If you've read the business pages this week, you won't have been able to avoid Ocado. With their IPO coming up, all the financial PR firms have been busy. And that means lots of talk about their warehouse at Hatfield - and whether the automation has helped or hindered them.
I'm not going to join in that discussion right now. But it has made me think about automation - and why it works for some people and causes trouble for others.
The answer isn't surprising. Automation isn't a panacea - it only works if you do it for the right reasons. So here are the three key questions which will help you decide if it's right for you.
#1: WHAT IS AUTOMATION GOOD AT?
There's no point automating unless it does something better than the manual processes it replaces. Here are the three top things you should look for.
Number one: automation's good at doing the same thing over and over again (it doesn't have to be a simple task - but it does have to be one that's repeated)
Number two: automation can be very accurate - machines don't get tired and they don't get bored.
Number three: in the right conditions, automation can be fast.
Match these characteristics against your business. Do they fit the tasks you have to carry out? Have you got some repetitive processes? (And this means everything about them: input, process, and output). Do you need to improve the accuracy of these processes? Would increasing the speed of these processes help you?
If you can tick two of these three boxes, automation could benefit you.
#2: WHAT ABOUT YOUR OTHER PROCESSES?
It's very easy to concentrate all your attention on the process you're automating. But automation can have a big effect on your other processes as well.
For instance, machines aren't as adaptable as people, so you have to give work to them in an absolutely consistent way. This often means adding processes you didn't need before. For instance, stripping off outer packaging, checking for damaged cases, re-palletising sub-standard loads, and so on.
You may need to add processes after automation as well. If you've got customers with their own special requirements, the chances are you'll have to carry out some customisation after the automation's finished its work.
These things needn't be a problem - but make sure you're not going to add more work than you save.
#3: DOES IT MAKE FINANCIAL SENSE?
Finally, don't lose sight of why you're automating. It's because you want to make more money. This may not come simply from reducing your labour costs. Automation may also increase your sales, because you fulfil your customers' orders more quickly and accurately than your competitors.
But, whatever your reason for automating, your numbers still have to be right. So do the sums. Are you sure you'll make enough extra profit to pay for your investment? And not just with favourable assumptions?
What's the message for you this month? Automation can be good for a business - get it right and you can have a real advantage over your competition. But before you jump in:
· be clear about what automation is going to do better for you
· check out the effect of automation on your other processes
· make sure the numbers add up.
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