November 2021 Volume 3

AUTOMATION

What Should You Do Now? My answer is simple - - Invest in automation. Gone are the days where you must feel guilty about putting in automation processes that have a risk of eliminating jobs. Over the next ten years, there will be fewer employees to fill positions in the U.S., and as employers, we need to start addressing this issue creatively through innovation. Innovation has always been the backbone of how the U.S. has solved macroeconomic issues throughout its history. We need employers to shift their views toward innovation and capital spending driven by automation and artificial intelligence (AI). One way to create a new awareness is to rethink how budgets are compared and approved by companies. In the manufacturing world, it takes an Act-of-God to an approved capital budget. The process is fraught with too much bureaucracy and a lack of the correct long-termmetrics. I know this firsthand when I was a senior member of a fortune 100 manufacturing company. Unrealistic financial thresholds of payback, generate a short-term return benefit and ultimately extinguish employee motivation of bringing long- term improvement ideas to the forefront.

Conclusion While we don’t live in the Twilight Zone, we will confront the ongoing challenge of the vanishing workforce. By looking at this problem through the lens of automation, there will be solutions to help you out in both the short and long term. And as always, I am here to help if you have any questions on how to get started making your in case to diverting your hiring budget towards a capital automation budget. ■

Author Jon Cocco is the owner and CEO of Feedall Automation in Cleveland, Ohio. He may be reached at jcocco@ feedall.com or 440-942-8100 or follow him on LinkedIn at www.linkedin.com/ in/joncocco/. For additional information, visit www.feedall.com.

References: 1. Wall Street Journal: 4.3 Million Workers Are Missing. Where Did They Go? The Balance by Josh Mitchell, October 14, 2021. 2. Bain & Company: Labor 2030: The Collision of Demographics, Automation and Inequality, 2017.

Figure 3: Comparison of upfront Hiring Costs versus Automation Costs

Metrics that Matter My argument is to take all your annual hiring expenses and compare that to the capital you have allocated to improving your productivity. We pulled together an analysis for a customer where the upfront capital costs of one of our automation machines cut the company’s annual hiring expenses in half (see Figure 3). Most companies never compare a hiring budget to a capital expense budget because they are managed by different people. In doing so, our customer was able to divert planned hiring expenses to capitalized expenses. The net result is it not only saved on the upfront costs but also generated ongoing savings with improved productivity.

FIA MAGAZINE | NOVEMBER 2021 32