Automate or emigrate

Aug 2005 10:11
Investment in new materials handling equipment can improve efficiency, but is it a serious rival to low-cost overseas labour, asks Debbie Giggle

Many materials handling processes can be automated but, for the UK manufacturer, the decision whether to invest in automation can be a difficult one. The benefits are obvious. Automation can achieve improvements that may never be possible manually, and can greatly improve health and safety performance. Off-set against this however are issues of upfront outlay and potential inflexibility once the investment has been made. If production requirements change, will the shiny new crane end up a white elephant? And whilst automated systems provide outstanding performance on repeatable, high-volume tasks, how effective will they be for manufacturers who make to order, or who have frequent changeovers and short production runs?

As UK manufacturers go head-to-head against overseas companies with lower labour costs however, the pressure to achieve results through automation has never been greater.
Greg Smith of Industrial Automation – a company specialising in customised automated systems – said: “Often manufacturers are faced with a clear decision: automate and keep manufacture in the UK, or migrate production to a low cost economy. Simple as that.
“Companies with well-established continuous improvement programmes generally come to us with comprehensive data on existing production efficiency on which to base any cost-justification, so the potential payback period can be rapidly assessed. Companies who are newer to lean manufacturing may not have these metrics in place and we work with them to gauge the benefits. In either case, UK manufacturers typically look for a payback period of between twelve and 18 months combined with solid long-term efficiency improvements that close the gap between costs of manufacturing here and overseas.”

For Starpoint Electrics Limited based in Chessington, Surrey, the decision to invest in in-line automation to eliminate a manual stage of its process was taken as part of a larger cost-reduction exercise. The company manufactures a range of products for amusement and gaming machines, vending and point of sale. Manufacture of some highly price-sensitive products is sub-contracted to a company in Asia, but the company wanted to ensure that its core business – the manufacture of reels and push-buttons for fruit machines – could be retained in the UK.
In addition to competing with reel manufacturers overseas, Starpoint faces competition from an alternative technology. With the introduction of touchscreens, some game designers are experimenting with video-based alternatives to traditional reel-based games. Reducing production costs and improving efficiency are key to the company’s success.

“We invested in two new automated lines with robotic handling which incorporate test equipment positioned after each work station,” explained Mike McEvoy, Starpoint’s operations director. “Each reel is immediately tested at high speed and without operator intervention after each phase of the manufacturing process. This provides higher output with a reduction in direct labour. As problems are identified immediately rather than at the end of the line, reworking is reduced. The line also automatically alerts a supervisor if more than seven units are identified as having faults, to enable the batch to be stopped and the root cause identified rapidly and effectively.

“We were able to increase our rate of reel mechs produced per person per day from 50 to 89 through automation alone. With further design-for-manufacturing improvements we expect this figure to rise to 114. Quality levels have increased. Rework rates are drastically reduced and, as the lines do not require full-time supervision we now have the potential to move from a standard eight hour shift to 24 hour, round-the-clock production.”

Starpoint is not alone in favouring robotic technology according to Smith.
“Robotic technology has been around for a long time, but its popularity continues to grow,” he said. “It’s not necessarily because the technology itself has changed. I think it is because manufacturers are now much more confident about reconfiguring and re-using the equipment. Many companies now have a strong base of robotic programming skills in-house and can see the long-term potential and flexibility of the equipment if their needs should change.”

According to Nick Tyler of Tube and Bracket Company, flexibility has also become an issue for non-automated materials handling equipment.

“People want to get the maximum use out of existing equipment for storage and movement of materials, such as racks and trolleys, rather than throwing it out and buying more,” he said. “That’s praiseworthy in today’s economic climate, but older equipment is often too ‘fixed’ and inflexible. If equipment can’t be reconfigured or adapted the manufacturer ends up fitting the process around the shortcomings of the materials handling equipment, and that is very bad news for any continuous improvement team.”

Tube and Bracket Company supplies a modular system called LeanTek which comprises coated steel piping, joints and fixtures that can be assembled into a variety of solutions including live storage, carts, trolleys and ergonomic workstations for use throughout the manufacturing process. When requirements change the pieces can be unassembled and reconfigured to suit the new demands.

“If the right piece of equipment is used, instead of muddling by with something less suitable, a dramatic improvement can be made,” continued Tyler. “For example a 50 per cent space-saving and a 70 per cent improvement in pickability could be expected where the materials handling equipment is fit for purpose.”

TRB Limited, the automotive switch manufacturer uses modular storage and handling solutions including dynamic lineside racking, trolleys and workstations. Mike Robinson, assistant manager, production engineering at TRB Ltd said: “We supply switches to our customers on a just-in-time basis and have to be able to build and adapt racking, often at short notice, that has the right depth and incline for our specific production and handling requirements.”

When the TRB factory in North Wales first opened it sourced modular storage components from the Far East, but deliveries could take up to six weeks, which did not allow the company to implement rapid changes in production areas. This year it moved to local supply from Tube and Bracket Company, who provide LeanTek components from stock on overnight delivery. TRB estimates that using fit-for-purpose materials storage and movement systems has contributed to an increase in takt time efficiency of between 10 and 20 per cent, depending on the specific model.

Perhaps some of the greatest opportunities for materials handling improvements however relate to packaging, warehousing and dispatch.

R S Components has invested in the region of £60 million in automation in recent years. Its warehouse in Nuneaton is fully-automated and uses advanced barcode technology and automated routing to process its workload. It handles 4,000 transport modules per hour through its bulk storage area and 2,800 parcels per hour through its outbound area. The investment encompasses three cross-belt sorters, 28 automated cranes and around ten kilometres of conveyor. Each item of inventory is stored in a special container with barcode identification. The warehouse management system carries real-time information on the status of all 530,000 store locations and has built-in intelligence to know automatically where to store and locate each item.

Chris Hewerdine, systems support manager at RS Components Nuneaton said: “The installation of the equipment is really just the beginning. You obviously make immediate improvements in speed of order picking, operational costs and customer service with the installation of the system, but the benefits don’t stop there. The fully-automated system has been in place for almost eight years at Nuneaton but, as we learn more and more about the capabilities of the technology and redesign our processes, we are achieving even greater efficiencies.”

RS Components uses lean manufacturing tools such as measurement of key performance indicators and value stream mapping to design and enhance existing processes. Areas of the site and specific operations are divided down and analysed in detail to understand opportunities for streamlining of processes. On-going performance is monitored through a structured review schedule which includes weekly planning meetings.

“Our historic data provides a strong basis for the design of new pick processes,” Hewerdine continued. “For example in the light of changes in insurance regulations we have recently created a controlled products area within the site for the specialist storage of flammable and aerosol items. Historic data enabled us to determine the most effective pick method and the optimum use of manual intervention and automation.

“Another recent example is a project we have carried out to improve crane efficiency. The cranes have six tables: three upper and three lower. The upper and lower levels had traditionally worked independently of one another but, with more advanced knowledge of the technology, we have been able to link the operation of both levels together for far greater efficiency. This goes beyond the design capabilities of the equipment as supplied by the crane manufacturer and takes us into previously unavailable areas of functionality. We estimate that this has increased storage capability for each crane by around 30 per cent and, as we move several thousand items per hour, this equates to a significant overall improvement in performance.”

“The important thing is to apply joined-up thinking,” concluded Smith. “When assessing how automation can help, consider every area of manual intervention from goods in, through manufacturing, to loading of transport at dispatch. Then apply rigorous decision-making processes using historic data to decide where and how to automate.”

Source: The Manufacturer