with an improved human interface. The graph below (Fig. 1.2) reflects the expected trend in automation investment.


Fig. 1.2. Japanese investment in manufacturing automation.

Due to the "Bubble" economy, many companies in Japan over-invested in automation, going much faster than the trend worldwide. After the bubble burst, there was a retrenchment. But there are already signs that automation investment will start to increase, at a rate close to what it was before 1990.


Published: September 1998; WTEC Hyper-Librarian