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Is Your Automation Technology Delivering on Expectations?

Automation is generally viewed as a value-adding technology, but it can also add costs due to complexity and an inability to deliver on investment justifications.

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For the most part, the increased use of automation in industry has delivered exceptional advances in terms of productivity and profit. This has been especially true for large company early adopters with the deep pockets to prove out the capabilities of these technologies. It’s also been true for most mid-tier companies that have been able to follow in the footsteps of the larger companies and implement their best practices without having to experiment as much.

Of course, automation technology continues to advance and companies continue to benefit. But there is growing disagreement and with it, some confusion, as to which technologies can provide the most value based on how far along the digital transformation path a company may be.

As pointed out in a recent MIT Management Sloan School article, “Historically, new technology has led to greater productivity as displaced workers shift to new tasks—typesetters might become graphic layout artists, while bank tellers focus on more complicated banking services. The current era of automation has been different…as new digital technologies become commonplace, productivity has stagnated and fears about unemployment have become widespread.”

The article references a few popular consumer-facing automation technologies that “disrupt employment and displace workers without generating much of a boost in productivity or quality of service,” such as self-checkout kiosks at grocery stores or automated customer service over the phone.

Technologies that don’t really improve productivity or reduce costs are referred to as “so-so technologies” in the article. The author references Tesla’s initiative to fully automate its California plant as an example of a company decision to pursue technology for technology’s sake—a decision Elon Musk ultimately admitted was a mistake.

So how can manufacturers avoid the adoption of these “so-so technologies”?

To find out, Automation World connected with two industrial system integrators who have experience working with a wide variety of manufacturers. Interestingly, they largely shared the same advice.

Does it add value?

“Technology adoption, including automation, should always be in service to an organization’s business goals, whether that be increased capacity, right-first-time quality, speed to market, or another goal,” says Bryon Hayes, PE, director of smart manufacturing solutions at Grantek. “The first place to look for non-value-added technology would be for ‘white elephants,’ those technologies or systems for which the ongoing costs outweigh the benefits to the business. For example, if a new high-speed packaging line is always going down for maintenance or unplanned stoppages, the organization needs to evaluate whether the equipment and its automation is actually supporting its business goals.”

Todd E. Ebert, PE, senior application engineer at RovisysTodd E. Ebert, PE, senior application engineer at RovisysTodd E. Ebert, PE, senior application engineer at Rovisys, notes that, in some cases, automation technologies can add costs to operations due to their complexity and inability to deliver on initial investment justifications. 

"Capital projects adding new automation technology are justified with a business case and anticipated ROI (return on investment) prior to receiving funding approval. However, most are never measured against that business case after commissioning to determine if the ROI was met and continues to add value,” Ebert says. “The addition of value for automation projects can’t be determined unless the value metrics are carefully defined and are actually used to measure that value, ideally on a periodic basis.”

As an example of a metric that can help manufacturers determine the value of an automation project, Ebert points to OEE (overall equipment effectiveness) as a “great tool to help a manufacturer determine the current value of an automated system, machine or even a process.”


   Listen to this podcast on the role of OEE in digital transformation.


Causes

Based on his experience working with manufacturers and seeing technologies not delivering on expectations, Hayes points out that such issues are not necessarily connected to the technology. These issues can also be caused by one business unit selecting the tool and the vendor without input from key stakeholders in other business units.

“I’ve seen IT departments purchase MES (manufacturing execution system) software without input from the production, maintenance or quality groups,” he says. “When this happens, key requirements get overlooked and either the technology languishes unused, or the company spends a lot more money in change orders as the new stakeholders are brought onboard the project.”

Ebert adds that the success of automation is “largely based on a technology’s ability to be implemented to meet a requirement. If the functional requirements are not properly defined by the end user, how will it meet or exceed expectations?”

In the MIT Sloan Management School article, John Kelly, chief technology officer at IBM says: “[If] all you do is automate something which is lousy, you’re going to get a lousy result.”

Technology assessments

When it comes to avoiding the purchase and implementation of “so-so technologies,” there are specific steps manufacturers can take, according to Hayes and Ebert.

Bryon Hayes, PE, director of smart manufacturing solutions at GrantekBryon Hayes, PE, director of smart manufacturing solutions at Grantek“Coming from the pharmaceutical industry, I always suggest that the manufacturer start by preparing a user requirements specification (URS) that clearly defines the business goals and the explicit requirements of all stakeholders,” says Hayes. “I recommend that requirements be written using a SMART approach (specific, measurable, attainable, realistic, and time-bound) so that the URS can be used in technology curation and vendor selection, and that it is easy to return to the URS after the system is installed to compare the results against the requirements.”

With a set of business and manufacturing goals in place, the gap analysis is “pretty straightforward to define an automation and technology roadmap that will create a master plan that systematically works towards those goals one solution or project at a time,” adds Ebert. “Manufacturers need to focus on business strategy and goals first, then technology can be evaluated and selected to meet those goals and avoid ending up with a ‘so-so technology’ solution that doesn’t meet the goals. Don’t let an automation technology define your business goals, select a technology that meets the goal you define, and then select an implementation partner that can help you realize the vision for your business.”

Ebert stresses that the evaluation process should include a technology risk analysis to identify obsolescence and supportability to determine if the technology can deliver value based on a pre-defined metric or philosophy. “This [then] becomes the baseline for the automation master plan,” he says.

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