microinformatics and work organization - a case study

EUROMICRO JOURNAL 4 (1978) 232-238 © EU ROM ICRO and North-Holland Publishing Company

Micro in format i c s and work organ iza t ion - a case study

C. Ciborra Istituto di Elettrotecnica ed Elettronica, Politecnico di Milano, Milano, Italy

G. Gasbarri Independent Consultant, C.so Plebisciti, 15, Milano, Italy

P. Maggiolini U niversit',)_ delia Calabria, Cosenza, Italy

When the relationship between computer systems and organizations is studied, social-organizational consequences of computer usage are quite often examined. On the other hand, consequences of different organizational structures on computer-based information systems are seldomly taken into consideration. This case study describes an organizational change that took place in the production department of a small manufacturing firm. In the pre-existing organizational structure various exogenous and endogenous disturbances hindered an effective production scheduling: fre- q~ent corrective action had to be taken in order to meet delivery dates (the fragmented information flows limited productivity growth). The usual way to solve a problem of information and control is to increase sophistication of the technical support of the information system (using larger computers, on-line terminals, etc.). A different strategy is based on a simplifying production organization as a first step. In the firm examined semi-autonomous workgroups were introduced to substitute the rigid and fragmented work organization. As a consequence, the organizational structure and the work flow become more controllable through the information network and microcomputer usage for production control brings improvements both in economic effi- ciency and effectiveness. Success of microcomputer applications seems to depend strongly upon simplifying and specializing the information system (i.e., the super-structure) and the organization (i.e., the structure). Such a change can be achieved only by designing and implementing dif]~rent organizational structures that a~lit explicit bargaining between members and clearer industrial relations.

1. INTRODUCTION

This case study is a descript ion and an interpre- ta t ion of the action of change in the work organizat ion that took place in a small manufacturing company situated in the Milan area. To be precise, semi-autonomous work groups were introduced in the production department.

The most in terest ing aspects of th is experience of organizat ional change are the fo l lowing:

- Firm's size: new methods of work organizat ion a r e ~ m p l e m e n t e d in the plants or of f ices of large mul t inat ional companies (Fiat , Volvo, O l i v e t t i , Phi l ips, AT&T, e tc . ) , in which technology, economies of scale, large investments are read i ly ava i lab le resources for experiments in organizat ional change. This experlmence in a small f i rm shows that these economic, technological and organizat ional resources may be a suf- f i c i e n t but not necessary condit ion for job design based on new c r i t e r i a .

- Start-up of change: innovation in work organization may be thought of as outside the cul tura l experience of the small entrepeneur. On the con- t rary , th is case study w i l l show how the neces- s i t y of change stems from production and market problems that can be co r rec t l y i n t e rp re ted and

solved by the innovative entrepeneur.

- Last but not least , the in teract ion between organizat ional change and e f f e c t i v e n e s s ~ f o r - mation systems based on microcomputers: the inno- v ~ m a l l entrepeneur understands what oppor- tun i t ies can be offered by microinformatics; he can match in a p ro f i tab le way his information needs with the character ist ics of the new dp technology and with deep changes in the internal structure of departments.

As a general comment, i t should be also pointed out that such experiences can be transferred and implemented in small production units situated inside large companies, according to the new oppor tun i t ies offered by d is t r ibuted dp systems.

2. THEORETICAL BACKGROUND

In order to in terpret th is case study i t is necessary to make some basic hypotheses on the in teract ion between information system and organizat ion e x p l i c i t :

- The information system is an organizat ional fact : i t is a means to d i rect and manage the organization.

- The dp technology (or computer system) is a

Microinformatics and Work Organization - a Case Study 233

technique avai lable for implementing a part of or the whole information system.

- the information system, being a means of management, is also a representation of the organizational system which supports i t . The organiza- t ion can be managed because i t can be "observed" through the information system.

- Current methods of system analysis and design have focussed the i r at tent ion on the information flows to be mechanized: th is approach seems to deal only with a f i r s t aspect of implementing an e f fec t ive management and control system using dp technology. Negligence of the aspects related to the organizational processes (structure, ro les, job design, etc. ) seems to be a key for expla i - ning the uneffectiveness of many (large) dp systems for business and administrat ion. In other words, methods of system analysis have often re l ied upon the "super-structure" of information flows between a c t i v i t i e s , neglecting the organizational mechanisms which allow to execute and adjust these a c t i v i t i e s . This should not be the case with microcomputers: the i r deep penetration and personalization in respect with the organizational structure require a system design approach more "organization oriented".

This case study may be regarded as a j u s t i f i c a - t ion of the l a t t e r hypothesis.

3. THE FIRM AND ITS MARKET

In the small manufacturing company about 150 people are employed. The f i rm produces high qual- i t y shoes for high class national and internat ional customers. The most important decision makers in the organization are the Entrepeneur and the Factory llanager (who also supervised the microcomputer i ns ta l l a t i on and appl icat ion) . Ninety percent of the production volume is composed of small batches for customer's orders. The produc- t ion process can be c lass i f ied in the small batch production, according to Woodward's scale [i].

According to the point of view chosen, the f i rm 's task may be described in terms of material f lows, transformation a c t i v i t i e s , information flows and control a c t i v i t i e s . In f ig . 1 a schematic representation of the f i rm 's functional departments is shown (cost centre structure).

The need to meet customer's requirements for small production volumes makes evident the crucial importance of the cost centre "F i t t ings and Leather Stock" (see f ig . 1). In fac t , one crucial area in the re lat ionship between the company and i t s market is the evaluation of the exact number of f i t - t ings* and leather types in order to meet customer 's requirements. The " r ight " quant i t ies of stock can only be determined by an e f fec t ive forecasting procedure. This schematic analysis of

Orders

Warehouse

I Del ivery I and Invoic ing

aThe shoes are very sophist icated, the f i t t i n g s are of various types and have to be designed spec i f i ca l l y for a given model.

Production J Planning

Production I Execution

l Raw Mater ia l s I,fa reh ou se

I Purchasing

F-

F-

Fig. 1. Cost centre structure of the f i rm.

234 C. Ciborra et a l .

the re la t ionsh ip between company, nature of i t s product and environment shows the importance of an e f fec t i ve inventory control system integrated in a sales forecast ing and purchasing system, a l l administered through an e f fec t i ve information system~.

In th is case study problems d i r e c t l y related to th i s side ( inventory-sales) of firm-market i n te r - act ion w i l l not be fu r ther considered. This as- sumption is an ana ly t ica l means to better iso la te the production problems.

4. THE PRODUCTION PROCESS

4.1. General problems In the production area two main a c t i v i t i e s have to be considered: production planning and produc- t ion execution. Both a c t i v i t i e s are c r i t i c a l from two points of view:

- f i r s t l y , because of the high incidence of d i rec t labour cost in production execution.

- secondly, because of the seasonal market be- havior, the time avai lab le fo r production (between the act of sale and de l ivery dates) is very short, espec ia l ly for those f rac t ions of orders which have to wait for the purchase of raw mate-

*At present, the f i rm 's management is studying tile extension of microcomputer usage to these areas.

Leather

g

g

c~

¥ I CUT

I SEW

VAMP WAREHOUSE

BOTTOM

L ~ . . . . .

I I' I I

I J

Leather and ] Fittings ~larehouse

Fittings

number of job t i c k e t s

/z!\\

maximum time

Fig. 2. Actual d i s t r i b u t i o n ( - - ) and object ive d i s t r i b u t i o n ( - - - ) of the job t i cke ts executed.

Fig. 3. The production execution departments.

r i a l s not in stock.

Without considering the a v a i l a b i l i t y of an ef fec- t i ve sales-forecast sytem, the turbulence of the market environment has to be " in te rna l i zed" [2] in terms of a f l e x i b l e production process: production planninga-g--an-d--c-ontrol appear to be crucia l for the f i rm, in order to face exogenous d i s tu r - bances.

The descr ipt ion of production structure and problems is made by monitoring the f low of jobs t i ck - ets in the production departments. I t is possible to represent the c r i t i c a l problem of production as in f i g . 2: the average execution time of a set of job t i cke ts is a random var iable wi th a Gauss- Jan d i s t r i bu t i on . The average job t i cke t is executed in a very short time compared with sets of la te t ickets ( i . e . , the d i s t r i b u t i o n has a large standard dev ia t ion) . The problem of production planning is to diminish the number of la te t i ck - ets, ~ t is to shorten the standard deviat ion of the d i s t r i b u t i o n .

4.2. Descript ion In order to describe the information system s t ruc ture and the organizat ional change, i t is necessary to s p l i t the cost centre "Production execu- t ion" (see f i g . 3). In th is subsytem there are three departments sequent ia l ly connected:

- Cut, where leather is cut in order to obtain the components of the shoe vamp. - Sew, where the components of the vamp are as-

Microinformatics and ~iork Organization - a Case Study 235

sembled and the product is f in ished.

In the f i r s t department job t ickets are given personally to each cut ter : so i t is easy to iden- t i f y where each work t i cke t is in the process.

In the th i rd department, an assembly l i ne deter- mines the production pace and consequently the locat ion of each work t i cke t (batch of shoes). lhe time cycle of the operations performed in the f i r s t and th i rd department is equal to less than ha l f the average in-process time. In those departments not so many batches are in the process and the control act ion does not cost so much.

In the Sew Department there are a number of work- benches: the layout is by process. Each worker is dedicated to a speci f ic operation (according to the pr inc ip les of Sc ien t i f i c Management). Shoe batches together with the corresponding job t i ck - ets are del ivered to each operation by a mechan- n i ca l l y paced conveyor. The batch de l ivery is contro l led by the department forewoman, cal led in jargon "the ins t ruc tor " .

Some remarks have to be made for a deeper analysis:

The in-process time of each batch in the Sew Department is more than hal f the average produc- t ion time. - The sewing and st ick ing operations are various and they are assigned to operators of d i f f e ren t s k i l l and professional experience.

Often there are long "wait ing periods" between d i f f e ren t operations: in the dead times each batch (together with i ts job t i cke t ) l i es on the "she l f " , an intermediate warehouse managed by the forewoman. - The cues at each machine or operation are d i f -

f i c u l t to forecast, because there are many models (mens shoes, womens shoes of various size, boots, etc.) and batches are small.

In th is department, a l l the f i t t i n g s are mounted: consequently the work flow in the department is in tens ive ly exposed to the exogenous disturbances (sales forecast-purchasing market) above mentioned.

5. THE INFORMATION NEED

Getting shoes made by the time they have been promised to the customer is the main preoccupa- t ion together with qua l i t y control of mangement and supervision of production. There is a con- stant pressure on the factory personnel to meet production schedules and spec i f i ca l l y to reduce the number of la te job t ickets. The intervent ion of control of production pace is pa r t i cu la r l y d i f f i c u l t in the Sew Department for the structural reasons mentioned above. The monitoring of sewing operators by the forewoman is complicated by the existence of la te job t ickets . These " la te t ickets" have gradual ly to overtake the others in the sewing process. But t h e g n of these job t ickets is d i f f i c u l t to i den t i f y (they may be on the shelf or at any work bench). The only person who controls and exchanges information and mate- r i a l s in the department is the forewoman. Thus, the crucial problems of the information system seem to be: what information the forewoman needs and for what type of in tervent ion.

The forewoman receives an information of s o l i c i - ta t ion from the Production Planning Department for a speci f ic order. She has to look for the corresponding batch and she has to decide the "overtaking" intervent ion in order to speed up

S o l i c i t a t i o n s Department Bottom

S o l i c i t a t i o n s S o l i c i t a t i o n s to e cut Department

Del ivery ~ k = ~ P r o d u c t i o n Sale De- Planning partements

S o l i c i t a t i o n s Department

\

\

Sew

Vamp Warehouse

Forewoman

/ / I " \

/ ! /

Working ~l Places

Fig. 4. Former work organization in the Sewing Department; --- t ra in ing in tervent ion, - -

From Cut

job t i cke t flow.

236 C. Ciborra et a l .

the production cycle. This involves the inst ruc- tor in keeping track of la te orders and making sure they are given p r i o r i t y . As s o l i c i t a t i o n s and exogenous disturbances (e .g . , lack of f i t - t ings) increase, the control a c t i v i t y becomes more d i f f i c u l t to manage and g loba l l y a dearth of control information and in tervent ion appears about how batches are progressing in d i f f e ren t parts of the department (see f i g . 4).

Moreover in th is s i tua t ion (which is very f re - quent) the " ins t ruc to r " does not perform her task of t ra in ing and con t ro l l i ng each operator; in fac t , the task formal ly assigned to the forewoman consists in an "on- l ine" qua l i t y control and t ra in ing of each operator: a relevant problem in a production process where workers are not equal- l y sk i l l ed . Although job t ickets are the output of a production-scheduling procedure implemented on a microcomputer, th is mechanized information does not help the forewoman in f ind ing la te batches and in the subsequent overtaking act ion.

Summarizing, a need of information appears for a more e f fec t i ve control of production scheduling.

An answer may be given (and usual ly is given) by a fu r the r sophis t ica t ion of the dp s~tem, that is a technological so lut ion is given to an in fo r - mation problem: a larger computer, real time, terminals, e tc . , would have allowed to mechanize extensive ly the pre-ex is t ing information flows and sources/dest inat ions (at each work bench, on the shel f , at the forewoman's working place). But at what cost in terms of hardware, analys is , sof t - ware, r i g i d i t y of the whole system? Probably at a cost outside the f inanc ia l p o s s i b i l i t i e s dedicated to the dp system in a small f i rm. Horeover, by choosing the technological a l te rna t i ve one often tends to neglect the role of the information system as a "super-structure" ( th is is due to various reasons, see [3,4]) and usual ly any superstruc- tura l in tervent ion does not solve s t ructura l problems.

The a l te rna t i ve chosen by the Factory Manager in order to meet the information exigencies was to change the organizat ional s t ructure of the Sewing Department. He understood that an informative complexity may derive from an organizat ional com- p lex i t y . By s impl i fy ing the organizat ional st ructure, a formerly complex information problem may be s impl i f ied and solved using a microcomputer.

6. THE PRODUCTION EXIGENCY AND CHANGE IN WORK ORGANIZATION

The background of organizat ional change often stems from changes in the environmental con- s t ra in ts of the f i rm [5]. In th i s case, a high and sudden demand of boots was the spec i f ic environmental "pressure" on the f i rm 's production organizat ion; boots have special manufacturing ex i - gencies (e.g. , a longer sewing time) and reveal themselves as a source of new disturbances in the sewing process.

The f i rm 's management decided to create a work group composed of four operators dedicated to boot manufacturing in order to face the market

demand. This decision was fostered also by the fo l lowing factors:

- Opportunity to shorten wai t ing periods on the she l f ; - Poss ib i l i t y of meeting de l ivery time without d is turb ing the shoe sewing cycle; - Poss i b i l i t y for each operator in the work group to execute a complete cycle of operations on a l imi ted number of orders. - Opportunity to improve and to standardize the professional level of the operators ( in order to el iminate the frequent bottleneck caused by the random absence of sk i l l ed operators). The Factory Manager thought to obtain th is improvement by paying operators on the basis of a group incent ive scheme (based on the number of job t i cke ts carr ied out) . - F ina l l y , by al lowing semi-autonomous regulat ion of the group, the qua l i t y control should have improved and i d e n t i f i c a t i o n of causes of defects was thought to be easier than in the t rad i t i ona l fragmented production organizat ion.

The organizat ional change, the creation of semi- autonomous work groups can also be described con- s ider ing the single operator in terms of job en- largement ( larger manufacturing cycle for each operator) and job enrichment ( respons ib i l i t y for qua l i t y cont ro l ) . Having rap id ly achieved the p roduc t i v i t y and qua l i t y object ives and having created a sk i l l ed group of operators dedicated to manufacturing of spec i f ic models, the work-group has been extended to the whole Sewing and Bottom Departments ( in the l a t t e r by s p l i t t i n g the t ra - d i t i ona l assembly l i ne in short sub- l ines) .

7. CONSEQUENCES OF ORGANIZATIONAL CHANGE ON IN- FORMATION FLOWS

The new work organizat ion has solved problems dealing with information flows needed for an ef- fec t i ve production scheduling and the forewoman's ro le. As shown in f i g . 5, the creation of work groups

- has eliminated the she l f , s impl i fy ing the mate- r i a l s and job t i cke t f lows; the number of batches in process has diminished, - has allowed to by-pass the forewoman, par t l y by delegating some local control power to each work group and par t l y by giv ing back the planning task to the Production Planning Department, - the orders scheduling and overtaking actions are now planned by the Production Manager, who knows the de l i very dates s i tua t ion , too, - has allowed the rapid i den t i f i ca t i on of job t i cke ts , which are in only one work group.

The las t element refers to the automated informa- t ion system, which is , a f te r the change, of major importance in order to manage and control the job t i cke t advancement.

In the pre-ex is t ing organizat ion a copy of the job t i cke t sent back to the Production Planning Department was not an e f fec t i ve information in order to i den t i f y the posi t ion of the corresponding batch in the Sewing Department, for s o l i c i t a - t ion and overtaking. Now, su f f i c i en t information

Microinformatics and Work Organization - a Case Study 237

S o l i c i t a t i o n s to Bottom Department

S o l i c i t a t i o n s to Cut Department S o l i c i t a t i o n s

Del ivery ~~ Sale Depar- tments

Product ion I Planning

Vamp Warehouse

L , , / /

F - - Z i - / + -- - / ' - ~ " " ~ Z ~ l Work group 2

, 1 I I I I I-- .J t_ -

Fig. 5. "Ce l lu lar " work organizat ion in the Sewing Department; - - - t ra in ing i n t e r v e n t i o n , - - - job t i ck - et f low, - . - s o l i c i t a t i o n .

has been obtained in order to make an e f fec t i ve work schedule, by recording on each t i cke t the code number of the work group to which a batch is going to be del ivered.

8. CONCLUDING REMARKS

Production and qua l i t y control have been improved, production goals can be achieved more e f f i c i e n t - l y , production organizat ion has become more f l e x - ib le - these are the main resul ts of the s impl i - fy ing action of the organizat ion and information network, supported by the microcomputer appl ica- t ion . he change in the control mechanisms has meant also a major delegation of r espons ib i l i t y and power to the work group ( in terms of in ternal a l loca t ion of manpower, upgrading, job content, better t ra in ing and incent ives, e tc . ) . The sim- p l i f y i n g and "user o r ien ta t ion" of the informa- t ion system have been obtained through an increased respons ib i l i t y of operators and through a broader "transparence" of the work f low. The pre-ex is t ing production organizat ion was appar- ent ly transparent and cont ro l lab le ( i t f u l f i l l e d the pr inc ip les of Sc ien t i f i c Management), but in r e a l i t y i t was confused, r i g id and fragmented; in that s i tua t ion each operator in the Sewing Depart- ment had the chance to "elude" external control (sources of defect and delays were rare ly i den t i - f i ab le ) .

The new job design and a par t ia l autonomy of the work group has been followed by a greater oppor- t un i t y of h ierarchical control on qua l i t y and quant i ty of production resu l ts . Operators have

accepted to work in a more "transparent" and ob- servable way, because they were given by the management some concessions mentioned above. Without these concessions, the p roduc t i v i t y increase and microcomputer usage would have not las t long at the high level reached.

Crozier [5] wr i tes that the effect iveness ( in economic terms) of a change in the social system of production obtained through ra t i ona l i za t i on always implies greater "commitment" and p a r t i c i - pation among people involved in the process of change. For example, an e f f i c i e n t production-data co l lec t ing system is based on a simple and clear information network in the production department and on the respons ib i l i t y of low level operators

have to feed-in correct data. The l a t t e r con- d i t i on can be f u l f i l l e d onlu through an e x p l i c i t bargaining about the information system design and management, production object ives and incen- t i va t i on scheme. Par t ic ipat ion appears to be not jus t a grateful concesslon of management to the workers for purely motivat ional purposes, but i t appears to be a means to get the new systems working. In th is perspective operators have to be rewarded for the "burden of pa r t i c ipa t ion" in terms of upgrading, better work condi t ions, etc.

Summarizing, two aspects should be emphasized in order to i den t i f y strategies for microcomputer usage: f i r s t l y , new methods of system analysis should be applied not only considering informa- t ion f lows, but also taking into account the real organizat ion s t ructure, in order to design control mechanisms which can be e f f ec t i ve l y supported by

238 C. Ciborra e t a | .

the microcomputer (otherwise microcomputer usage may encounter the same structural d i f f i c u l t i e s that quite often have caused the fa i lure of large systems); secondly, effectiveness of microcomputer applications is s t r i c t l y correlated with sim- p l i fy ing and specializing the information system, and consequently with a clearer bargaining in industrial relations and an increased part icipation at a l l levels in order to design new organizational structures.

In any case an innovative management is required, able to understand and exploit the interaction between the following elements in the information system design:

- opportunity offered by new dp technologies, - information system and organizational system,

independent and part ic ipat ive role of the user.

REFERENCES

[ I ] J. Woodward, Industrial Organization: Theory and Practice (London, 1965).

[2] F.E. Emery and E.L. Tr is t , Socio-Technical Systems, in: C.W. Churchman and M. Verhulst (Eds.), Management Sciences, Models and Tech- niques (London, 1960).

[3] E. Bartezzaghi, C. Ciborra, A. De Maio, P. Maggiolini and P. Romano, Information systems and organization: empirical findings regarding the introduction of the computer in manufacturing firms, Paper presented at the IFIP Congress (ToroDto, 1977).

[4] C. Ball~ and J.L. Peaucelle, Le Pouvoir informatique dan l 'entrepr ise (Paris, 1972).

[5] F. Butera, Environmental Factors in Job and Organization Design: The Case of O l i ve t t i , in: L.E. Davis (Ed.), The Quality of Working Life (New York, 1975).

[6] M. Crozier, L'influenza del l ' informatica sul governo delle imprese, in: F. Rositi (Ed.), Razionalit~ sociale e tecnologie de l l ' i n f o r - mazione (Milan, 1973).

microinformatics and work organization - a case study

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