Does Metal Shop Automation Cost Jobs?

December 4, 2018

Since the days of the steam engine, machine labor has been viewed with suspicion. People are always afraid that they’re going to be pushed out, and nobody wants to lose their job to a glorified toaster.

In our increasingly globalized world, ease of international commerce and websites like Alibaba have made it easy to outsource to cheaper overseas vendors. As a result, labor costs have to come down – and getting your team on board is a huge factor in successfully implementing automation in your metal shop. Because pretty much everyone is going to have objections to automation.

So let’s put to rest the idea that automation is going to cost jobs.

As much as this is an ongoing topic of debate, on the individual shop level, the main thing that automation accomplishes is reducing labor costs per job. This is basic math; when you bring in automation, you increase capacity, which means that the same number of people can do more. It’s not about reducing your labor force, but increasing their operational efficiency – and freeing up time for the sorts of work humans are best at. In other words, automation, whether we’re talking about cutting, automated CAD detailing, robotic lathes, or anything else, is about empowering your workforce. Automation – even CAD automation – serves your team, not the other way around, and can take over mindless, repetitive tasks. When properly teamed with your existing staff, you’re able to better utilize everyone. A pair of single-spindle lathes operated manually can have a spindle utilization as low as 50%; when automation was introduced at CNC Machine Products in Joplin, Missouri, spindle utilization increased to as much as 90%.

Automation helps your shop to better distribute both direct and indirect labor over more production, reducing your relative labor costs dramatically without letting a single person go. And with automated machines producing the same quality work every time, not only do you improve consistency (and reduce the amount of time spent reworking existing products or replacing bad ones), you’re better able to identify production problems – and put a stop to them. With more consistent quality metrics, you have a stronger basis to analyze what’s working, what isn’t, and where problems lie. That improves productivity and profitability, giving your shop the means to expand – which means hires, not layoffs.

And because automation introduces simple repeatability, quality problems happen less often, production quality is more reliably maintained – and even that machines can be trusted to operate without human interaction for significant stretches. That gives you a shop that’s operating 168 hours a week.

This is as true for low-volume shops as much as it is for high-volume behemoths. Automation makes switching between jobs faster and more effective, so multi-part, low-volume orders of 5000-10,000 pieces can be as profitable on a cost-to-labor basis as larger single-part orders.

Where does that lead you? To a machine that has paid for itself fairly quickly through reduced relative labor costs, increased efficiency, increased productivity, increased profitability, and increased capacity that empowers growth and enables you to implement economies of scale to undertake more jobs – and just feeding the growth cycle more. Which will demand new hires to do the work the machines can’t.

We’re looking at more jobs, not fewer, fueled by the productivity improvements automation can bring about.

That’s something everyone can get on board with.

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