The technologies that change how a product is made

1. Automation and robotics on the line: programmable machines do the repetitive jobs of welding, filling, sealing and stacking, with a few staff supervising rather than operating them.
2. Computer-aided design (CAD): the product is drawn and tested on screen, so a change to a shape or a measurement is tried on the computer before anything is cut.
   1. Dyson built over 5,000 prototypes of the bagless vacuum, and every physical prototype costs materials and weeks of time, which is exactly what testing a design on screen removes.
3. Computer-aided manufacture (CAM): the finished CAD file drives the cutting or moulding machine directly, so the design reaches the factory floor without being redrawn or measured out by hand.
4. Automatic stock control: barcodes and till systems record every item sold or used and place a reorder with the supplier once the level drops to a set point, so nobody counts the shelves.

Productivity and quality: more units per hour, and the fault that repeats

1. A machine works faster than a person, carries on through breaks and can run overnight, so more units come off the line every hour.
2. The rent, the supervisors and the machines themselves now cover a much larger output, so the cost of producing each unit falls and the business can either cut its price or keep the price and earn more on each sale.
3. A machine repeats the same movement to the same measurement every time, so fewer units come out faulty, fewer are sent back by customers and less material is thrown away.
4. Consistency cuts both ways, because an error in the programme or a worn cutting tool is repeated identically on every unit, so a whole batch can be wrong before anyone inspects it.

Cost, flexibility and staff: what the business gives up

Compare hand-finishing with an automated line at a bakery in Leeds turning out the same loaf.

1. Fewer staff are needed for the repetitive work, so the weekly wage bill falls by two thirds, but the £90,000 is paid up front and the maintenance contract is paid every year afterwards.
2. That is why the saving only shows as profit after many months of full production, and why a business short of cash may not survive the wait.
3. The last row is the flexibility cost: a line set up for one loaf is slow and expensive to switch, so a bakery selling thirty different products gains far less than one selling the same loaf all day.
4. Some jobs disappear and the ones that remain change, so staff must be retrained to supervise, load and maintain machines instead of making the product by hand.
5. Workers who fear redundancy work less willingly, so morale and output can fall during the very months the business needs the change to succeed, and if experienced staff leave the firm loses knowledge of the product that the machine does not hold.

The trade-off underneath all of it: fixed costs replace variable costs

1. Wages rise and fall with the number of units made, so labour is largely a variable cost, while a machine has to be paid for whether the line runs flat out or stands idle, so it behaves as a fixed cost.
2. Swapping one for the other means the cost per unit drops sharply as output climbs, but rises just as sharply in a quiet month, so the business carries more risk when demand falls.
3. The test is therefore volume: a large manufacturer running one product all day spreads the fixed cost across enough units to justify the machine, while a small workshop making one-off pieces cannot keep it busy, so people stay the cheaper choice.