Inflation & Volatility Boost the Business Case for Automation in Manufacturing - IT Supply Chain
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The world is facing the highest inflation rates in 40 years, and pundits are talking of a possible recession in the coming months.
The causes of this are well understood – a combination of factors including a shrinking labour pool, pandemic-related disruptions, global energy shortage, and the current crisis in Ukraine have placed persistent pressure on fragile supply chains, creating the perfect recipe for escalating costs.
It’s a stressful time for manufacturers, who are struggling to remain productive while faced with shrinking margins, and consumers are feeling the pinch with higher prices and longer lead times on product orders.
Rather than riding the wave of uncertainty, manufacturers can take steps to adapt through automation. Those that do could find themselves better equipped to manage inflationary challenges and whatever else the future may hold, as Andy Barrett, Services Director, Domino Printing Sciences (Domino)explores in this article.
Worker shortages are taking their toll. A retiring baby boomer generation and major disruption to labour forces during the pandemic – sometimes referred to as The Great Resignation – have led to global labour market gaps. Employers struggling to fill jobs are forced to increase salaries, further exacerbating price increases.
To respond to these challenges, businesses need to ensure that their workforce concentrates on value-added activities most aligned with the overall business strategy. Businesses should assess what activities are performed and how and look for options to automate activities that don’t require human operatives.
Manufacturers can utilise Industry 4.0 processes and automate systems in factory environments to take care of routine, menial tasks. In coding and marking, automation software integrated with existing MES or ERP systems can remove the need for manual code entry. The addition of vision inspection systems can ensure all product codes are correct without relying on manual, error-prone checks.
With automated coding solutions, manufacturers can network printers together and automatically monitor line counts and production, as well as streamlining product changeovers and other manual tasks requiring human intervention. This allows for a more efficient allocation of manual resources and can also allow for more production runs per shift, increasing productivity and allowing for greater adaptability and changes in demands.
The addition of cloud connectivity provides options for remote visibility and operations, allowing production managers to work away from the line and stay on top of all production activity.
Companies investing in performance-enhancing technology today may also find themselves better equipped to handle future challenges, including a possible recession. Automation can reduce running costs, eliminate errors, improve resiliency and productivity, and free up human resources to address critical business objectives during an economic downturn.
Recent research from Bain & Company found that companies make more dramatic gains and losses during recessions than during stable periods, highlighting the importance of preparing for a potential downturn ahead of time to increase the chances of emerging a ‘winner’. The research highlighted investment in automation as a key priority for businesses when adjusting strategies to prepare for a recession.
Talk of automated solutions and Industry 4.0 inevitably raises questions about worker replacement. While it’s true that certain manual tasks can be replaced by automation, these systems also have a role to play in the day-to-day running of factories, alongside production staff.
By scaling automation, companies can ensure that employees have more time to focus on value-added improvement activities, rather than doing mundane tasks This could be in using the data made available through connected, cloud-based systems to identify problem areas and implement improvements. Introducing automated solutions to identify these issues can help streamline processes, quickly unlocking additional benefits from automation.
Automation can also free employees to train or upskill in certain work areas. Companies must think about how best to attract and retain talent in a restricted labour market. Companies that provide options for upskilling, improvement, and progression will inevitably deliver more value as employers and will be more successful in retaining existing employees and attracting new ones.
It’s a challenging time for manufacturing, but the outlook is not bleak. Manufacturers today are fortunate to have easy access to the tools and equipment necessary to remain successful. With coding automation, automated code inspection, and better data visibility, manufacturers can hope to mitigate some of the current challenges of escalating prices and inflation and place themselves in good stead for future economic uncertainty.
