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Technological competency assessment

Article  in  International Journal of Services Technology and Management · January 2019

DOI: 10.1504/IJSTM.2019.098206

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138 Int. J. Services Technology and Management, Vol. 25, No. 2, 2019

Technological competency assessment

Ercan Oztemel and Semih Ozel*

Department of Industrial Engineering,
Engineering Faculty,
Marmara University, Turkey
Email: eoztemel@marmara.edu.tr
Email: semih.ozel@marmara.edu.tr
*Corresponding author

Abstract: Technological competency assessment has become one of the most

important issues in small and medium sized enterprises, particularly in
manufacturing industry. The main motivation for assessing the technological
infrastructure of an enterprise as a corporate competency is that it provides a
faster and higher quality presentation of products and services through the
discovery and utilisation of newer technological knowledge. Note that,
assessing the technological competency will bring about various benefits not
only to the enterprises but also to fund providers. In this study, a conceptual
model is proposed for evaluating the technological deficiencies and
highlighting the need for possible improvements. Four core components of
technological capability such as machinery, IT systems, manufacturing support
operations, storage and distribution are considered. The model has a nested
structure and presents an evolutionary approach for assessing the state of the art
and related progress. The details of the model are provided in the paper.

Keywords: technologic assessment; competency assessment; technological

competency; enterprise assessment; small and medium sized enterprises;
SMEs.

Reference to this paper should be made as follows: Oztemel, E. and Ozel, S.

(2019) ‘Technological competency assessment’, Int. J. Services Technology
and Management, Vol. 25, No. 2, pp.138–159.

Biographical notes: Ercan Oztemel is a Professor of Industrial Engineering in

Marmara University. His research includes artificial intelligence, simulation
and modelling, knowledge based systems, strategic planning, quality
engineering, decision support systems etc. Between 1993–2010, he worked for
Turkish Science and Engineering Council doing AI and simulation related
research. Meanwhile, he was a scientific panel member of NATO SAS Panel
and Steering Committee Member of WEAG (Western European Armament
Group) Research Cell for CEPA 11 and CEPA 15. Between 2010–2015, he was
the Deputy President of Turkish Measurement, Selection and Placement Centre
of Turkey. He has various research papers and books.

Semih Ozel is a Dr. Research Assistant in Engineering Faculty in Department

of Industrial Engineering at Marmara University. His research areas include
competency assessment, performance assessment, project management,
sustainability and applications of artificial intelligence especially in assessment
studies.

Copyright © 2019 Inderscience Enterprises Ltd.

 Technological competency assessment 139

1 Introduction

Technology, along with social, economic and cultural aspects, has become one of the
glaring issues with the biggest influence on the change of the societies. It is surely
accepted that technology is rising into prominence in these aspects by always being
influential in system, tool and machine developments. It is well known that the
technological achievements fuelled the agricultural revolution to emerge to the industrial
revolution and from there to knowledge society. That is to say that, with new
technologies and the respective production processes, a transition from agricultural
society to an industrial one was inevitable and mass production was facilitated in
manufacturing industry. Continuing the change process along this line, high technological
advances led the industrial societies to turn into so called knowledge-based societies, the
effects of which are gradually seen today (Vergragt, 2006).
This kind of changes and the respective effect on human life led to various definitions
and commentaries of the concept of ‘technology’ throughout the history (McCarthy and
Wright, 2004; Tschirky, 2003). Bechmann et al. (2007) derives out the following
definition by combining several of those.
The technology is systematic application of knowledge in industrial works or
more generally; the technology is all about the knowledge and skills that can be
used for the effective and productive implementation of an industrial process
that covers the services of research, development, production, marketing, sales
and after sales. (Bechmann et al., 2007)
It is obvious that technology has a vital impact, not just in terms of competitive
advantages of the companies and sectors, but also for the productivity of the companies
and respective countries. Kiper (2004) states that it plays an important role in the level of
the development of countries from the perspective of the impact it creates. This motivates
the studies on assessment of the technological competency of the enterprises especially
the small and medium sized enterprises (SMEs). The state funding organisations are also
interested in finding out if the funds provided to the SMEs will be transformed into
beneficial outputs using the available technological power. It is believed that providing
sustainable technologic capability to an SME leads safer continuation on business.
Technological assessment in this manner can be considered as the main source of
knowledge in distributing the state funds for improving the SME capabilities (Jemale,
2014). On the other hand, the “something that can’t be measured can’t be managed”
perspective has implied the need for the technology to be assessed on a measurable basis
in order to be developed and adopted. Studies on technology management have therefore
become very popular in the last two decades (see for examples, Kropsu-Vehkapera et al.,
2009; Shaker, 1996; Cetindamar et al., 2016; Leyten and Smits, 1996; Gopalakrishnan
and Damanpour, 1997). Keeping this in mind; it is seen that the evaluation of
technological competency is very important in performing the SME assessment, along
with financial, strategical, managerial and intellectual competencies (Shrivastava et al.,
2016).
Although, there is no commonly agreed definition of technological assessment, it can
be described as the state of the art of the technological level employed by a specific
enterprise. The literature provides various definitions including the following. According
to Boer (1999), “technological assessment is like evaluation of a beauty that is framed in
the eye of beholder”. However, there has been growing recognition among enterprises. In
140 E. Oztemel and S. Ozel

the study of Jemale (2014), technology is identified with determinants and effects of a
new technology using social and marketing approach. According to him, main qualitative
criteria of technological assessment are sustainable socio/environmental development,
public safety, early warnings against technological and environmental risks and ethical
applications of technology. Meanwhile, Banta (2009) used the concept of technology
assessment in health organisations and defined it as a form of policy research that
examines future consequences of applications including societal, economic, ethical and
legal.
On the other hand, in some studies the technology assessment is described as an art
more than a science because of some tangible attributes (So Young et al., 2005). Before
making a comprehensive analysis, it is necessary to highlight the importance of the
technological development and assessment. It certainly affects the SMEs directly by the
level of technological infrastructure employed as it highly triggers the competitive
advantage.
As stated earlier, the technological infrastructure is the main element of competency.
This is due to the fact that, with the discovery of knowledge and correct utilisation
through tools and equipment, technology provides faster and higher quality of products
and services (Grunwald and Achternbosch, 2013).
Nowadays, with the competition between companies reaching its highest level, it is
obvious that the technological expertise increases competitive power of business
enterprises. Work in this area no longer focuses on just technology but is also associated
with the innovation, machines suits, etc. (Schot and Rip, 1997). Developments in
technology empowers the innovative products and processes to spring up. The
continuation of a company in the market is considered directly proportional to its ability
to adapt to the technological advancements. The demand for technology assessment is
therefore rapidly increasing (Bechmann et al., 2007). By addressing the enterprise
compatibility for utilising the technology, the companies may find an opportunity to
implement an action plan to prevent or reduce technological gaps.
Similarly, from past to present, the technology, along with social, economic and
cultural factors, has become one of the most influential components in changing of
societies (Ladikas and Decker, 2004).
In this paper, a level-based technology assessment model has been proposed with the
aim of identifying the technological competency level of a certain SME. A nested
six-level and hierarchical structure is proposed in such a way that each level includes the
main characteristics of all the lower levels in the hierarchy. Besides, the competency at
each level is characterised by a set of assessment criteria.

2 The need for the technology assessment

Since technology has multi-dimensional aspects such as machinery, knowledge,

networking and information processing capabilities as well as operational perfectness, the
respective assessment should be carried out considering the effect of each of these in
enterprise operations. To facilitate these, a weighting scheme is proposed. At the
beginning of the study, the main motivation was on how to measure the technological
 Technological competency assessment 141

capability of an enterprise. In traditional thinking, the technological effectiveness of an

SME was generally considered to be managed under the umbrella of R&D capability.
However, as pointed out by Ginevičius et al. (2004), the lack of numerical data or the
question of how to use relevant data was causing difficulties in performing the related
assessments. This was the main reason for performing SME assessments rather than
using financial methods. Nevertheless, financial assessment of an SME does not provide
sufficient information regarding the technological capabilities and potentials. To sustain
these, additional and different methods are required and sought for the comprehensive
assessments as summarised in the literature part of the study. Since the importance of
technological competency in businesses increases every day, it is considered to be one of
the pillars in aforementioned SME assessment in this study. An SME assessment
therefore would not be complete without taking the technological aspects into account.
It seems that the concept of ‘technology’ is evaluated from various perspectives in the
literature. If the technology is accepted as a general concept by itself, it can be said that it
is one of the most important elements for increasing cash and quality of products and
processes (Van Est et. al., 2016). Technology, by this understanding, provides benefit
based upon the respective infrastructure and machinery parks, which can be called as
‘technological baseline’. Note that, for each enterprise, this baseline may be at different
scales, being the poorest technology at the bottom (manual operations) to the most
contemporary technological capability at the top (unmanned machines as described by
industry 4.0). The proposed model in this study therefore tries to identify the respective
technological baseline (level) of a particular enterprise. With more complicated machine
parks, the technology provides the opportunity for faster and cost-efficient production
(processes) as well as better quality and effective products. Hence, by building a
relationship between the owned technology and the most recent technological
achievements available in the market, it may be possible for the enterprises to assess their
own technological baseline and generate future plans and market operations.
Furthermore, this provides valuable information for the state-based SME funding
organisations as they naturally aim for developing better technology competent
enterprises through support programs. They also offer related funds for poor
technology-base enterprises for particularly possible technological improvements.
In this study, technological competency is therefore taken as the main assessment
driver. The model is designed in such a way that it mainly concentrates on ‘machine
utilisation’, ‘information technology (IT) systems infrastructure’, ‘manufacturing support
operation capability’, and ‘storage and delivery capability’. The required characteristics
of these are defined in terms of vehicles, machines, equipment and systems according to
the way the enterprise facilitates them.

3 Literature review on technology assessment and competency

The basic elements of the technology have been described in various ways, but basically
it is described by Wright and Smith (1989) as the integration of people, knowledge, tools
and systems with the objective to improve people’s lives. Rip (2015) defined
technological assessment by referring to early definitions as technological changes
impact policy making for service and manufacturing enterprises.
142 E. Oztemel and S. Ozel

Figure 1 Elements of technology (see online version for colours)

Knowledge

TECHNOLOGY

People Skills Tools and systems

Source: Pretorius and De Wet (2000)

Pretorius and De Wet (2000), on the other hand, took the attention on particular
relationships that exist between six elements as illustrated in Figure 1. He stated that the
skills people need to operate the tools and systems have to be sustained. Also procedures
that contain the knowledge required to operate these tools and systems should be clearly
defined and new knowledge should be generated through training. It was proposed that
the assessment of the technology including these six parameters should be evaluated by
previous manufacturing system experiences.
It is claimed that the impact of a technology on the competitiveness of a
manufacturing organisation can be determined by mapping the changes in these
quantified values over time.
Similarly, the technological competency is defined as “as the ability to develop and
design new product and, process to operate facilities affectively including the ability to
learn” (Prencipe, 1997). Application of the definitions to knowledge in general, the
technological perspective is not only defined for products but can apply equally to
services as well (Gatignon et al., 2016).
Apart from other concerns, the technologic knowledge is considered to be an
important argument in respective assessments. When technologic knowledge is to
alleviate the generation of ‘new knowledge’ then it becomes a good source of
improvement encouraging managers to realise knowledge management as being a core
activity in organisations (Moffett et al., 2004; Egbu and Botterill, 2002).
According to Moffett et al. (2004), the knowledge management is concerned with
comprising a diversity of knowledge sources and evolving knowledge wherever it
resides. In their study, they assumed that technology should be viewed as the key
contributor to an enabler of the field of knowledge management. This perspective is
related to technological-based ability to capture data, information and knowledge that
surpasses human capacity.
 Technological competency assessment 143

As technological developments become more advanced in applications, it emerged

that the employees who have to exploit the respective technology will have the
significant advantage of using market trends. Knowledge, which is constantly renewed
and enhanced, is considered to be the primary source of competitive advantage. Although
the technological arena has received much publicity in recent years, confusion still exists
over its implications for knowledge management (Moffett et al., 2004).
The technological competency is on the other hand can be seen more close to the
management of technology and assessment of technology. The technology management
is defined as the integrated planning, design, optimisation, operation and control of
technological products, processes and services. A better definition would be the
management of the use of technology for human advantage (Kropsu-Vehkapera et al.,
2009). The technology management is also considered to be a group of disciplines that
allows the organisations to manage their technological capabilities in order to create
competitive advantage. Basic elements of technology management are; the technology
strategy, technology forecasting, technology road mapping, technology project portfolio
and technology portfolio. Technology management helps understand the value of certain
technology for the organisation and creates new strategies for the related development.
There are various ongoing studies in the literature in this respect. Related reviews
indicate that the technology assessment is mostly about methodology or process, and the
way the process is managed as the capability on how well a process is designed and
managed affects the credibility and utility of the results which are also key factors in
assessing the technology (Wood, 1997).
Liao (2005), in his review, suggested various methodologies to be implemented in
technology management. They include;
x computer integrated manufacturing
x construction project management
x business process reengineering
x project appraisal
x product design
x space disaster management
x technology assessment
x knowledge management
x information management
x process design
x engineering design.
Cardullo (1998) studied the objective of technology assessment for enterprises. He
claimed that the enterprises technology assessment provides a roadmap for the future
with an endpoint of higher profitability coupled with productivity and quality, based upon
the capitalisation of the infusion of advanced technology. According to this study, the
enterprise technology assessment was carried out on a series of phases to achieve the
144 E. Oztemel and S. Ozel

required objectives of increased profitability and productivity through technology. These

are;

Phase 1 Technological audit

This phase is proposed to focus on serving to review the adequacy and effectiveness of
the technology management system within the enterprise. In this phase, mission, vision
and strategic goals are important viewpoints to assist in developing, or refining, the
enterprises. In the technological audit, a set of multidimensional processes are conducted.
These processes consist of;
x core competencies (CCs) analysis
x environmental analysis
x technological SWOT
x emerging technologies analysis
x development of assessment results
x revised objectives
x recommendations with alternatives
x associated analysis
x assessment recommendations.
Performing technological audit ensures the understanding of enterprises strategical
behaviours through examining the relevant factors listed above. It focuses on two issues
mainly the relevant technological factors and respective current state of enterprises.

Phase 2 Technology plan development

This phase aims to provide a technology plan for the particular enterprise. This plan
serves a clear technology roadmap and a respective strategic plan in accordance with the
results of Phase I and related recommendations.

Phase 3 Technology plan implementation

This phase recommends a formal set of enterprise intentions that allocates resources and
sets priorities based on clearly stated objectives and a perceived environment.
Some of the researches in this area divert the attention towards the technological
readiness and assets capability of the enterprises. The technological readiness at the
enterprise level implies the ability to embrace and use new technological assets
(Parasuraman, 2000). That is the ability of an enterprise to manage the usefulness of the
technology for gaining competitive advantage.
Similarly, Parasuraman (2000) defined technological readiness as “people’s (or in the
context of this study, an enterprise’s technological readiness as it addresses key informant
perceptions of the enterprises) propensity to embrace and use new technologies for
accomplishing goals”. The enterprise must not only be willing, but also be able to cope
 Technological competency assessment 145

with the complexities and challenges of using technology. Note that, conceptualisation of
technological readiness included four dimensions such as;
x optimism
x innovativeness
x discomfort
x insecurity.
Definitions were provided by Parasuraman (2000) for each of these four dimensions.
Within this context, optimism is a positive view of technology and a belief that it offers
people increased control, flexibility, and efficiency. Innovativeness is a tendency to be a
technology pioneer and thought leader. Discomfort is a perceived lack of control over
technology and a feeling of being overwhelmed by it. Insecurity is distrust of technology
and skepticism about its ability to work properly.
Oztemel and Polat (2006) also provided a study related to a new technology
management model using technology readiness approach. They aimed at assessing
enterprises readiness with three aspects in terms of operational, tactical and strategic
developments regarding the technology. They proposed a scaling system based on
weights.
Jun et al. (2013) analysed the effects of SME support programs in Korea in order to
understand how they build their long-term technological roadmaps. They contributed to
strengthening the capabilities of human resources, establishing mid-to-long term R&D
strategies, developing technology, enhancing the success rate of commercialisation, and
identifying technology development projects. Note that these are the main benefits
expected by most of the support programs. They also used structural equation model to
analyse regarding program outputs for improving the long-term technology plans. They
aimed to improve SME technological capacity analysing long-term roadmaps in the
future.
In assessing the technology, another aspect that needs to be considered is the
technology adoption. Studies focusing on technology adoption make contributions by
explaining why an enterprise selects a specific type of technology (Suarez, 2005).
However, insights into the technological readiness potentially offer greater explanatory
power as it may help predict the benefits to be gained from implementing technology.
In addition to the above studies, some other approaches and models are also
introduced in the literature developed for assessing the performance of the enterprises not
only on technological competency but also others like financial, strategic, intellectual,
R&D and innovation competencies. Among these models are European Foundation for
Quality Management Business Excellence Model (EFQM) and balanced scorecard (BSC)
(Wongrassamee et al., 2003; Kaplan and Norton, 2000; Camison, 1996; Hemsworth,
2016; Westlund, 2001). Note that these models perform the assessment in terms of
utilising the technological capabilities for assuring the organisational objectives.
Similarly, technology acceptance model (TAM) is introduced in order to utilise
information systems theory on how users accept and use a new technologies according to
a number of factors that have an effect on their decision. It mainly comprises of two
aspects such as perceived utilities and the perceived ease of application in order to
determine attitudes for adopting new technologies (Legris et al., 2003; Davis and
Venkatesh, 1996). Although, TAM is known as a technological assessment model, it
146 E. Oztemel and S. Ozel

mainly focuses on its acceptance rather than proving a direct feedback on the state of the
technological background of the enterprise with respect to the state of the art.
Similarly, Ahmad and Qui (2006) have determined a model that can efficiently
evaluate the institutional analysis of small and medium manufacturing enterprises. In
their model, both analytic hierarchy process (AHP) and data envelopment analysis (DEA)
are used in order to measure enterprise manufacturing performance. Also Lin and Tong
(2010) constituted a two-step credit rating model using Cox model and support vector
machine (SVM).
The literature also provides several methods for SME evaluation in many different
ways. Mainly, operational performance of the enterprises is taken as the baseline criteria
and methods are chosen accordingly. The assessment criteria are defined according to the
field, structural properties, and respective specialisation. Some of those performance
assessment methods and approaches include BSC, AHP, Fuzzy AHP, DEA, SEM, etc.
(see for example Sohn et al., 2007; Moon and Sohn, 2005; Huang and Li, 2009; Hanif
and Manarvi, 2009).
The literature study indicates that technology assessment studies only provides
advises or recommends and some future plans. Technological assessment tools or models
for enterprises considering their physical environment do not seem to be elaborated.
Performing the assessment and scoring system, the machines structure, information
systems and manufacturing support systems seems to be under estimated. It is seen that
the studies mostly focused on defining strategies and issues more related to the
management of technology. After all, there is still a need for evaluating and comparing
the technological capability of a certain enterprise with the state of the art technological
competencies. Creating a technological competency assessment model, which will
consider the above issues is therefore very beneficial and justified.

4 Proposed model for the assessment of technological competency

In this study, technological competency assessment is mainly based on evaluation of the

technological infrastructure retained by the enterprise assessed. The core infrastructure is
made up of a machining system that is directly or indirectly affecting every area of
manufacturing systems and adding value to the business. The proposed model is based on
a set of components so called ‘CCs’ where each of them constitutes to overall
technological competency. Note that the literature review summarised above indicates the
importance of the following components as the baseline for technology assessment (see
Figure 2).
CC1 machinery suit
CC2 IT systems
CC3 manufacturing support operations
CC4 storage and delivery.
 Technological competency assessment 147

Figure 2 Components of technological CC (see online version for colours)

Machinery suit
(CC1)

IT systems Technology Manufacturing

infrastructure competency support
(TC) structure operation (CC3)
(CC2)

Storage and
delivery (CC4)

Each of these are briefly explained below.

4.1 Machinery suit (infrastructure)

The first core technological competency employed by the model is the capability of the
enterprise to utilise the contemporary ‘machinery suit’ for its operations. The aim of
assessing this is to evaluate the technical status of the machines or equipment used in
services or manufacturing sites in the enterprise under assessment. Note that only the
types of machinery (equipment) in the contemporary standards have been taken as the
basis of the assessment.
For performing the assessment, every type of machine and equipment such as cutting
machines, press moulders, milling machines, etc. and respective operations carried out by
these machines are to be taken into account. The respective capability is defined based on
the evidences from the actual machinery compared to contemporary machinery-base.

4.2 IT systems
Without a proper IT infrastructure, enterprises cannot be considered as technologically
competent. Manufacturing systems have to facilitate the computer hardware and software
devices in parallel to machinery to some extent. Apart from standard programs that allow
computers to operate, some enterprise specific software is also employed. Through using
the programs with such certain capabilities, the enterprises reduce their costs, improve the
quality of the products or services, complete the production much faster, and employ less
number of staff. Therefore, IT systems are considered to be one of the core technical
competencies that directly influence the enterprise as a whole. Programming devices and
respective software employed for machine and system control, monitoring, data
collection, data handling, preservation, and reporting, as well as industry specific support
programs has to be assessed in this respect.
148 E. Oztemel and S. Ozel

4.3 Manufacturing support operations

Another type of core component that has to be evaluated under the umbrella of
technological competency is the ‘manufacturing support operations’. Enterprises should
be able to employ contemporarily available support technologies wherever applicable.
Some of these are listed below.
a radio frequency identification applications
b optical laser identification applications
c geographical information sharing tools and system applications
d physical and environmental security system applications:
x human and material detectors, X-ray machines
x fingerprint readers
x retina scanners
x cameras with various features
x alarm systems
x heat, light, gas, noise, etc. detectors.
e manufacturing support system applications
x product perception, specification and counting sensors
x mechanical default sensors
f quality control system applications
g communication transceiver applications.

4.4 Storage and delivery

Storage and delivery technologies are considered to be the fourth pillar of the
technological competency assessment. The main reason for this is that there is a huge
potential and technological opportunities to provide benefit to the enterprises in terms of
storing and distributing the products in any way. Whoever makes use of the technologies
such as automate guided vehicles (AGV), technologically enriched storing shelves,
specifically designed carrying platforms, transfer vehicles equipped with product specific
features and, etc., will be more effective in satisfying the customer needs such as
locating, addressing and delivering the products on time with good quality and quantity.
The competency along this line is considered to constitute the technological efficiency
and effectiveness of the enterprise.

5 Assessment procedure

Each core component is characterised by a set of nested levels where each level indicates
a certain possible state of technological capability in terms of the respective CC. The
assessment is carried out by evaluating and matching the existing technological
capabilities of the enterprise against the descriptions of these predefined levels. The
 Technological competency assessment 149

reason for creating a nested structure is that every level naturally encapsulates the
characteristics of previous levels. Note that, six levels are considered to be enough for
each component in order to represent the technological progress from the lowest level
indicating the least capability to the highest level for most advanced state of competency.
Figure 3 indicates core components with six-related levels.

Figure 3 Technology CC levels (see online version for colours)

Note that each CC has characterised by six different level indicating the technological
progress from the past up to now. The first level indicates very primitive level of
technology utilisation whereas level six illustrates up to date technological competency.
The reason for having six different levels is due to the fact that the technological progress
has shown six breakthroughs. Manual systems, semi-manual systems (first industrial
revolution), machining (second industrial revolution), automation (third industrial
revolution), autonom systems (pre industry 4.0), and intelligent unmanned systems
(industry 4.0)
Based on this levered approach, a set of assessment factors (AF) is defined for each
CCs. These are mainly based on the implementation of certain operations requiring the
technological capabilities at that certain level.
Each operation or the AF is evaluated in terms of retaining a certain state
corresponding to the one of the predefined six levels. The status of the enterprise with
respect to this evaluation is defined as the retained level. Note that this indicates the
existing competency level of the enterprise under assessment for a specific CC. It is
identified by a series of observations at the facilities, data check sheets, company
business records, etc. A specific set of evidence (physical devices, machine parts,
150 E. Oztemel and S. Ozel

sensors, customer orders, payment bills, capacity reports, production set up, machine
maintenance records, etc. is sought. The judgement of assessors and operator agreements
are also taken into account.

5.1 Proposed scoring procedure

For each component, the level of competency is calculated as described below.
a The respective core component is characterised by a set of nested levels where each
level indicates a certain possible state of technological capability of the respective
CC. The assessment is carried out by evaluating and matching the existing
technological capabilities of the enterprise against these predefined levels. The
reason for creating a nested structure is that every level naturally encapsulates the
characteristics of previous levels. For each component six levels are considered to be
enough to represent the technological progress from the lowest level indicating the
least capability to the highest level for most advanced state of competency.
b Similarly, a set of AF is defined for each CC. These are mainly based on the
implementation of certain operations requiring the technological basis. Each
operation or AF is evaluated in terms of retaining a certain state corresponding to
one of the predefined six levels. The status of the enterprise with respect to this
evaluation is defined as the retained level.
c A certain score (Ri) is assigned to each level to be between 10 and 100 points where
the first level receives 10 points. Similarly, 20, 40, 60, 80 and 100 points are
assigned to subsequent layers respectively. Note that 100 points indicates the highest
degree of CC
d Each of the core components are weighted (wi) in accordance with their
technological importance. Note that the weight scheme can be set up specific to the
enterprise based on the assessment objectives. This increases the assessment power
and provides the required flexibility to the model.
e The weights are defined by expert view for the case study. However, the model does
not enforce any weight values for any type of industries. The funding organisation
may define those weight by the importance of respective assessment components, or
by the objective of the fund raising. They may also be defined by carrying out a
group factor analysis. Similarly, a Delphi Study could also be carried out to identify
the best set of weights.
f Average competency score for every level i (Li) is calculated by multiplying the
number of operations retained in that level by predefined standard level score in the
following manner that is;
n
Li ¦ j R
j 1
i

where i = 1,2,….6
j = 1 if retained, 0 otherwise
 Technological competency assessment 151

core competency (CC1) is then calculated as the following:

CCi ¦L i n

g Multiplying level scores with the respective weight values defines the technological
competency. That is:

TC ¦ w CC
i i 0 d wi d 1.

Defining TC in this way indicates the enterprise has one of the following technological
competency state.
x 00.00 ≤ TC ≤ 9.99 → very poor
x 10 ≤ TC ≤ 19.99 → poor
x 20 ≤ TC ≤ 39.99 → insubstantial
x 40 ≤ TC ≤ 59.99 → just enough
x 60 ≤ TC ≤ 79.99 → good/perfect
x 80 ≤ TC ≤ 100.00 → excellent.
In order to facilitate the assessment process two tools are proposed as described in the
case study below. These are the score matching card and standard level description table.
The score matching card is constructed in a tabular format. CCs characterised by each
level are indicated in the columns whereas the AF (related business operations) are
provided in the rows. An example card for the CC ‘machinery suit’ is provided in
Table 1. Note that the card indicates both retained levels and predefined level scores.
Table 1 An example score-matching card for machine suit competency

1. Level 2. Level 3. Level 4. Level 5. Level 6. Level

Level → Manual Semi- Machining Automated Autonom Intelligent
↓ systems manual systems systems systems unmanned
(10 points) systems (40 points) (60 points) (80 points) syst. (100
Operation (20 points) points)
AF1 Retained - - - - -
Cutting machine level (R1)
AF2 - - Retained - - -
Drilling machine level (R3)
AF3 - Retained - - -
Press moulding level (R2)
… - - Retained - - -
level (R3)
AFn - - - - Retained -
Milling machine level (R5)
Level score L1 = R1 L2 = R2 L3 = 2*R3 L4 = 0 L5 = R5 L6 = 0
J=1 J=1 J=2 J=0 J=0 J=0
Core competency
(CC1)
CCi ¦Li n
152 E. Oztemel and S. Ozel

Table 2 is designed in order to identify the technological level possessed by a certain

company for respective capabilities. Note that this Table is generated in such a way that
any level has its main characteristics and is supposed to encapsulate all characteristics of
the lower levels.
Table 2 Level descriptions of the capabilities related to machine suit

Technological
Explanation
level
Level 6 At the highest competency level, human has very little even no influence in
Intelligent machining operations. This covers systems that use intelligent and autonomous
unmanned robots and very advanced technologies such as nano-technology. The machine
systems teams are dominant in manufacturing operations and decision making. The
success of the system relies upon unmanned vehicles and their interactions
(cooperation and coordination)
Level 5 At this level, a high proportion of machining operations are carried out by
Autonom automated and intelligent machines such as robots. The machines are also able
systems to make some operational decision by themselves. The success of the system is
quite related to the capabilities of the machines to satisfy operational
requirement
Level 4 At this level of technological baseline, the operations are carried out
Automated automatically by machines with limited human intervention. The system
systems totally relies upon the automation capability of the machines.
Level 3 At this level of competency, the major operations in an enterprise are carried
Machining out by machines with the support of operators. Machines have an important
systems place in workshops and some machines related systems such as CAD/CAM
are employed. Although the operators still take part performing the machine
operations, the system mainly relies on machines.
Level 2 In this level, manual operations and machining are employed together to carry
Semi-manual out the respective operations. Although some machining operations took place
systems in the shop floor, the system relies both on machines and man power.
Level 1 This level shows the lowest level of technological capability in terms of
Manual machine and equipment parks. Most of the operations in the enterprise are
systems carried out manually. Even if some basic tools are used, the system still relies
on manual operations.

In Table 2, every level has a general scope. The reason for that is to give enough
flexibility to cover a wide range of SMEs to be technologically assessed. This also makes
it easy to update the table upon technological progress. Once the level descriptions are
updated in accordance with the technological developments, this may allow new
inventions and innovations to be taken into account as well taking the old fashioned
applications out of the assessment process. With this system, there will be hardly any
enterprise in the first level which appears as a handicap in the model, similarly a few that
fit into Level 6. However, instead of the model becoming out of date in the future, a
flexible structure is proposed so that it has a high potential to be used and updated in
accordance with technological progress. In time, the first few levels will disappear and
the new technological breakthrough will have to be embedded into the model. So all
levels will be taken down one level below to open a space for the new level definition (if
any). Achievements alongside with industry 4.0 is a good example for this. The model is
currently embedding pre industry 4.0 implementations and some main capabilities of
 Technological competency assessment 153

unmanned systems. However, it may be enriched by introducing new capability checks in

the near future when those are applicable.

6 Case study

Implementation of the model proposed in this study is illustrated by performing an

assessment of an enterprise operating in metal industry. The enterprise called KAYALAR
ARMATÜR SANAYİ, one of the main companies in KAS GROUP, is considered for the
implementation of the model. KAYALAR ARMATUR is a medium-sized valve
manufacturer and has a wide range business market both in Turkey and abroad. KAS
Group has a range of product produced mainly radiator valves and brass fittings for
fixtures. The KAS Manufacturing unit is located across a 12,000 square meter area in
Sancaktepe in Istanbul, with two separate facilities for two main product families,
fixtures and flex. As there has been a marked improvement in the flex production facility
since the appointment of a new general manager, the capability to handle change in the
flex facility has been selected for the implementation of the proposed model in this study.
In order to assess technological competency of the company, a checklist of data
required for the assessment is created and the relevant information is collected from the
company through observations, interviews and document checks as well as automatic
collection from IT system of the company. In order to ensure the reliability of the
collected data, a face to face meetings with authorised managers are conducted for the
validation. Furthermore, employees operating machinery were also interviewed whilst
walking around the manufacturing areas of the factory.
The technological status of the enterprise has been assessed in accordance with the
required capabilities of the proposed technological competency model and respective
score-matching card. Once the company competency levels are identified, the results
from the scorecard are multiplied by the technological CC weights previously determined
(see below).
CC1 Machinery suit.
Machine suit (infrastructure) weight: w1: 0.5.
CC2 IT systems.
IT systems weight: w2: 0.2.
CC3 Manufacturing support operations.
Manufacturing support operations weight: w3: 0.1.
CC4 Storage and delivery.
Storage and delivery weight: w4: 0.2.
Note that, the weights for Machine Infrastructure are higher than the others as the
management and metal industry give more importance to the machine suits. The first CC
of technological competency which is the Machine Infrastructure is shown in Table 3.
There are nine machines used directly in the production line that affect the machine
infrastructure, and the characteristics of each machine have been marked to different
levels accordingly. The total score from the nine machines (6 * 20 + 3 * 60) is 300. When
divided by the number of machines (9 machines), the machine infrastructure score comes
154 E. Oztemel and S. Ozel

out as 33.3. This indicates that the company is at the third level of the competency scale.
By multiplying the score of machine infrastructure by the previously determined
respective weight values, an overall technological competency score (TC) is calculated as
it is shown in Table 3. CC1 ¦
Li n 300 / 9 33.3.

Table 3 KAS machine infrastructure matching score card

Level 1. Level 2. Level 3. Level 4. Level 5. Level 6. Level

Manual Semi- Machining Automated Autonom Intelligent
Level expression systems manual systems systems systems unmanned
systems systems
Level grades 0p 20 p 40 p 60 p 80 p 100 p
Operations
Cutting machine 9
Drilling machine 9
Press moulding 9
Pres moulding 2 9
Milling machine 9
CNC milling 9
machine
Revolver 9
Grinding machine 9
Welding machine 9
Level score L1 = R1 L2 = 6 * R2 L3 = R3 L4 = 3 * R4 L5 = R5 L6 = 0
J=0 J=6 J=0 J=3 J=0 J=0
Core competency
(CC1)
CC1 ¦L i n 300 / 9 33.3

Note: 9: retained.
Scores for the remaining areas of technological competency, IT systems infrastructure,
manufacturing support operation infrastructure, and storage and distribution
infrastructure are defined in the same manner as it is defined in the tables and found
scores of each are given below.
x IT systems infrastructure

CC2 ¦L i n 180 6 30

x manufacturing support operations

CC3 ¦L i n 280 8 35

x storage and delivery

CC3 ¦L i n 140 5 28.

 Technological competency assessment 155

The technological assessment for the example enterprise is found by multiplying each
weight and adding the scores of the infrastructures that make up the technological
competency.
Technological competency score;

TC ¦ w CC
i i

TC 0.5 33.3  0.2 30  0.1 35  0.2 28

TC 31.75 (3th Level)

According to the score obtained above, the technological competency of the company is
found to be at the third level as indicates the enterprise technological competency has
stated
20 d TC d 39.99 o Insubstantial.

7 Conclusions

Technological competency has become the most important factor for stabilising the
development of enterprises, particularly those in manufacturing sector. There is no doubt
that the technological expertise increases an enterprise’s competitive advantage.
However, the studies about this subject are no longer limited to technology but also
branch into R&D, creativity and innovation as well as those along that direction.
Moreover, financial, and strategical competencies are also worth taking into account.
However basically, the developments in technology are at the forefront of bringing
forward innovative products or processes as well as making progress in line with the
changes.
The main reason for choosing technology as an area of competency is that it has
being given the shape to the history of mankind for centuries and in particular during the
industrial revolution. The discovery of knowledge and correct use of that is mainly
known as the technology allows for the better quality and faster production of products
and services. The importance given to technology management in enterprises today and
the concentration of the studies in this area shows that it has reached a state where it is
impossible to perform enterprise assessment without taking the technological capability
into account.
Above all the discussion provided in the paper, the scientific contribution of the paper
is to provide a comprehensive assessment model focused on technological competency.
Human and organisational performance as well as their effects on technological
model are intentionally left out of the scope of the model in order first to ensure the
infrastructure and set up of machine suits to fit the required level of capability. However,
the future work will include the operational aspect of the compatibility model taken
especially human and organisational performance into account.
Similarly, the assessment model intends to identify the level of technology the
enterprises possess. However, there is always a possibility of risk associated by the
introduction of new technology. This may lead to reducing the risk in some way (such as
eliminating misuse of knowledge by increasing network security), but increasing the risk
in another way (such as not being able to sustain the new instalment causing investment
failure). These need clarifications in the following studies.
156 E. Oztemel and S. Ozel

As the technological competency covers a wide scope, in the manufacturing sector it

has been evaluated in the four areas mainly stated as machine infrastructure, IT systems
infrastructure, manufacturing support operation infrastructure, and storage and
distribution infrastructure.
The model can be adaptive to new applications through adding new devices and
systems in parallel to technological developments to this list. In this manner the model
structure can be updated over time and prevented from falling behind the technology.
The evaluation and analysis of previous studies on the assessment of enterprises is an
important step for the proposed model. While reading the studies under this scope, it was
realised that the enterprises were assessed in certain directions using a number of
methods and criteria as provided above. As stated, previous assessment studies tend to
focus more on measuring financial performance of the enterprises. These studies were
designed to analyse enterprises’ economic performance by using past financial data
which were easy to collect and quantify. Particularly for granting credit to the enterprises,
economic strength is tested by looking at the enterprise’s balance sheet. However, as it is
explained above, the desired results of an assessment will not always be obtained by only
considering financial data. That is why, it is highlighted by some researchers that it is
necessary to measure other non-financial assets valuable for the development and
sustainability of an enterprise (Wongrassamee et al., 2003; Kaplan and Norton, 2000).
Many researchers have carried out studies on this and have highlighted the need to
evaluate and bring aspects such as information management, strategic management,
human resources and customer satisfaction to a state where they can be measured (see for
example Sohn et al., 2007; Moon and Sohn, 2005; Huang and Li, 2009; Hanif and
Manarvi, 2009)
For each competency area, a six level table has been created for the measurement of
the competency, and the scoring has been provided on a scorecard with core criteria for
that area. The resulting scores also identify the level of the enterprise under assessment.
By using sector and competency-based weightings, the competencies are graded and the
enterprise is given a general score from the total of the competency points. An
assessment was carried out on an example enterprise using the model and some limited
data. It is possible to adapt the model, which has a flexible and customisable structure to
the strategies of the company using it.
The study will continue to measure the effect of new technological progress on the
model as well as associate risk avoidance capabilities.

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