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By Thomas Schied
• Jan 22, 2018
Director of Asset Management for TD Equipment Finance

As automation and robotics continue to disrupt a number of industries, businesses are investigating ways to stay competitive and improve efficiency. For the manufacturing and wholesale sectors, this often involves implementing sophisticated Automated Material Handling systems (AMHS). These systems are designed to streamline supply chain management and improve product quality, leading to both cost savings for the manufacturer or wholesaler and higher satisfaction for the customer.

But implementing these systems can be a major endeavor for companies of all sizes, requiring a top-down change in how employees interact with machines—and the initial investment for the technology can be substantial. Here are four steps businesses should consider as they implement these systems:

Step 1: Selecting a Vendor

Vendors can vary widely in their costs and offerings. Some questions that companies should ask as they evaluate a potential vendor include:

  • What comes with the technology? Does it include software updates, real-time consulting, on-site support, etc.?
  • What are the real estate needs? Can the current building support the new systems, or is additional space needed?
  • What’s the overall cost, and how long will it take to recover the initial investment? (Vendors can usually provide an estimate, and consulting with a banker can help a company understand the impact on a P&L.)

Step 2: Internal Audit

The management and logistics team, in partnership with the chosen vendor, should then review the company’s current supply chain processes and evaluate where change may be needed. If certain parts of the supply chain have a tendency for cost overruns, workplace accidents and poor productivity, that should be highlighted as potential test cases for automation. Likewise, if other parts of the business are already running smoothly, then automation may be more disruptive than helpful, at least in the short-term.

Step 3: Employee Interaction

A company's supply chain is about more than just numbers on a spreadsheet; it involves hundreds and sometimes thousands of employees often spread across the globe. It's important to engage with these employees, and particularly shift or floor managers, and get an idea of what parts of their daily jobs are most labor-intensive and could benefit the most from automation. This feedback will help ensure that the new processes are troubleshooting for existing problems instead of creating new ones.

Step 4: Implementation

Implementing automation requires a proactive mindset that takes into account potential roadblocks in advance.

That’s why companies should think about implementing automation in terms of building a roadmap with multiple stages. Instead of trying to apply automation to every facet of the supply chain, start with one or two specific functions that are either the easiest to automate or the most labor-intensive. If successful, then consider expanding to include more functions. If the technology again passes the test, then it may be time to roll it out throughout the entire company.

Even with the best technology, bugs are common and fixes can be cost- and time-intensive. By laying out a roadmap in advance, businesses will ensure that any potential conflicts or problems can be efficiently identified and handled.

When successfully implemented, automation can be a way to increase cost savings, boost productivity and improve the customer experience. It’s only a matter of time before automation becomes the norm in every labor-intensive industry. Companies hoping to gain a competitive advantage should take steps to determine how automation can revolutionize their business.

A version of this article originally appeared in Manufacturing Business Technology

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