Manufacturing Automation: Debunking the Myths – Part 3: Pricing

manufacturing automationLast year’s election campaigning proved that Americans are passionate about the prospects of the American manufacturing industry—and it also proved that there’s a lot of fear surrounding the so-called “rise of the machines.” Americans fear that warehouse automation tools will take their jobs, but those fears are based on a lot of widespread myths.

At Scanco, we’re here to set the record straight. If you’ve been curious about the real story behind how manufacturing automation stands to change the economy and our American workforce, this three-part series will help explain the facts. In our first article, we talked about how automation stands to benefit the economy and the real numbers behind the “job-stealing” myth. Last week, we talked about the real reason why the economy is struggling. This week we’ll talk about automation. Enjoy the last installment in our series of Manufacturing Automation: Debunking the Myths.

Fact: Automation May Create Jobs

If our production levels have gone down and our spending habits favor inexpensive imports, we have two options we can leverage to price American-made goods competitively for consumers:

  1. Raise the prices on imported goods so that an American-made product is similarly priced to a foreign-made product.
  2. Lower the prices on American-made products so that we can compete with the prices of imports.

Option #1 is what the Republicans have suggested to President Trump. They’re proposing a border adjustment tax, which would impose additional taxes on imports. This may increase the number of plants, sales, and jobs in America because it would penalize companies who manufacture overseas, but it would also increase our costs here in the States. Experts say that unless our dollar increases in value by 20% (a highly unlikely scenario), we, as consumers, would be stuck paying more for the things we buy because a border tax would raise import prices to the same rates as domestic prices.

Option #2 can happen with automation. If we’re able to increase production to a faster pace, we can keep up with existing consumer demand and therefore increase our profitability. Higher profitability leads to more opened plants, more opened plants leads to more jobs, and more jobs leads to a better output. It’s a good cycle.

Wait … That Sounds Too Easy

Option 2 sounds like pretty impressive news, but if you’re properly listening to what I’m saying, you may be thinking, “That’s a nice idea, but if the machines are making all the products, then we humans are still out of jobs.”

You smart cookie, you.

The reason why the machines won’t steal our jobs is because they can’t do them. Yes, automation tools can perform very specific job tasks very efficiently, but they aren’t flexible, and they certainly can’t learn new skills.

It’s true that automation empowers companies to spend less on labor to complete highly detailed, sadly exhausting, or ridiculously boring work. Machines are purchased once, and, as long as you keep them in good condition, they’ll keep performing the same tasks for years.

The key there is that machines perform the same tasks for years. This is both a good thing and a bad thing.

  • The good thing about machines – Tasks that are assigned to machines are ones we, as humans, hate doing: heavy lifting, mind-numbing calculations, or frustratingly detailed work.
  • The bad thing about machines – Machines can’t learn new tricks.

Let’s unpack that last one a little. Even if you can reprogram automation machines to perform new, more relevant tasks, they’re not going to reach the same levels of productivity in those new assignments because they’re specifically built and designed to complete a single function only.

To make an analogy, reprogramming automation tools for different functions is like deciding to use an old smartphone as a digital photo frame. The smartphone probably did well at its assigned task (being a handheld computer), but as a photo frame it would need constant recharging. In it’s new assignment, it would spend less time being a digital photo frame, and more time being a device with dead batteries that happens to be stuck to your wall.

If you want an effective digital photo frame, you’re either going to have to program the phone to use less battery power, or you’re going to have to buy a different, highly specific tool (a digital photo frame).

And that’s the key: Humans are the only ones who can reprogram machines, and humans are the only ones that can design new machines to perform different functions. Sure, those are jobs for programmers and designers, but that’s job opportunity. We’ll also need people to oversee and fix the machines, we’ll need people to sell and manufacture the machines, and we’ll need people to think for the machines.

And don’t forget that the machines will help us create more products, which increases jobs in the retail industry, too. As humans, we have the ability to envision new possibilities, imagine new futures, and create new businesses—and automation tools can help us make our dreams a reality.

Automation may increase the production capacity of our nation’s manufacturing companies, but humans come up with the new products to sell, and the new ways to sell them.

The real fact: Machines simply give us the tools to succeed in the modern world.

Learn More About How Manufacturing Automation Can Increase Your Competitive Edge

If you’d like to see the real numbers behind manufacturing automation ROI in companies and industries like yours, Scanco can help.

Since 1989, we’ve been providing tools and solutions that help manufacturers and distributors do their jobs better and faster, so they can increase their sales and grow their businesses. We’re happy to lend a hand toward your business growth as well—for free!

Contact Scanco online to schedule your free consultation and learn more about how automation tools for Sage 100, Sage 500 and Acumatica can help your business reach new heights.