Labor shortages in the manufacturing sector are projected to leave 2.1 million jobs unfilled by 2030, while rising costs and fierce competition are squeezing profit margins. In this challenging environment, automation is becoming a lifeline for manufacturers seeking to not only survive but thrive.
This no-nonsense guide is your roadmap to understanding and implementing partially automated factories and full ‘lights out’ manufacturing, with a laser focus on ROI. We’ll explore how these strategies can address the labor shortage in manufacturing, reduce costs, boost productivity, and ultimately transform your bottom line.
Whether you’re considering a fully lights out factory or looking to automate specific processes, this guide will equip you with the knowledge and insights to make informed decisions that drive your business forward.
What is an Automated Factory?
An automated factory is a manufacturing facility where machines, robots, and computer systems handle tasks with minimal human intervention. The ultimate vision of this concept is the fully automated lights-out factory, a facility capable of operating 24/7 with virtually no human presence.
This level of automation relies on advanced technologies like robotics, artificial intelligence (AI), and the Internet of Things (IoT) to control every aspect of production, from raw materials to finished goods. While full automation remains a goal for many, most factories today utilize varying degrees of automation, integrating machines and human workers to optimize their operations.
While the idea of a fully automated lights off factory may seem futuristic, the reality is closer than you might think. An excellent example comes from a Chinese factory where the implementation of extensive automation led to remarkable results. By replacing 90% of its human workforce with machines, the factory achieved an incredible 250% increase in productivity and an 80% reduction in defects.
Previously requiring 650 workers, the factory now operates with only 60 employees overseeing the 60 robot arms that work tirelessly across 10 production lines. This serves as a powerful reminder that lights-out manufacturing isn’t just a theoretical concept, it’s a tangible reality with significant benefits for businesses willing to embrace it.
Defining “Lights Out” Manufacturing From Dark Factories to Extended Shifts
The term “lights out manufacturing” refers to a factory operating with minimal to no human presence, often dubbed a “dark factory.” While the vision of a completely autonomous factory is appealing, the reality is that full “lights out” operation is currently most feasible for large-scale, high-volume producers.
For most manufacturers, a more attainable and impactful goal is to extend their workday through lights out automation. This means automating specific processes to run autonomously after the day shift ends, maximizing production capacity without increasing labor costs.
This approach allows for a gradual transition towards greater automation, offering a stepping stone for companies that may not be ready for a full lights out factory. By strategically implementing lights out automation in phases, manufacturers can reap the benefits of increased productivity and reduced labor costs while maintaining flexibility and control over their operations.
Levels of Automation
Automation in manufacturing isn’t an all-or-nothing proposition. There are varying degrees, ranging from basic automation of individual tasks to full automation of entire production lines.
- Partial Automation: This involves automating specific tasks within a larger process. For example, a factory might use robots for end-of-line processing such as packaging and palletizing, or for material handling in secondary processing stages, while humans still handle assembly and quality control. This targeted approach is ideal for tasks that are repetitive, dangerous, or require high precision.
- Full Automation: In a fully automated factory every step of the manufacturing process—from initial material handling to final post-processing—is handled by machines and computers. This requires sophisticated technology and meticulous planning but can yield significant improvements in efficiency and productivity. However, it’s worth noting that, according to McKinsey, an estimated 57% of manufacturing tasks could be automated with currently available technology, suggesting a hybrid approach might be optimal for many businesses.
Key Technologies Driving Automation
A few key technologies are driving the rapid advancement of automation in manufacturing. Let’s explore the most impactful technologies for manufacturers.
Robotics: The Backbone of Factory Automation
Robotics plays a pivotal role in factory automation, with industrial robots and collaborative robots (cobots) at the forefront. Industrial robots are designed for heavy-duty tasks, such as material handling and assembly, while cobots are built to work safely alongside humans, enhancing their capabilities and improving safety.
- Custom Machines and Turnkey Automation: Beyond standard robots, custom machines and turnkey automation solutions tailored to specific applications are also driving innovation. These solutions integrate robotics, sensors, and control systems to automate complex processes that may not be feasible with off-the-shelf robots alone.
Of course, it’s not only robotics that are driving manufacturers to improve growth. Here are some of the new and improved technologies that are impacting the modern manufacturing facility.
- Artificial Intelligence (AI) and Machine Learning: AI algorithms can analyze vast amounts of data to optimize production processes, predict maintenance needs, and improve product quality.
- Internet of Things (IoT) and Sensors: IoT devices and sensors collect real-time data from machines and processes, enabling better decision-making and predictive maintenance.
- Big Data and Analytics: Analyzing large datasets generated by machines and sensors can uncover hidden patterns and insights that can be used to improve efficiency and reduce costs.
The ROI of Automation in Manufacturing
If your manufacturing business is bleeding profits due to rising labor costs, skyrocketing material expenses, and the relentless pressure of downtime, then automation could be the transformative solution you need.
A well-implemented automation strategy can be the tourniquet that stops the financial hemorrhaging and sets your company on a path to profitability and growth. Let’s look closer at the financial benefits of automation in manufacturing, demonstrating how it can revolutionize your bottom line.
Labor Costs
Automation allows you to reduce your reliance on manual labor, which has a cascading effect on costs. Overtime expenses shrink as machines take on repetitive tasks, freeing up your workforce for higher-value activities. Hiring and training costs also decrease as you need fewer workers to maintain production levels.
Of course, with robots handling dangerous tasks, workplace injuries decline too, leading to lower insurance premiums and payouts. In 2022 alone, workplace injuries cost U.S. businesses over $167 billion. Automation can help reduce these risks and costs.
Material Costs
In the manufacturing industry, waste is the silent profit killer. Automated systems, driven by precision and consistency, optimize material usage, reducing scrap and waste by up to 30%. Whether it’s through precise cutting, accurate automated adhesive dispensing, or error-free assembly, automation ensures you get the most out of every ounce of material.
Downtime Costs
Unplanned downtime can be a financial nightmare for manufacturers, costing an average of $260,000 per hour. With every minute of stalled production, profits evaporate. Automation technologies like predictive maintenance use data and analytics to identify potential equipment failures before they happen.
By addressing issues proactively, you minimize downtime and keep your production lines humming, saving you significant sums in lost production.
Productivity & Efficiency Gains
It’s easy to see why a lights off manufacturing facility is something many business owners dream of. True 24/7 operations without the pressures of a high wage bill.
24/7 Operation
One of the most enticing benefits of automation is the ability to achieve true lights out manufacturing. Imagine your factory operating around the clock, even when the lights are off and the human workforce is home.
With automated systems tirelessly working, you maximize production output and reduce time-to-market. This 24/7 operation can significantly boost your overall output, allowing you to fulfill orders faster and potentially expand into new markets.
Increased Speed and Throughput
Robots and automated systems don’t experience fatigue or distractions. They work at a consistent pace, often exceeding human capabilities. This translates to increased speed and throughput, allowing you to meet customer demands more effectively and gain a competitive edge. In fact, 95% of manufacturing leaders reported increased production speed after implementing automation, according to a recent survey by Deloitte.
Optimized Processes
Bottlenecks in your production process are like clogs in an artery – they restrict flow and hinder performance. Automation can identify and eliminate these bottlenecks, streamlining workflows and optimizing processes. By automating repetitive tasks and integrating systems, you create a smoother, more efficient production environment. That optimization can lead to significant time savings and cost reductions, further boosting your profitability.
Is a Fully Automated Factory Realistic?
The idea of a fully automated factory, a world of truly lights out manufacturing where machines hum along without human intervention, is undeniably alluring. But is it truly achievable? Well, the answer is nuanced. While the prospect of a completely automated factory might seem like a distant dream for some industries, for others, it’s well within reach.
Current State of Technology
Advancements in technology have propelled automation to new heights. In industries like plastics manufacturing and electronics assembly, sophisticated robots, AI-powered systems, and interconnected devices are already transforming production lines. The global robot-to-human ratio in manufacturing stands at 1 to 71, indicating the growing prevalence of automation.
Take, for instance, the plastics industry, where robots are adept at handling tasks like injection molding and extrusion with precision and speed. In electronics manufacturing, automated systems excel at PCB assembly, testing, and packaging, minimizing errors and ensuring consistent quality.
Limitations and Challenges
Despite these impressive strides, full automation isn’t a one-size-fits-all solution. Some tasks, especially those requiring dexterity, judgment, or creativity, remain challenging to automate fully. The costs and technical complexities of implementing a fully automated factory can also be daunting for some businesses.
Industry-Specific Considerations
The feasibility of full automation varies significantly across industries. Some sectors are simply more easily automated due to the nature of their processes. Others, such as those involving intricate craftsmanship or highly variable tasks, may find it more challenging to achieve lights out operation.
Let’s look at a few specific industries to illustrate this point.
Plastics Manufacturing
Plastics manufacturing is a prime example of an industry where automation has flourished. Processes like injection molding, extrusion, and thermoforming are highly repetitive and well-suited for robotic automation. As a result, many plastics manufacturers have embraced automation to enhance productivity, reduce costs, and improve product quality.
Food & Beverage
In the food and beverage industry, automation is revolutionizing tasks such as packaging, palletizing, and sorting. Robots equipped with vision systems can quickly and accurately identify and handle products, ensuring hygiene and minimizing waste. In fact, a staggering 83% of manufacturers have invested in robotics for palletizing and packaging alone, highlighting the industry’s growing reliance on automation.
Industrial Manufacturing
Industrial manufacturing, with its focus on machining, assembly, and inspection, offers ample opportunities for automation. Robotic arms can perform precise machining operations, while automated guided vehicles (AGVs) can transport materials efficiently. Machine vision systems can inspect products for defects, ensuring quality control.
Electronics Manufacturing
Electronics manufacturing has long been at the forefront of automation. From PCB assembly and soldering to testing and packaging, robots and automated systems play a crucial role in ensuring high precision and throughput. This industry’s continuous pursuit of miniaturization and complex designs has only fueled the adoption of automation.
Ready to Discover Your Automation Potential?
Not sure if your industry is suited to automation? Unsure if automation will give you a realistic ROI? The path to a fully automated factory might seem daunting, but that doesn’t mean you can’t reap the rewards of automation in your specific industry.
Take our free Automation Assessment Questionnaire and get personalized insights into which processes in your factory are ripe for automation. Our experts will analyze your responses and provide you with a tailored roadmap to maximize your ROI. Don’t miss out on this opportunity to witness the full potential of your manufacturing operations.
Planning for Automation Success
Automation doesn’t have to be an all-or-nothing leap into lights out manufacturing. A phased approach, where you strategically implement automation in stages, can be a more manageable and less disruptive path to success. Here are the essential steps of planning for automation, ensuring you make informed decisions that align with your company’s specific needs and resources.
Assessing Automation Readiness
Before diving into automation, it’s crucial to assess your company’s readiness. This involves identifying processes suitable for automation, conducting a financial analysis to calculate the potential return on investment (ROI), and addressing the implications for your workforce.
Identifying Processes Suitable for Automation
Not all processes are created equal when it comes to automation. To determine which processes are prime candidates, consider factors such as:
- Repetitive Tasks: Processes that involve repetitive, manual tasks are often ideal for automation. Robots and machines excel at these tasks, reducing the risk of human error and fatigue.
- Dangerous or Hazardous Environments: Automating tasks in hazardous environments can protect workers from harm and reduce the risk of accidents.
- Areas with High Labor Concentration or Bottlenecks: Identifying clusters of workers performing similar tasks or areas where production is frequently held up can highlight opportunities for automation and efficiency gains.
By identifying these processes, you can prioritize your automation efforts and focus on areas where you’ll see the most significant impact.
Financial Analysis & ROI Calculation
Justifying the capital expense of factory automation requires a clear understanding of its financial impact. At DEVELOP LLC, we go beyond simply justifying costs. We want you to see automation as a catalyst for growth, increased profit, and a competitive edge in the manufacturing landscape.
Our ROI calculators can help you translate the immediate benefits of automation into tangible financial gains. These tools allow you to:
- Calculate Your ROI Timeline: Determine how soon you can expect a return on your investment in factory automation.
- Set ROI Goals and Budget Accordingly: Define your desired ROI timeline and explore realistic budget projections for your automated factory project.
We offer two distinct ROI calculators to cater to your specific needs:
- Standard ROI Calculator: Compare the costs of manual labor with the labor displacement costs and increased revenue generated by automation. Discover how quickly you can recoup your investment and start enjoying higher profits through factory automation.
- Reverse ROI Calculator: Set your target ROI timeline and input labor cost savings and revenue increases to see realistic budget projections for your automated factory solution.
By using these tools, you can gain a comprehensive understanding of the financial implications of factory automation and make informed decisions that align with your business goals. Remember, ROI isn’t just about cost savings. It’s about unlocking the full potential of your manufacturing operation through strategic automation.
Change Management & Workforce Considerations
Automation isn’t just about machines, it’s also about people. The success of your factory automation journey hinges on preparing and empowering your workforce for the changes ahead. Change management is a critical aspect of ensuring a smooth transition and maximizing the benefits of automation.
Here’s how you can proactively address workforce readiness and change management:
- Upskilling and Retraining: Invest in comprehensive training programs to equip your employees with the skills needed to work alongside automated systems. This might involve teaching them how to operate, maintain, and troubleshoot new technologies. By upskilling your workforce, you not only ensure their continued relevance but also foster a culture of continuous learning and adaptability.
- Communication and Transparency: Openly communicate your automation plans and the rationale behind them to your employees. Transparency builds trust and helps alleviate anxieties about job displacement. Clearly explain how automation will impact their roles and the new opportunities it will create.
- Job Redesign: As automation takes over repetitive and mundane tasks, redesign job roles to focus on higher-value activities. This could involve tasks such as data analysis, process optimization, and quality control. By helping employees to take on more strategic and fulfilling roles, you enhance job satisfaction and retention.
- Create a Culture of Collaboration: Encourage collaboration between humans and machines. Emphasize that automation is not a replacement for human workers but a tool to augment their capabilities. Create an environment where employees feel comfortable working alongside robots and other automated systems.
- Employee Engagement: Involve employees in the automation planning process. Seek their input and feedback, as they often have valuable insights into the intricacies of your operations. By giving them a voice, you not only gain valuable perspectives but also increase their buy-in and commitment to the automation initiative.
By addressing workforce readiness and change management head-on, you can ensure that your factory automation project is not only successful but also sustainable. A well-prepared and engaged workforce is essential for maximizing the benefits of automation and achieving your long-term manufacturing goals.
Implementation Strategies
When it comes to implementing factory automation, there are two main approaches to consider: a phased approach or a full overhaul. Each strategy has its own set of pros and cons, and the best choice for your company will depend on your specific circumstances.
So should you try and go from zero or minimal factory automation to a complete dark factory in one go, or should you go for a more phased approach?
Phased Approach
A phased approach involves gradually introducing automation into your factory over time. This allows for a more controlled and manageable transition, minimizing disruption to your operations.
Phased Approach: The Pros
A phased approach to factory automation offers multiple advantages, particularly for businesses seeking a more controlled and manageable transition:
- Lower Initial Investment: Spreading costs over time makes automation more accessible for businesses with limited budgets.
- Reduced Risk: Allows for testing and adjustment of automation strategies before full implementation.
- Gradual Learning Curve: Employees can adapt to changes incrementally, minimizing resistance and ensuring a smoother transition.
- Faster ROI: Smaller projects often yield quicker returns on investment, providing early wins and demonstrating the value of automation.
Phased Approach: The Cons
While a phased approach offers numerous benefits, it’s essential to consider the potential drawbacks:
- Longer Implementation Time: Full benefits may not be realized until all phases are complete, requiring patience and long-term planning.
- Potential for Integration Issues: Systems implemented in different phases may not seamlessly integrate, requiring additional effort and resources to ensure compatibility. To avoid this issue, a single-source integrator is essential.
- Less Dramatic Impact: May not address all inefficiencies or fully optimize processes, leaving some potential for improvement untapped.
Pros and Cons of a Full Automation Overhaul
A full overhaul involves implementing automation across your entire factory in one go. This approach offers the potential for maximum efficiency gains and cost reductions but also comes with higher risks and upfront costs.
Pros of a Full Automation Overhaul
A full overhaul of your factory automation should unlock a new level of efficiency and productivity, transforming your entire operation:
- Complete Transformation: Potential for maximum efficiency gains and cost reductions.
- Streamlined Systems: All processes are designed to work together from the start.
- Competitive Advantage: Can position a company as a leader in innovation and efficiency.
Cons of a Full Automation Overhaul
While a full overhaul promises significant rewards, it also presents substantial challenges that require careful consideration:
- High Upfront Cost: Significant initial investment can strain financial resources.
- Higher Risk: Errors or miscalculations can be costly and difficult to reverse.
- Disruption to Operations: Significant changes can temporarily impact productivity and require extensive employee training.
Choosing the Right Approach for Factory Automation
Selecting the optimal implementation strategy for factory automation is a pivotal decision that can significantly impact your company’s future. There’s no one-size-fits-all answer, as the best approach will depend on many factors, including your budget, risk tolerance, the urgency of your automation needs, the complexity of your operations, and your long-term goals.
Budget Considerations
Your budget plays a crucial role in determining your automation path. If financial resources are limited, a phased approach may be the most prudent choice. It allows you to spread costs over time, making factory automation more accessible without straining your finances.
Risk Tolerance
Every business has a different appetite for risk. If your company is risk-averse, a phased approach allows for more controlled experimentation. You can test automation in specific areas, assess its impact, and make adjustments before scaling up. This approach minimizes the potential for costly errors or unforeseen challenges.
Urgency
The urgency of your automation needs will also influence your decision. If rapid transformation is critical to address immediate competitive pressures or market demands, a full overhaul may be necessary. However, it’s crucial to proceed with careful planning and risk mitigation to avoid disruptions and ensure a successful implementation.
Complexity of Factory Automation
The complexity of your manufacturing operations is another key factor. For highly complex processes, a phased approach may be more manageable. It allows you to tackle automation in smaller, more digestible chunks, reducing the risk of overwhelming your workforce or encountering unforeseen integration issues.
Long-Term Goals
Consider your long-term vision for your factory. Are you aiming for incremental improvements or a complete transformation? A full overhaul may align better with ambitious goals for growth, innovation, and establishing a leading position in your industry. On the other hand, a phased approach might be more suitable for companies seeking steady, sustainable progress.
DEVELOP LLC’s Expertise: Your Partner in Automation Success
At DEVELOP LLC, we know that choosing the right automation approach is a critical decision. Our team of experts can guide you through the process, assessing your unique needs and goals to recommend the most suitable strategy. We specialize in phased approaches with stage-gate processes, ensuring a controlled and successful automation journey.
Whether you’re looking for a gradual transition or a rapid transformation, we have the expertise and experience to help you achieve your factory automation goals. Contact us today to explore how we can tailor an automation solution to your specific requirements.
Choosing the Right Automation Integrators/Partners
The success of your factory automation project hinges not only on the right strategy but also on choosing the right automation partner to guide you through the process. At DEVELOP LLC, we offer a unique combination of expertise, experience, and commitment to your success that sets us apart in the industry.
- Single Source Guarantee: We handle every aspect of your automation project in-house, from design and engineering to assembly, testing, and integration. This ensures seamless communication, consistent quality, and efficient project management throughout the entire process.
- Vertically Integrated Manufacturing: Our in-house capabilities for CNC machining, sheet metal fabrication and more allow us to control the entire manufacturing process. This translates to shorter lead times, higher quality standards, and greater flexibility to adapt to your specific needs.
- Wide Range of Products and Services: We offer a comprehensive suite of automation solutions, including automated manufacturing products, and turnkey automated systems. Whether you need a custom-designed solution or a standard product, we have the expertise and resources to meet your requirements.
- Proven Track Record: Our extensive experience in designing and implementing automation solutions for a diverse range of industries has earned us a reputation for excellence. We have a proven track record of delivering successful projects on time and within budget.
- Customer-Centric Focus: We prioritize your success above all else. Our collaborative approach ensures that your unique needs and goals are at the forefront of every decision we make. We work closely with you to understand your challenges, develop tailored solutions, and provide ongoing support to ensure your automation project delivers maximum value.
The Human Element in Automated Factories: Beyond Lights Out Manufacturing
While the allure of fully automated “lights out” factories is undeniable, the reality is that most manufacturers find a hybrid approach more practical and beneficial. Humans still play a crucial role in the manufacturing process, even in the most advanced automated factories.
Complexity of Manufacturing Processes
Many manufacturing processes are inherently complex, requiring adaptability, problem-solving, and decision-making skills that are still best handled by humans. While machines excel at repetitive tasks, they often struggle with unexpected situations or variations in materials.
The Importance of Human Expertise
Experienced workers bring invaluable knowledge of processes, materials, and troubleshooting techniques that cannot be easily replicated by machines. Their ability to identify subtle nuances, anticipate potential issues, and make judgment calls based on years of experience is essential for ensuring smooth operations and high-quality output.
The Power of Human-Machine Collaboration
Rather than replacing humans, automation should be seen as a tool to empower them. By automating repetitive and mundane tasks, you free up your workforce to focus on higher-value activities that require creativity, problem-solving, and critical thinking. This collaboration between humans and machines can lead to greater efficiency, productivity, and innovation.
Striking the Right Balance: A Hybrid Approach to Factory Automation
The key to successful factory automation lies in finding the right balance between human and machine. By automating specific tasks and processes that are well-suited for machines, you can free up your human workforce to focus on areas where their expertise is most valuable. This hybrid approach not only maximizes efficiency and productivity but also creates a more fulfilling and engaging work environment for your employees.
Seize the Future of Manufacturing with Factory Automation
The era of factory automation is upon us, presenting a world of possibilities for increased efficiency, productivity, and profitability. From incremental improvements with a phased approach to the ambitious vision of a fully automated lights out factory, the path you choose will shape the future of your manufacturing operations.
Are you ready to unlock the full potential of your factory? Take the first step towards a more efficient and profitable future by taking our free Automation Assessment to identify areas ripe for automation and receive personalized insights tailored to your specific needs.
You can also head deeper into the world of automation with our free eBook, Automate to Elevate: Your Guide to Automation Assessments. Discover valuable insider knowledge and insights to make informed decisions about your automation journey.
Don’t let the future of manufacturing pass you by. Embrace the power of automation and access a new era of growth and success for your business.
Ready to take the next step? Schedule a free consultation with our automation experts to discuss your unique challenges and explore the solutions that can transform your manufacturing operations.
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.