The economic value of flexible automation

Flexible Manufacturing Systems (FMS) have the potential to substantially improve the productivity of mid-volume, mid-variety production. The introduction of these systems into industry must be done on the basis of cost justification. Such justification has historically been possible through the use of easily measurable costs such as labor, inventory reduction, and reduced scrap. In the case of flexible automation, the value of flexibility is difficult if not impossible to measure. This paper attempts to provide a measure of the value of flexibility by comparing the costs of a typical fixed automation approach, with those of a transfer line (TL) in the same management environment. It is concluded that there is economic value to flexibility under many circumstances.