The beginning of May brings a relaxation of social distancing restrictions. What follows will be the opening of stores, shopping malls, other service outlets, educational institutions, etc. It will be a very long process of recovery from the COVID-19 epidemic, referred to in the literature as the “dance”, where the incidence curve will rise once and fall once. In this state, society and the economy will have to endure until a vaccine or drug for coronavirus is put into mass production.
What does this entail? Uncertainty. We can divide business uncertainty into 4 key areas, making up the system. These are: sales, supply, the process the company follows and finance. Each of these elements is touched by external and internal factors. Where often one can compound – or conversely eliminate – the other.
Current situation
How does this add up to the current epidemiological and economic situation? We know that the economic downturn is already taking place and will assume crisis proportions in certain sectors. We know that unemployment, especially in certain industries, will rise. We know that due to aid programs and the need to keep the state functioning, with revenues falling, the deficit will increase, and therefore inflationary pressures will be strong. We know that the epidemic will continue to smolder for at least a dozen more months, and that the general loosening may lead to localized outbreaks that will bring back the restrictions that have already been lifted.
On the fight against risk
For some companies, the first wave of restrictions imposed on the economy has already proved too much. Those that sail on must deal with further risks. In general, risk can be dealt with in several different ways: avoid it, mitigate it (minimize it), transfer it to someone else, accept it or have backup plans (actively accept it). But in order to take any action, you must first anticipate it, estimate it, put it in a strategy, this one translated into a concrete plan that will be controlled in implementation – closing the cycle.
In practice? Some companies will decide to build financial cushions (if they can), some will start cutting costs (wisely or not), some will do a sales offensive. On the other hand, those more advanced strategies may focus on consolidating the product portfolio and matching the current shape of the company to that portfolio; the opposite may also be diversification, both on the product and supplier side; another approach is the so-called “flight to the front” or technology leap.
Act and build your own shield!
Maintaining sales, keeping a committed team, employee health policy, maintaining liquidity, reducing costs, ensuring stability but also flexibility in production, rapid implementation. With what tools to implement such a spectrum of demands?
One of the answers to these creeds is automation. Very specific, because it is based on the use of collaborative robots [cobots] (with business and people). But how so – investments in the middle of a crisis? Yes, if you combat the effects of the crisis with them, you reduce uncertainty and improve cash flow.
Rapid deployment of collaborative robots (which is feasible in a few weeks) in those areas of the plant where routine and repetitive tasks are performed can bring:
- Freeing employees for more demanding (creativity and mental and manual involvement) tasks. The team will be more engaged.
- Reducing the number of people needed on the plant – which not only nullifies turnover issues in disliked positions, but lowers turnover costs and increases the plant’s independence from independent events.
- Reducing the density of workers on the plant floor, which can translate into a lower risk of potential infections.
- Overall reduction of fixed costs of the plant – from day 1 of the application’s operation, by setting them at the level of depreciation of the robot with accessories, or lease installments, and reducing them to “zero” at the end of these periods. The average ROI of cobot positions is about 18 months.
- Negate the effects of inflation (which is bound to be large), which will affect, among other things, wage pressures or raising minimum wage levels faster than was announced.
And that’s not all the advantages from implementing collaborative robots, either.
An increase in unemployment, or is it for sure?
But why automate if unemployment is rising? The projected increase in the number of vacant workers will have a local charter – linked to service centers, specific industries and places on the map of Poland. Thus, the phenomenon will be largely structural unemployment. Where people leaving, for example, the tourism industry may be reluctant to accept jobs on production lines, especially geographically distant ones. While certain industries, enticed by the possibility of remote work, will absorb some of the unemployed from any location, manufacturing expects to have access to people in its region and this is an impossible hurdle to jump.
The second aspect of the risk associated with increasing the plant’s manpower (in exchange for automation) is the increased vulnerability of the organization to a smoldering epidemic. More people means a greater likelihood that someone will bring a coronavirus to the plant site. And a higher density of workers per square meter means greater susceptibility to transmission of the pathogen between workers. Ultimately, then, there is a growing risk that the plant could come to a halt, for example, due to forced quarantine of the entire workforce.
Collaborative robots vs. industrial and classic automation
What about the investment and implementation outlay? What about the maintenance of the robots? This is where the advantages of using cobots over classical automation or industrial robots come in. The cost of implementing collaborative robots is lower than that of industrial robots, the payback time is very favorable, which ultimately makes, for example, the amount of the monthly lease or loan payment lower than if the position was operated by people. Banks and lessors are more willing to enter such investments, even in times of crisis, as they improve the overall profitability of the plant.
What’s more, cobots don’t take up much space, they generally don’t need enclosure (purpose). On top of that – the ease of programming (without programming) of collaborative robots and the versatility of their applications makes it possible to change their place of work. Free training is sufficient for operation. Thus, there is no need to hire a dedicated roboticist or use external companies.
Compared to classic automation, cobot is the possibility of change, without rebuilding the “machinery”. Simply put. Of course, such a robot is also an excellent complement to dedicated machinery, in place of one or more full-time employees.
We have a long way to go
Start taking action today. Research, analyze, calculate, plan and act. Risk management costs money, but the lack of it costs even more – sometimes all that has been built up over the years. This is a good time for change and a step forward. It doesn’t have to be big, the important thing is that it takes place, and the company becomes more resilient to turbulence and more effective in the market because of it. We can help you make it happen.
