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Manufacturers & Distributors

Automation is the Solution for Maximizing ROI

Posted on September 23, 2020 by

Tim Finerty

Tim Finerty

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Advance manufacturers around the world build different things with different workflows in different places. Yet there is one thing that remains the same among them all: the drive to create a higher-performing product as efficiently as possible.

As more and more companies face those pressures, a number of them are now adopting Industry 4.0 technology to adapt their workflows to the 21st century. And as a result of embracing this evolution, these businesses are reaping the benefits.

As the “fourth industrial revolution,” Industry 4.0—and the eight emerging technology centers that it encompasses—has allowed companies to solve long-standing issues while maximizing efficiencies. By completely changing the manufacturing ecosystem, invaluable tools such as artificial intelligence, Big Data, cloud computing, and other technologies have allowed companies to increase their margins and generate cash flow that has never before been accessible.

The shift to intelligent factory automation is a big step. But with support from industry groups and systems integrators, the challenge becomes less daunting as businesses become equipped with the necessary knowledge to leverage the intersections of advanced technologies, systems, and people to jumpstart or accelerate a digital path to strategic success. In order to ultimately be successful, understanding the numerous benefits of utilizing Industry 4.0 is the first step.

Supply Chain Efficiency

Past supply chain models were notorious for inefficiencies and dragging the financial impact and timetables of projects. Using Industry 4.0, businesses have become more interconnected than ever before and supply chains have become efficient mechanisms that feed the revenue of suppliers and manufacturers alike. Companies that digitize the supply chain consistently see lower operating costs, inventory efficiencies, and a boost in sales opportunities.

Digital processes also allow companies to see exactly where assets are across a diverse, global supplier network, thereby allowing them to also see potential disruptions and other risks that lead to lost revenue.

Beyond that, automated supply chain management also drives data-informed decision making, cross-collaboration, and optimized inventory and warehouse management that lead to greater opportunity to boost revenues.

Quality Control

Automated systems have also brought on a quality control revolution. Much like the integration of the supply chain, by using Big Data, modeling systems now have the capacity to detect and understand issues in the manufacturing process before the product is in its final stages.

Industry 4.0 brings to the table a suite of modeling, simulation, visualization, and immersion tools that allow companies the ability to analyze and validate components and products to mitigate flaws. By collecting enormous swaths of data and cross-referencing with industry standards and benchmarks, these processes have the ability to flag problems before they become a crisis.

Not only does it create a more fluid environment for workflow, but it also saves valuable time and resources. By being able to identify and assess quality control issues during their early stages, companies can reserve their spending for other issues and maintain a healthy cash flow for their business.

A Better System for the Factory Floor

When equipment sits idle and stations are bottlenecked, work does not get done and profit is lost. Companies that are making investments in automated tech have proven time and again that those inefficiencies are things of the past.

When a factory implements AI, they ensure that they take full advantage of their equipment by protracting Overall Equipment Effectiveness (OEE) on the manufacturing floor. By using system dashboards managers are able to track peak performances and be notified when machinery goes down, ensuring maximum use. A shift to Industry 4.0 is also a shift to predictive maintenance rather than preventative maintenance.

The same systems are also ones that will detect bottlenecks to prevent certain stations from being overloaded with work and clogging the entire station. By being able to identify such issues earlier rather than later, companies can create solutions that will ultimately result in accelerated production, streamlined delivery, and greater profitability.

There Are Tax Advantages

With the economic benefits of automated tech being clear, local, state, and federal leaders alike have created tax breaks to incentivize companies using Industry 4.0 technology to move to their communities. In a business environment that demands companies minimize spending to the greatest extent possible, tax advantages that come with digital manufacturing are an important factor for leaders to evaluate.

With companies around the country shifting their focus to developing smart factories and innovative spaces to meet the needs of growth in the 21st century, more and more local, state, and national governments have recognized the economic benefits of bringing that work to their communities.

R&D tax credits represent a significant opportunity to free up cash for companies investing in Industry 4.0 technologies. They can be claimed by companies in advance manufacturing and automation industries who have invested in developing new and improved technology. This incentive is another example of an ROI advantage for companies using automated technologies.

Bringing a Company into the Future

Companies looking to make the next step in regards to productivity and financial gains should take a hard look at how to embrace Industry 4.0. The broad range of benefits— whether increasing employee efficiency or increasing the quality of their product— creates almost limitless potential while simultaneously allowing companies to adapt to the ever-evolving technological ways of the 21st century.


*This content was also published on the Automation Alley blog. 

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Tim Finerty

Shareholder, Industrial Automation

Tim provides tax, accounting and consulting support to help industrial automation companies maximize profitability.

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