An economic analysis of investment in an assembly line: Case study at Ericsson Mobile Communications AB, Linköping, Sweden
2001 (English)In: Proceedings of ICPR-16 / [ed] Daniel Hanus, Jaroslav Talácko, 2001Conference paper (Refereed)
During the last four years the global annual production of mobile telephones has increased four times. To Ericsson Mobile Communications AB's supply unit in Linköping, Sweden, this has been a tremendous challenge. The supply unit has increased the produced volume of mobile telephones six times during this period at the same premises. The strategy for the production-engineering depattment was to change the manual assembly line into an automated assembly line. The automated assembly line was built up with SONY smart cells. During 1998 the volumes increased rapidly and the automation strategy where copied to the test stations for the mobile telephones.
This paper discusses the importance of how to link a manufacturing strategy to economical calculations. A case study at Ericsson Mobile Communications AB shows how financial calculations was used when changing from manual testing to automated testing of mobile telephones. Even though all benefits were not accounted for. the studied automation project for automated board test had a calculated pay back period of 7 months. The decreasing production volumes for mobile telephones made that the real yearly cost for the investment increased dramatically compared to the calculated investment cost. The decision-makers need to analyze the risks in an investment calculation due to the uncettai.nty in data used in the calculations. For example, it can be difficult to analyze the risks depending on the difficulty to predict the development for the product market and the future product volumes. The investment calculation result can also differ depending on who is delivering the numerical data that are included in the calculations.
Place, publisher, year, edition, pages
Manufacturing strategy, Production economy
Engineering and Technology
IdentifiersURN: urn:nbn:se:liu:diva-14108OAI: oai:DiVA.org:liu-14108DiVA: diva2:22650
ICPR-16: 16th International Conference on Production Research, 29 July-3 August 2001, Prague, Czech Republic