1.2 REASONS FOR AUTOMATING

Companies undertake projects in automation and CIM for a variety of good reasons. Some of the important reasons for automating include the following :

1. Increased productivity. Automation of manufacturing operations holds the promise of increasing the productivity of labor. This means greater output per hour of labor input. Higher production rates (output per hour) are achieved with automation than with the corresponding manual operations.
2. High cost of labor. The trend in the industrialized societies of the world has been toward ever-increasing labor costs. As a result, higher investment in automated equipment has become economically justifiable to replace manual operations. The high cost of labor is forcing business leaders to substitute machines for human labor. Because machines can produce at higher rates of output, the use of automation results in a lower cost per unit of product.
3. Labor shortages. ln many advanced nations there has been a general shortage of labor. West Germany, for example, has been forced to import labor to augment its own labor supply. Labor shortages also stimulate the development of automation as a substitute for labor.
4. Trend of labor toward the service sector. This trend has been especially prevalent in the United States. At this writing (1986), the proportion of the work force employed in manufacturing stands at about 20%. ln 1947, this percentage was 30%. By the year 20()0, some estimates put the figure as low as 2% [7]*. Certainly, automation of production jobs has caused some of this shift. However, there are also social and institutional forces that are responsible for the trend. The growth of govemment employment at the federal, state, and local levels has consumed a certain share of the labor market which might otherwise have gone into manufacturing. Also, there has been a tendency for people to view factory work as tedious, demeaning, and dirty. This view has caused them to seek employment in the service sector of the\economy (govemment, insurance, personal services, legal, sales, etc.).
5. Safety. By automating the operation and transferring the operator from an active participation to a supervisory role. work is made safer. The safety and physical well-being of the worker has become a national objective with the enactment of the Occupational Safety and Health Act of 1970 (OSHA). lt has also provided an impetus for automation.
6. High cost of raw materials. The high cost of raw materials in manufacturing results in the need for greater efficiency in using these materials. The reduction of scrap is one of the benefits of automation.
7. Improved product quality. Automated operations not only produce parts at faster rates than do their manual counterparts, but they produce parts with greater consistency and conformity to quality specifications.
8. Reduced manufacturing lead time. For reasons that we shall examine in subsequent chapters, automation allows the manufacturer to reduce the time between customer order and product delivery. This gives the manufacturer a competitive advantage in promoting good customer service
9. Reduction of in-process inventory. Holding large inventories of work-in-process represents a significant cost to the manufacturer because it ties up capital. ln~process inventory is of no value. lt serves none of the purposes of raw materials stock or finished product inventory. Accordingly, it is to the manufacturer`s advantage to reduce work-in-progress to a minimum. Automation tends to accomplish this goal by reducing the time a workpart spends in the factory.
10. High cost of not automating. A significant competitive advantage is gained by automating a manufacturing plant. The advantage cannot easily be demonstrated on a company‘s project authorization form. The benefits of automation often show up in intangible and unexpected ways, such as improved quality, higher sales, better labor relations, and better company image. Companies that do not automate are likely to find themselves at a competitive disadvantage with their customers, their employees, and the general public.

All of these fastors act together to make production automation a feasible and attractive altemative to manual methods of manufacture.

* Numbers in brackets refer to the References at the end of the chapter.