TECHNOLOGY MANAGEMENT IN MANUFACTURE BY EVALUATION OF TECHNOLOGY CONTENT. Assoc. Prof. PhD. Pham Xuan Mai, Transportation Engineering Department

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1 TECHNOLOGY MANAGEMENT IN MANUFACTURE BY EVALUATION OF TECHNOLOGY CONTENT Assoc. Prof. PhD. Pham Xuan Mai, Transportation Engineering Department 1- Introduction The industry of Vietnam in general and auto industry in particular are implementing the restructuring model to continue existing and developing, in order to meet the strategic objectives of the Vietnamese Government to become an industrialized country after To be able to do it, an increase in content of technology science and technology management in manufacture plays an essential role, through the process of development from now to after 2020, gradually masters technology, starting from low to medium-tech then approaching high-tech. Science simply is searching for the truth itself, positive knowledge that has been systematized whereas practical purpose of technology is a useful application of the scientific principles and laws for the production process, human being living and creating social property. Therefore, it can be said that technology aims to "knowhow" while science focuses on "know-why". Vietnam is behind other countries from technology point of view, so we need to quickly take advantage of other developed countries achievements to the apply properly to actual circumstances of each period rather than beginning on studying scientifically of what other countries have done, or in other words to find 'the truth itself' of existing techniques. However, it s necessary to define which kind of technology should be used? Low technology clearly doesn t bring out competitive value, whereas how medium-tech and high-tech should be exploited? In Vietnam nowadays, the number of sectors using technology from medium to high tech is about 24%, much lower than over 60% in Thailand, Malaysia and China (2008). Compare to other countries with equivalent level of development (by GDP per capita in purchasing power parity), Vietnam has low technological capacity, with high-tech content is just equal to 1/2 of China (in 1998), Thailand (1986) and 1/3

2 of Malaysia (1980), while the share of low-tech industries is higher than those countries at the same time (60 % compared with 20-30%). In the past 11 years, averagely a Vietnamese employee creates value for export and manufacturing value added (MVA) too low in comparison with other countries in the area, only about 1/5 of China, 1/3 of Indonesia, 1/5, 5 of Thailand and 1/10 of Malaysia. 2- Technology and method of evaluating technology content in manufacture Technology is systematic knowledge about the process and techniques using information and materials to produce goods and provide services. Technology components as in Figure 1, including: Techniques factor (T-Technoware): is contained in objects such as machinery, tools, materials and other infrastructure... (means). This is the hardware of technology. Human factor (H-Humanware): is contained in human being technology skills, including experience, knowledge, skills, creativity, ability to coordinate... (capacity) Information factor (I-Inforware): is contained in the data has been documented, which is used in technology including technical data, human and organizations. For example: the specification, demonstration, operational data, design documents, etc. (data) Organization factor (O-Orgaware): is contained in the institutional framework to build the organizational structure, including the regulations and procedures of organization institution, the authority responsibility, management, coordination, planning, training... in order to use the most out of technology factor and human factor (structure).

3 O- Organization H- Human I- Information I- Information T- Techniques Figure 1 : Technology components The components of the technology are closely related to each other as follows: T is the core, implemented, installed and operated by H H is the key of manufacturing activities, affected by I, O. I is the basis for H to make decision O links all components together, creates environment & motivation Four elements complement and interact with each other. They are required to be present at the same time in manufacturing activities. Technology evaluation is an activity of determining the level, value, economic efficiency and social-economic, environmental technology impacts, whereby the main part of technology management can be carried out. The purposes are: 1. for the transfer or application of a technology, 2. to valuate, regulate and control technology:

4 3. to be aware of the benefits and to recognize potential adverse to prevent, limit and overcome. 4. to support for the decision-making process (determine technology strategy, identify priorities in each stage of technology development, implementation of new technologies or technology transfer). There are some technology evaluation methods nowadays: 1. Approach from economic point of view (capital and labor); 2. Approach from input and output of the process; 3. Eclectic approach: using many indicators combined with measurement of isolation technology; 4. Technology measurement: isolating each component of technology; 5. The Atlas technology methodology; 6. Approach from strategic management perspective. Technology Atlas methodology was built by APCTT (center CGCN Asia-Pacific) of the Economic Commission for Asia and the Pacific (UNESCAP) and mostly used in countries such as the U.S., Japan, China. Thaco expected to use this method. The Atlas method evaluates technological content through Technology contribution coefficient-tcc which is calculated as below: TCC= T βt * H βh * I βi * O βo In which the separate contribution corresponding to the technical part (T), Human (H), Information (I), Organization (O). 0 <β <1 is the intensity contribution of the technology components. TCC shows the contribution of the technology on the entire production activities of the company. Order to calculate the amount of technology for a company: Step 1: Describe the production process in the company. Step 2: Determine the limits in sophisticated level of technology components. Step 3: Evaluate the modern level of technology components. Step 4: The contribution of these components. Step 5: Determine the contribution intensity of components βt, βh, βi, βo. Step 6: Calculate the TCC.

5 Step 7: Check the review results. Benefits of TCC review will be very specific to a company: you have identified the components T, H, I, O, which will assess the strengths and weaknesses of each technology component: the modern level of current technology components; quality of human resource in the company; determine what type of information to operate the machinery; define organizational structure to manage in the best way. On that basis, it will determine which component should be invested to improve the current technology intensity in the company. On the other hand, from the determination of the contribution intensity of β, we can allocate resources based on the value of the contribution intensity of the component to increase the maximum TCC. In addition, the TCC assessment will indicate the immediate results of the investment, new technology upgrade, the difference in using technology to modern technology in the area or the world. The calculation of TCC requires collecting information on the best procedure. Thus, it helps planners choose the appropriate technology at the national, regional and international levels. Through that, it supports them to determine the cause of the distance in modern levels and easily make appropriate policies to improve the level of technology. 3 - Technological content review in Truong Hai Auto Joint Stock Company. Truong Hai Automobile Joint Stock Company is a leading unit of automobile production and assembly in the country, moving from the assembly production (period ) to the automotive manufacturing with production projects and fabrication of components, large components, important components such as engines, chassis, composite/plastic items for automobile interior and exterior... in the construction framework of the first automobile industrial area in Vietnam, serving the sustainable development of Thaco Group and contributing to the development of Vietnam on the way to become an industrialized country by The company owns Chu Lai Complex, located in Chu Lai Open Economic Zone in Quang Nam province, in an area of about 500 hectares, including industrial automobile manufacturing and assembly area with 18 production units, seaports, bonded warehouse, professional colleges... There are 4,000 workers of Thaco with production capacity up to 50,000 units / year. Thaco Board of Science, Engineering and Technology has held an experimental assessment on technological content of a suspending cargo wielding

6 line in the mechanical company of the Chu Lai Complex (KPH), this is an important line of truck production process in which there are a number of inadequate issues in technology. In addition, this experimental review points out the problem to be adjusted in the application of the Atlas method in specific case of automobile production industry in general and automobile production of Thaco in particular. Results review of technology content in this line shows: - Technology content in wielding line is low (TCC =.394). This is due to the limited human resources and machinery which is used in the low level of technology and inadequate to create high-quality product. - Contributing Intensity Ratio of the two components,human Resource and Technology, is higher. Consequently, in order to improve the technological content, these two components need to be focused, especially of Human Resource in which weld-workers need to be trained and tested for qualification; replacing the old welding machines, small capacity machines which do not guarantee requirements but comsume large electricity power. - It is necessary to carefully check the quality of output. When detecting the product error, it is mandatory to consider if it is a massive error or random error. In case of massive error, the cause of the error need to be researched to proceed with recovery. - The level of mechanization and automation of communication is weak. The investment in innovative research is still low. Information: It is necessary to build a complete database of processes, checking standards for weld quality, safety instructions, easy to look up for information to be able to use effectively. Furthermore, there should be layout images of operations, processes, operations standards, checklists for production positions with high error-ratio for workers to follow. Overall, it is necessary to have a welding process to ensure quality standards, standard operating procedures applicable to the whole company. Organization: the current organization of the company is at the binding structure. Therefore, to enhance the technological content of the organization component, it is necessary to upgrade the structure to risk level. Company can reach out to market and sell their products independently, actively produce and predict production schedule. Based on below factors, the company has a manufacturing development in order to improve the technological content as follows: 1.Application of innovative technology solutions, investment, management and application of science to basically shift from low productivity, low technology, low

7 quality, low value-added, to high productivity, high technology, high quality, high value-added, high level of scientific technology, increase the value of the localization and reduce costs - increase production added-value. 2.Construction, completion of standard-system, technical-technology regulations, application of management system, tools to improve productivity and quality, advanced models, advanced manufacturing processes to improve productivity and core product quality of Thaco at the output the complex. 3.Further development of high-tech products, increase in the share of contribution of the complex in the total the Thaco GDP, and participation in regional and global value chains. Pic 2: Cargo floor dumper on welding lines, one of the devices that increases technological content in production at the welding line of the factory. Pic 3: 3D CNC machine shapes steel wire, scientific and technological research results that make big change in the technological content of production in the company

8 Experimental assessment results on technology content of welding line in the plant is used to continue the study to adjust a number of technology issues on the line and in the plant. On the other hand, it allows continuing research coefficients, weights and calculation methods to adapt and consist Atlas methodology on the vivid reality of companies of Thaco in the future. This is also the basic steps to build a technology governance model in the Chulai complex Chu Lai in 2013.