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The Should I Own A Business Podcast

5 Drawbacks of manufacturing with robots and automation

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Is manufacturing with robots a positive or negative experience for small to medium manufacturing companies? Manufacturing with robots and automation can increase production efficiency but may also have several drawbacks.

Using robots in manufacturing businesses can offer advantages to reduce production costs, automate repetitive tasks and replace workers. While we could have robots for process automation there are some disadvantages that should be appreciated.

You may think manufacturing with robots will increase your profits because robots will work all day, never call in sick or ask for a pay rise. In the real world, things are never so simple, as their are always pros and cons to evaluate.

Here are 5 drawbacks I learned through experience using robots and automated manufacturing processes.

Here is a another article about manufacturing and running a manufacturing business – What is it like running a manufacturing business?

 

1- automation is not as flexible as people which can be a disadvantage.

Humans are very dexterous and flexible in movement, and we can perform a wide variety of tasks without thinking about it. We can change how we do something instantly and change back without noticing because people are innately very adaptive to manual tasks. Manufacturing businesses often have tasks or jobs that change frequently and if you own a small manufacturing business this is quite likely.

Robots might be much more limited in their movement than humans and they need specific programming for every sequence they perform.

Imagine a spectrum where at one end, fully human processes are highly flexible and at the other end, fully automated processes are highly rigid.

Somewhere along this spectrum will be the best fit for your manufacturing process and it’s crucial to know where on the spectrum is best for your company. 

Automation may mean redesigning your factory layout and material flow, so it is important to consider the longer term consequences.

Think carefully if automating your processes will affect your customers. Generally, customers don’t welcome rigid service solutions unless there is a clear benefit for them.

If your production process has lots of different physical tasks that can change constantly, then perhaps the very flexible end of the spectrum is best for you. 

If you manufacture high volumes of items, then you may get benefits from a higher level of automation, as flexibility is less important than perhaps the unit cost.

Make sure your chosen automation offers the right balance on this spectrum.

Using robotics in part of your factory can work very well but consider how adaptable the automation is if you need to change your process or perhaps lose a major customer.

 

2- process automation is not totally reliable.

Moving parts wear, plastics can become brittle, causing electrical short circuits and software can get bugs and become outdated.

These are just a few issues I have experienced that caused production plant breakdowns.

Understand the impact a breakdown will have on your factory or business when it happens not, if it happens!

One factory I ran, was not able to ship from our fully automated warehouse for 3 days because of a breakdown. As an FMCG business that shipped hundreds of pallets every day, this was a massive problem.

Remember, depending upon automation, you may not be able to do things manually in the event of a breakdown.

In my warehouse example, conventional forklift trucks would not fit down the very narrow warehouse isles, and the safety guards were designed to keep humans out! There was no alternative way to work but wait for imported parts.

Negotiate detailed agreements with your robotics suppliers, for a list of critical parts they must store locally. Better still, keep critical spare parts in consignment stock at your factory. Waiting for service engineers or spare parts can be a business killer so have a service level agreement in place.

Set out the preventative maintenance plan for your robotised system to avoid unplanned factory downtime.

Work out a breakdown contingency plan before you buy not after!

 

3- is your return on investment for robotics accurate?

Investing in automation must obviously give an increase in manufacturing efficiency with a suitable payback to be worthwhile. Most robotic automation projects will assume your factory or production process will gain in productivity or reduce your production costs. Make sure that your calculations allow for when things don’t quite turn out as planned. For example, you might reduce the number of plant operators but then find out you need to recruit skilled (expensive) people to oversee the automation and manage the robots.

Don’t assume the robots will not need a supervisor of some sort.

In one factory, I found the original capital justification was 20-30% too optimistic about the projected cost savings from robotics.

Check if you have the skills in house to maintain your automation. If not, factor in what this will this cost you to get an accurate return on investment.

 

4- robotic process automation life expectancy and depreciation

Your automation or robotic system will need replacing or upgrading at some point so use a realistic life expectancy to set your depreciation rate.

Do not fall in the trap of depreciating a significant capital asset over a more extended period than its life expectancy. Otherwise, when you need an upgrade, the redundant system may still have a considerable netbook value in your financial accounts!

The rapid rate of change in this robotics technology and built-in obsolescence means your installation can become outdated fairly quickly.

 

5 – company culture and manufacturing automation

Assess whether your company has a strong culture of continuous process improvement and if process automation is a natural step for you. If your organisational culture is more intuitive than analytical, implementing production automation may be a significant culture shock. Trying to go from zero process automation to full automation is a giant step to take.

Evaluate your readiness and capability carefully. The robots will not just come along and fit in, as they will have their own needs and demands. Implementing automation or working with robots requires a shift in your mindset and may have negative impacts if your employees fear for their job security.

Moving to automated systems is not just a financial implication but also a human consideration.

 

Summary

Manufacturing with robots and using factory automation has advantages and disadvantages. While automation can bring significant benefits to your manufacturing business remember, it is never without a compromise.

Managing people in a manufacturing business can be frustrating but do not fall into the trap of believing that robots are perfect!

 

Understanding The Reality of Business Ownership

The Should I Own A Business Podcast explores the reality of being a business owner.

Local manufacturing presents a huge opportunity for new business owners.

Here are some other resources you might find helpful:

You might like episode 14 called How to Evaluate a Business Idea which helps you decide if a business idea is suitable or viable.

Article on why most great business ideas fail.

We also have a free test to see which areas you might need to consider before starting a business.

 

About the author: Brendan Barrow has extensive experience in leading and managing manufacturing businesses on 3 continents.

Brendan Barrow Co-Host 

The Should I Own A Business Podcast-Listen Before You Leap.

Avoiding new business failures, one owner at a time.

www.shouldiownabusiness.com