Factory automation is the use of machines, robots, sensors and control systems to carry out production tasks with little or no manual work. It covers everything from a single robot cell that stacks boxes onto pallets to a complete production line where products move from raw material to finished goods without being touched by hand.
This guide explains what factory automation includes, the main types, what it is used for, the benefits and the drawbacks, and how a typical project starts.
Today’s ever-increasing competition compels businesses to produce high quality and consistent products competitively. To step up their game, businesses in all industries have sought out building new products by integrating manufacturing techniques with the benefits offered by automation companies. One approach these automation companies do is to transform manufacturing by guiding them to adopt factory automation.
This trend has been increasing. In 2016, the use of industrial robots was at 1.83 million. Yet this figure has grown 14% annually and likely to reach 3.05 million this year. Even the automation economy itself is projected to generate around $214 billion worldwide by 2021. Factory automation systems have benefited businesses by increasing product quality, reliability and production rates. At the same time, it has reduced design and production costs and brought new innovative and integrated technologies.
Post summary:
- What is factory automation?
- Why is automation used in manufacturing?
- The case for factory automation
- Advantages and drawbacks of factory automation
What is factory automation?
Automation helps organisations perform processes with little to no human help.
By managing manufacturing equipment, it completes procedural tasks, increasing efficiency, quality, and effectiveness.
In its purest form, automation involves moving from one set of parameters to another by a steady state of values determined by a controller. This controller adjusts the present state to a group of desired conditions
There are three types of automation in manufacturing production:
- Fixed automation
- Programmable automation
- Flexible automation
These types of automation involve a combination of computers integrated with other mechanical, electrical, hydraulic and pneumatic devices. Today, advancements in automation include both electronic and computer monitors, using high-level programming languages, all installed and set up by factory automation companies.
Most automated factories run on the same building blocks. Industrial robots handle picking, placing, assembly and palletizing. Conveyors and handling systems move materials between stations. Sensors and machine vision check position, quality and dimensions. Programmable logic controllers, or PLCs, run the logic that ties everything together, and a human machine interface lets operators monitor and adjust the system.
In its simplest form, automation means a controller reads the current state of a process and adjusts it toward a set of target values, over and over, without a person in the loop. Everything else is built on that principle. What makes a factory automated is not any single piece of equipment but the way mechanical, electrical, pneumatic and software elements are combined into one controlled process.
The important point is that these parts are rarely bought as a finished system. An integrator designs how they fit your product, your layout and your throughput, then builds, installs and commissions the result. That is the work we do in factory automation at Tech Group.
The three types of factory automation
- Fixed automation is built for one product at very high volume. The sequence of operations is set by the equipment itself, so it is fast and cheap per unit but hard to change. Bottling lines are a classic example.
- Programmable automation produces in batches. The equipment is reprogrammed for each new product, which takes time between runs but suits medium volumes and product variety.
- Flexible automation can switch between products with little or no downtime, because changeovers happen in software rather than hardware. Robot cells and multipurpose CNC machines fall into this group. It is the type most manufacturers in the Baltics and Nordics need, since production here tends to be high mix and lower volume rather than mass production.
Why is automation used in manufacturing?
Using specific data points, manufacturing automation manages warehouse machinery, tools, process systems and other actions within the manufacturing environment. Within manufacturing, automation is fast gaining acceptance to raise both productivity, safety and efficiency. Components may be diverted to different assembly paths for continued work and finishing. A programmable controller can manage this transfer faster without the possibility of human error or being at a health risk.
Industrial engineers are focussed on the future of automation in manufacturing by improving current industrial robots. These robots provide for more efficient use of raw materials, human resources and above all, cost and energy. Businesses use automation so that their machines can create and shape highly accurate parts for assembling products.
The most common applications in the factories we work with are material handling, assembly automation, testing and inspection, end-of-line palletizing and intralogistics. Each solves a specific problem. Material handling replaces manual transport between stations. Assembly automation removes slow, repetitive hand operations. Inspection systems catch defects at production speed rather than at the customer. End-of-line automation takes the heavy, injury-prone job of stacking pallets away from people.
Factory automation is about making an existing production process run with less manual work.
The case for factory automation
The advent of new-age technology has increased the urgent demand for premium quality products and services.
Supplying premium products and services requires a high level of productivity & efficiency.
Maintaining these high levels of productivity & efficiency can be costly.
But, if a company automates its manufacturing processes, quality levels can remain high.
Artificial intelligence, robotics, big data, digital transformation, and the internet of things are used to expand the opportunities for manufacturing automation.
After all, manufacturing factories must work within several constraints.
These constraints range from the competition, regulation, security, quality and overall cost-effectiveness.
A factory automation solution eases these constraints by automating many tasks with both practical and efficient solutions.
Why manufacturers are automating now
The main driver is not technology. It is people. In 2023, more than a quarter of European manufacturing businesses saw production reduced by a shortage of workers, compared with 7% in 2012. Western Europe reached a record 267 robots per 10,000 manufacturing employees in 2024, ahead of North America with 204 and Asia with 131. The EU average of 231 sits well above the global average of 132.
Estonia is behind that curve. A national competitiveness report found that companies in Estonia face difficulties finding qualified labour, and that the level of digitalisation and automation in Estonian companies is low. The labour problem has arrived, but the automation response has not. That gap is where most of our factory automation enquiries now come from.
Advantages of factory automation technology
Increased productivity / higher throughput
Factory automation systems improve the production rate through better control of production. Companies that implement factory automation products can mass-produce using fewer assembly lines and still churn out more exceptional production quality.
An automated system runs at the same speed on every shift, without fatigue, breaks or staffing gaps. Cycle times fall and output rises without adding lines or people.
Improved product quality
Automation reduces human involvement; the likelihood of human errors gets decreased drastically. Better product quality with higher accuracy is maintained using factory automation systems. Automation controls and monitors every stage from the beginning to its completion. A machine repeats the same operation the same way every cycle. Human error, the biggest source of variation in manual production, largely disappears. Fewer defects mean less rework and fewer complaints.
Optimised operational costs
Integration of various processes in the factory with automated machinery minimises cycle times and effort. Hence, the need for a workforce is reduced. Thus, the requirement for additional human labour is replaced by automation. Once installed, the system needs fewer people to run the same volume, and it wastes less material because the process is under tighter control. The people you have move into supervision, maintenance and quality work, where their judgement is worth more.
Reduced routine checking
Automation eradicates the need for human manual checking of various processes. By utilising factory automation technology, industrial processes can be automatically adjusted to a set of determined parameters. Sensors and vision systems monitor the process continuously and adjust to set parameters. Operators no longer need to inspect every part or intervene at every step.
Increased safety levels
Factory automation raises warehouse safety levels by substituting people with automated machines in risky task conditions.
Robots used in heavy industry and manufacturing can be installed in unsafe and hazardous places, where humans are not able to operate.
Safer work
Robots take over the tasks that injure people: heavy lifting, repetitive motion, work in hot, cold or hazardous areas. Palletizing is the clearest example. It is one of the most common sources of back injuries in manufacturing, and one of the easiest jobs to automate.
Increased flexibility
Over time improved efficiencies lead to cost savings due to reduced waste, lower operational expenses, and decreased hands-on labour. Compared to other solutions, factory automation provides an additional level of flexibility to integrate changes to products or tasks. A modern automated line can be reprogrammed for a new product, extended with a new station, or sped up as demand grows. Adding output to a manual line means hiring. Adding output to an automated line means adjusting parameters.
Perceived drawbacks of factory automation
The main disadvantage often associated with factory automation and the automation economy itself; is worker displacement.
Automation in manufacturing statistics state that by 2030 automation and artificial intelligence will cut jobs by 29% while contributing as little as 13% to job creation.
Further reports from Oxford University predict that even by 2033, 47% of current jobs will also stop to exist. Automation does not mean there will be more unemployment or fewer roles, only that humans will no longer do half of the current jobs.
Also, the worker may have to relocate to find a similar job. Manufacturing companies with a close-knit team feel guilt at causing possible job redundancies.
Yet, factory automation should not be seen as a job loss, yet a job creator. Companies should consider either reskilling or better, upskilling their workforce so their workforce can do less valuable monotonous work but more highly-valued contributions.
Other disadvantages on the future of factory automation include the cost required to invest in automation.
Although challenging to place a number on it, factory automation infrastructure can cost thousands to millions of euros to design, engineer and install. Because of its importance, even governments are willing to burden the cost.
Furthermore, it needs a higher level of maintenance than manually operated machines.
In reality, though, the future of factory automation technology, if used wisely, can yield substantial opportunities for a company’s future. Before being put off by the cost, companies should consider the cost-benefit scenario and the human pay-offs.
The benefits of automation relieve humans from repetitive, hazardous, and unpleasant labour. Plus, it teaches them to learn new skill sets, future-proofing their job roles, thus providing further job security.
Factors to consider before deciding on factory automation
If you’re considering automating your factory, be sure to consider the following:
- The cost of labour is essential. If workers are in plentiful supply and cost significantly less than automation (maybe from developing nations with lower salaries), there could be little reason to automate.
- On the flip side, automation can outweigh an inexpensive wage force: higher levels of productivity, better quality and reduced human errors in product output.
- When building machines, can they be installed in places that will not harm existing staff? Particularly machines that interact with humans.
- Consider concerns other than technology. Maybe you have a cheaper workforce, but automation could make their lives safer and more productive.
- Do you have some areas of your manufacturing factories automated already? If so, can newer and more advanced automation build on your existing infrastructure or will the entire factory automation system need overhauling?
- Consider what needs automating to ensure the best return on your investment. Do you need to automate other business segments or only warehouses and factories? Maybe you have one new product line that requires automation.
- Remember that optimising automation performance is vital – with increased automation comes increased data that can be utilised to diagnose disruptions in all areas from better sales prediction to quality management.
- Are you open to turnkey solutions? Maybe you don’t need a new concept designed from scratch. Turnkey solutions are readily available in industrial automation and provide solutions ready to go.
- Automation can increase flexibility – these new processes can change the way your company does business. Can your company adapt to these more advanced levels of productivity – how will this impact sales? Procurement? Partnerships?
- About 64 per cent of manufacturing-related tasks are currently automated with present technology. In other words, €2.3 trillion of labour costs could be eliminated.
Questions to ask before you automate
A few honest answers will tell you whether a project is worth pursuing and where to start.
- Where is the bottleneck? Which station, which shift, which product is holding everything else back? That is usually the first thing to automate.
- Which jobs can you not fill? If a role has been open for months or turns over every year, that is a stronger argument for automation than any productivity calculation.
- What is already automated? New equipment should build on what you have, not require you to start again. An integrator should tell you early whether your existing line can be extended or needs replacing.
- How much does your product change? If you run many variants in small batches, you need flexible automation. If you run one product in volume, fixed automation may be cheaper and faster.
- Can the rest of the business absorb more output? Automation can double the throughput of a station. If sales, procurement or dispatch cannot keep up, the gain is wasted.
- Is there a proven solution already? Not every project needs a concept designed from scratch. Palletizing, conveying and many inspection tasks have well-established solutions that install faster and cost less than custom development.
How to automate a factory: where to start
You do not need to automate everything at once. Most successful projects start with one bottleneck: the station where product piles up, the job nobody wants to do, or the process where quality problems keep appearing. Automating that one step proves the return and builds confidence for the next.
A typical project with us runs in five steps. We visit your site and watch the process, because a specification never tells the full story. We develop a concept and a proposal with a clear price, timeline and expected outcome. We design the mechanical, electrical and software side of the system. We install and commission it around your production schedule and train your operators. After handover we stay available for service, spare parts and modifications as your products change.
We are not tied to one hardware brand. KUKA is our main robotics partner, but we specify ABB, Fanuc, Omron or others when they fit the job better.
Frequently asked questions
Is factory automation the same as industrial automation?
Industrial automation is the broader term and includes process industries such as chemicals and energy. Factory automation refers to discrete manufacturing: making, assembling, testing and packing physical products.
Does factory automation replace workers?
In our experience it changes jobs rather than removing them. The constraint in most factories we visit is that positions cannot be filled, so automation lets the existing team produce more. Operators typically move into supervision, quality and maintenance.
How much does factory automation cost?
It depends entirely on scope. A single robot cell and a full production line are different projects by an order of magnitude. The only reliable way to get a number is a site visit and a concept proposal, which is how every project with us begins.
How long does a factory automation project take?
A single robot cell can be running within a few months. A full production line is a longer programme with staged installation. The site visit and concept phase is what sets the timeline.
Which industries use factory automation?
Any industry that makes physical products. We work mostly with food and beverage, wood processing, electronics, automotive suppliers, building materials and warehousing across Estonia, the Baltics and the Nordics.
Improve factory automation using manufacturing specialists
Global manufacturers know that factory automation solutions and robotics technology are pivotal for their company to remain world leaders.
Leveraging powerful new technologies requires expertise that factory automation companies like ours build.
Many global and innovative manufacturers turn to Tech Group to put in place their factory automation infrastructure.
Learn more about how we have transformed business fortunes using factory automation, either contact us or read our customer stories here.
