of the performance of a process or system. However, there is one measure that effectively combines and summarizes many of the individual measures into one all-encompassing metric: That measure is productivity.
1.4.1 Productivity
The term “productivity” is often cited in the news media as an important economic indicator of the health of the nation’s economy. The U.S. Department of Labor, Bureau of Labor Statistics, collects and publishes productivity data for many elements of the U.S. economy. Per the Bureau of Labor Statistics website (www.bls.gov/bls/productivity.htm):
Productivity and related cost measures are designed for use in economic analysis and public and private policy planning. The data are used to forecast and analyze changes in prices, wages, and technology. (p. 1)
Thus, the measure plays an important role in the development of private sector and government economic policies. The interaction of productivity measurements on price changes, wages, and technology may be complicated, but the definition of productivity is not. While the term may have a slightly different connotation to an economist compared to an industrial engineer/technologist, the basic definition is clear. This simple definition is why this measurement, used as a means of quantifying manufacturing production, can be used in all levels of manufacturing. It is the author’s contention that the productivity measure is perhaps the best indicator of when and where to utilize automation.
As David J. Sumanth observed in Productivity Engineering and Management:
Productivity is concerned with the efficient utilization of resources (inputs) in producing goods and/or services (output.) (p. 4)
Note that “inputs” refer to all the resources (labor, material, capital, etc.) that go into producing the goods or service, and “output” is whatever is produced by the system under consideration. Thus, the productivity of a manufacturing system can be determined simply by the ratio:
productivity = output/input
For the purposes of this text, output will be expressed in units of parts/hr and input in terms of $/hr.
In order for the productivity ratio to rise, either the output must increase (more parts/ hour) or input must decline (amount of product remains the same with less resources). Productivity increases are positively viewed because they indicate that more is produced with less dollar input to the system. Therefore, if the selling price of the product does not change, the producer realizes an increase in profit. Conversely, a decrease in productivity occurs when not as much product is being produced and/or the input cost increases. Typically, all inputs (labor, raw materials, and energy costs) will increase over time. To prevent these increases in inputs from being passed along to the consumer as a price increase, more products must be produced. Note that this is the link of productivity to inflation. Therefore, it is obvious that improving productivity is of vital importance to manufacturing. Equally as obvious is how automation can improve productivity by allowing more products (output) to be made or by reducing the cost (input) of production.
The way a company can use productivity and the other manufacturing measures to justify automation will be addressed in detail in Chapter 2.
Specific reasons to automate one process may be very different from the reasons to automate another. However, the goal of any automation is to produce a tangible benefit. Common to all automation is the benefit of productivity improvement. Listed below are seven common reasons to automate:
Increase labor output
Increasing labor output has a direct effect on increasing productivity. If, through automation, the amount of product is increased, the productivity also increases. Essentially, automation focused on improving the effectiveness of the labor, thereby increasing the amount of product made over a specific time period, will lead to increases in labor output and, thus, productivity improvements. Examples include addition of a robot to handle material or use of a PLC to control a manual process. Each is intended to “free up” the worker from a task, thereby enabling him or her to produce more.
Reduce labor cost
Reducing labor cost also has a direct effect on increasing productivity. Because labor cost is an input in the productivity formula, reducing it increases productivity. In fact, from a productivity viewpoint it is difficult to distinguish reducing labor cost from increasing labor output because the net effect is the same. However, it is listed as separate to emphasize that some automation strategies focus on improving the amount of output produced from the current number of workers whereas others specifically target reducing labor costs. Examples of labor cost reduction include any type of automation that reduces the number of workers or the time each worker spends in production.
Reduce or eliminate effects of labor shortages
Depending on the state of the local economy, a plant may have an abundance of available workers or a severe shortage. If the manufacturing process is particularly labor intensive, lack of workers can result in machine down time, less product, and overtime for the current workforce, each of which can have a detrimental effect on productivity. Making the process less labor intensive through automation allows it to better withstand periods of labor shortages. Thus, automation strategies geared to increase labor productivity and/or reduce labor costs should be considered.
Reduce or eliminate routine manual and clerical tasks
Reduction or elimination of routine tasks is often the first avenue to improving a process’s productivity. Automating these types of tasks, once again, frees up the worker to perform more value-added tasks. This inevitably leads to productivity improvements through reduced labor costs and/or improved worker productivity. A good example is the automation of the engineering drawing process with computer-aided drafting (CAD).
Improve worker safety
Any opportunity to provide a safer worker environment is a worthwhile investment in any process, not only from the obvious benefit of worker protection—management’s ethical responsibility—but also from a productivity standpoint. Down time due to accidents also decreases productivity by limiting output from the process. Yet, physical safeguards intended to protect the worker might also hamper output. A better approach would be to utilize automation and completely remove the worker from the dangerous work environment. This should be attempted even if a productivity gain is realized or not. An example of such precautionary automation might be utilization of a robot to remove parts from an injection press. For a worker to remove parts from the mold, the press door must be opened, which activates mechanical interlocks that prevent the mold from closing as the worker removes the parts. But, if a robot removes the parts, the worker is no longer required to reach in the press, thus removing him from the dangerous environment. Additionally, the press cycle time improves because opening and closing the door is removed from the process since the robot typically accesses the mold from the top of the machine.
Improve product quality
Improving a product’s quality yields many benefits to the manufacturer, including reduced waste—a plus for both the business and the environment, which makes for better brand image and higher sales. The impact on productivity is equally impressive. Reduced waste reduces material costs, which decreases inputs to the process, thus increasing
