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Managing Risk in Advanced Manufacturing Technology
Hottenstein, Michael P., and James W. Dean
34/4  (Summer 1992): 112-126

Most advanced manufacturing technology (AMT) projects fail to live up to expectations. Lack of success may be due to misunderstanding or mismanagement of the risk underlying AMT projects. After studying two dozen such projects, the authors conclude that AMT projects have special risk profiles and that risk management strategies should mirror these profiles. A risk profile should reflect four types or sources of risk: market, strategy, technology, and organization. This article explores and illustrates each of these sources of risk and then develops risk management strategies appropriate for each risk profile. While no company included in this study explicitly developed a risk profile of their AMT project, several companies did develop plans that included elements of all four sources of risk. In addition, they employed a variety of strategies and tactics to manage these risks throughout the projects. These AMT projects were, on average, more successful.

 

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