When it comes to perfect storms of demand, Generac has moved to the center of a growing whirlwind. To take advantage of its once-in-a-corporate-lifetime opportunity, the maker of emergency generators is increasingly counting on automated processes.
The $3.7-billion company, based in Waukesha, Wisconsin, saw sales increase by about half last year thanks to exceptional demand for generators that residential and commercial customers worldwide purchased to cope with extreme weather and natural disasters, as well as a boom in U.S. consumers who installed Generac equipment in existing or new homes.
The company has responded to the unprecedented demand with plans to boost the size of its manufacturing, assembly and distribution complex in Trenton, South Carolina, by nearly 50%, adding 200,000 square feet to the building by this fall, as well as by announcing a plan to invest $53 million in its Wisconsin manufacturing and office operations.
As Generac leans into its fast-growing market, success in meeting the market will depend more and more on an automation mindset that the company has had all along, even though its home market of Wisconsin provides one of the strongest skilled-worker pools in the world.
“Automation has become a critical tool for all companies as labor has become scarce,” Aaron Jagdfeld, president and CEO of Generac, told StrategicCIO360.com. “Our journey over the last decade has really been about using automation to replace human labor where we can, and to aid in our growth. And they’re maybe one in the same, because the growth that we’ve been going through rapidly and at scale gives us the ability to automate.”
Jagdfeld said Generac invests in automation “far beyond just taking out the human component. It creates a more repetitive process that is repeatable in terms of quality and consistency.
“It used to be about taking maybe a single function that might be particularly troublesome, with heavy lifting or some kind of safety issue” for human operators, he explained. “What it’s progressed to is being more fully automated, where we have machines doing almost all of the functions and human beings not babysitting but watching and monitoring a few functions.”
But in expanding Generac’s production capabilities to meet new demand, Jagdfeld said, the company is “more and more moving toward where we have full-volume automation.” Assisting that end is the fact that, about five years ago, the company stood up an advanced-manufacturing team in house, replacing much of its use of outside contractors to get new automation systems up and running.
“We needed to build those competencies in house,” Jagdfeld said. “We were using external resources to help us set up a line or do line layouts, tune pieces of equipment and control systems, such as machine integrators. Now we’re bringing some of that in house, and our team has those kinds of skill sets. They’re used to programming robots and understand how to do line layouts, and machine controls, and connect them to different sensors to create a fully automated production line. It’s to the point where we find ourselves building some of the machines themselves, like taking a robot and building the rest of the machine around it.”
Yet charging into more full automation of processes brings new challenges while solving others. One of them is that “you do give up some flexibility as you make changes to products or things that you need to alter, either new features or other things in the product,” Jagdfeld said. “If you have invested heavily in automation, you can find yourself designing around the automation because you’ve already invested in it. There are tradeoffs.” And, of course, purchasing, installing and maintaining million-dollar automation systems “is not cheap,” he said. Fortunately, with an expectation that Generac will continue to have strong growth, the company’s success is expected to keep paying for its industrial transformation.