Information Technology in increasing Productivity in Manufacturing Sector

The quality and quantity of Information transfer at required speed is key to success for any business enterprises. S. Qin has rightly pointed out that manufacturing units exchange three things with the outside world, first is energy, second is matter and third but not the least is information. In the current industrial scenario of cut throat competitions with industries yearning for increased productivity and performance; faster, smoother and streamline information flow is need of the hour. It is required not just to stay in the competition but also to earn high-profit margins.To understand the impact of information technology in a manufacturing unit, we can divide the whole functions into different departments as listed below:

  • Marketing Department
  • Production Planning and Control Department
  • Production/Operations Department
  • Dispatch Department
  • Purchase and Stores Department
  • Maintenance Department
  • Quality Assurance
  • Administration and Human Resource Department
  • Finance and Accounts

For any manufacturing enterprises, the demand for production is raised through the marketing department, which is then conveyed to the production planning and control (PPC) which devises the plan for the production. This plan or schedule is further communicated to the production department which allocates its machines according to the planned sequence and manufactured products are then dispatched to the customers. All these departments are linked with a communication channel. The other auxiliary functions like maintenance, Quality assurance, purchase and stores, administration and human resource, finance and accounts are also linked as per requirement to streamline the activities at shop floor and management level.

The success of the organization is strongly influenced by the level and extent to which information technology is utilized in the routine operations.

Information Technology in Manufacturing Setup

All the major industries use Enterprises Resource Planning software that links all the functions stated above with a purpose of minimizing wastages and to achieve respective targets which in general are related to the on-time delivery of quality products. In fact, Ke-xin Bi have reviewed the literature on carrying out process innovation with the help of information technology and stated its role in increasing productivity, reducing costs and minimizing energy consumption. This involves innovation at three fronts; equipment, technology, and administration. Involvement of information technology in innovating existing types of equipment can be done by using computers, sensors etc.

Similarly, use of computer-aided design and related tools come under technological process innovation. While incorporating material management system, maintenance management system, production management system, management information system comes under administration process innovation. In this context, for real-time information transfer, use of RFID system has been presented by. This would enable managers to take timely decisions and maintain a competitive edge. Use of RFID technology would also help to keep a check on work in process inventory and give continuous feedback to the stakeholders. Fig.1 shows a typical component flow chart starting from inward inspection to the final dispatch. Use of RFID tags would definitely aid the management to keep an eye on material movement on the real-time basis and generate required signals to inform various functions like purchase, production planning, and control, dispatch etc. regarding the status of the final product. As mentioned earlier the speed with which information flows is also an important parameter of success for any organization.

Component Flow Chart in an Assembly line

Fig. 1: Typical Component Flow Chart in an Assembly line

Information technology has enabled top management to keep a constant record of shop floor proceedings ranging from the quantity of production to machine downtime along with its reason. Use of control systems like SCADA ( Supervisory Control and Data Acquisition) enables fault finding and diagnosis even when the engineer or technician is at the remote place. One such instance of how an information technology-based network can assist in speeding up the machine repair is described by V. Srinivasan. The author has demonstrated the use of Enterprise Asset Management (EAM) system in identifying the fault of a component, raising alarm and informing technician, producing audit report, providing technician the necessary information on the component and informing supplier about the problem to enable him or her to identify whether the failure is due to design.

In this way, this information network plays an important role in managing assets of the manufacturing unit which further ensures high performance of the manufacturing unit. The role of information technology becomes more prominent for manufacturing enterprise collaboration network (MECN). These networks basically involve collaboration between different firms to make use of individual expertise in order to minimize product development life cycle and production time. Availability of robust information flow network would certainly boost up the efficacy of the whole network and conversely may affect the whole network of enterprises adversely if the information flow does not streamline.

Take the case of famous just in time concept of Toyota Production System philosophy. Its success hadn’t been possible without the use of an efficient information flow system. Although networking of enterprises is really a cost-effective option corresponding information transfer pose some problems related to the technology. Some of these are stated by X. Li et al. These are basically related to the reliability of data transfer, the optimal distribution of resources etc. which can be an area of research.


To stand tall as a successful manufacturing firm in the constantly evolving technological environment, implementing and using information technology in all functions is inevitable. Many manufacturing firms have successfully incorporated information technology with lean manufacturing philosophy and reaping benefits out of it. Still, there are challenges involved in the usage of information technology such as security of information being transferred and reliability of data, resources required and cost of infrastructure, optimization of available resources etc. All these challenges provide an opportunity to all the researchers working in this domain.

Solutions to these challenges will make the firms more cost-effective and therefore contribute to nation’s GDP, eliminate incompetent competitors and provide ground for fair competition due to enhanced information security.

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