Disadvantages

1. Negative feedback from the employees: Automation may lead to dissatisfaction in employees and unions, which may disrupt the normal functioning of the organization. The reasons for dissatisfaction can be resistance to change or fear of losing job.

2. High initial investment: The initial capital investment is very high for an automated system.    

3. Higher level of maintenance needed: As automated systems are complex, they require higher levels of maintenance and the cost of maintenance can be substantial. The cost includes training of maintenance personnel, repairing costs, tools and equipment maintenance cost, etc. 

4. Less flexible: Automated systems are less customizable in terms of the number of possible products that can be manufactured when compared with manually operated systems.

5. Requirement of technical manpower: As most of these automated systems are complex, a competent and skilled person is required to operate the system.

In spite of these disadvantages, automation technology, if used wisely and effectively can yield substantial opportunities in future. By automating the production process, workers can be relieved from repetitive, hazardous, and unpleasant work. The level of automation in an organization depends on its requirements i.e. whether the entire production system has to be automated or only those parts of production process involving hazardous or routine work has to be automated. Refer Exhibit for further details.                                  

Exhibit

High-Tech, Mid-Tech, or Low-Tech Production

Sophisticated production technology or automation of production processes alone cannot ensure the success of any organization. There are many successful companies that still utilize the oldest known manual technology.  On the other hand, there are examples of companies that have failed despite having the most modern technology. This does not imply that the operations technology used by a company is irrelevant to its profitability or to other measures of success.  But before adopting new technology, organizations should realize that

Not all automation projects are successful.  Companies that launch major automation projects may manage the implementation of the automated machinery poorly.  As a result, they are worse off after automation than they were with their former production technology.

Automation cannot make up for poor management.  Even if the implementation of the automated production machinery goes well, the company may be so poorly managed that it fails anyway.

Economic analysis cannot justify automation of some operations.  It is wrong to assume that automation always results in the increase of profit levels. For example, if labor cost is very low and automated equipment is very costly, the extra cost of automation may not be sufficiently offset by product quality and other improvements.

It is not technically feasible to automate some operations.  In the garment industry, for example, the cloth that must be processed is so stretchable, flexible, and flimsy that certain production operations like cutting, assembling, and sewing are not yet automated.  In these operations the chief obstacle to automation is incorrect positioning of the cloth relative to cutters, sewing heads, and other mechanical devices.

There are instances where production operations have not been automated, and there are operations for which automation may not be possible. But for an organization looking at long-term growth, survival, and profitability it is imperative that it keeps its production processes in tune with the advances in the production technology. For many companies today, the question is not whether they will automate their operations or not.  Rather, their major concerns are:

Which operations will be automated?

In what sequence will the operations be automated?

When will the operations be automated?                          

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