The Wakeup Call - To Fully Automate or Not?

 The recent outbreak of Coronavirus has greatly impacted on how businesses around the world function and operate.  Factories and offices implement various schemes including work shifts, flexi-work or work from home, all geared towards lowering the risk of transmission.  The real challenge corporations are currently put up against is being able to maintain operating efficiency under newly implemented work arrangements. 

In terms of production facilities, factories with 1) fully automated processes alongside 2) tools to perform remote monitoring and 3) robust data analysis will ultimately be at the upper hand of this battle.  The upcoming series of articles will closely examine these three aspects and discuss how companies can benefit from leveraging them.  

Automated Processes (Physical Automation)

Automation on the plant-floor is usually classified into two categories.  Physical automation and systems automation.  As the name suggests, physical automation refers to equipment and machinery being able to operate with minimum human assistance.  Systems automation is automating the process flow of data and information between various systems used within the company.  This could be linking plant-floor MES to corporate ERP systems or POS with production system. 

This article mainly discusses physical automation whilst systems automation will be covered when discussing plant-floor data analysis.

The varying processes and nature of each industry means the degree of automation will vary.  No two industries are alike.  As much as a textiles manufacturer would like to fully automate their processes,  the fact that processes such as cutting and sewing is difficult for machines to handle efficiently (e.g. floppy cloth or fabric combined with the need of nimble finger movement) has meant a lot of these processes are still being performed manually. 

On the flip side, in the warehouse and logistics management industry, many of its processes can in fact be fully automated with minimal to no human intervention.  That is thanks to the development of advanced robotic and tracking technology (e.g. AMR/AGV and RFID) allowing for consistent and repetitive tasks to be carried out.  As a result, the increase in efficiency, reliability, accuracy and cost savings brought by such change often makes it a worthy investment.

Based on the above two examples, one may conclude certain industries like the garment industry can never be fully automated whilst other industries such as warehouse and logistics management can maximize the benefit of automation.  To draw such a conclusion is like saying autopilot technology is only applicable for aircrafts and not vehicles.  This could be viable 20 years ago but certainly not by today’s standards.  In fact, the advancement in technology has allowed textile machines to increase precision and flexibility in material handling thus accurately replicating human skills.  Like any other technology development life-cycle, it is a matter of time until the technology for that particular sector is mature enough for manufacturers to adopt.

Although some industries have progressed quicker than others in employing automation, there is no deny this is the general trend of the future.  The global epidemic caused by the coronavirus is a wakeup call especially for companies which currently still operate in a semi-automated environment where labor is (as of now) still considered a critical part of the manufacturing process.  These companies should look further ahead and weigh in the long-term benefits and costs associated with incorporating process automation within their facility say for the next 20 years.  When conducting ROI or risk assessment, more attention should be placed on qualitative and long-term factors.  One factor which every company should now have on their list is downtime as a result of temporary closure when employees who run critical processes in the facility are unable to attend work.  Other factors also attributable to long term impact could be a shortage of skilled labour or a decline in workforce due to an aging population.  All these factors may not be accurately quantifiable but will sure have significant impact on the corporation’s ability to continue operating effectively in the future.

In today’s consumer driven market, it is always challenging for companies to decide how to allocate and utilize budgeted capital expenditure in the most effective manner.   Despite many short-term goals which companies usually focus on due to the tendency of driving quick results, senior management and the board should always look beyond the ‘current trend’ and apply more ‘what if’ thinking instead of carrying a ‘what is’ mindset.