Automating an owner-managed business entails more than purchasing a new piece of equipment. The most successful transition requires a careful analysis of existing production process, an understanding of where and when change is required, staged rather than wholesale transition, targeting repetitive employee tasks that can be automated, integration of production changes with business systems, involvement of employees and outside experts and owner metamorphosis from micromanager to business manager.
Ready to Take the Path to Automation?
Small businesses need to increase their operational efficiencies if they are to compete with goods imported from countries with lower labour and manufacturing costs. The road to competitive manufacturing may just rests with those who are automating their existing businesses.
Automating any business is not as simple as buying the latest widget maker; rather, it’s a process that will guarantee return on that money spent on automating and provide those efficiencies throughout the process rather than just in one area.
Analyze Your Current Process
As an owner-manager, you should implement a time and motion study to determine areas that are needed to improve work methods. The process review should examine each stage of the manual production process and highlight those areas and processes that are burdened with high labour and resource use.
It is best to document your process utilizing flow charts and written descriptions, as this will allow for management, workers and outside suppliers to evaluate how to improve on it. Consider among other items:
- the stages of production
- number of times a product is moved or inserted
- time each stage of your process takes
You’ll also need to build in time in your review for interaction with other departments, inventory retrieval and discussions with outside suppliers – all of which will help you gather more information as you analyze your processes.
When studies arrive at recommendations, there is often a rush to implement the entire process simultaneously. Taking on implementation in small, planned steps is a more favourable approach to avoid larger capital expenditure, employee trepidation, or longer training, meaning a break in cycles and thus the possibility of missing customer expectations.
Upgrading to automated equipment in an area currently saddled with excessive manual requirements provides a focal point for employees, to help them see advantages and gain insight about additional changes that can be incorporated into your vision.
Integrate Production With Business Requirements
You can augment the production efficiencies implemented on the floor by looking at their online tools to create efficiencies for equipment software updates, ordering requirements, production costing and numbers to meet sales. Combining physical production with management and financing requirements allows for economies of scale and a better bottom line.
The ability to relieve workers of repetitive tasks creates a positive environment for both managers and employees. Machines can carry out repetitive tasks without risking the issues that surface when people do them. Consider medical conditions (such as carpal-tunnel syndrome), poor-quality production, tired workers who can’t work to 100% capacity and are injured when concentration decreases. All these areas affect production costs and your bottom line.
While managers may see automation as a positive for the business, employees may see it as one step closer to the exit door and unemployment. You may be able to assuage employees’ concerns with the likelihood of less overtime, better product production or enhanced customer service, but it is still up to you to determine how these changes will affect your employees.
To reduce attrition through modernization, management should – in conjunction with the path to automation – establish a plan for increasing market share, diversifying products or eliminating products or services that are suffering a loss. In the final analysis, if it is not possible to keep all employees, you must lay out a plan to reduce the wage burden.
In all walks of life, we implement ideas without knowing how they will work. When they malfunction, we call an expert. The same process should apply when automating and integrating support systems. Call in the experts to set up the systems, train your employees and work with them until they are sufficiently accomplished to work on their own.
Naturally, you keep the experts on-call once the system is up and running, to ensure not only that they can help coach you along but also that any available updates are installed promptly.
Work With Your Team
Transition takes time. Be understanding of employees adapting to new processes, be patient with experts that can’t meet deadlines or if a supplier may not understand your needs, while seizing the opportunity to provide information to customers about the positive changes that are on the horizon. Use this opportunity to determine if changes resulting from the upgrade may affect their operation and how you can alleviate their concerns.
Adjust Your Management Style
Automating the manufacturing process and its support systems should encourage managers to micromanage processes less than before. Firstly, employees have been trained on the new systems; secondly, experts are available to handle glitches within the process.
When automation reduces managers’ need to be as directly involved, it should grant them the ability to work towards building the business and strengthening their relationships with new or potential customers through visits to existing clients or improved networking. Further, less need to micromanage allows more time to review the interrelationship between productivity and profitability by product line, and to gain insight into how to further improve corporate performance.
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.