Rationalization and Automation

Recently updated on April 13th, 2023 at 06:29 pm


Rationalization refers to doing things on a rational and scientific basis .If the loan application of a customer in a branch of a bank is considered by the branch manager himself and not forwarded in a time consuming and wasteful procedure to the head office this is Rationalization

Rationalization and Automation are independent to each other. The involvement in increasing and large-scale use of machinery and the consequent displacement of labor is called Automation.

It is possible to conceive of rationalization taking place in an establishment without any significant resort to automation and capital-intensive devices .Both will depend upon the nature of the technological development and the considerations which are consciously brought to bear upon practical policy in the matter of the choice of techniques

According to the resolution passed by the conference, the main aims of rationalization are:

(1) Securing the maximum efficiency of labour with minimum effort;

(2) Eliminating waste of power and raw materials;

(3) Facilitating reduction in the variety of patterns (where such variety offers no obvious advantages) search into the methods of manufacture and use of standardised parts;

(4) Simplifying distribution of products by eliminating unnecessary transport, burdensome financial charges and useless interposition of middlemen;

(5) Securing to the community greater stability and a higher standard of living;

(6) Ensuring to the consumer lower prices of goods;

(7) Ensuring a higher and steadier remuneration to be equitably and fairly distributed among the various classes of producers,

According to the Bombay Textile Labour Inquiry Committee 1941, rationalisation has three aims:

(a) “Increase in production per man and machine and its relation to wages:

(b) Improvement in the efficiency of workers and in the working conditions;

(c) Financial and Industrial re-organisation.

The objectives of rationalisation may be summed up as follows:

(1) To eliminate waste and inefficiency of every kind;

(2) To bring about an adjustment in aggregate production and the aggregate demand by initiating agreements among various firms in the industry;

(3) To undertake the measures of absorption, amalgamation and reconstruction for the protection of weaker and inefficient units;

(4) To maintain stable and fair prices in the best interest of the manufacturers and the consumers;

(5) To ensure maximum allocation and utilisation of available resources;

(6) To check over-capitalisation and under-capitalisation of financial resources in order to ensure fair return and rational allocation of finances;

(7) To achieve, the goal of self financing or ploughing back of profits in order to minimise the burden of bank loans, debentures and other long terms loans;

(8) To introduce the techniques of cost and management accounting, budgetary control and internal audit etc., in order to ensure proper financial control and management.

(9) To introduce a system of scientific selection, training, promotion and wage payments for workers;

(10) To provide better working conditions like ventilation, lighting, proper working hours, absence of noise, drinking water, canteen, rest-rooms etc.;

(11) To institute various schemes like unemployment or sickness accident insurance, housing facilities etc;

(12) To protect the interests of the consumers by supplying they better quality products to reasonable prices and ensuring their regular and uninterrupted supply.


Scope of Automation

Automation may be applied to almost all the activities” to manufacturing, insurance, banks, wholesale and retail distribution communications, educational institutions and so-forth. The only exception is a firm which is faced with seasonality” where production consists of short runs of varying items or where operators lead the machines and apply a great deal of skill and judgement Add to this factor, the inability of smaller firms to raise money easily and the lack of specialized staff assistance” then automation recedes still further as a goal.

Proliferation of Automation

The field of automation is mushrooming, particularly the advanced countries .In the US for example, the number of robots increased from 100,000 in 1990 to 19,000 in 1995.The US is far behind Japan in this respect. The Japanese manufacturers of automated production systems are much ahead of their US counterparts.

Automated Machines

The mushrooming of industrial automation has brought a myriad of automation machines with diverse features. Particular emphasis needs to be made about machine attachment numerically controlled (NC) machines, robots, automated quality control ,inspections, automated identification systems (AIS) and automated Process controls.

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