Key Success Factors for Implementation of Advanced
Manufacturing Technologies (AMTs)-Case Study
Conducted on Selected Pharmaceutical Companies in
Bikash Barua and M.M. Obaidul Islam
Office of Research and Publications (ORP)
American International University-Bangladesh (AIUB)
Working Paper No. AIUB-BUS-ECON-2008-15
Bikash Barua and M.M. Obaidul Islam (2008). Key Success Factors for Implementation of Advanced
Manufacturing Technologies (AMTs)-Case Study Conducted on Selected Pharmaceutical Companies in
Bangladesh. AIUB Bus Econ Working Paper Series, No 2008-15,
Copyright © 2008 American International University-Bangladesh (AIUB)
Key Success Factors for Implementation of Advanced Manufacturing
Technologies (AMTs)-Case Study Conducted on Selected Pharmaceutical
Companies in Bangladesh
Bikash Barua and M.M. Obaidul Islam
Faculty of Business Administration, American International University-Bangladesh
This paper analyzes the key factors that affect implementation of Advanced Manufacturing Technologies
(AMTs) in some selected pharmaceutical companies in Bangladesh. In this regard, we go through literature
review to identify success factors for implementation and based on the literature review a framework is
established to examine the key success factors. We conduct a questionnaire survey to collect necessary primary
information. The information is then analyzed using statistical methods namely one way analysis of variance and
multiple pairwise comparisons. From the result of the analysis we draw a conclusion and provided some
suggestions in context. From the research, it is found that employee motivation, degree of availability of training
program, employee relation and cooperation, existence of an employee education & training program prior to
implementation, safety of performing job, need for team members to be familiar with the new technology,
degree of management commitment and support, degree of financial support, and availability of skill is the key
factors that affect successful implementation of AMTs.
Keywords: Advanced manufacturing technology, pharmaceutical industry, implementation, key success factors,
human factor, strategic factor, technological factor.
Advanced manufacturing Technology (AMT) involves the innovative integration of new technology, production
processes and management techniques with the workforce, organization, and culture of the enterprise to form a
total system of enhanced production. Indeed, the advanced manufacturing movement, in tandem with the
information technology revolution, is transcending the traditional parameters of mass production, giving rise to a
new era in manufacturing in which manufacturers are increasing the speed and flexibility of production while
improving product quality and customization (Mohanty, 1999).
The benefits of AMT use are far ranging—from increasing productivity, to improving flexibility, to producing
higher quality products, to reducing production costs (Beaumont and Schroder, 1997; Rischel and Burns, 1997;
In view of great opportunity of the future Pharmaceutical market, we try to looks into finding key factors that
lead to the successful integration of the advanced manufacturing technologies in the industry.
First of all we go through the literature review concerning the implementation issues and identification of key
implementation factors. Then we establish a framework to analyze the key success factors. Based on the
framework, we have collected relevant primary information through questionnaire survey. After then, we
perform Statistical analysis (ANOVA) to identify the success factors. We then provide some useful suggestions
for the industry. At the end, we provide conclusion about success factors based on the result of the analysis of
2. Literature Review
Badiru (1990) reports guidelines for developing and implementing strategic plans for AMT. He also discusses he
concept of strategic and operational planning. Babbar and Rai (1999) have reported that the problem lies not in
the level of technology, but rather in its implementation. They also state that, instead of rushing to invest in
AMT, a manufacturing company must reassess its direction, strengths and weaknesses, and then develop a
strategy for successful implementation.
Afzulparkar at al. (1993) have identified some of the issues and problems arising from implementing a cellular
manufacturing project and discuss the following issues, namely scope of CM projects, simulation modeling, cell
design, cell operational logistics, and labour issues in CM.
Voss (1986) reports that implementation is a vital issue which must be considered prior to any major
introduction of AMT, and that strategic considerations have a major influence on the success of post-installation
Sambasivarao and Deshmukh (1994) have discussed various strategic issues, such as finance position, technology
position, market position, product conception and resources, and developed a four-stage framework for
implementing FMSs. Boer et al. (1990) state that the advantages of FMS may be achieved, although economic,
technical and organizational problems and prerequisites may prevent or delay the full benefits.
Park et al. (1990) stated that implementation of automation technologies entails a large initial investment under a
long-term, uncertain environment. They also observed that the decisions to implement AMT must be
determined by expectations concerning factors of demand such as the breadth of the variety of products, the
quantity of demand, and also the quality of products.
Mohanty (1993) indicate that successful selection and implementation of AMT requires a thorough
understanding of various issues. Researchers have identified and classified these attributes. For example, Tayyari
and Kroll (1990) have divided AMT issues into two categories, namely direct cost benefits, and intangible
Mohanty (1993) has classified implementation issues into six categories: direct cost factors, preproduction cost
factors, human issues, social issues, strategic issues, and technological issues. He argued that implementation
issues are classified primarily on the basis of accountability for analyzing AMT benefits. Economic factors or
tangible factors are quantifiable using cost-borne figures. These factors are again classified into three categories,
namely pre-production cost factors, direct production cost factors and indirect production cost figures.
Implementation issues have long-term implications for the organization as a whole and so it is necessary to
consider the effects of AMT on the organization.
Efstathiades, Tassou, and Antoniou (2002) have justified the implementation issues from technical, business, and
manufacturing success. However, Zhao and Henry ( 1997) reveal that project team integrity, strategic planning
and project championship, and technical knowledge are significant.
Laosirihongthing, Paul, and Speece (2001) in their research found that organizational characteristics, principal
ownership, size of company and labour union membership have significant impact on successful implementation
Buruncuk and Zarife (2001) in their work of implementing information system found that environmental factors,
organization’s internal condition, project team structure, appropriate technology and methodology, and after
project support are critical for IT implementation success. They also concluded that success do not come from
sophisticated and high-end IT implementation; instead they are result of the skilled management and proper
implementation of Information Technologies’ both tangible and intangible assets.
3. Establishment of Framework to Identify Success Factors
Based on the issues discussed above we have identified number of dimensions to analyze the key success factors.
In this paper, success factors of AMT implementation we have considered in context of internal condition of the
In the organizational level, we used issues that are provided by Sambasivarao and Deshmukh (1994) as the main
determinants of AMT implementation success. These are human factors, strategic factors, and technological
Along the human dimension factors we have considered are degree of turnover of team members, experience
level of worker, active participation from the in-house engineers in system design, education level of workers,
need for team formation, organization and composition of the team, need for team members to be familiar with
the new technology, safety of performing job, existence of an employee education & training program prior to
implementation, employee relation & cooperation, degree of availability of education and training program, and
Within the technological category factors we have identified are degree to which the organization obtained
experience with a pilot project prior to implementation, configuration of hardware, configuration of software,
compatibility of the technology with existing system, understanding the potential contribution of AMT to current
operations and what new technologies can achieve, convenience in using the technology, degree of availability of
Need for external consultants, need to revise policies and procedures, need to reorganize organizational
structure, nature of the relationship between technology supplier and the user firm, degree of top down-planning
and bottom-up implementation, existence of a project leader, position of the project leader in the organization,
degree of willingness of top management to take sort-term risks for long-term improvements, degree of financial
support, degree of management commitment and support we have considered as the factors in the strategic
4. Research Methodology
After developing the framework we have collected data from primary source through questionnaire survey on
the pharmaceutical companies around Dhaka city listed in Bangladesh Aushadh Shilpa Samity and the Stock
exchange of Bangladesh. The content of the questionnaire focuses on the manufacturer’s view on the importance
of the factor variables. The importance of these factor variables are weighed on a scale of 1-7, representing
absolutely unimportant, fairly unimportant, relatively unimportant, important, relatively important, fairly
important, absolutely important.
The questions in the questionnaire are wide ranging and it was distributed to the executives and experienced
employees as engineers, marketing, finance, management/human resources management, manufacturing.
In total 32 questionnaires we have issued out of which 26 were answered and recovered representing recovery
rate of 81 percent. The average years of experience of the interviewees have more than 6 years in the
pharmaceutical industry. The distribution of the respondents according to their functional area is 34% human
resources and management, 25% finance, 18% manufacturing, 13% engineering, and 10 % marketing.
In this paper we have used statistical methods such as descriptive statistics and analysis of variances. Descriptive
statistics is conducted on the analysis of each factor variable. Average and standard deviation for each factor
variable are calculated to understand the importance level of each factor variable.
One way ANOVA is conducted on each of the factor variables in each dimension so that it can be figured out
whether there is any significant difference among factor variables in each dimension.
When a significant difference is found in the ANOVA result in a certain dimension, we have then conducted
multiple pairwise comparison using tukey’s method (Weiss, 1999) against each factor variable in that dimension
so as to further analyze the importance level of each factor variable.
5. Analysis of Data and Result
5.1 Analysis on the importance of key factors
To understand the importance of factors in implementing AMTs we have performed one way ANOVA to test
whether there is any significant differences exist among the factor variables in each dimension. The result of the
ANOVA is presented in Table 1.
From Table 1, we have found that at 0.05 level of significance the P value for factor variables in each dimension
is very low indicating a significant difference among the factor variables along each dimension. It is also known
from the table that among three dimensions human factor is found to be the highest in importance average.
Table 1: ANOVA results on the importance average of factor variables in each dimension
Dimension Human Factor
No. of Variables 12
Standard Deviation 1.428
F value 2.92
P value .001
5.2 Analysis of key factors-multiple pairwise comparisons
As significant differences exist in all factor variables in each dimension, we have then performed multiple
pairwise comparisons using tukey’s method (Weiss, 1999) to try to find out the sources of the differences. The
following are the results of comparisons.
5.2.1 Human Factors
Table A1 shows the result of twelve factor variables along human dimension. From the table, it is found that
employee motivation, degree of availability of training program, employee relation and cooperation, existence of
an employee education & training program prior to implementation, safety of performing job, and need for team
members to be familiar with the new technology are found to be most important while degree of turnover of
team members, experience level of workers, active participation from the in-house engineers, and education level
of workers are found to be least important. After multiple pairwise comparison is made, it is shown that at the