In its 2011 “Skills Gap in Manufacturing” report, the Manufacturing Institute laid out the situation: as American manufacturing continues to expand, a lack of critical skills in the workforce is becoming an increasingly common limitation. In many places, we see classified ad pages full of jobs for skilled positions like CNC machinists, high-volume assembly technicians, welders, or electricians. With a reported 600,000 unfilled jobs in the manufacturing sector, it’s something that has to be addressed.

Certainly, lower-cost foreign labor is still a drain, but there is little manufacturers can do about that. What can manufacturers do?

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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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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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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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