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Automation

Automation is the process of redesigning work so that it can be done using more machinery, equipment and information technology. The goal is to reduce the amount of labour used in the business's activities, reducing the labour costs. Automation may also lead to increased productivity, and allows for better quality standardization. Automation leads to higher fixed costs and lower variable costs and requires significant product, service and process redesign (see: Business Process Improvement and Reengineering).

Some of the fundamental ideas about automation date back to the early twentieth century to the original "scientific managers" such as Frederick W. Taylor and the Gilbreths.1 However, more specific theory about automation was developed during and after World War II. It was at this time that automation revolutionized the industry of mass-produced goods. D.S. Harder of the Ford Motor Company first used the work around 1947.1
 Peter Drucker, the father of management, uses the term automation in The Practice of Management. He says that automation assumes there is a basic pattern of stability and predictability, that processes can be integrated into a harmonious whole and that important conditions such as the interchangeability of parts or level production are emphasized to help control the system. Drucker used the word automation to help him define what he saw were the results of mechanization.

In the Harvard Business Review article titled "Decision Making in the Age of Automation," Melvin L. Hurni "states that 'the true roots of automation lie not in the mechanical feasibility of replacing hand operations but in the logic of an over-all system of operations.' The great length of the planning period required in automation because of the relative inflexibility of production facilities demands that the logic of automation be applied by top management rather than by just the manufacturing segment alone."1
 This is important. One of the pitfalls of automation is the fact that significant planning is required to define processes in a way that can by done systematically by a machine or information technology. Huge costs are required to redesign businesses' processes and buy the technology needed for automation, and costs become much more fixed, rather than variable. These costs can outweigh the benefits of automation if accurate and long-term planning is not undertaken by management.

Furthermore, automation today is a practice that raises concerns from stakeholders such as unions and employees. While industrialists and shareholders see automation as increasing productivity per worker (and therefore the ability to employ and pay workers will go up), many workers see automation as a way of replacing labour with machines and equipment.

 

 

References:
1. Massie, Joseph L. (1956). Looking Around. Harvard Business Review. Mar-April, 139-154.

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