Automation as an Investment
As every business executive knows all too well, high-return, low-risk investments are hard — if not impossible — to find these days. The economy continues to look uncertain at best, with the stock market having reached its lowest level in many years and numerous companies declaring bankruptcy, including American icons like General Motors and Chrysler. The implications for manufacturing capital expenditures are clear. In a 2008 Bank of America Business Capital survey, 40 percent of manufacturing company CFOs reported that they plan to decrease or postpone their capital expenditures in 2009.
Capital expenditures (Capex) may seem like discretionary costs that could be eliminated during these lean times. But if you have a cash surplus in your business and/or borrowing power, now is the perfect time to invest. And your best opportunity — with lower risk and higher returns — is to invest in your own interests in the fields of automation and enterprise integration.
Recent events and scandals have shown that you can’t control investments in outside firms and markets. With trust and transparency at an all-time low, the traditional risk-reward profile is just too unbalanced (Figure 1).
But you can control an investment in yourself (Figure 2). You determine the type of investment and the rewards you’ll reap. Pick your own return. To quote Jack Welch, General Electric’s former chairman and CEO, “Control your own destiny or someone else will.” (Figure 3)
Make your move now, before the economy heats up, while interest rates are still low. Take advantage
of the slowdown and use your time to research the best investments and deploy capital in the best way possible. If you do it right, you’ll outmaneuver any competitors and emerge from this economic recession in a much stronger strategic position. This paper shows you how.
The State of Manufacturing Automation
Generally speaking, manufacturing technology was restricted to plant operations for most of the past 25 years. Manufacturers stayed focused on their production lines and whatever they needed to do to fulfill the day’s work orders. But as technology evolved, new products and tools emerged to expand manufacturing technology beyond the factory through real-time information sharing, data exchange and knowledge management.