Every so often, challenges present themselves to a supply chain that threaten efficiency. Some are obvious, others are more subtle and harder to validate, but all are reasons to ask one question: Is it time to modernize? Modernizing is a cost-effective way to adapt to a new and changing world of logistics, but how do you know if it’s right for your business?
Here’s a list of five reasons you need to modernize your automated equipment, from most obvious to least.
1) Business Has Changed
It’s a given that your business has changed over the years. If it hasn’t, it’s because you’re out of business. Consumer demands change and supply chains have to change with it. For example, with the boom of SKU proliferation, operations have had to get smarter and more flexible with software solutions that can streamline architecture, critical to success. You used to make two versions of your product at the same rate, now you make eight versions based on new marketing analytics. The pressure is on to meet the demand, and that means convincing management to modernize is fairly straightforward.
2) Reliability/Performance Issues
This is a quick sell on management that a modernization is necessary. Beyond slowing production and upsetting customers, failing equipment can decrease employee retention as frustration builds with constantly putting out fires. Delays in production and missed shipments often result in necessary overtime, a cost that drastically threatens the bottom line. Of course, the products themselves are threatened as controls, sensors, conveyers and other pieces deteriorate, leading to loss of product and another hit to the bottom-line.
3) Equipment or Software Obsolescence
With the high rate of acquisitions in the material handling arena, OEMs go out of business or change their focus, meaning you may not be able to rely on them anymore for the support they once offered. This flies in the face of “If it ain’t broke, don’t fix it” mentality. It can be difficult to sell an upgrade before it’s necessary, but the cost of downtime after equipment fails—which it will—is much greater. Executing a retrofit can be a cost-effective way to make necessary updates without a wholesale upgrade.
4) Safety & Compliance Issues
Typically, a safety-related modernization is done after an injury is suffered. Of the 650-plus projects that Retrotech has done, less than 10% of those were justified solely on safety. Some companies place a higher priority on safety than others, making management more receptive to a proactive upgrade. Similar to waiting for a piece of equipment to break before fixing it, if you’re waiting for an injury before improving safety, the cost will outweigh the investment. When it comes to compliance, most companies strive to be in-line with ASME B30.13 standards. A modernization at the right time can make sure that happens. Again, being this level of proactive can be a tough sell on management.
5) Unsatisfactory Service or Support
As a driver for modernizations, satisfactory support is hard to justify on its own merit. When dealing with an OEM, it’s crucial to document every instance where service or support is not up to snuff. Tracking those instances, identifying what the impact is on production, and presenting those hard numbers to the management team is the best way to drive home the need for modernization. If you’re waiting for a replacement part or your provider no longer carries something you need, the impact can be enough to tip the scale with management to proceed with a much-needed modernization.