How Smaller Manufacturers Should Approach New Automation Tech

According to the Corporate Finance Institute, small and medium-size enterprises (SMEs) make up the majority of businesses operating globally. Of course, the size and/or categorization of an SME depends on the country it operates and how typical metrics such as annual sales, number of employees, assets, market capitalization—or any combination of these—are assessed. 

The manufacturing industries are no different. According to the Census Bureau, manufacturing establishments with more than 1,000 employees make up only 0.3% of all manufacturing establishments, though they employ more than 15% of the manufacturing workforce. With so much of the manufacturing industry comprised of small to mid-sized businesses, we wanted to explore the specific automation technology-related challenges these companies face during a time of rapidly expanding automation implementation and use. 

To identify these challenges and how to best address them, Automation World spoke with four industry experts: Jeff Payne, director of business development at AutomationDirect; Steve Bieszczat, CMO at DelmiaWorks; Caleb Funk, engagement engineer with ImaginIt Technologies; and Julie Fraser, vice president of research for operations and manufacturing at Tech-Clarity.

AW: How can smaller manufacturers identify specific challenges in their manufacturing processes to set achievable objectives for automation technology adoption?

Bieszczat: A good place to start is by creating a checklist of desirable outcomes and then benchmarking performance against those desired outcomes. For instance, a production checklist might include production cost, on-time delivery, bad parts/scrap and returns from customers.   

The overarching method is to set key performance indicators (KPIs) for critical factors and then measure the results to pinpoint common challenges and identify corrections or areas where automation could yield improvements. Enterprise resource planning (ERP) and manufacturing execution systems (MES) play key roles in monitoring business and production performance, which in turn provides the data necessary to measure and report on the key KPIs so that management can identify common challenges and measure the results of their automation investment and/or corrective actions.

Fraser: Most manufacturers have process experts who can identify the issues that are creating waste if you ask them the right questions. Asking the right questions often means challenging how things work. Typically, your most experienced people have created workarounds that enable the product to go through processes relatively smoothly and reliably, and they may no longer recognize the original issue. Once the issues to improve are identified, setting achievable objectives for automation may be obvious or may require an experienced automation engineer or system integrator to determine achievable objectives.

AW: How can small manufacturers align technology goals with their business strategy?

Funk: Start by mapping your processes to understand the current state of operations. This involves clarifying objectives, such as whether you aim to increase output, reduce costs while maintaining output, or adjust their workforce size. Understanding this is crucial for determining which technological solutions are appropriate.

Once objectives are clear, manufacturers should assess their existing technology to identify gaps that hinder achieving these goals. This creates a roadmap that outlines the technological advancements needed and aligns them with the broader business strategy.

Bieszczat: First, identify your business strategy. Is it to be a low-cost producer, a provider of quick turn services, or to add new product lines?  Identify the strategy and then list the steps to execute on it. These steps may include automation, new equipment, process improvements or all three. The main point is to identify necessary strategies and investments to achieve them.

AW: Can you point to any industrial technologies that work well to meet smaller manufacturers’ specific needs?

Fraser: I don’t believe smaller manufacturers have different technology needs. There are some aspects of large-scale infrastructure you may not need, but otherwise, it’s similar. 

The key is to find more turnkey technologies that require fewer personnel or less technology-skilled personnel to set them up and keep them running. Examples include plug-and-play or interoperable automation components; Git-based approaches for managing PLC code and versions; flexible, multi-function cobots vs. traditional robots; and software that connects and delivers value in days, not months. In the US, CESMII has the Smart Manufacturing Interoperability Framework initiative to standardize secure plug-and-play equipment and processes. This initiative enables small and medium-size manufacturers to move toward smart manufacturing more readily.

AW: How do you assess the credibility and reputation of potential vendors?

Payne: There’s no substitute for research. This could be first-hand knowledge from previous experience with a company or product. Some reputable automation companies are beginning to allow customers to rate products and the company itself, which can provide good data. 

Funk: Assessing the credibility and reputation of potential vendors begins with examining their track record. It's important to determine whether they successfully delivered on similar projects or services in the past. Industry reputation is another crucial factor, as it reflects the vendor's standing among peers and customers in their sector. 

In situations where the software or service is relatively new and lacks a long track record, customer references become particularly important. Vendor responsiveness is another key indicator of a vendor's reliability.  

Finally, a thorough review of the terms and conditions in contracts and service agreements is essential. This review can reveal the vendor's commitment to fairness, transparency, and customer satisfaction.

AW: How can smaller manufacturers estimate the total cost of technology adoption and implementation?

Bieszczat: Most technology projects come down to a short list of three vendors. Often, one of the key variables between the vendors will be cost. This includes the cost of the primary purchase and costs related to set-up, implementation, training your workforce and, perhaps, preparing the physical workspace. Use the average of the vendor-side costs plus a factor for your internal cost, which you can estimate as 30% to 100% of the vendor-side costs. This will produce a reasonable estimate of overall project expenses. 

Payne: Your most accurate estimates will come from outside firms, such as a system integrator. But this may not be the most cost-effective way to get a good estimate. Many manufacturers, including smaller ones, often have the capabilities in-house to complete the necessary modifications. Depending on the results of an assessment of your team’s skill level, handling new technology implementation in-house could save you money—if done right. But realize that it could also pose a higher risk. So, perform your assessment of in-house skills carefully.

AW: Once a project has been determined, how do you create a realistic timeline with milestones for deployment?

Fraser: Like project costs, timelines often shift as the provider and manufacturer learn more about one another. Be sure you communicate as much as possible early in the process to help the potential technology providers understand your objectives, needs, resources and situation. 

You must be prepared to devote some of your personnel to an automation project. Ideally, the internal team includes at least one process expert, someone the user team respects, and an executive sponsor. If you have specific timing needs, as a seasonal business might, or if you are working to meet new specifications with a deadline, put that out as a challenge. 

Setting a scope with boundaries for the project is the key to making the timeline realistic. For many automation projects, you will see new opportunities to improve as you learn; but if adding that capability slows down the project or adds extra expense, it may be wise to move in phases. Set improvement goals for each phase and measure before and after to gauge whether you’ve met the goal.

Bieszczat: Vendors provide timelines for deployment, which will typically be optimistic but useful. If a vendor estimates three months for deployment, and you intend to truly dedicate staff to the project, then add 50%. If a vendor estimates three months, and you know you will not have dedicated staff because employees will be working on other projects, double the vendor’s time estimate or more. Having dedicated staff is the key to fast technology deployments. 

Funk: Manufacturers need to establish start and go-live dates, which are critical anchors in the timeline. Considering tasks and phases involved, milestones emerge from the process of mapping the journey from the current state to the desired state. It’s important to assess whether the go-live date is arbitrary or if it's tied to specific business needs or external factors, which can affect its flexibility. 

From there, manufacturers can backfill the markers, setting intermediate goals and checkpoints that lead up to the go-live date. This approach allows for a structured yet adaptable plan.

AW: How should small manufacturers prepare for potential challenges and setbacks during implementation?

Fraser: Nearly every project will have challenges. Educating the project team and those who will eventually benefit from working with the new automation technology is essential. One element of that education could focus on identifying issues and effective problem-solving. 

Some tools of lean-thinking can be very effective, such as the five whys, root cause analysis, continuous improvement cycle of understanding the problem, defining solutions, considering alternative solutions, plan-do-check-act, and reflecting and learning.  Organizations can get training in lean-thinking from organizations like AME, the Association for Manufacturing Excellence. If the team has a mindset that setbacks are great ways to learn, it can motivate them. Executives and those funding the program must also agree that achieving the project goal is worth the time and effort to overcome any setbacks.

Funk: It’s important to realize project issues will be an inevitable part of the process. Drawing from experience with CAD tools, I know challenges are a constant in technology implementation. A clear roadmap is essential in navigating these challenges effectively. It acts as a guide, outlining the path from the current state to the desired outcome and allowing for adjustments along the way.

Bieszczat: That’s a hard question to answer without specific project information, but the general idea would be to assume setbacks and delays will occur, so build buffers into your schedule at the executive level. It does little good to set a schedule of three months, then tell the team you know it will take longer. That would invoke Parkinson's adage that the work will expand to fill the time allotted for its completion. Set realistic goals for the team, but also build buffers into the executive plan so, if delays occur, they will not harm the business. 

Payne: Contingency plans need to be in place. Depending on the critical nature of the process or machine being modified, a complete study should have been conducted to evaluate each step in the implementation process with a rollback plan, just in case.

Not all situations require this level of safety. If the process is crucial, but not mission critical, you may have more leeway when implementing changes. Some good questions to ask are: Can the process be run at about 50% of normal without causing major impact? If not, what is that number? Is there a manual process that can run in conjunction with the automated process while commissioning the module updates?