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The Advantages and Disadvantages of Automation in the Operation of a Business Organization

A Discussion in Examples

“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency.The second is that automation applied to an inefficient operation will magnify the inefficiency.”

~ Bill Gates

Introduction

Automation is the process in which operations run automatically instead of manually.Myriad control systems and types of equipment work together systematically in order to complete a task that would otherwise be completed by hand.

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Automation generally increases overall efficiency, allows people to shift their focuses to more important tasks, and permits the speedy production of a large number of products. This process is used throughout many different fields, and aids in the manufacturing of different products globally.

Automation is particularly useful for very large businesses which output a great number of products that must be delivered to customers. Those who monitor the manufacturing and transferring of products from factories to customers are called logisticians. More specifically, logisticians analyze and organize supply chains. In general, supply chains are the overarching systems that transfer products from suppliers to consumers.

These systems ultimately include the acquisition, distribution, allocation, and delivery of the products. As time passes, customers develop more detailed preferences, and establish higher standards for the quality of these processes. Given this, logisticians have the opportunity with new technology to automate entire systems and fleets to meet the growing needs of customer satisfaction in flexibility and transparency.

This essay will discuss examples of businesses and supply chain systems that have already implemented automation, such as Amazon, multiple automobile and truck companies, and hospitals. It will also discuss the general beneficial nature of this process, including increased speed of production and delivery, lower costs, and increased human safety.

Example: Amazon

The success of the logistics branch of Amazon is a fine example of the manner in which logisticians may utilize new technologies to automate systems in order to satisfy customers’ new needs of flexibility, transparency, and convenience. For instance, Amazon’s warehouses, the areas where products are prepared for humans to deliver, are already partially automated. Within them, there exist Kiva robots which carry and transfer shelves of products to these delivery people (“Amazon”, 2016).

It is the inclusion of these robots that allows Amazon to ship millions of products to customers every day. Without them, it is likely the delivery process would be far more lengthy and inefficient. It would also cost more, as the company would need to continuously pay many workers to transfer these shelves of items. It can be seen in this case that logisticians have already taken advantage of new robotics technology in order to create multiple control systems that automate an otherwise laborious operation.

As customers’ desires for quicker delivery expands, such automation proves very effective in satisfying these desires. Moreover, customers now also seek much flexibility with delivery dates and times; they now want their products delivered at very specific dates and times. This sort of automation allows for a much quicker processing of these needs, as items are automatically placed on their respective shelves and then transferred according to shipment time.

Furthermore, in addition to the automation of transferring shelves of items to human deliverers, Amazon is also looking to automate the actual process of picking items from shelves. This would eliminate the need for workers to transfer the items from shelves to trucks, and thus, cut costs and theoretically cut time expenditure.

This said, the process of picking items from shelves has proven to be quite difficult for bots (“Amazon”, 2016). Currently, the average human can pick 400 items per hour with very little error. On the other hand, the best bot can only select 30 items per hour, and the error rate is much higher.

This said, for many years, robots were only implemented to perform repetitive and precise tasks that humans would only prove to be very inefficient at completing. However, according to the MIT Technology Review, with the advancement of computer chips, algorithms, sensors, and actuators, implementing robots to perform more complicated tasks is more feasible, and cheaper and safer than ever before (Knight, 2016).

Moreover, as technology improves, it is likely a bot may be able to select up to 3000 items per hour with very little error. In this particular case, picking the exact personalized items to be shipped to the correct customers demands a certain level of intelligence from the picker, and imparting this sort of intelligence in bots is still very difficult for engineers.

Nevertheless, as seen, if successful bots were created, and these bots could perform these tasks accurately, logisticians could certainly take advantage of them in order to automate cumbersome processes and better satisfy the evolving needs of customers.

Automation has served Amazon in different sectors of its company as well. For example, even some aspects of delivery have been automated. Amazon recently completed its first drone delivery where an Amazon Fire TV and a bag of popcorn were delivered to the customer via a drone (McAlone, 2016). This type of automated delivery method provides the very significant benefit of speedy delivery. In fact, this TV and snack were delivered to the customer just 13 minutes after they were ordered online.

It becomes clear that automation can improve the logistics of delivery, and this concept can be expanded to other business models. For example, consider food delivery. The food takes time to prepare, but there currently exist many additional manual processes that eat up a lot of time. For instance, the delivery person must retrieve the food, wait at street lights and in traffic, and then walk to the customer’s door. If this process became automated, the logistics would be far more efficient.

The food could be transported via drone to the customer. Moreover, this automation would increase transparency in the delivery process. When a delivery person is handling the food, there exists some opacity for the customer as to what exactly is happening with their product. However, knowing your product is on a drone is straightforward. Thus, it can be seen that this sort of automation, as demonstrated by Amazon, certainly enhances logistician’s abilities to satisfy the changing transparency and efficiency needs of customers.

Example: Automobiles and Trucks

Automation also provides numerous opportunities to logisticians working in automobile and truck organizations. More specifically, logisticians who work with vehicles in relation to transportation may experience copious benefits of certain types of automation. For example, there currently exists a movement of driverless trucks transporting products all the way across Europe and arrived at the Port of Rotterdam (Petersen, n.d.).

This sort of innovation and automation improves economic efficiency drastically, and serves as a method of increases flexibility and transparency. Standard modern truck transportation is quite expensive. For instance, “Shipping a full truckload from L.A. to New York costs around $4,500 today, with labor representing 75 percent of that cost” (Petersen, n.d., n.p.). It can be clearly seen that removing the labor component from this equation would reduce costs significantly.

Of course, multiple expenses would exist when initially implementing this sort of automation, and driverless trucks are not cheap, but the long-term economic efficiency would absolutely outweigh the amount of money spent on labor. In addition, less money would need to be spent on fuel, as driverless trucks always cruise at the optimal rate in order to preserve gas. They also would not need to stop regularly for breaks. There are many more benefits than simply the economic type however.

For example, laborers are also restricted to only drive a certain number of hours in the day for safety reasons. Most laborers are required to take 8 hour breaks after a certain number of hours of working in order to get the rest they need to drive safely. However, a driverless truck is essentially just a computer, and could travel up to 24 hours per day without rest, for there aren’t safety concerns regarding the operator falling asleep or making a steering mistake.

This certainly reduces the amount of time present between shipment and delivery. It can be extrapolated that this type of automation also satisfies customers’ desires for flexibility; companies may now be more flexible with their delivery times as they can ship quicker.

Example: Hospital Logistics

Automation has also proved to be very useful for logisticians working within hospitals. For example, many hospitals have adopted an in-hospital transportation system that automatically transports sterilized surgical equipment to the respective surgery room after storing it in automated warehouses (“In-hospital”, n.d.).

This improves the overall function of surgery preparation within hospitals. A few of the benefits of this automation include: shortened preparation time, a reduced burden on staff members and surgeons, an ensured accurate allocation of devices to the appropriate rooms, and the elimination of wasted space. In-hospital automation is a fine example of effective automation on a micro-scale.

Instead of transporting a vast number of products across the country, automation in this case allows for the transport of just a few items from room to room within a hospital. Ultimately, improving the function of more micro operations allows logisticians to then branch out and improve the functions of more macro operations.

It would otherwise be very difficult to improve the overall function if the work happening within the hospitals was inefficient. This sort of automation increases flexibility for staff members, as they are not burdened with the stress of accuracy, or the time required to manually move the devices. It follows that these staff members may then pay more attention to customers and provide better service overall.

General Benefits of Automation

In general, automation provides many overarching benefits to logisticians working in many different fields. Ultimately, implementing automation into the manufacturing, or delivery, sectors of a business reduces financial costs. These costs may either be cut via decreasing the number of workers that must be paid salaries, or via decreasing the amount of time it takes to actually produce products and deliver them to customers.

The aforementioned examples of Amazon using automation and the incorporation of driverless trucks demonstrate the manner in which these economic cost cuts may be enjoyed. They also demonstrate how logisticians may increase flexibility and transparency for customers. As mentioned, Amazon’s utilization of drones increases flexibilities with delivery dates, as well as customer understanding of what is happening to their products as they are being shipped.

Furthermore, as automated transportation and delivery is rather consistent, these attributes also improve the overall operations of customer service. For instance, customer service representatives may enhance their communication to the customer about information regarding expected delivery times, as such information is readily available with automation; thus, increasing transparency (Fawkes, 2014).

In other words, this sort of automation allows companies to track products being transported in real-time, and in many cases, provides customers online resources to be able to track their own products as well.

This resolves most practical issues regarding transparency for customers. In addition, driverless trucks allow products to be transferred far more rapidly, saving time and money. This grants companies increased access to these products quicker, and thus allows them to be more flexible with customers overall.

Companies no longer have to wait for products to ship or arrive in order to plan their next moves, or collaborate with customers. It can be seen with these examples, as well as through logical deduction, that automation in logistics sectors of companies increases overall economic efficiency, and provides logisticians opportunities for increased flexibility and transparency.

Another general benefit of automation within logistics sectors of companies is a significant lack of error. In other words, automated processes eliminate worries of human error that would otherwise exist if laborers were completing the tasks instead. Additionally, less humans would get injured in more physically laborious settings, which also means less companies would have to deal with lawsuits.

According to a study published by the American Society of Safety Engineers, “If no humans were on the production floor, no more human errors would occur, no one would get injured, and companies would produce higher-quality product that they could move faster to market” (Haight, 2007, n.p.). It can be seen that the replacement of humans with bots would not only reduce the level of errors made, but also lessen the number of people being injured on the job.

This is especially pertinent to the case of driverless trucks. Within the past few years, more truck drivers were killed on the job, 835, than workers in any other occupation in the U.S (Petersen, 2016). Albeit obvious, there have not been any reported human casualties from companies who have switched to automated transportation and utilized driverless trucks. Overall, there is far less room for error, approximately 0 percent chance of human error, and less injuries and casualties with the incorporation of automation into different logistics sectors.

Challenges of Automation

These things considered, there do also exist some challenges companies may face when switching to automation. Firstly, switching to automation may be very expensive. Advanced technology, and robots, are typically not cheap. While the company and logistic sectors would ultimately save more money because they would not be paying multiple workers various salaries, the initial purchase of many robots would be very drastic.

At the same time, it may take a very significant amount of time to fully transition to automation from manual work successfully. This is especially true for larger companies. For example, the transition may take larger companies many years to carry out fully, and by the time it is completed, it is likely newer technology systems may outdate the recently established system. Technology changes and advances rapidly. More specifically, myriad researchers and scientists are seeking to construct more efficient bots.

As time passes, the bots get better and better at performing their designated tasks. It could be seen as a hefty waste of financial resources to transition to automation if the process would take years, and the company would still have relatively inefficient technology at the end of it. Further research is necessary in order to conclude the true benefits of automation for larger companies, but the rate at which technology advances is certainly important for these companies to consider when considering automation.

Another potential challenge of automation in the logistics sector is the lack of human judgment, logic, and decision making power in various operations, as well as increased human dependence on systems they could not handle if necessary. It may seem intuitive that automation is inevitably less erroneous than manual human work, and that productivity would increase. However, implementing is still very controversial, as humans may provide other very valuable benefits to various operations.

Humans provide judgment, logic, experience and opinions, (Haight, 2007) and must be seen as an interactive component in the system. Automation can sometimes lead to a dynamic that is controlled more by bots than humans. It is very important to still make the dynamic and strategy of the company human, as humans are ultimately currently smarter and more strategic than bots. It is true that incorporating bots may improve efficiency and productivity for more mundane, repetitive, time consuming tasks, but they will only do what humans program them to do.

They cannot possibly provide the same insights and judgments humans can, so it is generally unwise to implement them where human judgment could benefit the process. The real challenge appears when a certain operation is repetitive and mundane, as well as one that demands human judgment and logic. This said, it is also problematic when humans depend too heavily on bots, and are not able to problem solve when bots malfunction.

Most strategic decisions are best made when the decision maker understands the intricacies of all operations, and does not simply rely on some third party bot to always handle certain systems. These things said, additional research is necessary in order to absolutely determine the best approaches to these challenges, but in order to optimize the functions of logistics sectors of different companies, it is very important for logisticians to consider the benefit of the human element in the big picture.

Conclusion

Overall, it can be seen that automation provides myriad benefits to logisticians looking to improve flexibility and transparency for customers. Put simply, automation is the amalgam of systems where operations are run automatically instead of manually. These systems are used in a wide range of fields, but are especially pertinent to logistic sectors that deal specifically with product preparation, transportation, and delivery.

There currently exist many examples of companies who have successfully incorporated automation. For instance, Amazon has proved to be very successful, and is a fine example of the manner in which logisticians utilize advanced technologies in order to automate systems, and satisfy new customer needs of flexibility, transparency, and efficiency. Many of the company’s approaches to automation have shown to be effective in different ways; Kiva is a robot that efficiently transfers shelves of items for pickup, and drones are now used to deliver products to customers.

Automation also provides numerous opportunities to logisticians working in automobile and truck organizations. As seen, automation in this field increases the rate at which products are delivered to their destinations, and reduces human errors and human injuries drastically. Both of these fields also enjoy increased flexibility as a result of automation.

Moreover, the grand scheme of operational efficiency begins at the micro scale, and all of the intramural units must cooperate efficaciously in order for the macro operations to cooperate. Automation is very efficient on more micro scales, such as hospitals, and thus, allows logisticians to expand. In addition, automation also provides many general benefits, such as the reduction of financial costs, the virtual elimination of human error, and increased human safety.

These things said, as discussed, there do exist various challenges companies face when deciding to implement automation. Purchasing the adequate technology may be incredibly expensive, and large companies might not be able to update their equipment optimally before even newer technology is released. Also, the nature of automation deprives the specific operation of human judgment, logic, and experience. In some cases, this is not an issue.

For instance, very mundane and repetitive tasks that could not be significantly improved with human help. However, some scenarios might prove to be exceptionally tricky. It is important for logisticians to consider these scenarios meticulously before deciding to implement automation.

All things considered, further research is necessary in order to conclude anything definitely, but the examples presented, as well as conventional knowledge regarding the general benefits of automation suggest it certainly helps logisticians satisfy customers’ evolving needs in relation to flexibility, transparency, and convenience.

References

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    Retrieved December 28, 2016.
  • Haight, J. M. (2007). Automated Control Systems Do They Reduce Human Error And Incidents?
    One Petro. Retrieved December 28, 2016.
  • IHI. (n.d.). In-hospital logistics system. IHI. Retrieved December 30, 2016, from
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