Degree of automation in the machine tool driven manufacturing industry in developing countries – the case of Uganda.
Developing countries like Uganda are characterised by small domestic markets, weak laws on intellectual property rights and poor labour legislation. In addition, lack of awareness, poor industrial strategy, no external markets to complement the domestic one, high tool investment costs and low returns can be cited as bottlenecks to the growth of the manufacturing industry. The industry is further characterised by small-medium batch sizes and non-flow line production technologies, low volume/capacity, lack of high responsiveness, limited potential of industrialization and therefore cannot survive in highly competitive markets. This study analyses the machine tool driven industry in a developing country. It models the relationships between measures of Advanced Manufacturing Technology (AMT) penetration, adoption trends and sets of predictor variables most of which are intangible. The study is carried out in 39 firms found to be using machine tools and employ more than five people. Non parametric statistical techniques, logistic, quantile and linear regression together with Multivariate fractional polynomial techniques were used. In all cases robust regression was applied. The results show that education levels of blue collar workers, engineers and managers were instrumental to the investment in systems, devices and stations (SDS), while clerical employees were instrumental in integrating these technologies. The CEO and environmental issues were strong influences. The strongest single strategic motivation that drove Ugandan firms to invest in AMT’s was the superior image of the firm followed by reduction in labour costs. Lastly, recommendations were made for Government, industry and the academia. The study provides interesting insights into factors that characterize this industry in a developing country.