Industry Specific Insights

How does a factory owner decide whether to invest in industrial automation or not?

Ryan Chan

I hear the bigger the company the more it becomes just a financial decision. Especially when it becomes more important to show quarterly gains. But it is the opposite the smaller a company is. A small company owner may sacrifice additional profits just to keep the proven team available. (And find additional profits elsewhere.) A small owner is more flexible, agile, and more likely to place employee on new job if automation can increase profits enough. sort of like investing profits back into company to expand and diversify.

There are also many other factors, with different sets for different companies. Like demand increases, competition. For example your competitor want to get the edge and make widgets much cheaper by automating and make more per hour. If your cost is that of 1 per hour and your competitor’s cost is 100 per hour.

(You may not find a employee capable of making 100 per hour, competing with a robot. Or you cant cost justify enough employees needed to keep up.)

They could sell their widget at a fraction of what your cost, causing you to automate just to compete and stay in business. The difference between you and your competitor could be, what you do with the employee (your most valuable asset). If you where the one who place employee on new job instead of laying them off, you are more diverse or expanded and take the lead again. That is why automation is inevitable just as evolution is. You may slow it down, but you won’t stop it, so time is better spent preparing for it. Smarter to retain your knowledge base.

All kinds of scenarios out there.

Originally posted by D Fitchett Jr on Quora

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