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How to Upgrade Legacy Manufacturing for an Automated Factory

You’re ready to embrace automated production but still primarily have legacy equipment in your facility. That’s a relatively common scenario with numerous possible solutions. Here are some vital things to do while navigating your upgrade plans and process.

Decide Whether to Upgrade or Replace

You may initially decide to upgrade legacy machinery instead of replacing it with something wholly new. That often makes sense from a cost perspective — upgrades typically cost only 15-40% of new equipment. But they’re not always the most feasible option and deciding against a complete machine replacement could cost more in the long run.

Weighing the Pros and Cons of Replacements vs. Upgrades

Factory managers must make careful assessments before going with that approach. For example, how easily can people get spare parts for the machines they want to upgrade? If that’s already difficult, it’ll probably only get more challenging — and perhaps even impossible — over time.

Another thing to consider is whether the machine to upgrade has functioned reliably or experienced numerous unexpected breakdowns. Giving the machine new technology and features to work in an automated facility may not resolve those functional problems. In such cases, it often makes more sense to replace the machine rather than make targeted improvements.

One question to ask that could justify making machine upgrades is whether the equipment could improve to perform more tasks or produce a greater variety of products. Many people make the mistake of thinking an upgrade only means tweaking a machine to do its current job better, but that’s not necessarily the case. Upgrading could cause a versatility boost.

People should also educate themselves on existing and upcoming legislation about manufacturing emissions and actions to mitigate climate change. If upgrades can’t make a current machine meet those targets, manufacturing leaders should replace it sooner rather than later. Talking with consultants that specialize in helping upgrade legacy equipment can make it easier to reach an informed decision.

Replacing equipment rather than upgrading it can be profitable if the product remains in sellable condition. Check the market for machines similar to yours. If you don’t see many, that could allow you to set a higher asking price due to the lack of market saturation. If your machine has been well-maintained over its lifetime and the manufacturer still provides spare parts, those aspects should also make it easier to sell.

Consider Machine-Based Subscriptions to Reduce Upfront Costs

If you primarily have legacy equipment and are ready to embrace automation, the associated costs could seem outside your budget. However, many equipment manufacturers are drastically changing how clients can obtain their products.

They offer subscription models, sometimes referred to as equipment-as-a-service, machinery-as-a-service or asset-as-a-service. In such cases, the manufacturer retains ownership of the equipment, but clients lease it for a set period. They pay monthly usage fees that usually include all maintenance, installation and repair-related costs. One company that provides industrial robots this way includes remote monitoring to stay abreast of possible issues.

A 2022 report predicts most equipment providers will sell their products as bundled offerings by 2030. The study also noted how some companies already make more than 50% of revenue and 100% of profits through such options. Instead of equipment manufacturers selling hardware as the sole competitive differentiator, they stand out with specialized software that comes with their machines.

The research also indicated more than 40% of acquisitions made by equipment manufacturers relate to cloud and software technologies. The figure was less than 20% a decade ago, suggesting equipment producers have their eye on the future.

Choosing a subscription-based service could help your company transition from the legacy equipment you have now to more capable machines. Start by thinking about the type of machine or technology that would make it easier for you to reach automation goals. Then, see if service providers offer it through subscription tiers. Get all the relevant details — such as the monthly costs, what comes with your plan and whether you can avail of a lease-to-own option — before reaching a decision.

Upgrade Legacy Equipment Slowly and Thoughtfully

Deloitte’s 2022 fourth-quarter CFO Signals study shows that automation and digital transformation efforts remain in focus for the new year, with 79% of respondents choosing to make this a priority. Results like this might add pressure to others in the industry to upgrade their equipment all at once in an effort to keep pace. 

However, experts say it’s better to upgrade legacy machines one at a time rather than doing the transformation too quickly and becoming overwhelmed. Get input from all affected parties about how to proceed with the upgrade — they will likely have ideas and opinions you may not have previously considered. Any machine improvements may also temporarily or permanently change employees’ workflows and responsibilities. That reality could make it necessary to redistribute their duties or hire more people to ensure adequate staffing.

Think about the desired extent of the upgrades, too. An evaluation of a legacy machine may reveal non-upgradeable parts or indicate it would be prohibitively costly to change those components. On the other hand, some legacy machine upgrades are relatively straightforward. Most are in the form of add-on sensors that collect operating data.

Such information can pinpoint process inefficiencies and prevent unexpected downtime due to machine failures. Photoelectric sensors can also count products entering or coming off a production line to support quality control measures. The key is to pursue strategic retrofitting projects by understanding how specific upgrades unlock meaningful business benefits.

Data about automation success could also make it easier to convince C-suite members who need help seeing its benefits and justifying the associated expenses. Proceeding with purposeful upgrades significantly increases the chances of seeing healthy returns on investments.

Track the Results of the Changes

After going through these steps to remove or enhance legacy equipment in favour of automated manufacturing, people should determine the best ways to monitor the outcomes of what they’ve changed. That increased visibility will allow them to see whether machines are working as expected. If not, people can be proactive in making the appropriate adjustments.

One possibility is to choose metrics and set relevant goals about where the organization was before using automation and where leaders hope it will be relatively soon. This approach helps keep people motivated because everyone knows what the organization aims for with its automation investments. Plus, if the company meets its goals, it’ll be easier to convince decision-makers to approve further automation investments.

It can seem daunting to transition from legacy equipment to machines that support an automated factory. However, the suggestions here will help those in charge of the task take the proper steps and make informed decisions throughout the process.

Emily Newton is the Editor-in-Chief of Revolutionized Magazine. She has over three years experience writing articles for the tech and industrial sectors. Subscribe to the Revolutionized newsletter for more content from Emily at https://revolutionized.com/subscribe/
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