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When to Break the 80/20 Rule in Automation Integration 

Posted on February 2, 2024
When To Break The 80/20 Rule In Automation Integration 

 

At DEVELOP LLC, we want to draw the distinction between a custom automated machine integration that is suboptimal, and a machine that breaks the 80/20 rule for good reason. Building a custom automated machine, taking over a process robotically, or automating technology is a choice made every day without a path to swift ROI, without replacing labor, without increasing speed, and without generating exponential growth in vital cases. 

 

What 80/20 Tells Us You Shouldn’t Automate 

 

We’ve discussed the merits of applying the classic economic principle ‘The 80/20 rule’, sometimes called the Pareto Principle after 20th century Italian economist Vilfredo Pareto, to your industrial machine design targets. Targeting 80/20, the consistent observation that 80% of the market share, sales, and profits from most businesses derives itself from 20% of their products, allows for the quickest turnaround on return on investment, the most rapid profit, and earliest opportunities for growth seeking tasks. If you strictly follow the 80/20 rule when planning your machine targets, these are the types of tasks you aren’t going to want to automate: 

 

Only One Shift or Less

 

Creating an automated solution to only operate during one shift sacrifices the tireless advantage of a machine. A machine doesn’t need sleep, doesn’t get tired, doesn’t get repetitive stress injuries, and doesn’t need a work life balance. A machine that only works one or a partial shift risks a lower return on investment. You don’t want to look back on the opportunity cost of manual labor and wonder why you just didn’t hire a worker.  

 

Won’t Displace the Amount of Labor

 

It doesn’t make fiduciary sense to swap a process that needs three workers a shift for a process that needs three workers AND three machines a shift. The machine should be shouldering the dangerous, unsatisfying, and repetitive work of the job. You shouldn’t be paying for the same amount of labor on top of the costs for power, maintenance, and operation of the machine. There are even non-automatic process improvements that should be considered first.  

 

Low Volume Production

 

One of the most basic advantages of an automated machine is faster than human speeds. Picking a product that doesn’t have high demand, doesn’t have growth potential, and won’t benefit from fast production beyond finishing the shift early won’t make sense to your return on investment. There are more lucrative products to target.  

 

Customizable and Variable Inputs

 

A machine really brings value to your production through high volume and low mix production. A simple program can achieve machine accuracy, consistency, quality, and efficiency at higher speeds for your products. The more demands for customizing each product, the more unlikely the machine is going to produce your products more efficiently than specialized labor. Scope bloat, the name for excessively adding functions and parts to a machine, can extend the automation integration timeline and markup costs so high that return on investment is unfeasible.  

 

Can’t ROI

 

We can design any automated solution, but the solution must be practical for your bottom line. There are no one size fits all solutions and not everyone is on even footing. If you have a manufacturing process that can be automated, and the automation will increase quality, speed, retention, safety, and throughput, it can still not be right for your business if the product can’t make enough money or generate the growth you need to return your investment in a reasonable timeframe. A responsible automation integrator will communicate the potential return on investment calculations during an automation assessment, you should never move forward with an integration without justifying your ROI.   

 

Won’t Generate Companywide Enthusiasm

 

We can scope a machine that will generate superior production, we can provide the ROI calculations, we can write educational manuals and programming guides for proper operation, we can gather input from your workforce and translate it into a machine process that is familiar and comfortable, but your workforce will never trust the technology unless you can generate companywide support. Your team will trust you more than us, never underestimate the sabotage a lack of engagement, strawman arguments, and ambiguity can cause your ability to adopt a machine onto your floor. It takes discipline to educate your workforce on the opportunities the machine will create for workers, the improvements to the work environment, and the capacity for growth and profit caused by the machine. A workforce has a lot of energy for support, if that energy is not directed towards support it will redirect itself to resistance. If you don’t trust yourself to foster that kind of enthusiasm from the manual laborer to the warehouse manager to the CEO, a perfect machine is going to gather dust.   

 

When You Need to Break the 80/20 rule 

 

Just because you aren’t hitting every one of the 80/20 targets listed above doesn’t mean your machine can’t be an invaluable asset to your growth, your production capability, or the quality of your products. There are circumstances where you need to break the 80/20 rule, where you have to break the 80/20 rule, and where the indirect benefits of breaking the 80/20 rule outweigh the benefits of quicker turnaround on ROI. 

 

Regulations

 

Changes in government regulations, shifts in company policy, or additional requirements for certifications are non negotiable. The Sarbanes Oxley Act of 2002 for instance was a direct response to a series of financial scandals in the early 2000’s, not the least of which was Enron. Suddenly, there was a completely new set of rules revolving around financial record storage and transparency with criminal consequences to management and financial officers. These requirements put a level of urgency on the development of IOT and the interoperable technology we use today in our machines, though now integrators have found more ways to support the health of your business with real time metrics and network controls. A machine can bring impartiality, specificity, and consistency to the production targets you can’t do without. 

 

Safety

 

A Universal Robots study from Assembly Magazine concluded that automation technology and the use of cobots, or collaborative robots, “can realistically reduce up to 72% of the common causes of injury in manufacturing environments”. The same study concluded that the average cost to a manufacturer per injury ran to $39,000 each with a total cost of $15 billion per year to the manufacturing industry. Even though a cobot moves at speeds no faster than a manual worker and usually alongside that worker, the mitigation of contact with harmful substances, repetitive motion, overexertion, falls, and other hazards can drastically improve the safety of your production. 

 

Labor Shortage

 

Do you have a job on your manufacturing floor that your employees love to do except for one major task? If you have a process, product, or task on your floor that your business needs to survive, sustaining that process becomes more important than profitability. High turnover, rare skills, and diminishing job prospects bottleneck your production, and it’s estimated that the cost of replacing those workers can cost 20% of the yearly salary of the prospective hire. Finding the highest turnover tasks and processes on your floor and automating those processes improves your work environment, improves the chances of employee retention, and raises employee satisfaction. 

 

Inclusivity

 

A custom machine integration can design features that take on physically demanding roles to extend the careers of older workers or support physically disabled workers to take on manufacturing tasks. A custom automated machine can be designed with equitable training, training that bridges gaps in language barriers, and accessibility tools that broaden your ability to recruit.  

At DEVELOP LLC, we know how to find your 80/20, we know how build for your custom demands, and we know how to take the requirements for your business and integrate them into your business to support your growth, mitigate your bottlenecks, and confront the challenges of industrial manufacturing with a custom machine integration. Tell us more about your project, schedule a virtual meeting, or call (262)-622-6104 to learn more about how we can help you automate your business responsibly.  

 

 

 

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