Factoring and small business

Factoring and small business


In today's rapidly changing environment, management of nonprofit organizations requires a variety of skill sets to successfully navigate challenging organizations.

The basic objectives of the Café are to assist NGOs in enhancing and improving their programmes and activities; to effect a better understanding of NGOs in general; and to enable NGOs to network at local, regional and international levels.

Alternative marketing strategies" are low cost ways to target specific neighborhoods, age groups, ethnic communities, and/or low literacy families with special cancer messages. Such strategies include the use of low cost flyers, posters, payroll stuffers, and program announcements scattered throughout a community to deliver a message. Ideally, these alternative strategies can also be used to complement traditional media efforts.

When distributing a marketing piece always remember to focus the content of your message and where it will placed on the characteristics of the community you want to reach. In NALIC that community is rural, older, and medically underserved. In order to reach those families,

As the programmes and projects of NGOs expand, the need for money to run their operations becomes all the more critical. Much of this comes from third party funding organizations, either in the country where the NGO operates, or in OECD countries that assist projects in developing countries.


Resources for Mobilizing Funding for Development Projects
• Small Grants Program,
• Social Development Department,
• World Bank
• International Youth Foundation,
• Baltimore,
• Maryland USA
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Technology strategy for the enterprise

Technology strategy for the enterprise


Organising technology at the enterprise level is part of corporate planning function and is a continuous process. This can be divided into the following three streams :

a. Replacement of obsolete technologies with newer ones; and continuous modernization of existing technologies for improving productivity and competitiveness.
b. Development and introduction of new products with a view to Diversify.
c. Setting up of new units.

While having certain common components, the above three streams have certain operational differerences and therefore need to be dealt with separately. However, the first step to technology status and the forecasting of technology needs, keeping in view the technology trends (domestic and global) and to the changing market in order to better satisfy the consumer expectations. While defining strategy, the time frame of technology cycle and its impact needs the maximum attention. Further, technology should be identified not only in term of machines but also products and processes to achieve the desired end product and level of productivity. This can be clarified by comparing core industries like Cement and Steel with fast track Electronics industry. While in the first case changes in the machines and processes take place without consumer getting the feel of it, in case of electronics and consumer products, the product range changes have an impact on consumer because he gets involved in it.

Further, a company engaged in the manufacture of consumer electronic products has very little time at its disposal to bridge the gap and keep pace with changes, but a company making cement or steel could go in a systematic manner to improve its state of technology and simultaneously meet the requirements of employment policies and marketing distribution system in the country in order to satisfy the consumer needs effectively.

The questions of technological obsolescence, time cycle and scale of operations are more relevant today than they were ever before. It is because of the increased pace of technological developments, emerging intense competition and stepping of electronics in almost all industries—be it automobile, telecommunication, aviation, cement or mineral industries where use of micro—processor has now become more a necessity than fashion—that the concepts of scale or size of production have assumed increasing importance. India is passing through transition phase where we have technologies varying from bullock cart to A-320 aircraft. Appropriate technology for each industrial segment is thus the need of the hour and should be the objective of an enterprise. While we might like to introduce bio-engineering, super conductivity and jet engines in one go, the scale of operations and results achieved may or may not justify the same. Since technology strategy of the corporation has a long term impact, its appropriate choice in the context of the environment is very critical.

As indicated earlier, the technology strategy of an electronic consumer product company, for instanced, cannot be the same as that of Steel, Cement or other core industry. And within the same sector the technology strategy of a company will change depending upon whether its target is domestic, international or mixed market. For example the technology strategy of a 100% Export Oriented Unit (EOU) company has to the state-of-the art technology and also has to be backed up by the capability to quickly respond to the changes in accordance with the merging global situation. On the other hand the strategy of a core industry company will be governed by domestic needs and Government’s socio-economic policies.

Technological changes at the enterprise level should take cognizance of the following :
a) Country’s changing economic scenario
b) Changing cultural and living standards
c) Government policies including those with respect to import and export and their effect on cost.
d) Global changes taking place in the range of products affecting the economic scene and living standards
e) Intensity in competition
f) Economics and sociology of conservation and pollution control consciousness creamed as a result of Government policies and pressures.

Some of the typical products exemplifying the global or universal trends are the TV, Video, automotive and home appliances industries in which a sort of explosion in demand has taken place.
In these verindustries, grater computersation, control through remote instruments and miniaturization are the technological changes which are now taking place.

After the internal resources, customer needs; global technology and market trends have been evaluated, the next step is to precisely identify the gaps at the enterprise level. While quantitative methods an assist in the identification of emerging technologies and possible know-how gaps, an assessment based on the following can be of direct use for an existing set up (for new enterprises the more scientific methods may be necessary) :
• Feedback data on the performance of existing equipment and failure analysis report, comparing productivity, cost of production and quality vis-à-vis acceptable standards.
• Feedback data in basic product parameters vis-à-vis other competitors and keeping watch in their plans and activities.
• Technology scanning by product groups.
• Interaction with customers, foreign companies, consultancy organisations, institutions, etc.
• Mapping the international technological status through tendering, obtaining quotations, engaging foreign consultants and evaluation the same in terms of domestic/export environment for the enterprise.
• Clearly defining the technology life cycle of new products as a consequence of technological changes by means of cost benefit analysis and with reference to time frame for implementation.
• Energy conservation and pollution control policies and strategies.

The management of technology at the enterprise level requires that the technology management group should receive necessary inputs for formulation of possible technology options form the customers, business groups and other corporate agencies. Based on these inputs the Technology Management Group should identify gaps in technology and formulate possible new technology alternatives. Thus the specifications of the required new technology get firmed up as a first step. The plan of action to implement the strategy may include :

a) Resource analysis of the company in terms of availability of technological expertise, finances, skills and equipment.
b) Analysis of Customer (both current as also emerging) needs and the time frame of validity.
c) Analysis the global data regarding the state of art of the technology and the markets. Based on these inputs the Technology Group carries out an evaluation of available options and the cost benefit analysis to arrive are investment decision.
d) Identify the route : technology acquisition vs. in-house development.
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Do you agree that pricing of technology is an important factor in technology transfer? If so why?

Do you agree that pricing of technology is an important factor in technology transfer? If so why? What are the considerations and norms for pricing a particular technology? Give example.


Modes of Technology Transfer:
The technology transfer plan and absorption, to a large extent, depend upon the mode of technology transfer which in turn depends upon the scope and specific needs of the enterprise. For example, technology transfer needs and mechanisms for setting lup a new plant, and those for improving the productivity or introducing new products in the existing plant would be different. The noraml modes of transfer are Turnkey joint ventures, technical know-how licencing, one time purchase, vetting, modernisation through Technology Development Fund (TDF) schemes and purchase of prototypes and drawings.

Once the negotiations with seller/collaborator have been completed and taken on record, it is essential that the licencee should evolve a proper back up organisation ensure smooth technology transfer for both dsign and manufacturing. The R & D set up should also be activated to support the technology transfer process and develop the know-why capabilities. A time bound project plan and implementation scheme after conclusion fo the collaboration agreement as also a comprehensive technology transfer plan have to be prepared defining the responsibilities of the various devisions of the company. Corrdinated by the Technology Management Group, the project plan could cover several aspects, eg,. Receipt of techinal documentation, k training of licensee personnel at the collaborator’s works, and echievement of indigenisation levels. A system for continuous monitoring of technology transfer plan at the product, divisional and corporate levels has to be developed depending upon the area /scope of collaboration. The indigenisation scheme and traning of engineers in idendified areas at the collaborators’s works after familiarising them with the documentation received from the collaborators has to be worked out so that the trainees could derive the maximum benefit from their stay at the collaborator’s works. The involvement of R & D is necessary to carry out product improvement research so that the technology acquired is upscaled and improved upon after successful absorption. Cement industry has done exceedingly well in the absorption of technology imported from different sources. Some highlights of this experience and the denefits accrued therefrom are given in Appendix 1. The following guidelines need to be followed for transfer and absorption of imported technology.

6) Continuous monitoring of technology transfer plan at the product, divisional and corporate levels.
7) Training of engineers in identified areas at the collaborator’s works after familiarsing them with the documentiation received from the collaborator, so that they could derive the maximum benefits from their stary asyt the collaborator’s works.
8) Analysis of documentation, technical information etc. Received from the colloborators by the R & D groups and preparation of specific developmental plans for import substitution, product improvement cost reduction, etc. Keeping in view the innovations taking place internationally.
9) Entrusting the R & D group with the responsibility to carry out product improvement research so that the technology acquired is upscaled and improved upon further.
10) Associate the Technology Management Group from the initial stages of technology transfer plans including negotiations, training, dicussions, etc. held with the foreign collaborator.

The above trategies should help the organisation to absorb/adapt imported technology and achieve self-reliance at the earliest, thereby avoiding further imports of technology.
An on-line system for monitoring tecnology changes and a system for evaluation of their relevance and impact on the organisation have therefore to be given the foremost place in the organisation’s corporate planning process.

The above discussion is also relevant for a new organisation, as it is for asn existing set-up, except that it does not have previous experience and built-up technological capabilities, and hence has to generally acquire technological from elsewhere on perhaps lesser favourable terms. Any enterprise-new or existing, besides keeping track of the changes, has to keep itself in readinees to implement the changes at the fastest speed and thus keep its resources, such as funds, men and material always in readiness.

While an enterprise, on one hand, may establish its own R & d facilities and keep up the upgrading of the facilities, on the other, its process of technology evaluation has to be active all the time in orfer to remian competitive.

An enterprise must have a system of forecasting technological changes with time schedule and organise the human resorce (HR) structure in amnner that all unit operation, s individually and colelctively, are optimal.

Technology Management in Indian Cement IndustryTechnolgoy Transfer Sceario in Cement Industry
Cement Industry has only recorded substantial growth since independence (from about 1 million tonners to 63 million tonne capacity) but also has undergone dramatic technological change. Starting with high-energy intensive, high manpower and practically no instrumentation, the industry now is high energy efficient, employs low manpower and has state of art instrumentation, including automation with expert system. The industry from a stage or having 97% of its capacity under the wet process has now 80% of its capacity under the dry process system. The compulsion process had to be reduced to half of what was then for each unit of cement produced. This study gives features of the technology changes which have takes place and are skill underway. The study is based on the proceedings of the national worshops on energy management in Cement Industry held at Hyderabad on 29th August, 1991.

Industry Profile
The Cement Indsutry has recoreded substential growth in the past decades. The installed capacity which was about million tonnes in 1950 has shot up to about 64 million tonnes in 1990-91. The acutal production of cement in 1990-91 was 48.75 million tonnes representing an average capacity utilisation of 76%. The cement demand at the end of 1994-95 is expected to be around 65 million tonnes. This implies that at the average capacity utilisation of 75% the installed capacity needed by 1994-95 would be around 85 million tonnes requiring an additional capacity creation of 21 million tonnes in the next four years. But, the current indications are that the installed capacity by 1994-95 would be only about 75 million tonnes implying shortfall of 10 million tonnes.
The structure of Indian Cement indsutry has undergone a significant change with respect to plant size and process employed. The industry has grown phenomenally in that last six years and after the cement decontrol and liberalisation policies, the industry is enjoying good times now with booming markets and better realisation of prices. But this is not a matter for complacence but an opportunity to aim at higher capacity utilisation, adopt energy efficient technology, etc. In the past decades, there has been a general shift towards dry process plants which are energy efficient compared to wet process. At present there are still 71 wet process kilns representing 16% of the industry capacity. Though in terms of units wet process kilns represent 43%, their share in production capacity is low at 16% due to lower ratings ranging between 200 to 60 tonnes per day (tpa). The industry is now wetnesing a steady move to higher capacity rating kilns of 1.0 million tpa. Further, some companies are already moving towards 1.5 million tonnes per annum capacity cement plants. Many Indian cement plants have already adopted latest technologies such as the precalciners which facilitate the use of high ash coals and time stone of inferior quality which leads to substantial fuesl and electricity savings.


Energy Consumption TrendCement manufacturing is an energy intensive operation with energy accounting for about 30% of the production cost. In terms of direct manufacturing costs, energy constitues 60% of the total direct costs. The sector consumes about 10 million tonnes of coal and 5.5 billion units of electricity. Of the total estimated demand in the industrial sector, the coal requirement in the current industry accounts for 5% and power requirement 4.5%

Systematic studies have been conducted in the country and abroad and what follows hereinafter has been identified as the techological improvement areas. All these area not only relate to energy conservation but also to adapting state of art technology.

Energy Conservation Approaches
Considering the vast magnitude of potentiality for energy in cement plants, it would be worthwhile classsifying the options under following categories:

Stage 1: Operational improvement and optimation measures and efficient electrical load management.
Stage 2: Retrofit (modernisation, expansion etc. of old or existing plants) options for energy conservation through improved process controls, capacity enchancement etc.
Stage 3: Adoption of state of art technology for energy efficiency improvements.
Energy Conservation opportunities
• Energy conservation opportunities in operational improvements and optimisation.
• Energy conservation opportunities through process controls, capacity enhancement / add-on devices.
• Energy conservation opportunities through adoption of state of art technology.
Appropriate technology cover the following broad areas:
k) conversion of wet process plants of dry process plants
l) conversion from preheater technology to precalciner technology.
m) Conversion of planetary coller system to grate cooler system.
n) Adoption of vertical roller mille in place of the traditional ball mille for grinding control and energy conservation.
o) Adoption of the state of art micro processor based controls for effective process control and energy conservation.
p) Use of alternative fuels such as lignite and natural gas in the case of plants with precalciner technology.
q) Adoption of on-line composition analysers to monitor and maintain raw meal mix in order to optimise on kiln heat consumption.
r) Simulation pilot plants for analysis of grindability index of raw meals, clinker and coal to enable judicious belending for grinding energy reduction.
s) Adoption of bucket elevator conveying system in place of pneumatic conveying system.
t) Adoption of rope way for material transport in place of traditional dumper system which is more energy intensive.
Table 1 gives the energy consumption pattern of Indian Cement industry.

The power consumption in cement manufacturing is mainly spent in grinding and handling operations and hearly seventy per cent of it is consumed in raw material grinding, sintering and cement grinding systems. The energy consumption pattern is found to vary from one plant to another due to factors such as:
e) Age of the plant
f) Type of process adopted
g) Plant size capacity and system design
h) Plant layout and material handling system
Hence there cannot be a universal standardised approach towards conservation and each plant is required to be examined on its own merit.

Energy audit has to be done periodically to monitor efficient use of energy. This would include studying various operations using energy, and equipment and examining their relative efficiency / performance and adopting energy conservation methods.
Mobile energy diagnostic unit (energy bus) which is a unique facility equipped with latest and sophisticated facilities and on-board computer with relevant software for faster and accurate assessment of energy use pattern is available in the country, and can be used in cement plants.

Number of cement plants in the country have adopted some of these measures in various combination and have improved energy efficiencies. This has been achieved partially through technology acquisition and partially indigenous effort. The absorption of technology for equipment, process, operations and quality control has been of very high order and it is hoped that the remaining gaps will be further narrowed down from continuous technology development and upgradation efforts on the part fo machinery manufacturers, cement manufacturers and related R&D institutions. It may be mentioned here that most of the cement machinery manufacturers had technical foregin collaboration arrangements and are producing plants based on those imported technologies. Many cement plants with huge capacities such as Modi Cement and Gujarat Ambuja Cement have been built up with imported technologies from USA and other countries. While cement plants in India have quality control and testing facilities they have really not created any substantial R&d facilities, baring a few only such as Dalmia Cement and ACC. Most of them depend on the foreign technical support or support from machinery suppliers.

National Council of Building Materials (NCBM) at New Delhi, Central Building Research Institute at Roorkee, ACC Research Station at Thance (Bombay) are some of the main R&D institutions related to cement industry. The cement costs in India are not internatioally competitive due to various factors including technological deficiencies. Pollution control, waste utilisation, optimisation of operations are some other area which need more attention of the cement industry.
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Briefly discuss the existing linkages with particular reference to technology management in India.

Briefly discuss the existing linkages with particular reference to technology management in India.



INUSTRY ASSOCIATIONS AND PROMOTINAL AGENCIES:
There are several industrial associations such as Confederation of Engineering Industries (CEI) federaton of Idian Chambeers of Commerce and Industry (FICCI) Association of Chambers of Commerce and Industry (ASSOCHEM) etc. which are formed mainly by vaious industries to represent their interests to the govt and also provide a link beetween govt and industryb Many of these organisations have in formation data bases concernng trade and technology, and organise
Tecnology-oriented programms for the benefit of the industry from time to time. CEI has recently started total Quality Managment programmes (TOM) to educate the industry about the techonological and quality requirments at internatonal levels and also how to achieve those standards for indian products. The GOVT. has set up several specialised facilities, such as, training centers, advanced design centers for comuters, tool rooms, information etc. for the benfit ofd the industry.2 Specialised agencies such as National small industry corparation (NSIC), small industry development centers (SIDC), have been particularly set-up for small industries. The financial institution are also now actviely supporting techincal and tecnoligcal efforts of enter prices and have even set up specialised orgnisations, such as, Tecnology and development & Tecnology finance Corpration (RCTFC) at New Delhi. Venture capital Schems snd Companies have also come up recent past. Consulants play an important role in the acquisition, trasnsfer and development of tecnology. The enerprice can identify competent consultancy orgnisation/ consulants relevent to its areas of operations and develop necessary linkages with them by way of utilising in any area of interset. Consultancy serviceare generally effective and provide solution to problem on casae to case basis. Consulants can also help in developing linkages and utilisation of facilities available at national institutions or elsewhere.
LINKAGES :
We have earlier seen in the preceding units that a strong S&T infrastructure and institutional mechanisms have been buit-up in the country, and the facilities and expretise available can be shared or taken advantage of by the industry or the enterprises. The linkages of these facilities at enterprises level is important and may lead ton cost effective tecnology programmes, particularly in-hi tech areas. The large enterprise may have certain level of in-house R&D and other tecnological facilities and therefore need to have linkages with other insititution at a higer level or of specialised nature. The small enterprises are generally noy able to afford to provide edquate R&D and tecnological activities with iin the company, and, therefore, may need to depend even on expertise and facilities avalaible in other insitituion
At a rather reatively low tecnology levels. Such requirment could include desinged engineering, product desingn, process modifications, quality control measure, cost reduction techniques testing facilities and so on. Linkages are therefore all important for all enterprises whether large, medium or small, with the insitiutional and other facilities available in the country, in the area of generation, development, and transfer of tecnology, for an effctive management of tecnology at enterprise level.


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How would Technology Evaluation improve the competitiveness of an enterprise? Give an example.

How would Technology Evaluation improve the competitiveness of an enterprise? Give an example.



Technology and Competition: Although technology competitiveness is necessary for corporate survival, it alone is not sufficient. Of course, a corporation with inferior technology cannot compete at the same price level with a corporation superior in technology. The reason why superior technology alone is not sufficient is that business is a system, and there are many other systems (or sub – systems) that determine business success. Therefore, if technology is to give a competitive edge, management must manage it as a part of the business system. Technological innovation can be integrated with production, marketing, finance and personnel into a balanced business system. Managing technology essentially involves four central concepts:
a) New ventures
b) Innovation
c) Research
d) Research infrastructure

New Ventures: Although new ventures centered around technology are an important class of business, new hi – tech ventures are difficult because they involve two major risks: developing new products and creating new markets. Ideas central to new ventures are concerned with entrepreneurial management, overall business plan, and the dynamics of organizational growth.
Innovation: It denotes the whole span of activity from creating new technological knowledge to implementing it in new businesses. Ideas central to innovation include concepts such as types of innovation, processes of innovation, the technology Scurve, technology life cycle, economic life cycle, economic life cycles, sources of innovation, business opportunities in a technological system, marketing and new technology, corporate diversification through new ventures, and technology in manufacturing strategies.
Research: Technological change is new knowledge about what things to produce and how to produce them; and in the corporation, new knowledge often comes from corporate research. The corporate laboratory is charged with the responsibility of looking after the present and future productivity of the corporation. Managing and integrating corporate research with other management functions and strategies is essential to technology management. Research management includes organisation of research, project management, research personnel, and corporate research strategy.
Research infrastructure: The technologies of a corporation do not exist in a vacuum but are part of a larger technological context, first of the industry, then of the nation, and then of the world. This larger context is a research and development infrastructure, and it has an important influence on the competitive conditions in a country. With the expansion and increase of intensity of international competition, the R & D infrastructure of a nation plays a critical role in economic competition.
Managing technology is taking risks in novel products and developing new markets. In the world of rapid technological progress and changing competitive environments and market needs, firms must pay increasing attention to developing new innovative products for domestic and world markets, and therefore an efficient technology management system is important for them.
Let us first clarify the distinction between innovation and invention since invention is only the beginning of innovation. The steps required to transform invention into innovation can be illustrated in the famous Xerox story.
In 1935, Chester Carlson was working in the patent office of Mallory Company. His technical background work as a carbon chemist, printer, and then as a patent lawyer. He became concerned about the errors in copying patents for public dissemination and the costs involved in copying. Using his chemistry and printing background, he began experimenting with new ways to create a copying process. His basic idea was (a) to project the image of a typed paper onto a blank sheet of paper coated with dry ink, (b) to hold the ink temporarily at spaces of typed letters by static electrical charges induced by the light, and (c ) finally, to melt and ink into the paper by baking the paper. This would produce a quick, dry reproduction of a typed page; and the process came to be called Xerography.
Carlson succeeded in obtaining a crude image, thereby reducing his idea to practice. He filed for a patent. Yet like all new inventions, it was still not commercially efficient, cost – effective, or easily usable. It required development. Development of a new technology usually costs a great deal of money, takes time, and requires skilled resources. All inventors face similar problems – first conceiving the invention, reducing it to practice, obtaining a patent, then obtaining support for development and commercialization.
Carlson went from company to company seeking support. He was turned down, again and again. By 1942, he had obtained the valuable patent on the basic process. Then a venturesome group at Battelle Memorial Institute agreed to work on the development in return for a share in potential royalties. Battelle was a non – profit research and development organisation, with a range of advanced technical research capabilities.
Finally, the innovative pieces for Carlson began to fall in place – invention, patents development and commercialization. In 1945, while Battelle began development of the Xerography process, a small company named Haloid learned of Carlson’ patents Joseph Wilson, the president, was a risk – taker and was looking for new products. Wilson produced the first copiers, using Carlson’s patents and Battelle’s developments.
The rest of the story became business history. That company became Xerox, creating a new industry in office copying products. Xerox grew tremendously, keeping a technological and marketing dominance over the industry for almost three decades.
The interesting questions to ask are: How many companies missed out on the xerography patents? Why did it take an R& D outfit like Battelle to see the technical potential in Carlson’s invention? What leadership qualities do innovative, risk – taking managers like Joseph Wilson possess?
Effective technology management in various countries have led to several technological advancements in the past. In table 1.1 we had listed for you some significant technological advancements during the past two centuries in selected areas. Recent Gulf War (1991) is another burning example of technological.




Advancements in which defence systems using latest development in materials, electronics and computers, etc. were used by USA against Iraq. There is evidence to show that there has been acceleration in technological change all over the world during the last one hundred years. Table 1.3 gives some evidence to indicate that there is a decreasing trend in the speed of introducing technological developments into social use. The time of substitution has also decreased over the years. This has stepped up the pace of invention, innovation and substitution/ diffusion. This means acceleration in the whole process of technological change. The new machines and techniques are not merely products, but sources of fresh creative ideas.
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Indian companies do not distinguish between `Technology Absorption’ and Technology Adoption’. Comment.

Indian companies do not distinguish between `Technology Absorption’ and Technology Adoption’. Comment.


This is necessary to understand the nature of technological change in general and its social implication in particular. Freeman has categorized technological change into the following three categories:

Incremental innovations: These are small and marginal improvements brought about by individual units and firms out of the experience of working with the specific process or the product. These generally give rise to productivity improvements or better products/process resulting in lower costs. Although each single incremental innovation may have relatively insignificant effect on the productivity or the cost, the cumulative effect of many of these innovations taken together may result in significant improvements. Also some of the management techniques like work study, organisation and methods (O&M), value analysis, etc, are used on specific processes with objective of productivity improvement and cost reduction and most of them would actually result in accelerated incremental innovation. The R&D efforts in India have often resulted in incremental innovation e.g., developments in auto industry.

Radical Innovation: These are major changes in the process or the product generally brought about by formal research and development efforts. Radical innovations are disjointed events, difficult to predict and have a substantial effect on productivity, cost and the quality of the product. Consequently, they act as catalysts for the growth of new markets. The development of a “jumbo” passenger aircraft, or one with supersonic speed would fit in this category as would the development of so many new drugs. Sometimes, a whole cluster of radical innovations develop, interlinked with each other, giving rise to the creation of new industries and services.

New Technological Systems: Some of the radical innovation, in course of time, end up development an entire cluster of many radical innovation interconnected with each other both technologically and economically, thus creating an entire new industry. The cluster of petrochemical innovation finally created a petrochemical industry and the cluster of synthetic materials innovation similarly gave birth to the synthetic materials industry. It is to be noted that the various radical innovations forming part of a new technological system are connected not only technologically but also economically.

1) Continuous monitoring of technology transfer plan at the product, divisional and corporate levels.
2) Training of engineers in identified areas at the collaborator’s works after familiarsing them with the documentiation received from the collaborator, so that they could derive the maximum benefits from their stary asyt the collaborator’s works.
3) Analysis of documentation, technical information etc. Received from the colloborators by the R & D groups and preparation of specific developmental plans for import substitution, product improvement cost reduction, etc. Keeping in view the innovations taking place internationally.
4) Entrusting the R & D group with the responsibility to carry out product improvement research so that the technology acquired is upscaled and improved upon further.
5) Associate the Technology Management Group from the initial stages of technology transfer plans including negotiations, training, dicussions, etc. held with the foreign collaborator.
The above trategies should help the organisation to absorb/adapt imported technology and achieve self-reliance at the earliest, thereby avoiding further imports of technology.
An on-line system for monitoring tecnology changes and a system for evaluation of their relevance and impact on the organisation have therefore to be given the foremost place in the organisation’s corporate planning process.
The above discussion is also relevant for a new organisation, as it is for asn existing set-up, except that it does not have previous experience and built-up technological capabilities, and hence has to generally acquire technological from elsewhere on perhaps lesser favourable terms. Any enterprise-new or existing, besides keeping track of the changes, has to keep itself in readinees to implement the changes at the fastest speed and thus keep its resources, such as funds, men and material always in readiness.
While an enterprise, on one hand, may establish its own R & d facilities and keep up the upgrading of the facilities, on the other, its process of technology evaluation has to be active all the time in orfer to remian competitive.
An enterprise must have a system of forecasting technological changes with time schedule and organise the human resorce (HR) structure in amnner that all unit operation, s individually and colelctively, are optimal.
Technology Management in Indian Cement Industry
Technolgoy Transfer Sceario in Cement Industry
Cement Industry has only recorded substantial growth since independence (from about 1 million tonners to 63 million tonne capacity) but also has undergone dramatic technological change. Starting with high-energy intensive, high manpower and practically no instrumentation, the industry now is high energy efficient, employs low manpower and has state of art instrumentation, including automation with expert system. The industry from a stage or having 97% of its capacity under the wet process has now 80% of its capacity under the dry process system. The compulsion process had to be reduced to half of what was then for each unit of cement produced. This study gives features of the technology changes which have takes place and are skill underway. The study is based on the proceedings of the national worshops on energy management in Cement Industry held at Hyderabad on 29th August, 1991.

Industry Profile
The Cement Indsutry has recoreded substential growth in the past decades. The installed capacity which was about million tonnes in 1950 has shot up to about 64 million tonnes in 1990-91. The acutal production of cement in 1990-91 was 48.75 million tonnes representing an average capacity utilisation of 76%. The cement demand at the end of 1994-95 is expected to be around 65 million tonnes. This implies that at the average capacity utilisation of 75% the installed capacity needed by 1994-95 would be around 85 million tonnes requiring an additional capacity creation of 21 million tonnes in the next four years. But, the current indications are that the installed capacity by 1994-95 would be only about 75 million tonnes implying shortfall of 10 million tonnes.
The structure of Indian Cement indsutry has undergone a significant change with respect to plant size and process employed. The industry has grown phenomenally in that last six years and after the cement decontrol and liberalisation policies, the industry is enjoying good times now with booming markets and better realisation of prices. But this is not a matter for complacence but an opportunity to aim at higher capacity utilisation, adopt energy efficient technology, etc. In the past decades, there has been a general shift towards dry process plants which are energy efficient compared to wet process. At present there are still 71 wet process kilns representing 16% of the industry capacity. Though in terms of units wet process kilns represent 43%, their share in production capacity is low at 16% due to lower ratings ranging between 200 to 60 tonnes per day (tpa). The industry is now wetnesing a steady move to higher capacity rating kilns of 1.0 million tpa. Further, some companies are already moving towards 1.5 million tonnes per annum capacity cement plants. Many Indian cement plants have already adopted latest technologies such as the precalciners which facilitate the use of high ash coals and time stone of inferior quality which leads to substantial fuesl and electricity savings.
Energy Consumption Trend
Cement manufacturing is an energy intensive operation with energy accounting for about 30% of the production cost. In terms of direct manufacturing costs, energy constitues 60% of the total direct costs. The sector consumes about 10 million tonnes of coal and 5.5 billion units of electricity. Of the total estimated demand in the industrial sector, the coal requirement in the current industry accounts for 5% and power requirement 4.5%
Systematic studies have been conducted in the country and abroad and what follows hereinafter has been identified as the techological improvement areas. All these area not only relate to energy conservation but also to adapting state of art technology.

Energy Conservation Approaches
Considering the vast magnitude of potentiality for energy in cement plants, it would be worthwhile classsifying the options under following categories:
Stage 1: Operational improvement and optimation measures and efficient electrical load management.
Stage 2: Retrofit (modernisation, expansion etc. of old or existing plants) options for energy conservation through improved process controls, capacity enchancement etc.
Stage 3: Adoption of state of art technology for energy efficiency improvements.
Energy Conservation opportunities
• Energy conservation opportunities in operational improvements and optimisation.
• Energy conservation opportunities through process controls, capacity enhancement / add-on devices.
• Energy conservation opportunities through adoption of state of art technology.
Appropriate technology cover the following broad areas:
a) conversion of wet process plants of dry process plants
b) conversion from preheater technology to precalciner technology.
c) Conversion of planetary coller system to grate cooler system.
d) Adoption of vertical roller mille in place of the traditional ball mille for grinding control and energy conservation.
e) Adoption of the state of art micro processor based controls for effective process control and energy conservation.
f) Use of alternative fuels such as lignite and natural gas in the case of plants with precalciner technology.
g) Adoption of on-line composition analysers to monitor and maintain raw meal mix in order to optimise on kiln heat consumption.
h) Simulation pilot plants for analysis of grindability index of raw meals, clinker and coal to enable judicious belending for grinding energy reduction.
i) Adoption of bucket elevator conveying system in place of pneumatic conveying system.
j) Adoption of rope way for material transport in place of traditional dumper system which is more energy intensive.
The power consumption in cement manufacturing is mainly spent in grinding and handling operations and hearly seventy per cent of it is consumed in raw material grinding, sintering and cement grinding systems. The energy consumption pattern is found to vary from one plant to another due to factors such as:
a) Age of the plant
b) Type of process adopted
c) Plant size capacity and system design
d) Plant layout and material handling system
Hence there cannot be a universal standardised approach towards conservation and each plant is required to be examined on its own merit.
Energy audit has to be done periodically to monitor efficient use of energy. This would include studying various operations using energy, and equipment and examining their relative efficiency / performance and adopting energy conservation methods.
Mobile energy diagnostic unit (energy bus) which is a unique facility equipped with latest and sophisticated facilities and on-board computer with relevant software for faster and accurate assessment of energy use pattern is available in the country, and can be used in cement plants.
Number of cement plants in the country have adopted some of these measures in various combination and have improved energy efficiencies. This has been achieved partially through technology acquisition and partially indigenous effort. The absorption of technology for equipment, process, operations and quality control has been of very high order and it is hoped that the remaining gaps will be further narrowed down from continuous technology development and upgradation efforts on the part fo machinery manufacturers, cement manufacturers and related R&D institutions. It may be mentioned here that most of the cement machinery manufacturers had technical foregin collaboration arrangements and are producing plants based on those imported technologies. Many cement plants with huge capacities such as Modi Cement and Gujarat Ambuja Cement have been built up with imported technologies from USA and other countries. While cement plants in India have quality control and testing facilities they have really not created any substantial R&d facilities, baring a few only such as Dalmia Cement and ACC. Most of them depend on the foreign technical support or support from machinery suppliers.
National Council of Building Materials (NCBM) at New Delhi, Central Building Research Institute at Roorkee, ACC Research Station at Thance (Bombay) are some of the main R&D institutions related to cement industry. The cement costs in India are not internatioally competitive due to various factors including technological deficiencies. Pollution control, waste utilisation, optimisation of operations are some other area which need more attention of the cement industry.
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Discuss various approaches to technology development.

Discuss various approaches to technology development. Explain the technology development approach adopted in your organisation or through an example you know.



For all the countries, the most practical strategy for technology development is to ‘make some and buy some’ This gives the advantage of selecting an appropriate area of specialization and the potential to exploit the technology trade in the international market place.

The complex process of technology development is schematically presented in figure.





The technological needs are derived from national socio—economic goals. A country’s technology development strategy is then determined by combining these identified technology needs with potential technological developments in the world and a through assessment of available land emerging technologies. Then the country determines a strategy to import technologies which it cannot practically develop itself and identifies technologies which can be produced locally. Now, there is a universal realization that unless a concerted attempt is made to build local technological capabilities for absorbing imported technologies, any attempt to develop indigenous technologies encounters enormous difficulties. Even with regard to imported technology, it is essential for a country to be able to select, digest, adapt and improve it for local consumption. All of these efforts justify greater priority and allocation of resources to R&D. A per—requisite for effective utilization for R&D resources is the development of technological infrastructure within the country, including institution building, manpower development, provision of support facilities and creation of an innovative climate.
The following general principles with regard to the planning for development of indigenous technological capabilities may be kept in view :
i) It is important to be selective in self—development of technology. Emphasis should be given to total integration of all activities in the technology production chain to achieve self—reliance.
ii) In selecting areas for development, a country can be inward—looking in some areas and outward—looking in some other areas.
iii) Import substitution can only be a temporary strategy.
iv) In the technology production chain, a number of activities involving basic and applied research can be undertaken, but it is important to be able discard some of the non—productive projects and concentrate, from time to time upon those which have high commercial potential.
v) Technology development is best achieved through collective effort. Individuality, which tends to aim at being unique rather than practical should be minimized.
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Discuss some of the aspects and issues concerned with technology.

Discuss some of the aspects and issues concerned with technology. Discuss the relevance of any two aspects with reference to your organisation or any other organsiation you are familiar with. Name and describe the organsiation you are referring to.

Almost all of us, in our own generation, have seen many technological changes that have affected our day-to-day functioning and the production of goods and services. However, the moment we get down to precisely defining technological change or measuring it, we are immediately faced with a host of difficulties, including conceptual ones. For example, would the process of mechanization or substitution of labour with capital qualify as a technological change or does technological change encompass changes in product design as well? In this unit we would like to evolve a broad understanding of technological change and develop a framework which should enable us to delineate the implications of technological change clearly.

Technological change has been defined broadly as ‘the process by which economies change over time in respect of the products and services they produce and the processes used to produce them’ and more specifically as alteration in physical ‘processes, materials, machinery or equipment, which has impact on the way work is performed or in the efficiency or effectiveness of the enterprise’. Technological change may involve a change in the output, raw materials, work organisation or management techniques but in all would affect the relationship between labour, capital and other factors of production.

Information technology is all pervasive as it affects all activates that contain some form of logical function. The source of the activity could be mechanical, electrical, pneumatic, hydraulic or even intellectual. Information technology cuts horizontally across clerical, supervisory, managerial and communication activities which are common to all sectors of industry and also affects the design of products and services, processes and organisations producing the same. We shall now discuss some of the major changes brought about by developments in information technology.

Changes in Products : Information technology brings about changes in products by replacing mechanical (e.g. watches), electromechanical (e.g. calculators) or older electrical or electronic parts or components, by upgrading traditional products by enhancing their capability. It includes functions involving, for example, logic and decision-making.



the product change mentioned above have three major consequences. The first is that the value addition is transferred from the manufacture and assembly of parts to the production of the electronic assemblies/ sub-assemblies with associated software a shown in Figure for the telephone switching equipment as an example. Juxtaposed is the fact that the manufacture of electronic component-based systems can have vary low labour intensity. The picture that emerges suggests that the labour intensity of such products decreases with further consequences in terms of employment as well as location of the manufacturing plants.

The second effect relates to short of product life cycles. Product design of many products get linked to developments is information technology in general and to developments in electronic technology in particular. Because there are very fast developments in these technologies, they have their effect on the design of newer products, thus shortening their product life cycles. As a convergence technology, IT acquire the ability to condition developments in an ever increasing number of sectors of the economy.

The ability to create, store, retrieve, transfer, transform and convey informations/data efficiently and economically allows the products to the integrated into large systems so that the products are compatible with the large systems for enhanced capability. For example, electronic typewriters cannot only type but also store the typed information for later processing on a microcomputer and so compatibility with microcomputers will be one more feature to be built into electronic typewriters.

Changes in Services : We use the term ‘services” in its broadcast sense as bundles of benefits some of which may be intangible and others tangible, and they may be accompanied by facilitating goods. This sector has the highest growth rate in most economies of the world and has the larges single share of employment in the world GDP. It is said that in USA services account for over 70% of total income. In developing countries the share of services estimated is around 40% but with technological developments taking places it is likely to grow further. Information technology is already affecting the productivity of service production as well as increasing their transportability. In order to understand these changes better, we present a classification scheme for services as proposed by Baumol and classify services into the following four broad categories :

1) Stagnant Personal Services : These services require direct contact between the customer and the service provider. Since the quality of the service, to a great extent, depends upon the amount of time spent on services it is difficult to realise significant productivity gains in these services. For instance, hair cutting, teaching and counseling belong to this category. However, it is possible to realise significant gains in productivity in the supporting activities necessary for providing the services. For example, over head projectors, photocopying facilities teaching aids and computers have all contributed to a higher productivity of teachers.

2) Substitutable Personal Services : These services also require direct personal contact but it is possible to substitute these services with technological alternatives. For example, guards can be substituted or helped by electronic security and surveillance equipment and domestic servants by a variety of household appliances like washing machines, ovens, mixers, etc. Information technology has played a big role in improving the productivity and the performance of these equipment substituting services. Centrally controlled computer devices or gadgets incorporating programming facilities have been developed to operate the domestic appliances in accordance with the consumers’ needs or desires.

3) Progressive Services : These services require the use of some equipment and also direct personal contact with the receiver of the service. Technological change affects the productivity of the equipment more directly and significantly than the personnel offering the personal contact-based service. For example, air transportation requires the use of the airplane as well as that of the ground and cabin crew; and broadcasting requires the use of studio and transmitting equipment as well as the “personal” contact established by the broadcaster(s). In a way. there is some hardware and some software required to render the service and information technology is affecting the productivity of the hardware more than that of the software.

4) Explosive Services : Services that do not require personal contact belong to this category such as telecommunications. Information technology is bringing about significant productivity increases in these services thereby reducing the unit cost and setting counter inflationary trends in prices. Developments in information technology are also contributing to the generation of new services in this category e.g. facsimile transmission (FAX), Videotext and Electronic Mail.

The above classification helped us to understand the role of information technology on productivity improvements in services. It also brought out another major effect of information technology, viz., its contribution to the transportability of services. Many services, based on exchange and transformation of information, are becoming more and more, transportable. This can be seen happening in some banking and retailing operations, stock market services as well as in services relating to development of software.

Transportability of services has brought about at least three major effects in its wake. It has led to internationalization of services on many fields bringing out crossborder flows of messages, information and data. Many of the services traditionally catering to local markets are now being offered to the global market. The second effect relates to changes in barriers to entry in services. In many services the barriers to entry are getting lower as the cost of entry is practically limited to the cost of equipment which itself is falling e.g. desktop publishing. On the other hand, the barriers to entry in some other services, where an integrated network of services is offered are getting higher. This can be seen in some banking operations as well as development of software requiring satellite data transfers. Transportability of services has also increased the transparency of market and the money market have already affected by information technology. the Bombay Stock Exchange is being planned to be more transparent very soon. Being designated as National Stock Exchange, scripts of many international companies will be admitted and many Indian companies would be listed on the stock exchanges abroad.

Changes in Processes : Information technology changes processes in two major : it allows the incorporation of higher levels of skills and functions into equipment (as in computer controlled machine tools and robots) and it increases the flexibility of many processes to achieve economies of scope involving almost continuous production of individualized products. This can be seen in figure below where different stages of manufacturing automation are plotted against volume and variety.



Process automation as the general characteristic of replacing direct labour (unskilled and semi-unskilled) with capital in conformity with the long-term shift in prices. Consequently, direct labour cost as a fraction of the product cost is declining. This phenomemon is wiping out the comparative advantage of developing countries in terms of low labour cost. Training and retraining of labour, including technicians/operators, has almost become a necessity in the existing enterprises.




The second effect is the combination of lower labour cost with higher automation. As can be seen from Table, automation seems to be removing the primary reasons for locating assembly operations in off-shore locations. This table compares the cost of assembling semi-conductor devices in the United States and Hong Kong with three alternative processes and the loss of comparative advantage for U.S.A in terms of a lower labour cost in Hong Kong due to higher automation.

The automated assembly process using the so-called “hands-off” approach also produces products very high quality. Information technology enables the producers of process equipment to develop horizontal links with other products or equipment or services such as material handling, integrated process control, fabricators etc. It also helps the manufacturing process through better planning, coordination and control. For example, modern manufacturing resource planning enables management to pan and control all manufacturing resources—material, equipment, personnel, tools, etc. more effectively, thus improving the productivity of operations as well as releasing investments in inventory.

It is now widely known that in Japanese enterprises inventories are operated on hourly basis, while in India and other developing countries inventories are still carried on monthly basis which increases the over all costs of operations and products.

These changes also affect the skill—mix of personnel required for the changed process. As production processes become more sophisticated, the number of direct workers would perhaps show a decline whereas more engineers and technicians would be required to carry out reprogramming, installing, repairing and even developing those skills which are likely to become scarce.
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