Fiat Company: Deployment of Robotics in Manufacturing Case Study

Product-mix flexibility and capacity utilization

Product-mix flexibility is the conferred ability of an organization to produce different products sequentially using the same lines of production. As indicated, the shift from Fordist mass production systems enables a company to reduce tool specifity and enhance the multi-tasking of various production lines in the production process.

For example, the deployment of Robotics in automobile manufacturing by the Fiat Company enabled the company to have product-mix flexibility. This enables firms to use limited number of production lines to generate numerous products as compared to inflexible production that adopts a new line for each production process.

Conversely, product-mix flexibility allows the company to downsize its labor force without affecting total output. In fact, after adopting Robogate technology by Fiat Company, it downsized the labor force. This, however, did not have negative effects on its production (Maielli, 2005, p.110).

This phenomenon is proven by the results of Jones and Paris who argue that turbulences created by workers has marginal influence on productivity among companies which are product-mix flexible (Maielli, 2005, p.110).

For a company to reach product-mix flexibility there should be a discontinuity in management and organization. This is a key pillar supporting Fordist mass production system. This company must initiate a cost reduction initiative by reducing the asset specifity.

The product-mix flexibility is directly connected to capacity utilization since if a production system is totally flexible, the capacity utilization of each line must be optimal. Flexibility in a company’s production system is a direct assurance of achieving product-mix flexibility.

Such connection is set to minimize the spare capacity created during mix production. Capacity utilization approach in product-mix flexibility is further enhanced given that the productivity of labor force still continues to do mass productions even after the number of man-hours is reduced (Maielli, 2005, p.109).

The reduction of monthly working days from 19-23 and 232 annually after the adoption of robotics deployment in the production lines of Fiat Company explicitly shows that product-mix flexibility has maximum capacity utilization.

Innovative features of Robogate technology

The Robogate technology was developed in-house by Fiat Company and used to create flexibility with enhanced product-mix flexibility. Robogate key innovative feature was the ability to produce different car models in a sequence using a single production line. The technology also offered the company chance to explore other areas where production costs could be reduced.

For example, downsizing the number of company workers. The Robotics deployed in different Fiat Company plants enabled the company to optimally utilize its capacity through engaging every possible capacity in the production process. For instance, in Fiat production plants, some plants recorded 90% capacity utilization.

Thus, with robotics deployment there was a discontinuity in managerial processes and organization that characterized flexible production systems. In Robogate technology application, a single line was converted to multi-task in the production of various types of cars according to demand. This reduced the tool specifity, which characterized Fordist production system that laid emphasis on specialization and tool specifity.

Due to increased utilization of firm’s production capacity, this technology enabled the company to slice down its working-force without having any effect on the production capacity of the company. The technology also enhanced the reduction of production costs by reducing the number of working days without effecting the production and the performance of the company at its peak (Maielli, 2005, p.115).

The rapid production of cars, the over and underutilization of some lines led to the creation of spare capacity. Infusion of the technology into the firm’s production lines enabled the utilization of spare capacity to increase production. At its peak, the Robogate technology enhanced the company realization of flexibility and this typified Post-Fordistic mass production systems.

Comparison of Fiat flexibility between 1980s and 1970s

Fiat was among the first companies to adopt a Post-Fordist system in production after its recovery from the 1970 oil crisis. The large-scale deployment of robotics in the production process of Fiat Company was the most significant move to cope with increased competition and demand. In 1972, the company initiated the adoption of FMS so that it could shift to flexible production methods from the Fordistic inflexible mass production systems.

The move was considered as the first step towards discontinuity in management and organization involving the shift in planned goals and replacements of procedures supporting operations supervision (Maielli, 2005, p.102). The inflexibility of the 1970s is evidenced by the data collected from Fats archives that show that the company still retained Fordistic related production system despite adopting the Robogate technology.

The 1970s also witnessed crisis due to the use of inflexible production methods that were asset-specific and hindered mass manufacturing of industries to adapt to the ever-increasing demand of their products (Maielli, 2005, p.104). Therefore, the period of 1970s was characterized by inflexible production systems that threatened to offset the industrial production.

The criteria used to access the flexibility of a company’s production system are how well it utilizes the capacity of production at its disposal. During the 1970s, Fiat maintained a single line production, due to the level of inflexibility, but this changed as robotics application in production gained momentum as indicated in the graphical representation (Maielli, 2005, pp.112-115).

Although this era marked the initial application of Robotics to production, inflexibility still loomed. The onset of the 1980s saw massive deployment of robotics in production. This went along with the rise in the level of flexibility and product-mix flexibility as witnessed in the different levels of production recorded in the 1970s and 1980s.

Further, the number of cars produced in the 1970s as compared to the 1980s proved that Fiat Company had gained more flexibility (Maielli, 2005, p.115). In addition, the Fiat Company was able to reduce its labor force, the number of working hours and the number of working days in the month and year, an impossibility in the 1970s.

Effects of Robogate deployment and the speed of production in Fiat Company

In the face of the 1970s crisis, most companies were faced with the prospect of adopting new technology that could enhance maximum production to meet the rising customer demands. Among this company was Fiat automobile company that was fixed on the Fordist inflexible production system that has led to its failure and crisis.

To maximize production, Fiat Company adopted and deployed the robotics in its production process to aid it in its recovery. The periods before Robogate technology were characterized by inflexible production processes and asset that disallowed the manufacturers from bulk production to manage the increasing mandate from old markets and upcoming markets.

Therefore, the incorporation of product-mix flexibility was seen as the only remedy to the situation (Maielli, 2005, p.104). The product-mix flexibility took into concern the capacity utilization as a major factor in driving the industries to revival. The deployment of the Robogate technology-enabled Fiat Company to produce different car types from a single line of production as compared to the Fordistic production system that enabled production of a product by a single line of production (Maionelli 104).

Robots were first deployed in 1972 in managing the automated finishing of the caers. They enhanced the speed of production as witnessed in the increased production from approximately 126 cars a day before robotics deployment and up to 1,400 cars a day. This production involved multiple types ranging fro Unos, Ritmos to Regata from the same plant using the same lines of production. As exhibited by the graphical representation, the robotics improved the speed of production by their utilization in the welding part of production (Maielli, 2005, p.112).

The deployment of robotics also enhanced the reduction in working hours that never affected the productive capacity of the industry, highlighting the significance of the robotics deployment in enhancing the speed of production. The deployment also reduced the number of working days to a range of 19-23 and 232 days in a year (Maielli, 2005, p.115).

Deployment of Robotics and discontinuity in management and organization

The 1970s crisis that hit the manufacturing industries necessitated them to adopt another method of production in order to cope with the ever-increasing demand of products. This need stemmed from the fact that the inflexible production systems were hindering the companies from mass productions. Therefore, any undertakings were geared towards shifting from inflexible to flexible mass production. This needed a discontinuity in managerial process and organizations (Maielli, 2005, p.102).

This involves rethinking of strategic goals and changing the criteria by which performance is measured on. This meant a leap from the inflexible Fordistic production system to the flexible Post-Fordistic system of production. The adoption of Robogate technology by the Fiat Company signaled the onset of the discontinuity in Fiats managerial processes and organizations.

The discontinuity is traced back to 1970 when Fiat incorporated flexible mass production and thereby shifting from Fordistic mass production. This shift necessitated the managerial discontinuity leading to adoption of new routines in decision making and their application in the daily running of the company production processes (Maielli, 2005, p.104). The achievement of flexibility by Fiat Company served to show that there was a full shift from inflexible tendencies of Fordism and discontinuity in managerial processes and strategic decision making.

The successful integration of robots in the production process served to show that Fiat Company had fully deviated from Fordistic production system. The robotic system allowed the company to produce multiple varieties of cars from one plant using the sale production lines sequentially. This was made possible by the reduction in tool specifity and specialization (Maielli, 2005, p.106).

Furthermore, the company was able to restructure through laying-off some of the workers and reducing time of hours, days worked and managed to reach its intended production level without any hitch. The flexibility level of a company is also determined by the capacity utilization that a certain firm seems to embrace. Fiat Company was able to effectively utilize capacity in the production process creating spare capacity that was utilized back in the production process to increase productivity.

Bibliography

Maielli, G., “Spot-Welding Technology and the Development of Robotics at Fiat, 1972- 1987: A Case of Production Management Discontinuity?” Business History, Vol. 47, No.1, January 2005, pp.102-121.