A McKinsey study shows that companies worldwide will invest more than 25 percent of their capital in automation solutions in the coming years. However, the study also shows that small and medium-sized enterprises (SMEs) in particular have been hesitant to do so. By debunking four associated myths, this blog takes a look at why SMEs should see automation as an opportunity rather than a potential burden.
Why do small businesses avoid automated solutions?
With full order books but a shortage of skilled workers, maintaining productivity is a hot topic for many large German corporations. In fact, the Handelsblatt newspaper has even reported that German SMEs are experiencing a productivity crisis. Questions surrounding productivity is not, however, confined to Germany. It is an issue affecting North America and South Asia, and many other industrialized nations, including in Europe.
Research shows that many European SMEs are slow to recognize the opportunities that robotics and Industry 4.0 offer in terms of productivity and in saving resources. Not only this, but a 2022 report suggested that more than half of production managers felt overwhelmed by current technical and digital changes. While automation has progressed in recent decades, there is clearly much more scope for SMEs to embrace what is has to offer.
Four myths related to automation and why SMEs should see it as a major opportunity:
Myth 1: Automation is too expensive for SMEs
Many companies worry that the costs of automation solutions might be prohibitive and managers often do not inform themselves of their potential benefits. There is also a belief from within some SMEs that only large companies can handle the conversion, which hinders many companies even looking into the vast potential automation can offer.
In fact, depending on the industry, the use of robotics means accelerated production, support in quality assurance and reduced workload for skilled workers, even in small businesses. In short, automation can have a positive impact on a company’s productivity and efficiency.
Moreover, automation solutions cost less today than they did in their early days, and initial investments usually pay off quickly. Robot systems from global automation company KUKA, for example, are also characterized by low maintenance costs, while they run smoothly and will be checked by experts regularly.
Our example: A galvanizing plant in Germany’s Black Forest region purchased an automated welding cell and subsequently saved its twice-weekly truck transportation costs to a welding company in eastern Europe. As well as transportation costs, the decision in favor of the welding robot also made sense because of the shortage of welders in the region.
Myth 2: Automation costs jobs and discourages applicants
The fact is: skilled workers are in short supply in the German economy and as a result SMEs in particular have problems finding well-trained personnel, especially for demanding, difficult or monotonous tasks. Another advantage is that employees can use their skills and knowledge for more attractive work when robots take over unergonomic routine tasks.
Pleasant working conditions are important considerations when employees choose to join – or choose to stay – with a company. Employees (future and existing) tend to see a company investing in automation systems as having an innovative, positive spirit. This is something particularly attractive for young employees.
Our example: A builder of drying systems in Bavaria, Germany, was having increasing difficulties finding suitable skilled workers for the demanding but comparatively monotonous welding work. The pressure for a solution was mounting because the company’s order books were full. They found the perfect robot to perfectly weld its centrifugal fans in around 50 minutes (compared to around a day by hand) and employees could be deployed for other work.
Myth 3: Robotic systems are complex and difficult to operate
Operating some automation solutions is so simple that even skilled workers without prior knowledge can use them safely. Robots with user-friendly software and intuitive control systems can even be ready for use within minutes, meaning they immediately provide reliable support in the required areas of production.
Our example: “Unpacking, setting up, and the first programming” of the company’s automation system “took just 30 minutes”, explains the managing director of a company that provides finishing on plastic surfaces. The medium-sized plastics company opted for a collaborative robot because it is easy to program and flexible to use. During operation, the cobot checks DataMatrix codes for accuracy, saving time and production costs.
Myth 4: Production processes must be changed
Traditional companies in the skilled trades as well as in industry work according to decades-old and proven patterns. It is therefore difficult for many to imagine how robotic systems can support operations. The challenge is to divide the processes of one’s own operation into those that can and cannot be automated. Advice from an automation professional opens up many possibilities and promotes understanding of new processes. Through in-depth consulting, the applications are optimally adapted to the conditions of the company – not the other way around. The best companies provide customer support all along the way: from planning to smooth commissioning to maintenance of the running application.
Our example: The Fiedler brewery had only four by five meters available to accommodate a palletizing robot in its historic brewery building in Oberscheibe, a small German town near the border with the Czech Republic. A Kuka five-axis KR QUANTEC PA now takes care of loading and unloading pallets with empty and full crates. And the automation solution meant that extending the building or changing production processes was not necessary.
Conclusion: How automation works for SMEs
New technologies such as industrial robots and cobots create new opportunities for small and medium-sized enterprises. This includes improved conditions for employees, but also a considerable increase in productivity.
Successful automation means finding the right system that fits the production and requirements of the company in question. Prejudices such as “too expensive, complex, complicated” will quickly disappear and no longer impede production automation of small and medium-sized enterprises.
*This case study was kindly provided to us by KUKA.
