By Bill Griffin, Chief Revenue Officer, Bright Machines
For three decades, the solution to manufacturing has been offshoring to regions of low-cost labor. It has taken less than three months to disrupt what took 30 years to create. Crucial aspects of production, especially assembly, often rely on people who are now restricted or even forbidden from entering factories. This while supply chain infrastructure is beginning to move towards improved resiliency through reshoring.
But even before the coronavirus crisis, production lines were facing challenges associated with high demand, labor shortages and geo-political challenges. It’s no wonder that in a recent study nearly two thirds of companies surveyed stated they are likely to reshore in part in response to Covid-19.
While the desire to manufacture locally is now stronger than ever, few if any are willing to pay the higher labor costs that will come with it. That’s why in order for manufacturing to reshore, the industry must shift more of its operations from expensive, manual assembly to flexible and resilient robots.
Unfortunately, the demand for automation comes at a time when businesses have been undermined by not only disruptions in their supply chain, but also with less predictable forecasts for future product demand. In this environment, few companies are committing capital to new expenses.
But I offer good news on this front.
Microfactory-as-a-service shifts the cost of automation to an operating expense and provides an alternative to a lengthy capital equipment process, providing several benefits:
- It’s hiring help – Today’s smart automation can take on the same tasks that have in the past been relegated to manual labor – soldering, picking and placing parts, inserting connectors, screwing and dispensing. Microfactory-as-service allows manufacturers to treat automation as an operational expense, just as they would manual labor.
- Speed of adoption – The most pertinent time to consider a robotic solution is when you need it, not six months before. Capital expenditure processes are very time consuming, slowing down adoption and risk having approval to purchase well after the problem has been solved. Typically, new vendors will have to go through a centralized vetting process before they find their way onto the AVL (approved vendor list). In contrast, operational costs are managed by the factory or operation management team and approved locally, often immediately. In simple terms, if you can show a cost saving with a robotic solution treated as an operational cost, you can likely have it at the speed of the decision.
- Throw out old ROI models – Return on investment can be a complicated calculation, especially when depreciating capital equipment. By moving to an opex model with microfactory-as-a-service, the ROI calculation is replaced with a direct cost saving comparison. For any specific process, you have clear costs associated with applying direct labor which can be easily compared with the service cost of robotic automation.
Robots work 24 hours a day, with no shift differential, and no loss of productivity or quality. The key to success is flexibility. Rigid robotic solutions, like those developed from scratch for a custom purpose do not suit the ‘as-a-service’ model. When robots are recruited to a team in the same way operators are and can be retrained and redeployed in a similar way, then the model is both compelling and easy to justify economically.
It’s time for people, technology and manufacturing to come together to get factories back to work.