The Economics of Automation – Part 2

Posted by John Clemons on January 23, 2013 @ 8:18 am

Automation SolutionsIn this last installment on this topic I said that the main purpose of automation is no longer to eliminate labor. That may have been the purpose some decades ago, but it is no longer the purpose of automation.

I spent some time explaining that fundamentally that was the case because if some type of machine or automated equipment could be used to replace manual labor, it would have already been installed a long time ago.

So, then, today, what is the purpose of automation if it’s not to eliminate jobs? Let’s see if we can answer that question with a simple analogy.

If your job is to move some cargo from one point to another and you had a standard pickup truck to do it with, you would probably do OK. If you had a lot of cargo to move you would probably need to make lots of trips and it would take you a good bit of time to do it, but you would get it done.

But, immediately you would be looking for a bigger truck.  And, if you really had a lot of cargo to move, you would be looking for a lot bigger truck. And, if you had to move that cargo a long distance, you would be looking for the quickest routes. And, if that truck didn’t as fast as you thought it should you would be looking to get it a tune-up or even get it a new engine.

Well, you see where I’m going with this analogy.  Manufacturing just about anything is pretty analogous to moving this cargo with a truck. You want to move as much as you can as fast as you can, so you want the biggest and fastest truck you can get. (And, you’re not trying to lay off the truck driver; that would just be stupid.)

That’s what automation today is all about. It’s about making the manufacturing operations more productive with higher volumes, faster speeds, and so on just like what you want to do with moving the cargo.

Automation today is about finding ways to increase productivity, move things through the plant faster, move higher volumes through the plant, get more product out the door, get the equipment to do more, reduce downtime, reduce waste, increase first-pass quality, increase first-pass yield, and so on.

It’s about giving the people on the shop floor, the people actually driving the productivity truck the biggest and fastest truck we can possibly give them.  It’s about making them the driver of the biggest and fastest truck that ever hit the highway.

And, just like getting a bigger and faster truck when you need to move that cargo, getting the biggest and fastest manufacturing plant you can sure makes a lot of economic sense. Getting the plant to do more by being more productive is nothing but great economics.

That’s what automation is about today.  That’s what we try to achieve when we look at opportunities to put in new automation in plants.  It’s simply about getting more productivity out of the plant. Getting you a bigger and faster truck so you can haul more cargo with less trips.

And, as a by-product of the improvements in productivity, in many cases wages for the shop floor worker go up and more shop floor workers are hired. Think about this, you definitely can, need to, and want to pay the person driving the big, fast truck a lot more than the person driving the small, slow truck. After all, they’re getting so much more done. They’re worth or value is so much higher because they’re able to do so much more.

Most people don’t get that the first time I tell them, or even the first ten times I tell them. But, ultimately, my job is to raise the wages of the people on the shop floor as much as I possibly can by giving them the tools they need to get so much more done.  The better tools they have, the more they can get done. The more they can get done, the more valuable they are to the company and the more they’ll get paid.  That’s just simple economics.

My job is so cool!

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