Mindful of these patterns, look for places where there is a high content of repetitive labor; somebody doing the same thing over and over again. It makes no difference whether an operation requires highly skilled or not so highly skilled labor-a girl winding hairsprings for watches or a man feeding nuts into a tapping machine. If an operation is repetitive, there is an opportunity for improvement. Look for spots with a high through-put of material. When you set up an automatic machine, it has to be adjusted. But if you are forever changing the setup it is not so attractive a place for automation as one where you have a lot of material passing through one setup. Sausages are all supposed to be alike, but if you making ladies' hats, it's a crime to make two alike. Look for places where there is a sequence of similar time cycles. In the printing of signatures for magazines, for example, paper is unrolled and may be printed in yellow, red, blue, and black on one side. It is then put through a dryer and may be printed in yellow, red, blue, and black on the other side. After going through the dryer again the paper is cut into sheets. The sheets are folded and delivered to a feed-out. These 14 steps have all been timed to go at a similar rate. As a result, they can be combined sequentially into a single machine system. Web presses that pour out signatures at a terrific rate are an excellent example of what can be done when a series of operations has, or can be made to have, similar time cycles. Examine your operations to see how many groups have similar levels of mechanization. Then try to determine how many of those groups of similar levels are interrupted by manual procedures. Eliminate or mechanize the manual procedures, or rearrange the sequence so that operations which can be mechanized are consecutive. A lot of in-process inventory sitting in tote pans, on racks, or in bins spells idle dollars. Here is an excellent place for automation. Relics of a hand method also are prime targets for automation. Take the manufacture of shoes. Foot gear was originally handcrafted by a single shoemaker. This one-man operation was then broken down into a series of steps, each one allocated to an expert. In the last half century these manual methods have been largely mechanized. Today, 50 to 80 operations are entailed in the manufacture of a single pair of shoes. Every one of these steps is either fully or largely mechanized, yet the products and the processes are essentially unchanged. The shoemaking industry is a prime candidate for auto mation. Another opportunity for automation lies in idle expensive machine tools such as boring mills. Many production machines of this type have load factors as small as 50 percent. JUSTIFICATION Let us turn to the second phase of the strategy problem; namely, justification. The most important concept in this area is that eliminating labor is not the be-all and end-all of automation. There is no real justification for such an attitude. The elimination of labor is just one of many reasons for mechanizing, and need not be a factor at all. Take the reduction of training time. An ordinary canvas work glove has a seam that runs along the periphery of each finger. Stitching this kind of seam requires great skill, and it can take months to train an operator to make these seams properly. Winding hairsprings for ladies' wristwatches is another example. There are only a dozen or so people in the whole country who can keep up with the standard rate of manual winding, and it sometimes takes 2 years for the average winder to learn the art. Any mechanization aimed at reducing training time is certainly justifiable. Monotony and excessive muscle strain are two more justifications for automation. People simply will not work hour after hour at machines that take as much effort as changing a truck tire. So whether or not you eliminate labor, you at least make it easies to find a work crew if you cut down on muscle strain. People will avoid hazardous or dangerous occupations. An operator feeding a punch press can expect to sooner or later leave a finger, or at least a piece of one, under the punch. But if a dial-feed table is installed on the front of the press so that parts can be plased in nests at the front of the dial, the operation is considerably less hazardous. The frozen food business provides another illustration. Cold-storage warehouses have picking lines where orders are filled for retail stores. These warehouses are operated at 0° F., and ultimately they may be kept at minus 4° F. An operator goes in and works for 20 minutes and then comes out and warms up for 10 minutes. During July, he's a prime candidate for pneumonia. But machines don't get pneumonia. Consider the utilization of floor space. If you transport materials by machine from one operation to another in a multilevel building, the machine can carry goods vertically as well as horizontally. But if you have to carry things in your hands, in a tote pan, in a wheelbarrow, or with a forklift truck, you have a good reason for putting your whole factory on one flor. American cities abound with multistory buildings that are not being used properly. Here is an opportunity to mechanize floor-to-floor materials handling (perhaps using gravity for power) to salvage these centrally located multistory buildings. And now, look at uniformity and quality of the product. Where these characteristics are paramount, the improved production rates of mechanized machines and the resulting reductions in lead time may be secondary. In regard to lead times, one manufacturer of nylon hosiery used to take an order on a Monday and fill it by the following Friday. He took his greige goods out of stock, then dyed them, finished them, and packed the merchandise. By mechanizing this sequence, he found he could ship his product the same day the order was received. The dollar savings in inventory are obvious. PLANNING Of course automation costs money and it imposes some rigid standards. An automatic machine has got to be fed a uniform input. If you change the quality of the input, the machine may not respond very well. So you have to tighten up a bit on tolerances. A corollary: Start your automation at the raw material end and work through the process. And expect to need more maintenance and more maintenance people than you needed before. Because automatic machines are more expensive than their conventional counterparts, you will probably have to make a greater capital investment. But weigh the cost versus the savings. Compare these factors during the time spent building the specialized machinery, putting it into operation, and passing through a reasonable period of production. Then get the payback. The "discounted cash flow" method is especially useful for calculating rates of return on investments, including those made in automation equipment. First, by placing a time value on money, it helps you to figure out acurately the rate of return on one specific investment over the years. Second, by applying the method to other proposed projects from new pavement for the parking lot to a national advertising campaign, if you like-you can make valid comparisons between investments in any kinds of assets or services. Now a final word on planing-the third part of the strategy of automation. Plan for the whole operation at one time. Cover market definition, sales planning, purchasing, storing, component manufacture, component assembly, packaging, warehousing, shipping, and distribution. Plan for inventory control, quality control, production control, and cash flow. Then combine the individual plans into a single system. Unless your situation is most unusual, you will not be able to afford what you plan. If you can, you probably did not plan deeply enough. Lacking resources to complete a project at one time, then buy what you can each year on a planned basis. A plan will insure, for example, that in 1965 you will not have to scrap what you have built in 1962. LARGER IMPLICATIONS The effects of automation on our economy, on employment, and on the general welfare of our citizens have been discussed at length in newspapers, on television, and via other mass communications media. Participants in such discussions have included highly placed Government officials, sociologists, and labor representatives. Many of these people have damned automation as a destroyer of jobs and a creator of unemployment. Assume that a business has a sound cost structure and that suddenly its labor costs go up without an increase in productivity. This means that overall costs will increase. If overall costs go up then prices must go up, too. And when prices go up, sales will go down. When sales go down, production goes down-and when production goes down, employment goes down also. Looking at it the other way, when the productivity of labor increases without an increase in cost, employment will go up. When people talk about raising wages without increasing production, they are inviting unemployment. This is basic economics. It bothers me deeply to hear people suggest that such a course is valid. If the "high pay for low output" theory were true, then industries noted for their lack of high mechanization should have high and increasing employment in an expanding economy. But such is not the case. Take the extraction industry, forestry, and food production. These areas are noted for their lack of high mechanization, and their employment has gone down. But look at the steel industry, the automotive industry, the chemical industry, and the telephone industry— all noted for high mechanization over the past 20 years--and look at what has happened to total employment in each one. It has gone up. One final point: Timing. When should you consider automation? Whenever you suspect that you could be doing your manufacturing more efficiently. For almost all of us that is right now. [From Automation, July 1962] CHALLENGE TO MANAGEMENT, DEVELOPING POLICIES FOR AUTOMATION 1 1 (By Roger W. Bolz, publisher and editorial director of Automation magazine) Willingness of leaders to accept responsibility is an important ingredient for success in any organization. But this willingness to accept is a hollow and potentially harmful characterization in industrial leaders unless it is matched by a true understanding of the technical, organizational, and economic factors which the evolution of automation has brought to the forefront. "One of the outstanding conclusions *** is that automation places a great premium on managerial planning. Manufacturing management has a new role to play. This role is that of 'machine designer' with the factory becoming an integrated machine which is conceived, built, operated, and maintained by highly skilled personnel." This comment by the authors of a recent article describing the development of a computer-controlled processing line underscores one of the most important facts concerning automation technology today-and for the future. Regardless of the type of industry, the kind of plant, or the character of the production problem, management in the age of automation is and will be far more critical and important. And let there be no doubt that this is the age of automation. What manager can foresee a slackening in those forces listed in figure 1 which are compelling automation? The salve of lip service to good management principles will offer little balm for lost markets and competitive upsets in the years ahead. The all too prevalent "seat of the pants" approach in management will result in some staggering losses since to gamble without a broad knowledge and understanding of basic automation technology is to invite failure. To ignore technology will be to write finis in many cases. Today's more complex integrated production systems and increasingly involved automated lines have proved, conclusively, that the conventional approaches of the past are no longer valid. Management must be entirely responsible for the fullest understanding and application of automation to achieve maximum benefit for all involved. In the years ahead top management will find it increasingly necessary to give serious assistance in the way of reducing costs and increasing productivity in the plant. Much broader knowledge and understanding of new and unusual approaches to manufacturing will be highly desirable. Certainly there will be little confidence in "formulized" proposals developed by subordinates intent on getting as much machinery as possible for a fixed amount of money approved for spending. Concern for more than the cash drawer is necessary in order not to lose sight of the all-important return on investment. 1 This article is based upon a presentation before the First Annual Manufacturing Forum. sponsored by the American Management Association, New York, March 1962. J. D. Schiller and H. H. Arnold, "Developing A Multimachine Complex," Automation, September 1961, pp. 52–60. There is no correlation between the amount of machinery per dollar investment and profit produced. The need for a new philosophy in management was emphatically brought out in a recent book 3 with this prefacing comment: "Cost reduction and profit improvement must be made the philosophy of a company-its way of life. The company must organize for the job and give it continuous attention. All aspects of the company operation must be addressed, including manufacturing methods, installation of modern production equipment, marketing and distribution, purchasing and traffic management, labor costs, and overall financial factors." This is a highly significant commentary on the key purpose for automation. Indeed, it must be made the main concern of any company if the major advantages of automation in the way of profit improvement are to be realized. Success with automation technology calls for good decisions. Good decisions by management require broad knowledge and a clear policy. Without a clear policy, management may end up feeling pretty much like the man that took a nap on a fast commuter and wound up at the end of the line. Policy basically reflects management's philosophy and records management's decisions. To make good decisions, then, it is desirable first that management take a detailed look at the problem, establish a basic philosophy, and develop needed policy based on these governing principles, plans, and courses of action. ESTABLISH A PHILOSOPHY Without a general underlying knowledge of automation technology, the real advantages profitwise remain untapped in most instances. It is necessary to recognize that automation technology involves an integrated approach to study of the complete manufacturing system. Successful application requires an overall study of the manufacturing process in its entirety, as a nine-stage development. This new attack on the problem, as shown in figure 2, contrasts sharply with the departmental or piecemeal approach common in the past. Charles W. Stewart et al., "Cost Reduction and Profit Improvement," Machinery_and Allied Products Institute Council for Technological Advancement, Washington, D.C., October 1960. FORCES COMPELLING AUTOMATION International Technological Competition Demand for Higher Living Standards Pressure of Population Increase Expanding Horizons of Scientific Knowledge Rising Capital and Overhead Costs Nead for Higher Product Quality and Uniformity Increased Manufacturing Competition Added Business Volume and Complexity |