Fifteen years ago, Micron Manufacturing Co. made a bold gamble.
The Walker-based manufacturer invested substantial resources into replacing more than 60 lathes and other outdated equipment with 19 state-of-the-art CNC lathes featuring autonomous capabilities. At the time, the new automation equipment was relatively unknown, and represented a big step toward what company executives thought would be the future of manufacturing for their business.
“It was quite the role of the dice,” said Dan Vermeesch, Micron’s plant manager. “Basically, we saw the equipment that was coming out. We saw what our customers were demanding: products that required tighter tolerances and smaller volumes. So we geared the equipment purchase to what we believed the future demand of our customers was going to be.”
A real world approach to automated manufacturing.
Tuesday, March 27
Interest in robots, cobots and other Industry 4.0 technologies is soaring, but that has many small manufacturers wondering: Where do we start? What makes sense for our factory? What’s the total cost to deploy automation?
Join MMTC-West, MiBiz and experts from Zeeland-based Disher for a one-hour webinar that will cover the basics of factory automation and offer answers, insights and strategies on how to get started.
The bet has paid off handsomely. The company finished transitioning to the new machines in 2011 and, since 2013, has invested an additional $2 million in automation equipment. Sales have grown significantly for Micron, as the automation equipment, which Micron can run unattended overnight, raised productivity while avoiding increases in labor costs.
While Micron began its quest to automation over a decade ago, many of West Michigan’s small manufacturers are just now approaching a similar decision point where they’re facing little choice but to automate or lose ground to competitors.
The gains in productivity realized by OEMs and large suppliers incorporating mass automation into their processes have filtered through the supply base. That’s created a gap for many of West Michigan’s small manufacturers, who are facing ever-increasing pressure to increase production and quality amidst a severely constrained talent pool.
Yet when smaller manufacturers start to look into replacing processes previously completed through human dexterity, pen-and-paper tracking and manually operated production lines, they’re confronted with an overwhelming number of questions on where to start.
“There’s so much information out there about automation,” said Justine Burdette, vice president of technical services and regional director of the Michigan Manufacturing Technology Center-West (MMTC-West). “A lot of the examples that are talked about today are focused on very large manufacturers. For most manufacturers in West Michigan that doesn’t really resonate with them. As a smaller organization, it’s hard to know where and how to start with automation.”
STARTING WITH A FOUNDATION
Automation experts suggest that companies first ensure their plant floors are running in ways that promote maximum efficiency, long before investing in automation equipment.
“Anytime we have a conversation with a client about adopting automation, the first thing we tell them is, ‘Remember: automation isn’t the goal. Productivity is the goal,’” said Joe Dyer, team leader of manufacturing technology at Disher Corp., an engineering, consulting and product development firm based in Zeeland.
“The lower-cost solution to increasing your margin is really the lean solution,” Dyer said. “There’s a possibility (small manufacturers) have never even been exposed to the reducing-waste mindset and the value-stream mindset. Those solutions are going to come in many different forms and not just automation, but it's definitely a huge part of it. You can’t flip it on and walk away either. You have to be able to use automation in a way that creates value and not take it away or create a bottleneck.”
Disher created a productivity assessment program to help manufacturers determine where to make production process improvements in preparation for automation. The assessment includes a walkthrough by Disher engineers, who then sit down with company executives to determine the best solutions going forward.
“Blanket applying of automation isn’t going to cut it,” Dyer said. “You have to apply it in a way that makes sense, that’s going to give you an ROI and isn’t going to complicate your process further, which is a distinct possibility if you do it wrong.”
Instead of investing in complex and expensive automation equipment, Dyer advocates small manufacturers choose the simplest option to fit the task at hand, particularly since many times those simple solutions prove to be the most reliable.
“Instead of buying a robot with a crazy end of arm tool, which might cost a tremendous amount of money, can you commonize parts?” Dyer said. “Can you design (the product) for manufacturability? Can you create different tool sets? How can you simplify not just your automation, but the products and the processes that you’re using in order to make it worth your while?”
In some circumstances, small manufacturers may not need to immediately turn to sophisticated automation technology to realize improvements in productivity and return on investment. For example, Micron recently incorporated automated conveyor belt systems that funnel waste material away from their automated CNC machines.
“A lot of people may think that's not particularly intelligent automation, but it's crucial because it takes away a menial-labor-type job and allows our people to continue to focus on their education and the improvement of the system,” Micron’s Vermeesch said.
Small manufacturers also need to have a clear understanding of the entire cost that incorporating automation will have on their operation, experts said.
Additional maintenance costs, increased power requirements and utility costs, space planning, service contracts, downtime in production due to breakdowns and other considerations all need to be weighed and measured when considering automation equipment, experts said.
Most times, manufacturers calculate a two-year period to see returns on their investments in automation, assuming that equipment lasts between seven and 15 years, Disher’s Dyer said.
For Micron, one of the most crucial considerations in automating was finding an equipment manufacturer with a robust service department close to their operation. While Micron primarily sources its automation from a single manufacturer, it has strayed to other companies in the past. However, those manufacturers lacked the servicing capability Micron needed.
“They didn't have a big service segment in this part of the county,” Vermeesch said. “We were flying people in from California all the time to help with this equipment. That's expensive compared to having someone drive up from Indiana.
“Certainly it isn't just buying a new piece of equipment. Something will happen and you will need some support. You better understand what their ability to support you is.”
While the costs of automation can still be high for some manufacturers, changes to the U.S. tax code under the Trump Administration promise to help cushion those expenses. The new tax code allows companies to deduct the entire cost of equipment in a given year, rather than only a portion of those costs under the previous tax bills. Those changes have resulted in more rapid deployment of automation equipment in recent months, according to a recent report in The Wall Street Journal.
CONNECTING WITH OTHERS
To help sort through the numerous vendors, technologies and implementation strategies, it’s important for small manufacturers to talk to others who have already incorporated automation into their operations, Dyer said.
To help connect manufacturers interested in automation equipment, MMTC-West created an automation user group. The group is facilitated by engineers from Disher and meets monthly to discuss best practices for incorporating automation technology, challenges, pros and cons to certain equipment and other automation-related topics.
“It doesn’t matter what industry you’re in so long as you’re interested in automation or manufacturing systems and how to integrate that automation,” Burdette of MMTC-West said.
A CULTURAL SHIFT
Before incorporating automation equipment, executives should ensure they have an honest conversation with their employees about what the new investments will mean for the company.
“This is a real issue and if it is not addressed with grace and truth, you will not be successful in implementation,” Dyer said. “A typical way in which to address this is to be up front and honest with yourself. If the end and only goal is to cut jobs, automation will not be as successful as it should be.”
For Micron, incorporating automation equipment allowed it to train its workers to a higher level, as well as hire other highly skilled workers.
“Our people are much more highly paid now than they were those years ago to be able to work on this specialized equipment,” Vermeesch said.
While the shift to automation equipment can be a daunting task for smaller manufacturers, the risks of automating need to be weighed against the potential loss of competitiveness and productivity a manufacturer may face by not taking the plunge.
Overall, those watching automation in the manufacturing sector suggest a measured approach underpinned by voluminous research into the best solutions for a given company.
As with any investment, incorporating automation equipment represents a risk, particularly for small manufacturers that lack the resources of much larger OEMs. However, with the proper consideration, even modest investments in automation technology can position a small manufacturer to remain competitive for years to come.
“It’s not a one-size-fits-all approach,” Burdette said. “Every company is different and unique. It always pays to do your homework.”