When Can I Expect ROI From Automation

Advances in technology and engineering have provided manufacturers with incalculable gains throughout the 21st century, but these have not fixed a fundamental problem in the industry: maintaining a workforce. Automation provides manufacturers with the ability not only to make their business safer, but protects itself against a changing economy.

There are plenty of costs that need to be calculated to determine the true ROI that automation provides businesses. Hiring, on-boarding, benefits, and safety contribute to the “hidden cost” of retaining employees. Thankfully, automation is able to reduce or eliminate many of these fees.

Below, we examine how productivity, retention, cost, and labor waste are affected by automation, and the advantages that using these machines can provide your work force. As we will see, the real ROI of automation isn’t just in efficiency, but eliminating the hidden costs that emerge in manufacturing.

Productivity

It should come as no surprise that automated machines are able to work faster, longer, harder, and more consistently than a human on the workforce.

On average, the ROI on robotic automation is 24 months.

This isn’t to devalue how important people are in manufacturing – without men and women clocking in every day, factories could not function. But even the best workers are not infallible – people get sick, and in times like these manufacturing companies have to spend extra revenue to ensure the health of their workers.

Machines require routine maintenance, cleaning, and inspection, but the downtime spent on these activities tends to be significantly less than that of a worker. More, automated machines are safer for workers to operate. People will still need to be trained on how to operate these machines, but the profit potential tends to be much higher overall.

Employee Retention

It is estimated that the average employee turnover rate in manufacturing is 37%. Comparatively, the average turnover rate across the U.S. is 3.6%. This is a huge disparity, and as the workforce ages and millennials show little interest in this industry, talent is hard to find and harder to keep.

To make up for the inability to keep employees around for the long haul, manufacturing companies that might be investing in better machines, instead put that money into recruiting and training. The payoff is not great. Spending more money on training and development does increase employee retention, but does not account for a shifting economy.

Automation in the food manufacturing industry is forward thinking. We can’t predict what the future holds, but if industry trends are correct companies will spend more money on HR with diminishing returns. Machines don’t suffer from absenteeism, can work all hours of the day, and are built to last.

Diminished Waste

Lean manufacturing is a methodology based around finding where value lies to the customer, and using this as a benchmark to reduce waste and maximize productivity. It has been successfully implemented by companies from Toyota to John Deere.

The hallmark of lean manufacturing is reducing waste in every form it takes – whatever the customer doesn’t want to pay for should be removed from the equation. It also means subtracting unnecessary steps or movements on the factory floor to save time and money.

In frozen food manufacturing and baked goods manufacturing, customers are interested in consistency – they should find whatever they are eating to be tasty and predictable. Fresh ingredients, reliable application, and preservation are three of the key contributing factors that matter to customers.

This doesn’t mean that there aren’t other important things to food manufacturing – it means to view your product from the lens of a customer, and identify aspects of your product that matter most to them. Automation reduces cost on these elements through even ingredient application, efficiency, less downtime, and increased sanitation.

Conclusion

While adding automation to your production line tends to yield an expensive upfront cost, machines tend on average to pay for themselves within two years. As turnover rates grow higher and hiring pools for manufacturing jobs grow limited, automation is particularly valuable to the food manufacturing industry.

Some fear that these machines will one day take over the market and run everyone out of manufacturing. There will always be a place for people in manufacturing. Automation reduces waste, increases efficiency, and helps make factories a safer place.

With equipment like our automated pizza production line and ingredient topping technologies, Quantum Technical Services provides companies like yours with the solutions you need. Contact us today to learn more about our offerings and how we can bring real savings to your food manufacturing business.