Don’t Fall Into the Automation Trap Without Proper Planning

I’m a big believer in automation and technology. With labor costs continuing to rise and the economy showing signs of slowing in some markets, it makes sense that growers are looking for ways to improve efficiency. But I’ve seen too many businesses spend significant money on equipment without really understanding whether it’s going to improve their bottom line. Just because a machine makes a process faster doesn’t mean it’s making you more money.

Here’s where I think growers get caught. Someone justifies an $80,000 piece of equipment because it will eliminate the need for two employees on a production line. The ROI looks great on paper. But once the equipment arrives, those two employees are simply moved somewhere else because there’s always more work to do at a nursery. Congratulations, you now have the same payroll plus an $80,000 machine. Unless those employees are replacing other costs or generating additional profitable sales, you haven’t realized the labor savings you used to justify the purchase.

The same thing happens with production capacity. Let’s say you buy a machine that allows you to produce another 100,000 plants a year. At $20 per plant, that’s $2 million in potential revenue. Sounds fantastic, until you realize you were already producing everything you could sell. Now you’ve spent $80,000 to create more inventory, more carrying costs, and potentially a whole lot more scrap. Producing more plants doesn’t make you money. Selling more plants does.

I also think we overlook how often some equipment actually gets used. Take planting, for example. If you’re only using a machine for 30 to 60 days a year, does buying a faster machine really justify the investment? Sometimes improving the process, changing the schedule, or eliminating unnecessary handling delivers a better return than buying another piece of equipment.

I’m not saying don’t automate. I’ve saved millions investing in automation, but what I am saying is to calculate the return based on what actually changes across the entire business, not just what happens at one workstation. Automation can improve quality, safety, and consistency, and those benefits have value too. But we need to be clear about what we’re buying and why.

Before spending capital to make something faster, shouldn’t we first ask whether making it faster will actually make us more money?