Where Industry and Security Intersect
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Access to and the application of technology is not only critical to developing new products and to enhancing the performance of existing products, but it is also essential to efficient, cost- effective manufacturing. U.S. AT manufacturers, according to survey data, want to enhance their access to both new production methods and to organizations with special defense and civilian technological capabilities to help them improve their manufacturing processes.
The AT manufacturer’s aim is twofold: 1) to maximize output and lower costs on existing product lines; and 2) to employ production technology to enable the introduction of new materials enhances product quality, performance, and manufacturing output. Unfortunately, the application of new manufacturing processes or automation in the AT industry often is constrained by low volume and small production runs.
Interestingly, 74 percent of companies who responded to a question about whether a lack of automation was a major hindrance stated that it was only a minor obstacle. This finding, however, does not necessarily lessen the need for many AT companies to improve processes wherever it is possible.
The technical sophistication of U.S. AT companies varies greatly. AT companies are in search of both relatively simple forms of assistance as well as advanced technical services and manufacturing know-how. About half of the industry, data indicate, may not feel that assistance from outside organizations is needed.
Only 176 (49 percent) of 359 companies chose to respond to a question asking them whether they want assistance in one or more of five areas: metrology, ISO 900022 quality control, process verification, equipment demonstration, or European "CE" mark23 safety standard requirements.
At least a few AT companies may suffer from corporate culture barriers, such as the "not-invented here" syndrome found in other parts of U.S. industry, that hinder the adoption of new technology by some segments of the AT industry. Alternatively, companies already may be utilizing solutions that are to be found at federal labs or do not feel that they apply. In one instance, an AT manufacturer advised BIS that it viewed the provision of assistance to private companies, some of which might be current or potential competitors, as damaging to the competitive position of the firm.
Generally speaking, the data show that it is mostly smaller companies that are most interested in outside technical assistance to improve manufacturing. Very large AT manufacturers, however, also expressed a desire to tap outside expertise to help them optimize manufacturing capabilities. As might be expected, industry needs vary considerably.
In the case of metrology, only eight companies wanted help with precision measurement in manufacturing. Six of these firms had annual sales of $2 million or less.
Of 176 companies responding to this survey section, 37 companies expressed interest in getting outside help in manufacturing process verification. Only two of these firms had sales exceeding $10 million annually. Again, small companies showed the greatest demand for these services–some 30 firms, each with 1999 annual revenues of less than $10 million. The other seven companies were larger AT firms, each with revenues of $11 million to $140 million.
There is strong company interest in equipment demonstration, which would allow AT manufacturers to get a better appreciation of how the application of new systems, controls, processes, etc., might enhance product quality and operational efficiency. Fifty-eight firms in all cited a need for such demonstrations–mostly smaller enterprises; six companies with annual revenues ranging from $12 million to $110 million also showed interest in these technology demonstrations.
The form of manufacturing assistance generating the greatest demand, however, has to do with mastering administrative and manufacturing procedures to attain international standards compliance certifications. Fifty-five companies said they need assistance with ISO 9000 certification–seven of the firms having 1999 revenues of $13 to $100 million. Smaller companies with revenues of less than $10 million — 47 in all — have the greatest need for help with ISO 9000 standards.
The same is true in the case of the CE mark that appears on products that meet European Union safety standards. Some classes of U.S. AT products — and other goods — cannot be sold in the European Union because they lack this certification. Smaller AT companies, 77 with revenues below $10 million in 1999, expressed interest in receiving assistance in producing products to conform with CE standards. Another seven larger firms with revenues of $12 million to $100 million said they need help as well.
U.S. AT manufacturers also stated that their manufacturing enterprises could benefit from closer linkages with U.S. standards organizations such as the Underwriters Laboratory, American National Standards Institute, Federal Communications Commission, and the National Institute of Standards and Technology at the U.S. Department of Commerce.
22 ISO 9000 is a quality standard established by the International Standards Organization. It is recognized around the world and can be applied to companies of all sizes in any industry.
23 The CE mark is the official marking required by the European Community for all electric and electronic equipment that will be sold, or put into service for the first time, anywhere in the European Community. It proves to the buyer -or user- that a product fulfills all essential safety and environmental requirements as defined in the European Directives. Manufacturers also must include operating instructions and safety notices in the language of the country in which the product is sold.