Lower Costs and New Tech Driving Automation in Business

More organisations today are realising the advantages that automation can bring their businesses in reducing errors; increasing profitability; driving efficiencies and enhancing competitiveness

These benefits are increasingly clear but achieving them has not been easy historically. The right technology has not always been available and even when it has been, organisations have often struggled to afford the investment required.

That’s changing today and we are seeing adoption ramping up, down to two interrelated trends. First the cost of automation is falling. That is partly because the cost of the technology that drives that automation is coming down but it is also due to the related cost savings that businesses make by reducing repetitive work and cutting overheads associated with certain types of manual labour.

Second, with all the latest advances in areas such as machine learning, robotic process automation and data analytics, businesses can achieve more through automation today than they could previously. 

Part of this relates to driving operational efficiencies. In manufacturing, for example, the ongoing roll-out of the Internet of Things is driving enhanced connectivity across the supply chain, thereby supporting streamlined processes. Robotics and the latest transactional information systems can drive further efficiencies and help businesses gain a broader insight into how their processes are operating today.

The ability to predict what is likely to happen using a combination of machine learning, sensor-based technology and data analytics is another major benefit of this advanced technology. Organisations can improve operational safety by anticipating and addressing factors likely to cause machinery and equipment to break down. This predictive maintenance capability also reduces costs by helping ensure faults can be addressed and rectified in advance.

There are also benefits to adopting advanced technology in logistics and forecasting. At a granular level, Artificial Intelligence can help manufacturers predict how demand may change based on weather forecasts or historical data patterns. They can then use that data within automated processes that position and rearrange stock for picking processes based on projected demand.

Scoping the Challenges

Given all this, however, there are still some risk factors with automation. When systems go down, the impact on the organisation can be severe, often depending on how good a back-up it has in place. 

Another risk factor is that the organisation implements too high a level of automation. That will limit flexibility and business agility. Automated systems can be difficult to change quickly. That may limit the ability for the business to respond rapidly to changing customer demands. As a result, they will lose focus on the customer and the levels of service they offer may depreciate also. Indeed, customer service is one area where the arguments for and against automation are finely balanced.

Automation in this context often works best when it is applied to simple, straightforward and repetitive processes – buying an airline ticket, for example, where the essential process followed is similar every time. Where the process breaks down, there is some sort of a problem, or there is a need for a more empathetic engagement, then people will still be needed to guide the process. 

Managing Change

Ultimately though, the hottest topic organisations are having to wrestle with today in relation to automation is its likely impact on the wider business. Businesses need to be able to take their employees with them on the journey. Some are falling down in this regard. They may be comfortable with the concept of automation but they don’t necessarily know how best to achieve it. 

A major issue is often that the organisation concerned does not transition to automation. Instead, they see it purely as a cost-cutting exercise or one designed to deliver improvements in efficiency. They pay for the automation but they do not necessarily move their business to it, or think about how to take their staff on that journey. 

The reality is that any large-scale automation is likely to remove at least some jobs from the organisation. Often, the jobs that do go are likely to be those in the more routine roles.

Businesses must also understand however, that the process of digital transformation can generate new jobs in areas such as software development or programming for example and free up existing staff to move away from repetitive tasks and fixed processes to concentrate instead on taking a bigger, more margin-generating role within the business. 

In line with this, it is sometimes the case that automation can be delivered in order to make improvements in the back office, and those savings can then be used to make greater investments in the front office and the people working there. Automation will typically involve far-reaching changes to the company. Sadly, that may mean some people lose their jobs but the new opportunities that result for the business may mean that they can re-skill to take advantage of other openings within the business.

Today, the onward march of automation looks unstoppable, fuelled by costs coming down and more advanced technology. There are risk factors at play which will need to be carefully managed, of course, but businesses that make a carefully-considered strategic decision to adopt more automation today, will be well-placed to access a wide range of rewards.    

About the Author

Richard Seel is Managing Director, Supply Chain & Logistics (UK & US) at Delaware Consulting, a fast-growing, global company that delivers advanced solutions and services to organisations striving for sustainable, competitive advantage.