The Hidden Costs of Not Automating Your Production

By now, most of us know that opting to automate requires an investment. What we don’t talk about nearly as much, however, is the cost associated with NOT automating.

For smaller manufacturers, the expense of automation can be a barrier to entry, but what if we told you that there is also a steep price for maintaining analog workflows? In fact, some market research suggests that the cost premium of delaying automating may be as high as 50%!

So, where are you spending money when you opt out of automating?

Downtime

The International Society of Automation has reported that, on average, most manufacturers will experience 800 hours of unplanned equipment downtime each year, equivalent to approximately 15 hours per week. Furthermore, research firm Aberdeen has estimated that the average business loses $260,000 per hour of downtime — that's over $2 million per year!

While not all instances of unplanned downtime can be avoided, leveraging automation can help mitigate the risk of losing extended time (and money) to the disruption.

Automating dull, repetitive and/or dangerous tasks can have a positive impact on employee engagement and retention and help to prevent accidents or errors that can cause unplanned downtime. Incorporating automation into workflows also opens the door for tools like predictive maintenance and machine monitoring that assist in catching equipment issues before they turn into costly failures.

Inefficient Processes

Extended cycle times, inconsistent product quality, wasted materials, downtime (again!), are all symptoms of inefficient processes that inhibit ROI. In fact, market research firm IDC estimates that inefficient processes can cost businesses 20-30% of potential revenue every year.

Optimizing workflows with automation can alleviate many of these pain points and drive increased productivity and ROI. The precision and consistency of automated systems helps to minimize errors, defects, and material waste in production while also maintaining more consistent product quality. All of which is essential to producing more products at a lower cost. Automation is also a game-changing tool for quality control, allowing for quick and effective identification and removal of faulty items.

Labor

Nearly 60% of manufacturers surveyed in the National Association of Manufacturers (NAM) outlook survey for Q3 of 2024 highlighted employee recruitment and retention as their biggest challenge. The Employment Cost Index for total compensation (wages and benefits) in manufacturing keeps climbing, gaining 3.8% YoY as of September 2024. With labor costs high and getting higher, and a skilled labor shortage contributing to extensive downtime (!!!), it’s becoming increasingly cost prohibitive to manufacture without incorporating automation.

Automation can help alleviate the pressure of the labor shortage, particularly for smaller businesses by filling job vacancies and maximizing ROI on existing workforce. Automating low-value repetitive or hazardous tasks allows employees to work on higher-value tasks that increase engagement, boosting retention. Moreover, redirecting focus to these high value tasks helps to drive innovation, leading to business growth.

Are You Paying the Price for Not Automating Your Business?

Industrial Robot Help specializes in working with businesses that are new to automation. We take a low-cost approach to automation, ensuring that the strategies and solutions we develop for our clients are simple, accessible, and adaptable for future growth and/or changing production needs. IRH is brand-agnostic, meaning we are driven by client needs not manufacturer kickbacks. From concept, to code, to controls - IRH’s team of experienced engineers will manage your adoption of automation, enabling your team to focus on driving innovation and business growth.

Want to get started with automating your business? Book a free consultation with Industrial Robot Help today and discover the power of automation, simplified!