Seeing the Bigger Picture? Ramping up Production with the Use of Augmented Reality

Abstract

Problem definition: Firms increasingly use augmented reality (AR) devices to improve their production ramp-up processes. These devices appear useful, yet little is known about their broader impact on worker productivity and behavior. Academic/practical relevance: Efficient production ramp-ups are particularly important when product life cycles are short. An ongoing debate among academics and practitioners pertains to how Industry 4.0, and AR devices in particular, can accelerate the ramp-up. The current study provides empirical evidence related to AR in the production ramp-up context, examines the strengths and weaknesses of AR, and tests four hypotheses, leading to a more nuanced view of AR use in the manufacturing ramp-up. Methodology: A framed field experiment in a manufacturing plant provides a test of how quickly workers can perform new tasks with and without AR support and how the use of AR affects their ability to suggest process improvements. Results: When faced with a new task, workers instructed by AR smart glasses use 43.8% less time to complete the task compared with a control group that relies on paper-based instructions. However, workers that use AR glasses consistently use 23% more time than the control group when both groups repeat the task without either AR or paper-based instructions. Task difficulty moderates this relationship; workers assigned to a more difficult task benefit the most from AR instructions. After the devices are removed, workers instructed based on paper improve their productivity faster through learning than those instructed by AR. In addition, the former group suggests better process improvements than the latter one. Managerial implications: Although these results indicate substantially higher productivity resulting from AR devices, they also support the view that, once instructed through AR devices, workers come to rely on this new technology without fully internalizing the task. This failure to internalize their task then leads workers to suggest less useful process improvements.