Analyse the possible disadvantages of Computer Aided Manufacture (CAM) for a small manufacturing business.

Mark scheme

Marking points from the official mark scheme (May/June 2020). The mark or mark type is shown in brackets.

1. Possible answers might include:
2. Computer Aided Manufacture involves the use of computers and computer-controlled machinery to improve the production process. This can be the use of computers controlling robotic manufacture.
3. The disadvantages to a small manufacturing business:
4. • The initial cost can be very high. Computer controlled machinery is expensive to buy and install.
5. • The skills of the existing staff might not be suitable leading to possible redundancies which is costly to a business. Redundancies might also damage the reputation of the business.
6. • Might be necessary to recruit new more highly skilled employees – leading to a higher wage bill even though fewer employees might be needed.
7. • CAM is not suitable for all business – a business manufacturing handmade furniture or home decorations would possibly lose its uniqueness (handmade). If the businesses' USP was being handmade then the business might become less competitive if CAM was adopted.
8. Possible answers might include:
9. Process innovation is the implementation of new or significantly improved production or service delivery methods. This might be as simple as changing from batch to flow production.
10. A competitive market requires businesses to be constantly aware of and matching or exceeding the offerings of their competitors to consumers. Competition might be in terms of product innovation, quality and/or price.
11. Improving the process by which components are produced and delivered to customers can be important by enabling the business to reduce the delivery time to customers and to improve the quality of what is offered to customers.
12. Process innovation can also:
13. • Reduce costs by improving production methods; possibly introducing totally new methods of production i.e. introducing or increasing the use of automation or robotics which can improve the quality of the car components. Quality is essential to the car manufacturers who will be buying the components because this could affect the quality of the finished car.
14. • Increase the speed of production which leads to a shorter waiting time for customers. Increasingly consumers want fast delivery, both business and private customers. Car manufacturers increasingly using JIT need fast and reliable suppliers of components.
15. However:
16. • Competing on price might be difficult because of the high initial cost of some process innovation.
17. • If competition is on quality, then there might be benefits to be gained.
18. • The importance can depend on the strength of the individual component manufacturer in that competitive market. If the business is one of the more dominant businesses in the market, then process innovation might be essential for that dominance to be maintained and for repeat orders.
19. • If the business is a smaller business, then the relative costs might be too high when compared to the possible gains to be made.
20. • In the motor industry, constant process innovation is essential to remain in the market. Competition to supply components to the large car producers is high.