A Strategic Guide to Pivoting Your Business Towards Automation
By Patricia Laureys & Jennifer Hall
October 25 | 7 min read
Embracing Automation: Winning Over Stakeholders with Ease
As the business landscape continues to evolve, many companies are finding themselves at a crossroads, contemplating whether or not to take their operations in a new direction through automation. This pivotal decision requires careful consideration and evaluation of the available options. Some companies may choose to automate internally, while others may opt to rely on an external partner that already possesses the necessary technology or is willing to invest on their behalf. Though the prospect of automation can be intimidating, approaching it strategically allows companies to overcome integration challenges and reap the numerous benefits automation offers.
Learn how to foster engagement, communicate the benefits, and build a successful automation strategy that will ease internal adoption.
Automation Strategy: Understanding the Need for Change
Logistics automation is no longer a choice for some, but a necessity in today’s digital era. Industries worldwide are leveraging logistics automation to streamline processes, reduce costs, achieve faster deliveries, and stay competitive. However, this transition requires a conscious decision to embrace change and step out of comfort zones.
Despite the undeniable benefits of automation, there is often reluctance at the C-suite level to fully embrace this technological shift. We have witnessed numerous cases where even with a defendable ROI, there is a hesitance to the implementation of new automation solutions. This hesitance may stem from various factors, such as fear of the impact on day-to-day operations, uncertainties surrounding new solutions, and the potential disruption to established corporate standards.
One common concern is the fear of disrupting ongoing operations while implementing automation projects. The introduction of new solutions that lack sufficient market references can create uncertainty and resistance within the organization. Additionally, the involvement of new vendors may require businesses to adapt to unfamiliar norms, leading to internal discussions regarding corporate standards that have been in place for a long time.
Another significant consideration is the potential impact on employees and the resulting discussions with unions. Change can be unsettling, and the introduction of automation may raise concerns about job security and the need to reskill or adapt to new roles. These discussions with employee representatives can further complicate the decision-making process and add to the overall uncertainty.
Furthermore, media coverage often tends to focus on negative stories rather than highlighting the success stories of automation implementation. This biased reporting can perpetuate doubts and create a sense of apprehension among businesses considering automation.
The Case for Automation
While hesitance and concerns around automation are understandable, it is crucial to address these apprehensions and be properly educated on the benefits that automation, and a good automation strategy can bring to businesses. The board supporting and accepting new solutions can help alleviate uncertainties and convince stakeholders of the value of automation.
Automation, with its ability to address operational challenges, optimize costs, and meet customer demands with agility, is rapidly gaining popularity among businesses. It offers significant benefits that are worth considering as companies strive for efficiency and competitiveness. Let’s delve deeper into the case for automation and understand its potential advantages:
Addressing Key Operational Challenges
Automation directly tackles some of the pressing challenges faced by businesses in their day-to-day operations and can help businesses justify costs. Here are a few key areas where automation shines:
- Operational Expenses: Rising energy costs and the need for sustainability drive businesses to find ways to reduce their carbon footprint while optimizing costs. Automation can help achieve energy efficiency and sustainability goals.
- Real Estate Costs: Urbanization has led to increased real estate costs. By utilizing existing space more efficiently, automation helps optimize warehouse layouts and reduces the need for additional space.
- Labor Availability & Costs: Finding and retaining skilled labor can be a challenge. Automation can alleviate the burden of monotonous, repetitive tasks, reducing labor turnover and allowing employees to focus on more value-added activities.
- Harsh Work Environment: Some industries, such as warehouses and freezer environments, have harsh working conditions. Automation can improve worker safety, reduce ergonomic issues, and create a more comfortable work environment.
- Strict Regulations: With safety and sustainability regulations becoming stricter, businesses need to ensure compliance. Automation can help streamline processes and ensure adherence to these regulations.
- Market Requirements: Meeting customer demands for faster delivery, greater product variety, and improved quality is crucial to staying competitive. Automation enables businesses to adapt quickly, increasing operational agility and meeting market expectations.
- Faster Delivery and the Amazon Effect: Consumer expectations for speedy deliveries have been greatly influenced by e-commerce giants like Amazon. Businesses need to adapt to this trend by leveraging automation to streamline logistics processes and ensure efficient order fulfillment.
- SKU Proliferation and Product Variety: The market is experiencing an increase in product variety and SKU proliferation, driven by consumer preferences for customization and personalization. Automation enables businesses to efficiently handle a wide array of product variations and manage complex SKU profiles.
- Increasing Requirements and Challenges: With the rise in product variety, packaging diversity, and cross-overs between categories, operators face challenges in meeting regulatory requirements, ensuring food safety, maintaining product quality, and managing best-before timing. Automation helps address these challenges by enhancing accuracy, compliance, and quality control processes.
- Lost Revenue Due to Labor Shortage: During peak seasons, businesses may face challenges in meeting customer demand due to a lack of available operators. Automation bridges this gap, ensuring smooth operations and preventing lost revenue opportunities.
Addressing Fears and Improving Reliability
Concerns about automation reliability are natural, but they can be addressed effectively:
- Choosing the Right Technology: Selecting between newer technologies and proven solutions can create fears around reliability. Collaborating with subject matter experts and carefully evaluating technology options can help mitigate these concerns.
- Internal Expertise: The reliability of automation also depends on the knowledge and expertise of internal engineers and maintenance departments. Investing in training and continuous improvement ensures smooth operations and minimizes downtime. To provide support as your team gets up and running, consider seeking assistance from external parties. Their expertise and guidance can help accelerate the learning curve and ensure a successful implementation of automation solutions within your organizations. By leveraging the support of external partners such as LIDD, you can enhance your internal capabilities and ensure a seamless transition.
Enhancing Retention and Attractiveness
Investing in automation not only benefits businesses but also enhances their attractiveness as employers:
- Employee Retention: Automation eliminates monotonous tasks, making work more engaging for employees. This, in turn, improves labor retention and loyalty.
- Attracting Top Talent: Companies that invest in automation are viewed as forward-thinking and innovative, making them more attractive to potential employees.
- Commercial Benefit: Automation not only benefits businesses and employees but also enhances customer satisfaction and vendor relationships. Financial partners also encourage investments in automation for long-term success.
Automation Strategy: When Is It Time to Automate?
Understanding when it’s time to automate can be instrumental in securing C-level buy-in for this transformative shift. Here are some key indicators that your business may be ready to embrace automation:
- Falling Short of Market Service Level Expectations: If your current operations are unable to meet the market’s service level expectations in terms of speed, delivery deadlines, or accuracy, it’s a clear sign that automation could be beneficial. Automated systems can significantly enhance efficiency and precision, helping you meet and even exceed market expectations.
- High Cost of Order Fulfillment: Exorbitant order fulfillment costs can eat into your profits. Automation can bring down these costs by streamlining processes and reducing the need for manual labor.
- Labor Challenges: Difficulty in filling open warehouse positions or dealing with high labor turnover can be effectively addressed with automation. Automated systems can perform repetitive tasks consistently and efficiently, reducing your dependency on manual labor.
- Increasing Competition: If competitors like Amazon are building new facilities close by, you might soon face a shortage of labor or have to deal with increased labor costs. Automation can help mitigate these risks by reducing your reliance on human labor.
- Need for More Storage Space: If expanding your product offering or production requires more storage space but, you are unable to extend your buildings due to restrictions from local authorities or you need to remain close to the customer in urban areas, consider automation. Automated systems can maximize the use of available space, allowing for expansion without additional rental costs, enabling you to overcome limitations imposed by local authorities and optimize your operations efficiently.
Strategies for Pivoting Towards Automation
When it comes to implementing automation, having a well-defined automation strategy is crucial for success. An automation strategy should prioritize people and processes, enabling an incremental approach that leverages technology to drive efficiency and effectiveness. Constant communication with key stakeholders and effective change management are essential for implementing an automation strategy that delivers results. By following best practices and considering these elements, organizations can put quality on autopilot and achieve success.
- Assessing the Current State: Before taking any steps towards automation, it’s crucial to have a clear understanding of your current processes and costs. Identify areas that could benefit from automation and those that require human intervention. Understanding the key indicators mentioned above is a good starting point.
- Setting Clear Goals: Define what you aim to achieve with automation. Whether it’s cost reduction, improved efficiency, or better customer service, having clear objectives will guide your automation journey.
- Choosing the Right Technology: Not all automation technologies are created equal. It’s important to choose solutions that align with your business needs and goals.
- Cost Benefit calculation: Let’s dive into the numbers and determine the true value of automation for your business. By conducting a thorough cost benefit analysis, including a feasibility study with return on investment (ROI) calculations for each feasible solution, you’ll have a clear picture of the potential benefits and costs involved. This analysis, along with the right selection criteria, will guide you towards choosing the perfect automation solution that aligns with your business goals.
- Business-Lead Vendor Selection Process: It’s essential to choose the right vendors who can provide the necessary technologies and support for automation. Conduct a thorough assessment of potential vendors, considering factors like their track record, expertise in automation solutions, compatibility with your business needs, and the ability to deliver on time and within budget.
- Project management: Evaluate your organization’s project management capabilities, considering factors like project management plan, technical expertise, communication, stakeholder management, and the option to outsource. It ensures accountability for planning, executing, and completing automation projects.
- Employee Training and Support: Automation doesn’t always mean replacing humans; it means augmenting their capabilities. Ensure employees are trained and supported throughout the transition.
- Iterative Implementation: Instead of a complete overhaul, consider implementing automation in phases. This allows for adjustments and improvements along the way.
Automation readiness: Is your business ready for logistics automation? LIDD’s free automation assessment tool provides a clear snapshot of your current state so that you can properly prepare for equipment implementation and maximize your investment. Don’t risk making costly mistakes or investing without a clear plan – let LIDD’s assessment tool guide you towards a successful implementation. Learn more about how the tool can help you optimize your automation strategy below.
Taking your business in a new direction with automation may seem daunting, but with a strategic approach, it can lead to significant growth and success.
However, despite its many benefits, it is important to also recognize that automation is not a one-size-fits-all solution for every business. Each organization has unique requirements, processes, and considerations that must be carefully evaluated. Consulting experts in the field can provide valuable insights and guidance to determine the best approach and automation strategy for your specific business needs. By weighing the pros and acknowledging the potential limitations, businesses can make an informed decision and gain C-level buy-in to embark on the automation journey with confidence.
Automation Readiness Assessment
Embracing logistics automation offers a prime opportunity to increase efficiency, mitigate labor shortages, reduce costs, and improve customer satisfaction. Yet, it’s crucial to remember that automation isn’t fool proof. Thorough preparation of you project is imperative for a successful implementation.
LIDD’s Logistics Automation Readiness Assessment can provide you with the guidance and insights you need to prepare for logistics automation. Once you’ve chosen an automated solution, It offers a clear snapshot of your current state and effectively guides you on implementation preparation. Our goal is to help you maximize your investment and achieve optimal results.