Manufacturing Automation has taken huge steps forward in recent years, helping companies become safer and more efficient. Technology such as robotics for picking, packing, or welding is constantly advancing, making systems better, and smarter, each year. Vision systems alone are undergoing a revolution in terms of effectiveness. This type of automation is also more affordable every year, while the cost of just about everything else – labor, energy, raw materials, and insurance – is rising.

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Most companies who implement surveillance programs and other security measures do it because they want to address employee related theft. In industries like warehousing, it’s a common problem,  and it costs up to $15 billion in lost inventory every year. It’s been known for years that companies with excellent security measures can also expect to be more productive, but that’s always been correlation, and the two haven’t been linked by cause. That may have changed based on a recent study.

“Cleaning House: The Impact of Information Technology Monitoring on Employee Theft and Productivity,” takes a look at how firm investments in technology – based employee monitoring impact both misconduct and productivity. The study makes a persuasive case that pilferage is an issue that hinges on management style more than individual ethics.

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Earlier this year, Food Logistics published a provocative article, “Automate or Die”.  Do you have to automate? Of course not. But it brings to mind a good question: where is the point of acceptable ROI for automation projects? When does it make sense? What aspects are potential pitfalls?

We’re  inside warehouses, distribution centers, commercial operations, and manufacturing facilities every day. We don’t see full scale automation in all — or even most — of these operations. We’ve even seen some companies who have automated go back to picking with carts. We’ve seen others thrive due to their automated projects. The point is, you certainly won’t “die” if you don’t automate. But that doesn’t mean that you should not automate some or all aspects of your operation.

In some cases, we try to make the case that automation isn’t needed. In others, we try to help these companies understand when a capital investment in automation equipment and/or software will save money, increase productivity, reduce problems, and improve their business. It’s not  something that you can do from a distance.  It requires a command of the facts on the ground, in the servers, and throughout the supply chain.

So, the question is, why automate? 

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OSHA estimates 85 deaths, 35,000 serious injuries, and another 62,000 non-serious injuries. More than 11% of forklifts are involved in these accidents every year, meaning that the forklift in your warehouse is statistically destined to have an accident before it goes out of service.

Almost 40% of forklift-related accidents involve a pedestrian

And this doesn’t  take into account the accidents that damage property, but don’t hurt people. Forklift-to-forklift collisions, or forklift colliding with warehouse racks aren’t included in these numbers if people aren’t injured.

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Merging two formerly separate industrial operations can be more difficult, expensive, and time consuming than creating an entirely new plant. After all, even in the best of scenarios, it’s almost always easier to start with a blank slate. But in these days of consolidations and cost cutting, this can happen to almost any company.  Planning and open communications is the key in general, but there are specific issues you should be aware of.

What are some pitfalls, and how can you avoid them?

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There isn’t much value in a worker walking across a facility; value is realized at work areas, not in transit between them. In many operations, order pickers can walk as many as 12 miles a day. This level of walking makes workers tired and more prone to error, injuries, and declines in productivity. While some degree of walking is unavoidable, much of this is simply commuting time to retrieve supplies, or inefficient design that makes the job harder and less efficient than it should be.

How can you reduce time walking, and increase the time people spend getting things done?

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There is nothing inexpensive about a new facility.

The cost of real estate (or lease costs), new equipment, people, regulatory compliance, and potential downtime add up very quickly, even for a relatively small operation. But reconfiguring your current operation has its own challenges. You have to deal with operating in a construction/renovation environment, the potential that the redesign won’t serve your needs through future growth, new equipment, and more. It’s a difficult choice.

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The warehouse. The office.

Sometimes it’s as if one doesn’t exist to the other. As one of our customers told us, “it’s like we have two companies here, and one doesn’t know what the other is up to.”

But when you’re trying to operate better, it’s impossible to separate the two functions. Decisions can be made in one area that can impact the other severely, so communication and cooperation are vital. Too bad it doesn’t always work that way. How can you improve it?

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Whether you’re operating a dedicated distribution center or the order fulfillment or stock warehouse of a manufacturing operation, most industrial facilities deal with storage and warehousing to some degree. In the not-so-distant past, warehousing was treated mostly as a cost center – a necessary evil that had to exist so that the more profitable parts of an enterprise could operate. Thankfully, more enlightened thought has prevailed recently.

Order fulfillment and storage are not just places you can save money – they can earn money. If the gremlins don’t get you.

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In a recent blog post, Auburn professor Dr. Kevin Gue, one of the bright minds in the industry when it comes to the business of industrial distribution and plant operations, reflected on the reaction to his ProMat 2013 talk on “Designing a Worker-Centric Facility”.  Gue has smart points about the relationship between safety and ROI – and how you can deal with those issues.

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