At DEVELOP LLC, we’ve taken in depth looks at topics like the difference between a Cobot and Robot, why a single source integrator is the best choice for an automation partner, and how you should (and shouldn’t) calculate your ROI. Today we want to take a bird’s eye view of all the ways that Automation improves your business. Here are the top seven ways automation improves efficiency and reduces costs.
1.
Solves the Labor Shortage
Manufacturers are drowning in a labor crisis with no end in sight. Flimsy strawman arguments, thought leader driven articles, and social media posts wringing hands about ‘what it will mean if the machines take away jobs’ have completely missed that manufacturers cannot find workers for their manufacturing lines.
- Americans are filing 10,000 new social security claims each day. As the older generation retires, premium skills are permanently lost.
- As many as 2.1 million manufacturing jobs are predicted to go unfulfilled by 2030. It is a trillion dollar problem manufacturers cannot solve without automation.
- The average time to fill a manufacturing job has ballooned to 42 days, with some reporting as long as two months.
There are a variety of costs and inefficiencies that manufacturers absorb due to understaffing.
- Overtime- If you have less employees than you need to get your work done in an eight hour shift, your only choice is to pay your workforce overtime. Your management must divide effort they should be spending on the performance of the business to gather volunteers willing to fill these extra hours.
- Turnover- Roughly 44% of employee turnovers happen in the first six months. The average cost to the employer to vet, hire, and train costs an estimated 20% of that employees yearly salary. If you have a repetitive, ergonomically challenging, hazardous, high turnover position on your floor, you throw that money in the trash.
- Efficiency Costs- When you operate below the recommended staff level for a task, you increase the risk of requiring rework. Supervising staff that should be focused 100% on their tasks have to cut their productivity to train new hires. Constant crisis management trains your team for complacency in a crisis.
Find those high turnover tasks, those difficult to hire for tasks, and those headaches, and put a custom automated machine on that task. You are not replacing your workers. You are not displacing your workers. You are supporting your workforce. Your workforce will thank you.
Read More: Why Overcoming the Labor Crisis Requires Robots
2.
Reduces Labor Costs
Labor is expensive. Labor is the number one cost for every business when they audit inefficient processes. An efficiently applied workforce supports your growth, manages your creative tasks, and charts a course to financial impregnability. A misapplied workforce bleeds your company revenue, stagnates your growth, and misdirects energy that should be applied to new product development. These are the things you pay for when you have labor on a production task that would be better suited to an automated solution:
- Salary- Turnkey automation does not need a salary. Turnkey automation does not get paid overtime. Salary typically represents the lions share of the ROI savings on an automation project.
- Benefits- Turnkey automation does not need health insurance. Turnkey automation does not need sick days. Turnkey automation does not need paid time off (PTO). Turnkey automation does not have seniority.Turnkey automation does not have contracts that stipulate raises. You do not pay into unemployment insurance for a machine. Turnkey automation does not need workman’s comp. Turnkey automation can operate 24 hours a day without incentives.
- Training- A turnkey machine does not need a supervisor. A turnkey machine does not need reskilling, upskilling, or education incentives. Turnkey automation does not have a career path. Turnkey automation is not going to give you an ultimatum about needing a different role. Turnkey automation does exactly what it is programmed to do at exactly the same speed, same consistency, and same quality.
- Facilities- Turnkey automation does not need a parking space. Turnkey automation does not need bathrooms. Turnkey automation does not need a breakroom. Turnkey automation does not need PPE, an emergency shower, or an AED. All a machine needs is a work envelope.
A custom automated machine sidesteps these costs and puts those dollars back on your bottom line.
3.
Consistency and Quality
Repeatability, making sure every time a product comes off your manufacturing line it looks and operates exactly the same, comes with the basic qualities of an automated machine. Especially when dealing with fatiguing and repetitive work, an automated machine improves your business with production consistency in the following ways:
- Rework Mitigation- Defects, production mishaps, and inconsistent output requires you to pay for returns, replacements, and rework on your products. The International Journal of Engineering Research and Applications found that human error accounted for 80% of the defects in manufacturing products. If you have a solution that can eliminate 80% of your rework costs, you cannot afford not to pursue it.
- Customer Satisfaction- In a crowded manufacturing market, 91% of Americans consider reputation, positive feedback, and a track record of dependability when they choose who they purchase services and products from. Inconsistent output, poor quality, and constant returns drive away customers and strangles your source of revenue. Machine precision, automated output, and machine speeds guarantee you keep promises to your customers in ways that a manual process cannot.
- Efficient Production- Turnkey automation maintains the same production speed, the same quality, and the same consistency over multiple shifts. Turnkey automation does not get tired. Turnkey automation does not break for lunch. The machine does not get distracted an hour before the end of day.
- Downtime Control- With an automated system, you are given a schedule for maintenance, a list of operating standards, and instructions for operation of your machine. Any downtime or reduced production levels are dwarfed by the continuous operation of your machine. A machine will never quit on you, a machine is immune to the influence of global events, and a machine limits itself only by how much you need to run it.
A custom automated machine gives you back control over your production even as it scales higher.
4.
Safety
Workplace injuries are not just devastating to the morale of the team.
- At an average cost of $39,000 per injury, the manufacturing industry lost more than $15 billion in 2017 in direct and indirect costs due to workplace injuries.
- Missing time for an injured worker can be as long as 5-15 days, with some never coming back from their injury. That is time your manufacturing works understaffed, overworked, and under efficient.
- Workplace injuries happen to the old and the young. Workplace injuries strike whether you have the time to pivot your production or whether your warehouse team is at capacity for orders.
- As a business grows, it is always assumed the business assumes responsibility for the costs, training, equipment, and internal effort related to safety.
A custom automated robotic solution comes with safety improvements built into the integration.
- Injury Exposure- The top five most common workplace injuries are eliminated when a machine takes over an inefficient process. It instantly eliminates worker exposure to 72% of workplace injuries.
- Safety Technology- Each machine and robotic solution integrates sensors, barriers, alarms, estops, awareness items, and equipment designed to protect your workers.
- Formal Training- Each custom integration comes with education, training, and formal instruction on how to operate the equipment safely and efficiently.
- Regulations- Certifications, inspections, and product quality can be maintained and achieved much more easily with the consistency and quality of a machine.
Automating your production means automating your own safety.
Read More: Innovation in Robotics and Safety
5.
Growth
The best recipe for growth requires more revenue, higher productivity, improved consistency, better quality, employee satisfaction, employee retention, and faster productivity. Growth leverages the unique marketability of your products against your capacity to scale. Partnering with a machine builder is the only strategy that nets you every ingredient in the recipe for growth at once.
- Machine speed- There is no mundane task on an assembly line a machine or robotic solution cannot do faster than a manual line.
- Machine consistency- Turnkey automation follows a program with specific singulation, orientation, and dimensional consistency. They maintain accuracy at high speeds better than any manual line.
- Scalability- A modular machine solution does not need to start with end to end automation. You can target the easy ROI processes first, then extend that machine with machine tending, pick and place, packaging and palletizing, secondary automation, and other robotic systems that augment your existing automated systems.
6.
Hard Assets
While your tacit knowledge, leadership skills, and team proficiency all have value to your business, automated machinery brings intrinsic monetary value to your business.
- Capital Investment- Your turnkey automated machine becomes a part of the asset valuation of your business. While the increased manufacturing capability boosts your ability to pursue new sales and opportunities, your automated machine improves the financial profile of your business like property, vehicles, or equipment.
- Resale Value- A tangible hard asset like a turnkey machine can be sold when it is no longer useful to the business. Even with depreciation, you can generate funds to support your growth, pay for larger machines, or support your business in a crisis.
- Investment Leverage- Banks, lenders, and financial institutions prefer hard assets when calculating the risks on the type of loans you need to make necessary capital investments for your growth. Investment companies prefer to hedge their lending portfolios with hard assets like your turnkey machine.
- Tax Deductible- Since your automated machine is a hard asset, you can claim an annual tax deduction on the depreciation value of the machine.While your turnkey automation goes to work on your production, it also goes to work on your balance sheet.
7.
Opportunity or Imperative?
Turnkey automation, lights out automation, and hands off robotics used to be an option out of reach of small manufacturers. Now automation is not just affordable, it may be the only way survive.
- Self Sufficient Technology- Agility, flexibility, and stability are at the forefront of manufacturer strategy. As global instability threatens labor, market forces, and trends worldwide, manufacturers are embracing the steadfast reliability of a turnkey machine.
- No Going Back- Since 2001, big and small corn farms increased automatic technology use from 5.3% to a staggering 58% by 2016. Across every industry, similar levels of automation continue trending up to a level of saturation that cannot be undone or competed against by manual manufacturing operations.
- Dropping Cost of Robots- Between 2015-2025, robot costs have dropped 65% while demand for robots continues to increase. These downward trending costs level the playing field on return on investment for even the smallest manufacturers.
The Foregone Conclusion
What you have learned today about profitable automated systems and efficient robotic solutions is practiced every day by the most lucrative leaders in the manufacturing industry today. The future of interoperable robotics, lights out unattended machines, and automated manufacturing lines is in reach of even small business just starting their automated manufacturing journey.
Tell us more about your project, schedule a virtual meeting, or call (262)-622-6104 to discover how we can put value, productivity, and control into your growth with a robotic or automated system.
You will look back on this moment and see where everything changed for the better.
About the Authors:
Matt Moseman leads as President of DEVELOP, with a strong foundation from the Milwaukee School of Engineering, where he earned both a Bachelor’s and a Master’s in New Product Management. Moseman’s career highlights include his pivotal role in founding NodeUDesign, innovating in automation hardware, and driving DEVELOP LLC to the forefront of industrial robotics with a focus on enhancing productivity and efficiency.
Sean McKittrick, as Project Program Coordinator at DEVELOP LLC, brings a multifaceted background from Knox College. McKittrick’s first year at DEVELOP LLC has been marked by significant team growth and zero turnover, showcasing his ability to build a collaborative and effective work environment. His experience spans quality management in healthcare software to managing production for a million pounds of material monthly, highlighting his diverse expertise in project coordination and manufacturing excellence.