On the road to factory automation: How to build your business case

Material handling has had a high annual turnover rate for many years, with a jump from 2015 (25.6%) to 2019 (31.3%) followed by a reported 37% in the past 12 months.

The reasons include health and safety, with OSHA estimating up to 62,000 forklift-related accidents and 87 fatalities on average each year. There are also the relatively low salaries (median of around $37,000 in the US, compared to a national median of around $48,000). 

The result is a labor shortage impacting manufacturing and material handling, where 1.9 million jobs are predicted to be unfilled by 2030. It’s against this backdrop that automation can plug the gaps on factory floors, rather than be seen as replacing existing workers. The challenge is to pick a solution that’s the right fit. And that’s not always the case with some robotics in factories.

Autonomous Guided Vehicles (AGVs) offer some automation capabilities, but they also require routes to be fixed, and tasks to be pre-programmed. Initial setup usually involves manually laying magnetic tape around the building. Any layout changes involve manually rearrangement, because the automated robots don’t have the sensors to dynamically readjust and continue. Instead, they come to a stop when meeting obstacles. Naturally, for busy factory environments this can cause delays until the obstacles are removed by human intervention. 

Autonomous Mobile Robots (AMRs), offer more flexibility, with advanced sensors allowing them to adjust and continue their journeys.They also come at a higher cost than AGVs. There are also payload limitations, in terms of sizes and shapes they can transport. Also there are restrictions in terms of space, especially when turning in congested spaces. To avoid these potential blockers, companies are looking toward new forms of automation.

Hyperautomation is on the horizon for 2025. In material handling and manufacturing, this is where organizations aim to accelerate automation so that it’s possible to transport goods without human intervention. Successful implementation is predicted to mean ‘more than 20% of all products will be manufactured, packed, shipped, and delivered without being touched — the person who purchases the product will be the first person to touch it.’ 

To achieve this within material handling, businesses will be harnessing newer forms of automated robotics. Those that allow greater process flow customization and more adaptability to payload sizes and shapes. And because this is a long-term strategic shift, it often pays off to take shorter steps at the beginning, to build momentum and help guide decision-makers in the right direction.

Explore ways to get buy-in that doesn’t involve a complete transformation, and instead a way to try within a small part of the business. 

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Highlight health and safety impact

There are the rewards in terms of increased safety, which can help mitigate employee concerns around their jobs being replaced. They can be redeployed for more strategic functions, rather than continuing with the physical tasks, with the related risks and dangers of becoming part of the OSHA injury statistics.

Often the physical tasks involve repetitive motions, which are another factor in causing injuries. The DART rate (Days Away, Restricted, or Transferred) was highest among transportation and material moving occupations (pdf) during 2021–2022, with ‘overexertion and bodily reaction’ a major contributor. This comes with the financial impact of workers having to lose out on shifts, switch to different roles, and potentially be less productive if the injury is chronic. 

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Adopt a proof of concept approach

Ideally this should be in an area that produces specific and measurable results within weeks. Allowing project leaders to demonstrate results and allow time for adjusting budget allocations to scale up investments. 

It should also allow for the growth to be repeated at scale, using the same framework, rather than having to take a different approach. And it should be as user-friendly as possible, with as little technical expertise needed, to help involve the wider workforce. 

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Appeal to cross-departmental stakeholders

There’s the potential uplift to customer experience, with more standardization in picking, packing, and posting products. Industrial enterprises that have adopted technologies including automation have reduced their ‘Demand to Deliver’ time (includes steps from demand to order intake to final distribution) by about 10.9% annually.

Ultimately stakeholders will know that the costs of not embracing automation will outweigh the costs of investing in the technology. As an example, the automotive industry is estimated to lose $2.3 million for every unproductive hour. Many of their concerns will be how best to de-risk any implementation.

For a practical example of how to start or evolve your automation and robotics roadmap, look toward this automation project with a wheel.me customer:

• Customer
  Automotive parts manufacturer with 100+ facilities
• Workforce
  150,000+ people
• Industry challenges
  Experiencing the industry-wise challenges of high employee turnover contributing to high labor expenses
• Business challenges
  Relying on manual labor-led approach to material handling, with 20% no-show rate
• Goals
  Implement automation globally to increase productivity, efficiency, and reduce costs

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Project assessment

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How Genius 2 was deployed

1. Pre-deployment planning: Material flows and project setup
2. Connect to network: Options for 5G or WiFi
3. Mount Genius 2 sets to carts 4 wheels
4. Mapping: Can be done by non-technical users using the wheel.me app, using Genius 2’s LiDARs, cameras, and navigational algorithms
5. Set up charging stations: Placed around the site to ensure maximum uptime
6. Start first mission: test route and verify capabilities
7. Continuous testing: Optimizing all the way until go-live

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Deployment results

• It took 4 days to deploy 12 Genius 2 sets – that’s now been scaled to 52 sets of robotic wheels
• The autonomous wheels completed 94 km | 58 miles in one month, running 7 hours per day
• The reduced reliance on manual labor led to decreased costs, higher reported workforce satisfaction, and a drop in recorded injuries
• Customer was able to hand over the running of wheel.me to their maintenance team after 3 months
• Operators and maintenance can troubleshoot quickly, with extra support from wheel.me when needed

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Framework for choosing the right project

For initial discussions within your steering group, use and adapt this 3-stage exploration framework:

The ability to start small with Genius 2 reflects the wider rise in composable business architecture, another component that adds business case support. Where businesses can pick and choose solutions on a modular basis. 

It’s a way of adapting quickly to changing factors to maintain resilience and growth. This makes it an ideal strategy for the dynamic nature of material handling. Genius 2 allows automation and robotics for organizations that want:

• Usability
  A simple UI that can be operated by existing workers who have the “on the ground” material handling knowledge and experience
• Efficiency
  On average Genius 2 can be integrated in 10X less time than other automation and robotics solutions
• Capability
  A route to full automation for material handling processes that brings savings across time, resources, and manual interventions
• Intelligence
  Genius 2 provides a continuous source of data for workers to identify optimum layouts and take action on any bottlenecks
• Autonomous
  Advanced mapping and navigation can be set up from the app, with onboard sensors and cameras for 360-degree visibility and movement
• Modularity
  The modular nature of Genius 2 means automation can be scaled in line with business needs – no downtime for upgrades needed