Some tangible automation benefits are lower labor costs, less wastage, higher productivity, and fewer defects. Besides, automation benefits also show up in intangible ways, such as a better reputation in quality assurance. Due to both tangible and intangible benefits, the automation industry will evolve at a CAGR of 9.2% in 2021-2028. As a result, revenue in the automation industry will likely go from USD 191.74 billion in 2021 to reach USD 355.44 billion in 2028.
Consumers are after getting better quality products at a lower price. And producers have been competing in meeting this conflicting demand. On the other hand, producers need to meet growing profits. How can producers meet conflicting demands when paying increasingly more for inputs like labor, energy, and raw materials? Hence, producers are after automation benefits that collectively improve the quality and simultaneously reduce the cost.
In the absence of automation, our ability to increase quality and reduce cost is highly conflicting. Higher precision and lower wastage are significant automation benefits. In addition to reducing labor demand, it also reduces the knowledge and skill need. As a result, junior can take over the role of more expensive senior. In some instances, such as processing silicon and food and producing medicines, human touch and presence add contamination. In addition to improving productivity, automation can increase quality and reduce cost simultaneously. Hence, to raise as well as retain competitiveness, leveraging automation benefits is at the core of the competition strategy.
Furthermore, there is increasingly stringent regulation on quality, wastage, pollution, and emission. Hence, for example, farmers and manufacturers are turning to automation food safety regulations. Here are a few examples of automation benefits.
Automation translates on-job learning into process innovation:
Japanese companies are known for on-job learning. Yes, they translate knowledge and data into a set of rules. Eventually, they automate those rules. For this reason, there has been a very close partnership between Japanese companies and local technology firms. They closely collaborate on learning, codification, and improving production machinery to keep increasing the automation benefits. This is one of the underlying reasons for the growth of latecomer Japanese firms to be better performers. For example, being a late entrant, Toshiba succeeded in taking over the leadership in the hard disk industry. Hence, there is no surprise that seven are from Japan among the 10 ten industrial robotics firms. It seems that the secret of Japanese quality has been due to leveraging automation benefits.
Reduce employee turnover effect:
Employs combine education and training and experienced earned knowledge and skill with innate abilities to contribute to production. Experience makes employees valuable, as it increases the role of experienced gained tacit knowledge and skill. However, once they leave, that tacit capability also departs with them. But a significant portion of experienced earned capabilities could be codified into data, information, knowledge, rules, standards, and micro process definitions. With technology, we can automate them. Hence, upon departure of experienced employees, the effect on the organization will be pretty low as their experienced earned valuable intangible assets has already become part of organizations’ production process.
Increase precision through automated operation:
The precision of manual operation is in the order of millimeters. But we can build a machine to show precision far higher than that. Hence, in many productive activities, humans are not suitable. For example, in semiconductor processing, operation demands accuracy in the order of nanometers. Furthermore, even in furniture making, millimeter inaccuracy in making holes or cutting wood is not acceptable for the furniture to be assembled by the end-user customers.
Automation increases the productivity of capital machinery:
We use human workers to load inputs to and unload finished products from capital machinery in many cases. But there is a minimum time limit that human workers need to get these loading and unloading operations. But this operation time could be reduced by automating this role. For example, making a chair by automatic machine takes one minute. It takes another 30 seconds to bring out the product from the machine manually. But a robot can take the product out within 10 seconds, saving 20 seconds of machine time on each chair, according to an industry insider. Hence, even in Bangladesh, a plastic chair manufacturer finds automation for that unloading job cheaper than low-cost labor. As a result, utilization of machines increases.
Automation benefits include increased inspection accuracy:
One of the humans’ jobs in production is to perform a visual inspection. For example, human inspectors keep looking at running fabrics for detecting defects. But due to speed and fatigue, often, human inspectors leave 30 percent of defects undetected. Fortunately, automation of this task with digital imaging and computer vision can improve the accuracy and throughput and lower wastage. As a result, producers can improve the quality and simultaneously reduce the cost by leveraging automation benefits in industrial inspection. Like fabric inspection, there have been many industrial quality assurance jobs that are already automated or waiting to get automated soon.
Reduce rework, variability, and wastage: key automation benefits
In those days, when human workers used to use hand spray to paint automobiles, defects in painting leading to rework and wastage were a concern. But that situation has improved substantially due to the automation of paint shop jobs. Similarly, automation benefits fruit peeling and fish cutting have led to more than 5 percent additional food extraction. Even furniture makers are finding robot painters to reduce wastage of paint, variability, and rework.
Increase safety as automation takes dull and dangerous jobs:
The justification for the deployment of robots in 1961 in the factory of General Motors was for automating a dangerous job. It transported die castings from an assembly line and welded them on auto bodies. This role delegation prevented human workers from exposure to poisonous exhaust gas or losing a limb if they were not careful. Since then, an increasing number of robots are finding deployment to automate dangerous jobs. For safety reasons, butcher shops are targets of automation. Similarly, automation has taken many nuclear materials and waste handling jobs. Furthermore, automation in the form of conveyor belts has taken material handling dull jobs.
Automation reduces contamination:
According to IFR (international federation of robotics), the robot population in the global food industry has almost doubled between 2014 and 2021. Robots in the food industry have been doing more than picking and packing. Furthermore, PLC (Programmable Logic Controller) has brought very high-level automation in the food processing industry. One of the drivers has been food safety. Human touch and presence are sources of food contamination. Hence, processors are after automation to comply with stringent food safety regulations.
Of course, all those automation benefits to contribute productivity improvements, producing more from per unit of labor and materials. As a result, producers find a way to improve the quality and simultaneously reduce costs. Fortunately, this scope has been expanding due to the advancement of automation technologies. Hence, automation has been a vital strategy for improving competitiveness. As technology has been progressing, automation’s ability has been improving, and cost has been falling. For example, research finds that prices of industrial robots will drop by roughly 65 percent by 2025. Therefore, leveraging automation benefits has become a core competence to attain and retain competitiveness. By the way, decision-making should consider automation disadvantages for turning benefits in favor of competitiveness.