Creating opportunity and efficiency through automation
By Rob Swenson
For the Sioux Falls Area Chamber of Commerce
Using advanced machinery helps keep Electronic Systems Inc. (ESI) vital in a globally competitive industry.
“If we didn’t have automation, we’d be out of business. We couldn’t compete,” said ESI President Gary Larson. “We’re continuing to automate wherever we can.”
Sioux Falls-based ESI makes electronic products, such as custom electronic circuit boards used in the industrial, medical, agriculture and energy markets. The company’s name might not seem familiar because its products are made primarily for other businesses.
In addition to keeping the company competitive, automation has helped ESI position itself for additional growth. But automation has limits, so the company also has been adding to its workforce, Larson said. And for the last four years, sales have been increasing.
The 39-year-old manufacturer has 265 employees, and they run and maintain an array of machines that have helped the company to increase output.
For ESI and many other companies – and not just businesses in the manufacturing industry – automation and related technologies are creating opportunities as well as efficiencies. Automation and computer technology have been driving changes in business for decades, but the pace is accelerating locally as well as globally, according to business experts and observers.
The next five years are likely to bring a lot more mechanized changes to the business world, said Travis Thiex, an automation engineer in Sioux Falls with South Dakota Manufacturing & Technology Solutions (SDMTS), an organization that helps manufacturers prosper and grow.
“The shortage in the labor market and advances in technology are coming together and really promoting automation. It’s a lot easier than ever before,” Thiex said. “You can get a robot up in hours now. It used to take weeks.”
In manufacturing, robotic equipment can be used to do a single, repetitive task or more advanced machines can be programmed to perform a complex series of tasks. Most of the companies that Thiex helps use machines for jobs that would be boring, repetitious or dangerous for humans.
A lot of businesses use automated processes to help sort and calculate office-related information, or even to respond to customer inquiries. But some remain reluctant to cross into the automation threshold, Thiex said. “I don’t quite understand. There’s a mental blank there. People fear what they don’t know.”
Financial concern appears to be a significant factor blocking increased adoption. Acquiring and implementing automated equipment can be expensive. Equipment can cost hundreds of thousands of dollars or more. The Sioux Falls Development Foundation is among the organizations looking for ways to assist businesses on that front.
“One of challenges that some businesses have in adopting that trend and moving toward automation, particularly in manufacturing, can be the upfront costs,” said Mike Gray, director of business retention and expansion with the Development Foundation. “That can be a tough transition for companies to make in the short term— to take on the debt to bring on the new equipment. So we’re working to see how we can help companies adopt this strategy, realizing technology can lead to higher-paying jobs.”
Representatives of the Chamber, the Development Foundation and Forward Sioux Falls talk to executives about challenges confronting their companies on various fronts. The technology frontier regularly comes up in those conversations.
“A lot of them say, ‘yep, the new technology is starting to emerge in an area that we’re beginning to look into.’ But they need some guidance,” Gray said. He points to SDMTS as the expert of choice for helping local businesses implement automation.
The tight labor market in the Sioux Falls area is a factor prompting more companies to consider automation. But many of the same companies also are looking to bring on more skilled, higher-paid workers to run and maintain machines.
It is not just those businesses producing a product that can benefit from automation. Those producing a service, or looking to increase efficiency in internal operations, can leverage technology to their advantage.
In addition to manufacturing, warehousing and logistic businesses are among the companies in Sioux Falls that are making productive use of automation and technology. Technology can help track truck routes and plan the efficient shipment of products, for example.
Automation in action
Weisser Distributing is based in Tea and also has busy warehouses in Sioux Falls and Las Vegas. The company uses automation and related technology to help distribute hundreds of brand-name products for other companies. It also uses advanced equipment to market thousands of products that it has manufactured in factories in Asia.
“What we really consider ourselves is a retailer. We’re an online retailer,” said CEO and owner Eric Weisser.
Weisser Distributing has about 150 employees but only five trucks, which are used for local distribution. The merchandise it sells is shipped around the world, mostly by the U.S. Postal Service.
The company sells everything from auto supplies to games for children. It is the No. 1 seller of potato sacks on Amazon, for example. (If a family or an organization needs potato sacks for a race at a picnic or some other event, they need to get the sacks somewhere, Weisser points out.)
Weisser Distributing uses automation primarily to assist with data, including customer outreach, he said.
The company gets approximately 600 customer inquiries a day via email, and a lot of the questions tend to be the same, day in and day out. So the company uses an automated response system, which can prepopulate a suggested response in an email for an employee to send. The employee reviews the suggested response before sending it.
The response system helps guarantee that customers get a quick and accurate response to routine questions. It also has reduced the average response time from about five or six minutes to 20 or 30 seconds, Weisser said. Before, if an employee providing the answer was rushed, the consumer might get an incomplete or inaccurate answer.
“With software automation you know you’re going to be cutting down on mistakes,” Weisser said.
Another way Weisser Distributing uses automated processes is to help price thousands of products that it sells online. Sales parameters are set in advance. As a result, the price of a product might vary during the course of a day, depending on how high or low competing products are marked.
“We just always want to make sure we’re price competitive because on the internet, price is king,” Weisser said.
Automation also has made significant inroads in the healthcare industry in Sioux Falls, and not just in the large, regional systems operated by Avera Health and Sanford Health. Both of those systems are based in Sioux Falls, and each employs thousands of people locally.
Small clinics with a variety of focused specialties also are using automation and advanced technology in procedural and office operations. Family Dentistry of Sioux Falls, for example, uses advanced machines to make digital images of the inside of patients’ mouths and to make crowns at its clinic along South Minnesota Avenue.
“We’ve recently gotten into laser dentistry, as well, which is pretty amazing,” said Justin Bolen, the business manager at Family Dentistry of Sioux Falls. Varying wavelengths of light can be directed to a tooth to numb the area for dental work or to clean out decay or plaque.
Technology also has helped automate, consolidate and improve office processes at the clinic. Patients may reach the front office personnel with a question by calling, texting, emailing or sending a computer message from Facebook. Staff members also are connected electronically so that they can communicate with each other or with the entire staff during the workday.
The dental office tries to position itself on the front edge of technology, Bolen said.
“We put ourselves in that position so that we can always keep up with what’s going on out there and with what’s going on in people’s lives,” he said. “We try to create the best product we possibly can for people, and usually that involves investing in the newer technology.”
Other automation inroads
The accounting field is among other local industry sectors that have entered the world of automation and is expanding its use.
“The area that excites us is what we would call robotic process automation. In short, it’s RPA. We’re seeing a lot of opportunities in this RPA space to really help automate business processes,” said Ross Manson, chief practice officer of strategy and industries for Eide Bailly LLP. The company is based in Fargo and has a significant presence in Sioux Falls and other cities.
RPA is an emerging form of technology that uses artificial intelligence, a phrase often used to describe machines capable of mimicking human behavior.
Eide Bailly has an innovation team that is exploring RPA possibilities. The company is looking at RPA software coding to assist the company internally and potentially externally with finance and accounting work, such as in expense reimbursement.
“The opportunity really exists anywhere there is a manual process of keying in information and providing a benefit to taking that structured data and continuing to move it through your business process,” Manson said.
“It’s a great tool to help automate certain processes that are very manual and take up a lot of time for your staff,” he said. “It frees them up to do higher level, more productive aspects of the business.”
One significant challenge in this growing area is to write a clear, rules-based script so that a bot can make a yes or no decision because there is not much room for inference of meaning, Manson said.
Like businesses in the Sioux Falls area, companies across the United States and around the world increasingly are experiencing the effects of automation. The ripple effect of changes can be felt quicker than in the past because, in some cases, geographic boundaries don’t divide and limit commerce as much as they once did.
In June, the World Economic Forum issued a report that identified the top 10 emerging technologies of 2019, as identified by a panel of global experts. Several of the technologies are machine-oriented and could substantially alter the way business is conducted everywhere.
Collaborative telepresence, for example, might soon allow participants in virtual gatherings to feel the touch of other meeting participants, as well as see and hear them. Meanwhile, robots increasingly are expected to go beyond their precise and practical uses in fields such as manufacturing and medicine and venture into a more social roles, such as engaging with people and trying to elicit social responses.
Dreaming up possible uses for technology will always run ahead of practical applications, however. In most businesses, applications typically have to be tested and proven before they are adopted.
And despite the potential that machines have to help companies prosper, people will remain important because machines can’t really think.
Larson said that despite advances in machines, focusing on customer service has been the real key to Electronic Systems’ success, and it will continue to be important as the company grows in the future. Providing good service requires good employees, he said.
“Machines don’t develop relationships,” he said.