Implications of automation in engineer-to-order production: a case study

Abstract

In order to retain a certain level of production in Norway, suppliers to the Norwegian maritime industry need to lower their production costs. Automation is generally an effective way of achieving this in standardized high-volume, low variety production. However, manufacturing companies in the Norwegian maritime industry typically supply capital-intensive, advanced and customized products in low volumes. In this engineer-to-order production situation, manual labor is traditionally preferred over automation. Nonetheless, such companies increasingly automate parts of their production. This paper presents a case of a supplier that has chosen to automate its welding operations, the implications and determinants of this decision.