Why Do You Buy Automation?

When we launched Automation World 18 months ago, one of the questions on our minds was, “Why do manufacturers buy automation?” We came up with many answers to that question, but the one that continues to make the most sense is—manufacturers buy automation to solve business problems.

In every issue, we tackle business drivers—global competitiveness, managing energy costs, better decision-making—and we look at ways manufacturers use automation to improve business results. What have we learned? First of all, that automation is as much a philosophy as it is a collection of technologies. The most successful manufacturers review their entire manufacturing strategies, and how those will achieve their corporate goals, before they spend a dime on hardware and software.

What else have we learned? That buying automation forces you to simplify your processes, document your procedures, communicate among multiple departments and get buy-in from upper management. Each one of these things has benefits in and of itself. Applied in total, they can make the difference between a company that is just barely surviving, and one that is thriving.

Yes, but does it work?

Late last month, I had the good fortune to visit a manufacturing company that truly practices what it preaches, when it comes to buying automation. Baldor Electric Co., in Fort Smith, Ark., manufactures electric motors, drives and generators in 16 manufacturing plants—15 located in the United States and one located in the United Kingdom, as part of an acquisition.

While the specifics may vary, Baldor’s manufacturing challenges mirror those of many U.S. manufacturers. For the last 35 years, it has faced offshore competition, first from Great Britain, then from Japan, and now from Taiwan, Korea and China.

The company made the fundamental decision to keep, and expand, its manufacturing capacity in the United States, but to do so, it knew that it needed to drive costs out of every step of the manufacturing process. There are two strategies Baldor encourages its customers to adopt to remain competitive—manage energy costs and apply workforce automation. John McFarland, president and chief executive officer, says that applying these strategies has allowed Baldor to thrive, with year-to-date sales up 17 percent. Full-year 2003 revenues were $561 million.

On the energy management front, Baldor handed out $2 to every employee. Says McFarland, “We told our employees that every motor we make requires $2 worth of electricity to produce. We then encouraged them to give us suggestions on how to reduce that cost.” The application of the employee suggestions, along with energy savings from premium-efficiency motors, variable-speed drives and peak-shaving generators, have reduced Baldor’s energy consumption by 1 million kW of power a year.

Perhaps even more startling is the success the company has had in launching a line of commercial-duty motors that compete with those produced in Mexico and China. Plant manager Mike Ballman spent months working with Alliance Winding Equipment, in Fort Wayne, Ind., to design automatic winding machines for the motor stator assemblies. The products included in the finished machines read like a who’s who of automation suppliers—Rockwell Automation motor starters, Giddings & Lewis controllers, pneumatic controls from Numatics, EGS Sola/Hevi-Duty power equipment, and about $150,000 of motors and FlexDrives from Baldor.

This new production line is run by three employees per shift, compared to 30 employees per shift for a manual line—a savings that will quickly pay for the $3.5 million initial investment. Baldor is poised for significant growth in its commercial motor business. Manual operations required two days to produce a stator, but automation has reduced that to 14 minutes.

A tenfold reduction in labor and a 200 times increase in throughput—that’s why you buy automation!

Contact Jane Gerold at jgerold@automationworld.com

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