As an Industrial and Manufacturing Engineer, I have worked in factories for over 10 years and have toured several other factories including Volvo Powertrain, Hershey Chocolates, and Harley Davidson. For years I have heard the concerns of automation replacing jobs.
You may replace a picker and sorter with a robot that can do the same thing. You may replace a buggy driver with an AGV, or Automated Guided Vehicle. Amazon may try to replace delivery drivers with delivery drones. The fact is that Automation is expensive and requires that you hire skilled labor that knows how to program, maintain, and repair automation systems. You may replace a few buggy drivers with AGV’s, but then you will need to upgrade the infrastructure of your facility to accept AGV’s, develop new safety standards and in process controls to prevent people from being run over, hire a team of maintenance technicians who can work on AGV’s, and hire a full time programmer to help program and troubleshoot AGV’s. In the case of Amazon’s drones. You will need to hire teams to deal with theft, vandalism, programming, drone retrieval, manufacturing, maintaining, and troubleshooting drones. Where is the cost savings in that?
In places I have worked, we use automation when the following conditions are met:
- A person cannot safely produce the product. (Situations where the product may be too heavy, awkward to handle, or contain harmful chemicals)
- A person cannot produce the product with repeatability (Situations where precision is important)
- A person cannot produce a quality product (Situations where it is difficult for people to produce the product in its intended fit, form, and function)
Automation is meant to help people and create better products. It is not a substitution for the work force. Automation may take certain jobs away, but it creates many other jobs in its place.
Return on Investment (ROI)
A typical ROI benchmark is 2 years when evaluating automation, but calculating the ROI has become very complicated. We look at a holistic picture when calculating ROI. For example, if you are having staffing issues like everyone else, the factory is not producing its intended output. Automation can help increase output and lower the ROI. If the factory has a large amount of scrap, automation can help reduce the cost of scrap and increase profitability. If new safety regulations are introduced requiring thousands if not millions of dollars in investment to protect the work force, automation may help reduce those costs.
Today’s ROI calculation needs to look at the growth and efficiency of the company in its current state and compare it to the future state with robots and automated equipment. With the cost of automated equipment and robots often surpassing $1 million, it is very difficult to get an ROI of less than 2 years.
Where You Will Find Automation
You will find automation in high volume factories because it is impossible to meet demand with just people alone. You can see automation in the automotive industry where carmakers produce more than 20,000 cars per month, or you can see it in the HVAC industry where they may produce 100,000 furnaces and air conditioners per month. You will also find it in industries where precision is needed. Again this includes automotive but it also includes pharmaceutical, medical, tooling, electronics, and more.
Interested in the field of engineering? Comment below or email me on what specific topic you would like to learn more about.
