Turning to Automation: Reducing Costs & Increasing Efficiency

With the utilization of automation, production can happen faster, scrap waste is reduced, fewer defects are produced, less rework is needed, and company morale is improved. All these are great on their own, but together, they contribute to continuous improvement and productivity gains which drive down costs and increase production quality.

In the world of production where time is money, and money seems to not go as far as it used to, automation is a tool in a manufacturer’s belt to bring efficiency to the process that then brings value to consumers.

Production lines don’t just run faster, but also more efficiently, when they are automated, providing more output per unit of time. For example, industry experts indicate that process automation typically increases throughput by as much as 50%. This boost in capacity allows manufacturers to take on more projects, increasing revenue. The increased opportunity for additional productivity isn’t going unnoticed. New reports show robot sales reached record levels for North America in 2022 with $2.4B in sales, an 18% increase from 2021.

Benefits of process automation include:

• Enhanced product quality with fewer defects/returns
• Improved operational insights/improvements from data collection and analysis
• Reduced operation, maintenance, and labor costs
• Increased productivity and reliability
• Increased workplace safety and compliance
• More efficient inventory and warehouse management
• Data analytics improve processes, eliminate bottlenecks
• Improved customer satisfaction (higher quality, faster delivery)
• Automation connects multiple locations for real-time decision making
• Creates a transformative experience for the entire organization

Investing in Automation

If you are new to automation and want to determine its value, start by selecting a few steps in your manufacturing process that could use improvement. Depending on the type of application, scale and complexity, and equipment required, deploying an automated industrial solution varies in cost.

The return on investment (ROI) for a purchase of a robotic process automation system can be difficult to measure and depends on a variety of factors, including the complexity of the manufacturing system, IT requirements, staffing needs, and production goals.

Variables that should be considered in an ROI calculation include robot system usage, total robot system cost, IT resources needed, labor costs per operator, number of operators removed, expected productivity gain (throughput), material savings, distribution, maintenance, operation, and training costs, hiring and retention costs, and safety and ergonomics.

In general, a good estimate is that initial costs may be recouped within two to three years. If the up-front purchase price for process automation is too steep, or management is cautious and would rather try automation first on a limited basis before investing heavily in a solution, or the company wants the ability to scale up or down easily, automation as a service (AaaS) may be the best solution.

AaaS integrates robotic process automation and business process automation to provide companies with automation solutions at an affordable monthly cost that improves how manufacturing or business processes perform across all business units. AaaS also improves employee engagement, from front-line workers to top-level management.

“AaaS allows for manufacturers to secure automation solutions as a part of their operating budget rather than as a capital expenditure,” says Dean Elkins, senior director of advanced automation for Gray Solutions, a Gray company. “This allows the manufacturer to apply labor and compare an hourly rental rate as compared to operators.  This model helps fill the gap in times of spiked production or when short term automation solutions are required for reasons of seasonality.”

The value of a new automation system is derived by creating new agile and flexible workflows where every part of the operation performs optimally during times of peak demand. “Aside from addressing labor shortages, automation adds benefits such as greater flexibility, increased average throughput, and less waste due to human error and scrap,” says Elkins.