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A Preliminary Analysis of the Economic Impacts of Programmable Automation Upon Discrete Manufacturing Industries

IP.com Disclosure Number: IPCOM000128628D
Original Publication Date: 1973-Dec-31
Included in the Prior Art Database: 2005-Sep-16
Document File: 34 page(s) / 98K

Publishing Venue

Software Patent Institute

Related People

Nake M. Kamrany: AUTHOR [+3]

Abstract

In this report the potential savings of computer-based manufacturing sys-tems are hypothesized. It is contended that computer-based manufacturing automation is an extension of the continuing stream of technological progress that the U. S. has been experiencing. Technological progress has significantly contributed to the growth of the GNP with a high rate of return on investment. It is our contention that the development of computer-based automation will yield better than the average benefits derived from technological progress. However, the approach examines cost savings rather than contribution to growth. The savings impact upon DOD procurement and production cost of, the discrete manufacturing sector are hypothesized by assuming the existence of an automated factory; although such a reality is perhaps several decades away. Many assumptions are made about costs, its components and relation-ships. A hypothetical case study, literature references, opinions of the con-sultants, and other case studies and judgmental costs provide the basis for the hypothesis. Also, the societal impacts of computer-based manufacturing programmable automation are conjectured upon the environment, employment, general price level, urban-rural mix, and international trade. A number of definitions and distinctions are made with respect to automation, productivity, technology, and related points. Also, some of the major characteristics of the manufacturing industry are identified. This study was sponsored by the Advanced Research Projects Agency (ARPA) under Contract DAHC 15-72-C-0308. The focus of the work is in the potential economic impact of automation on the DOD procurement. The study also examines the attendant impact on the civilian sector as a by-product. v

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THIS DOCUMENT IS AN APPROXIMATE REPRESENTATION OF THE ORIGINAL.

A Preliminary Analysis of the Economic Impacts of Programmable Automation Upon Discrete Manufacturing Industries

Nake M. Kamrany

ARPA ORDER N 0,.222311

ISIIRR-73--4 October 1973

INFORMATION SCIENCES INSTITUTE f 46 76 Admiralty WaylMarina del ReylCalifarnia 90291 UNIVERSITY OF SOUTHERN CALIFORNIA (213) 822-1511

THIS RESEARCH IS SUPPORTED BY THE ADVANCED RESEARCH PROJECTS AGENCY UNDER CONTRACT NO. DAHCIS 72 C 0308, ARPA ORDER NO. 2223/1, PROGRAM CODE NO. 3D30 AND 3PIO.

VIEWS AND CONCLUSIONS CONTAINED IN THIS STUDY ARE THE AUTHOR'S AND SHOULD NOT BE INTERPRETED AS REPRESENTING THE OFFICIAL OPINION OR POLICY OF THE UNIVERSITY OF SOUTHERN CALIFORNIA OR ANY OTHER PERSON OR AGENCY CONNECTED WITH IT.

THIS DOCUMENT APPROVED FOR PUBLIC RELEASE AND SALE; DISTRIBUTION IS UNLIMITED.

CONTENTS

FIGURES iv TABLES iv ABSTRACT v ACKNOWLEDGMENTS vi 1. INTRODUCTION 1 The Characteristics of Programmable Automation 2

The Economic Characteristics of a Discrete Manufacturing Sector 4 How Programmable Automation (PA) Can Impact the Production of Discrete Manufacturing Products (DMP) An Illustrative Model 12

11. IMPACT UPON DOD PROCUREMENT 20 ,Ill. IMPACT UPON THE CIVILIAN SECTOR 31

Impact Upon the Manufacturing Industry 31

Impact Upon International Trade 34 Impact Upon Price Stability, 38 Impact Upon Employment 43 Impact Upon Industry Structure, Location, and Environment 46

IV. POLICY IMPLICATIONS 49 V. APPENDIXES 53 A. Sources of Data 53 B. Bibliography on Productivity, Technology and Automation 62

C. Relevant Macroeconomic Models 68 D. Relevant References in Simulation and Modeling of Production Plants 70

INPUT/OUTPUT BIBLIOGRAPHY 72

University of Southern California Page 1 Dec 31, 1973

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A Preliminary Analysis of the Economic Impacts of Programmable Automation Upon Discrete Manufacturing Industries

F I G U R E S

I Output and gains resulting from technological progress (1949-1968). 13 2 Relationship between procurement rate and procurement expenditures. 3 Comparative costs and savings from programmable automation. 29

4 Wholesale price trends. 40 5 Annual change in wholesale price. 41 TABLES

I GNP by industrial origin 5 2 Capital-output ratios, U.S. industries, 1962 7 3 Durable and nondurable goods industries 8 4 Matching industry characteristics with automation attributes 17 5 The impact of PA upon production steps 19 6 The changing composition of Federal expenditures, fiscal years 1963, 1970, and 1973 21 7 Relative cost distribution of a recent high performance military aircraft 25 8 DOD procurement of specific items and the impact of programmable automation 27 9 Projected relative and absolute savings from programmable automation as a function of number of items produced per year 28 10 The impact of programmable automation on the DOD budget 30

11 Impact of programmable automated system on manufacturing industries 12 Impact of programmable automation upon manufacturing sector 33...