Is manufacturing automation good for SMEs?

Manufacturing automation is fast becoming a standard procedure in manufacturing companies. Although automation offers many advantages, it is not yet widespread among SMEs (small and medium-sized enterprise businesses). One of the reasons for this is that automation involves a high investment. For this reason, it may not be suitable for SMEs with small budgets. Also, many employees fear that robotics technology will take away their jobs.

However, manufacturing automation can be pretty beneficial for SMEs. There are a lot of cost-effective alternatives that SMEs can invest in to free up human tasks. In this article, we go through why SMEs need manufacturing automation and its benefits.

What is manufacturing automation?

In manufacturing, automation involves using management software to operate during production. It uses advanced technologies, robots, and equipment to improve and automate production processes. Manufacturing software helps automate production processes and operations like inventory management, product inspection, and procurement. Also, using automation tools upgrades your company so your equipment can handle tasks.

For example, a drink manufacturing company may have an automated system that dispenses a given quantity of ingredients.

Why is manufacturing automation so crucial in 2022?

Robotics technology and automated systems have significantly transformed the manufacturing industry. Currently, the global industrial automation market is projected to grow to up to $395.09 billion.¹

Many companies across different sectors realize the importance of automation for their business processes. With labor shortages and supply delays due to COVID-19, companies are now seeking more effective ways to keep their businesses running. COVID-19 also changed how many organizations function - many factories and companies had to close up. Now, these companies, including SMEs, are looking for ways to get things done faster and better. Also, due to the shortage of skilled labor, many organizations are looking for ways to reduce manual operations. This way, there can be less reliance on skilled labor while generating faster results.

But is automation the answer?

Yes, automation is an excellent way to move forward as a business owner. In today’s age, introducing automation to your industry can bring many benefits, including increased productivity and higher revenue.

Meanwhile, many SMEs feel like automation is for large companies only. This explains why 40% of big enterprises implement automated systems in at least one business unit while only 25% of SMEs do the same.² According to McKinley, SMEs have more success when they invest in automation, even though they are less likely to invest in it.³ It is the best time for SMEs to invest in manufacturing automation to reap huge benefits.

11 benefits of manufacturing automation for SMEs

Many manufacturers are increasingly using automated systems for greater efficiency. Whether it’s inventory management, digital marketing automation, or packaging automation, every company can benefit from automating some tasks. This makes it easy for companies to focus on other areas of development while robots automate repetitive tasks.

Here are some key benefits of manufacturing automation for SMEs:

1: Increased labor productivity

One of the significant benefits of automation technology is improved labor productivity. Using manufacturing automation relieves stress on employees by managing repetitive and routine tasks. Robots and A.I. machines eliminate the efforts and time needed to get some tasks done, thus increasing labor productivity. Production operations can continue around the clock with little or no supervision and at incredible speed. It also means employees can focus on other tasks within the company, like customer service.

2: Reduced labor costs

Many people view automation as high investment, but it’s an upfront investment that saves costs at the end of the day. Higher investment in manufacturing automation brings about reductions in manual labor. One machine can do the task of about three people at greater speed, thus lowering operations costs. This is a good advantage in situations with a shortage of skilled workers.

Also, automation systems help companies save on employee costs like wages, leave allowances, and equipment. These costs can then be invested in other parts of the company to scale up the business.

3: Improved product quality

Aside from increased production rates, automation systems also help improve manufacturing processes. Humans aren’t perfect and may sometimes make mistakes that can lead to heavy consequences. However, companies can invest in automation systems that complete the job perfectly. Robots can work efficiently, achieving greater accuracy and reducing errors in manufacturing processes.

4: Improved workplace safety

There are some risky processes involved in manufacturing which may sometimes be very risky to employees. The U.S. Bureau of Labor Statistics considers manufacturing one of the most dangerous occupations regarding job-related injuries.⁴ Industrial automation not only reduces human error but also reduces the occurrence of workplace injury. In companies where automation machines are used, employees act as supervisors rather than operators. Businesses can minimize danger to humans by automating risky tasks, thus creating better and safer working conditions.

5: Eliminate redundant tasks

No one wants the role of sticking labels on cartons or counting inventory every minute. In many cases, employees who take this role often leave the company for better opportunities. This means companies may spend more time and money hiring new people. Automation, on the other hand, reduces manual labor and gets jobs done faster. You can simplify repetitive and boring tasks using automation. After all, it will take humans longer to slap labels over a product compared to a machine.

6: Valuable data

According to Harvard Business, bad data costs U.S. companies $3 trillion annually.⁵ The good news is that automation simplifies data collection in companies. These machines can collect data about details of your facility, production, and products. This way, employees can easily collect data like product readings on the move. This minimizes the time needed for manual imputation, improves accuracy, and prevents stock shortages.

7: Increased ROIs

Automation tools and robots are investments that bring about greater efficiency and returns. When you invest in the right automation solution, you can achieve production goals faster with few resources. Everyone is in business to make money, and robots can help you make your money back with less labor and resources.

8: Increased flexibility

Companies are always looking forward to growth and expansion. However, employees may find it hard to track data and adapt to workflows during changes. Automation is precisely when it comes to collecting information relating to a particular product. Also, automation allows companies to adopt dynamic schedules to meet production demands.

9: Faster recovery

During Covid-19, many companies had to obey the restrictions, thus disrupting production. Not all companies could recover and bounce back into the business. However, automation makes it easy to eliminate manual labor and protect your business from adversities.

10. Proper monitoring

Automation machines have monitoring tools that let companies spot defects and take necessary actions before getting them out of hand. For example, in the case of a system defect or malfunction, companies can quickly identify where there is a problem. Also, companies can use automation monitors to monitor input materials. When ingredients are becoming less effective, companies can easily take action to fix the situation.

11. Data-driven decisions

Companies that make data-driven decisions are likely to outperform their competitors.⁶ Meanwhile, manually compiling data can be exhausting, making it difficult for companies to make data-driven decisions. With automation tools, businesses can efficiently synthesize a lot of data and information.

Manufacturing processes SMEs can automate

There are many automation opportunities for small and medium-sized businesses. Some areas where SMEs can see the benefits of automation solutions include:

• Operations management

  There are a lot of challenging and repetitive activities that you can automate during the manufacturing process. Automated software can take the job of overseeing certain business operations like production and inventory management.

• Accounting processes

  Managing finances and keeping accounts can be an arduous and time taking task. Now, you can trust automated accounting software to undertake your bookkeeping and finances.

• Procurement automation

  Procurement automation streamlines supply chain processes such as ordering goods, managing vendors, maintaining communication, and determining suppliers’ requirements. This way, businesses can complete many processes faster.

• Product inspection

  Manufacturing industries need to release products that meet customer satisfaction. This includes ensuring the products are free of contaminants, the ingredient blend ratio is correct, and products meet requirements in terms of size and quality. Manual inspection can be tedious, but you can use automation tools to ensure products are up to standards. This way, you reduce the chances of defective products getting packed into boxes.

• Customer management and support

  Manufacturing companies create products for people, and it’s essential to prioritize customer service. It’s a brilliant idea to have automation systems like the Customer Relation Management (CRM) System to automate customer operations. This way, you can collect customers’ data, process orders, reduce waiting time and, in the long run, improve satisfaction.

• Document automation

  Manufacturing processes often involve documenting processing, like approval documents. Manually doing these tasks can be a hassle, but with document automation, you can get the job done quickly.

• Analysis and reporting

  As a company, knowing if your efforts are paying off and if you’re moving closer to your business goals is essential. You can use automation tools to get the analysis done efficiently.

• Compliance automation

  Manufacturers have so many standards and rules and regulations to comply with. Meanwhile, keeping up with all these rules can be a hassle, so it’s best to automate some components. This way, you can improve accuracy and ensure products comply with industry standards.

How can SMEs successfully implement manufacturing automation?

The use of robotics is spreading across several manufacturing industries. But how can small and medium-sized enterprises implement manufacturing automation processes? Here are some steps to tap from the advantages of automation systems in your company:

1: Identify tasks you can automate

Company A may not have the same manufacturing processes as Company B, so they may not require the same automation system. Also, you cannot automate all manufacturing processes. Therefore, the first tip for medium-sized enterprises is to figure out processes they can automate.

An excellent way to figure this out is by asking questions like:

• Is the task repetitive?
• Is the task process complex?
• Does it require multiple people?
• Is the task sensitive?

If the answer to the questions is yes, you probably need automation systems to streamline tasks. Also, your answers to these questions can determine which tasks you need to automate first.

2: Validate the automation processes

Some tasks are simple and cheaper to automate, while others can be pretty expensive. When investing in automation machines, it’s essential to focus on processes that bring higher ROI and are easier to implement. Also, consider conducting a risk assessment to ensure the feasibility of your automation plans.

3: Build a roadmap

Now that you know what tasks you’ll be automating, it’s time to build a roadmap. This involves setting a goal (what do you want to achieve with your robots?) and highlighting how you will measure these goals. Also, you need to highlight the steps involved in automation processes and include a design model to fit your business requirements.

There are three major automation design models, and they include:

• Fixed automation

  This automation solution is a system where production processes are fixed and produce only one product type. Once this automation system is in place, it’s hard to change the product’s style. For this reason, fixed automation is best for producing large quantities of products and best for products in high demand.

• Flexible automation

  As the name suggests, flexible automation systems adapt to the changing production needs of a company. In this case, systems are capable of producing multiple product types at the same time.

• Programmable automation

  With programmed automation, you can program commands into the system to run production in varying quantities. This means you can change the configurations of your automation system based on your manufacturing needs.

4: Create a budget

You’ll need to create a budget that aligns with your automation plans. Automation solutions are a huge investment but aren’t as expensive as they seem. When making a budget, highlight your business requirements and research the suitable investment and the costs.

5: Choose the right suppliers

The next thing to implement automation solutions is sourcing the necessary automation machines and equipment. It would help if you worked with a suitable supply chain, so it’s best to do your research to ensure you only work with trustworthy suppliers. It’s also a good idea to schedule demos with suppliers so that you know what to expect before you get it.

6: Choose the right automation tools/equipment

It’s time to identify and choose the machines or tools you need to automate your selected tasks. It’s best to only invest in automation tools that are proven to be effective and successful. You may shortlist different alternatives and determine the pros and cons of each until you find the best fit.

Also, if you want to implement automation solutions, you must find a suitable machine for your company and tasks. The last thing you want is to spend money on equipment that may be useless for your company. Don’t follow industrial automation trends; instead, find out what you need and what will be useful for your needs. If you aren’t sure what equipment to use, you can seek advice from companies like yours or your engineering department if you have one.

7: Invest in a pilot project

Pilot testing involves creating a beta version of your desired software to see how it automates your production processes. This step is crucial because it gives you a trier run while identifying problems and areas for improvement.

8: Start small

While setting a budget, it’s important to remember that you can start small. You do not have to get your automation systems all at once if it’s going to crush your budget. A good idea is to start with the most basic need and keep expanding as your budget allows. Target your primary pain point, invest in an automation solution to address it, and use gains from your investment for other automation tools. Also, you can consider investing first in an automation machine that everyone in the company can benefit from.

9: Involve the human power

To implement automation solutions, you need to carry along your employees so that they see the benefit of the technology. Introducing automation manufacturing is a big change in the company. For this reason, employees need to be carried along to help implement and sustain new technologies. You need to involve your employees in the journey and establish them as automation champions.

10: Invest in employee training

It is essential to ensure that your employees are well-trained in using automated techs to achieve success. The more knowledgeable your employees are about industrial automation, the easier it is to reap long-term benefits. So, investing in automation tools also means building staff capabilities to use the systems. Also, you need to get the training right to ensure it is done based on their abilities, roles, and tasks in the company.

11: Create monitoring plans

You shouldn’t operate automation machines without some sort of supervision and monitoring. Therefore, it’s essential to make plans for monitoring, maintenance, and improvements periodically.

12: Create contingency plans

Investing in automation solutions also means creating a contingency plan in case an operation fails. This way, when something goes wrong with the systems, you know who to call and how to get things done without disrupting the production process.

How to choose automation tools

Here are a few things to look out for when choosing automation solutions for your small business:

• Price

  Investing in automation tools is excellent but bad if it hurts your budget. Fortunately, there are a lot of cost-effective automation tools, so look for solutions that are affordable and small-business friendly. This doesn’t mean you should go for the cheapest tool on the market. Instead, it means finding software that offers the feature you need at a cost-effective rate.

• Features

  It’s best to go for automation tools that can grow with you—the more advanced features they have, the better your future business needs. So, while getting automation software, don’t just think about what you can automate today but also what you can automate in the future.

• Integrations

  Another thing to consider when choosing automation tools is how well they can integrate into your current business needs. Don’t use an automation machine that can’t serve your business needs or integrate with your company model.

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