Trends in Automation Today - A Business Blog Article from KLR

Business Blog

Trends in Automation Today

posted Nov 9, 2017 by John E. Surrette, Jr., CPA, CFE in the Business Blog

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Good help can be hard to find. Some manufacturers are investing in robots and other types of automated equipment to address potential labor challenges. But leaders in automation also consider alternative uses of automation technology that extend beyond just replacing humans.

Labor challenges

Today, the top concern among U.S. companies is attracting and retaining qualified employees, according to the third quarter Duke University/CFO Global Business Outlook survey. This issue tops the list for the second time in the survey’s history, which spans more than two decades. The survey also found that the limited supply of qualified managers often hampers companies’ expansion plans, forcing many to forgo value-added investment opportunities.

In addition to a limited supply of skilled labor, other labor-related concerns include rising wage rates and benefits costs, as well as increasingly burdensome labor regulations.  

To address these concerns, some manufacturers are investing in automated equipment to replace certain rank-and-file positions. Then they may train any displaced workers for higher level tasks or to become managers, if they’ve got the right skills and work ethic.

Automated equipment tends to work well for repetitive, dangerous and labor-intensive tasks. For example, robots may be useful at performing pick-and-place tasks and cleaning up toxic waste. However, humans are generally better than machines at performing custom work and interacting with customers.

Next generation automation

Tech-savvy manufacturers understand that the benefits of automation can extend well beyond easing labor concerns to include intelligent and predictive interactions. The Internet allows supply chain partners to connect virtually and share information. Why not leverage this “big data” and use artificial intelligence (AI) to identify and analyze trends based on real-time data?

For example, AI software can analyze customers’ payment and ordering behaviors. Based on those trends, the software can place automatic holds on delinquent accounts (to reduce bad debts), recommend supplemental product offerings (to boost revenue) or prevent a dissatisfied customer from switching to a competitor (to lower customer turnover). AI software can also be used to schedule people and machines to maximize efficiency based on incoming orders or to identify fraud and cyber risks based on anomalies in accounting data.

Some manufacturers that provide after-market customer service are using a concept known as “twinning,” where identical machines equipped with remote sensors are sold to more than one customer. The machines are continuously monitored for utility consumption, production volume and output quality. Rather than service the twinned machines on a standard schedule, the manufacturer can provide service on-demand, when a machine underperforms compared to historical performance — or its twin.

AI is also becoming popular in quality control. Smart cameras can be trained to identify defects with greater accuracy than human eyes. Then the cameras can access data from production equipment to diagnose and identify root causes of defects quickly, allowing the manufacturer to resolve problems before expensive delays and customer complaints pile up.  

Be Realistic and Cautious

KLR’s 2017 Manufacturing Industry Outlook report found that roughly one-third of respondents plan to invest in automation to modernize their operations in the next year. This can be a costly — but potentially rewarding — endeavor. Before jumping in head first, contact us to discuss the pros and cons of your automation strategy and maximize your return on investment.