Case Study 1 - 25 March 2024 Automated Manufacturing Systems During the early 1980s, manufacturing technology changed radically due to factory automation. Robots made their manufacturing debut, and many, including General Electric, believed that factory automation was the production industry of the future. Founded by Thomas Edison and heralded as a cornerstone of American industry, GE was so confident that factory automation would be a "megamarket" that in 1980 it established the $500-million factory automation division. The company hoped to have 20% of the factory automation market by 1990. General Electric's vision included automated systems to augment productivity and quality. Since automation requires many high-tech devices, such as controllers to turn on and program machines, cameras, and sensors to regulate work, computers and software for applications, and communication networks to connect the technology, GE would establish itself as "America's factory-of-the-future supermarket." Because it did not produce all the necessary products, GE pursued acquisitions and licensing agreements. The first purchase, for $150 million, was a produced of computer-aided design (CAD) equipment, followed by licensing agreements with a total of 11 Japanese, German, and Italian robotics companies. What resulted, however, was a catastrophe because the separate units did not work well together. GE had conservatively forecast that sales would reach $1 billion. However, by the end of 1982 customer interest in GE's factory-of-the-future was waning and the company had landed only nine projects, almost half of them within GE. Although it had hoped for 20% of this market, GE was forced to all but halt its robotics division in 1983. The products required extensive customizing to prevent the improperly designed system from paralyzing production. Also, robots were difficult and laborious to install. These and other obstacles resulted in low sales figures industrywide and about $10 million per year in losses at GE. Additionally, GE lost its position as the largest seller of numerical controls in the U.S. This business unit produced highly specialized computers that assist and guide large machine tools in cutting, drilling, and shaping parts. Annual sales of numerical controls declined from $86 million to $60 million, with losses equaling about $10 million. The CAD equipment division was also in disarray due to key personnel losses in the areas of sales and engineering. Further, the company neglected to focus the business on its primary product lines, resulting in inaccurate planning and development of new products. By 1984, the division was suffering losses of roughly $40 million per year./n3. What lessons are learned from GE's experience?

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