Manufacturing Companies Lag in Computer Usage, Study Finds
Orange County manufacturing companies are “significantly below” the national average in terms of office automation and their utilization of data- and word-processing equipment, according to a study by Arthur Young & Co.
In its 20-page study, the accounting firm said Orange County manufacturing concerns have an average of five personal computers for every 100 employees, compared to a national average of 12 personal computers per 100 employees. The data suggests that “computers may be grossly underused in the Orange County manufacturing community or that there is an increasingly long line forming at the PC work stations,” the study said.
Orange County manufacturing companies average three full-time data-processing workers per 100 employees, which is probably close to the national average, Arthur Young said.
Survey results indicated 67% of the companies questioned use microcomputers, or personal computers, in some aspect of their business; 77% use minicomputers, which are significantly larger and more powerful than microcomputers, and 65% utilize mainframe computers, which typically are found in the largest companies.
Below National Averages
Just 39% of the companies surveyed use electronic spread-sheets, software for working out mathematical problems, contrasted with a national average of 95%, the study said. About 52% use word-processing software, contrasted to 96% nationally.
“What all these facts and figures really boil down to is that the majority of Orange County’s manufacturing companies are below national averages in terms of data processing and that they are not taking advantage of today’s sophisticated office technology,” said Thomas Britton, director of Arthur Young’s management consulting department at the Costa Mesa office. “It would appear that there is some room for improvement.”
On the bright side, the study found that the average age of computer hardware in the county is three years in all but the categories of primary metals and miscellaneous manufacturing, “suggesting relatively sophisticated, up-to-date data-processing operations.” Because of rapid developments in the efficiency of computer equipment, obsolete hardware and software can hurt employee productivity, the study noted.
In all, Arthur Young surveyed 385 manufacturing companies, including those engaged in primary metals; fabricated metal products; machinery; electrical and electronic machinery; transportation; measuring instruments, medical and optical goods; and miscellaneous manufacturing.
Other findings include:
- American manufacturing companies tend to neglect training programs, and Orange County companies are no exception. Only 43% of the companies surveyed had any formal training programs, and only 19% of those made use of outside instruction. “It appears to be a widely neglected area, with a potential competitive advantage going to those companies willing to make the investment,” the company said.
- Although larger manufacturing companies in the county tend to have the largest computer hardware, their software also is the oldest, averaging six years. Larger manufacturing companies in Orange County may “want to examine new software to increase productivity and effectiveness,” the report said.
- Companies apparently are not racing to use newer, more advanced technology such as electronic mail and local-area microcomputer networks, the survey found. Just 10% of the companies questioned use electronic mail, the ability to send messages from one computer user to another, and 8% use the microcomputer networks, in which several computers are linked together and can share common files. Comparable national figures were not available, but Britton said the figures nationally are “probably about the same” as for Orange County. Neither technology “is being used very effectively,” he said.
Smaller-Size Companies
In analyzing its survey, Arthur Young noted that its sample of companies “underscores the predominance of the small-to-medium-size companies in Orange County,” a conclusion which parallels one of the principal findings in a study of Orange County industry completed last year by Allen J. Scott, a geography professor at UCLA.
Because of the relatively small size of Orange County companies, “they don’t have the kind of automated management and control procedures that you would find in much larger manufacturing activities,” Scott said.
About 65% of the companies surveyed in the county employ 100 employees or less, Arthur Young found.
The company estimated that the study involved “several hundred” hours of staff time and thus cost between $10,000 and $15,000.
“It (the study) provides insight into the use of information technology for both our clients and ourselves,” Britton said.
