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Automation

Involves the use of machines (including computers) to carry out operational tasks. It is most prevalent in manufacturing. For example, computer-aided manufacture (CAM) uses computers to control and adjust the production process. See computer-aided manufacture (CAD). However, automation can also play a major role in increasing productivity and reducing costs in service industries – for example – the self-scanning checkouts in supermarkets. The automation of information (as opposed to labour) is now increasingly commonplace (eg automated stock control). Overall automating processes can significantly reduce unit costs, increase profits, as well as improve quality and increase productivity, which could also provide marketing advantages / a competitive edge. It is, however, not as straightforward as this for some businesses, namely those who deal with hand-made products, where variations in the product might add a unique charm. In such cases, a business could potentially lose sales from the more consistent, standardised product arising from a more automated production process. There are also several financial costs involved in automating processes that need to be considered in relation to the financial benefits, as follows: Initial capital and installation costs, finance costs, training costs, and redundancy payments. There are also on-going costs eg energy, maintenance and depreciation but these costs should, in the long term, be outweighed by the reduction in costs and increased productivity outlined above. The short term issue is securing the finance required to implement the new technology. In addition to the above costs, the move to automation could temporarily disrupt operations – resulting in delays to customers while installation and training takes place, unless carefully planned. There are also qualitative factors to consider, which mainly concern the impact on employees and on employee-employer relations, employee morale, motivation and performance.

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