Automa­tion in Man­u­fac­tur­ing: There’s More Than Meets the Eye

Glob­al­ly, man­u­fac­tur­ing is under­go­ing an enor­mous change in trade. Accord­ing to McK­in­sey (MGI), $4.6 tril­lion in trade could shift in 5 years1. Unfor­tu­nate­ly, man­u­fac­tur­ers are still grap­pling with sup­ply chain dis­rup­tions and dif­fi­cul­ties sourc­ing raw mate­ri­als. Even if they can find what they need, often prices have increased to lev­els that are threat­en­ing margins.

Add to that the sig­nif­i­cant increas­es in demand delayed prod­ucts, plans, and pur­chas­es, and the chal­lenges of imple­ment­ing new tech­nolo­gies into the pro­duc­tion process. Find­ing and retain­ing enough employ­ees with the skills man­u­fac­tur­ers need con­tin­ues to be a top challenge.

Organ­i­sa­tions are scram­bling to dis­cov­er the secret that that will allow them to man­age these chal­lenges at the same time — and come out on top. Some of these meth­ods include look­ing for sup­pli­ers geo­graph­i­cal­ly clos­er to pro­duc­tion cen­tres, a more resilient sup­ply chain, employ­ees who have the skills need­ed for Indus­try 4.0 man­u­fac­tur­ing, and tech­nol­o­gy to help them mod­ern­ize and bring new effi­cien­cy to production.

So it’s no sur­prise to see sup­ply chains slow­ly piv­ot­ing towards automa­tion, dri­ven by intel­li­gent ana­lyt­ics, big data, and cog­ni­tive computing2. Some com­pa­nies, how­ev­er, are still work­ing to become paper­less, and feel over­whelmed by the under­tak­ing that lies before them. Those that have begun their dig­i­tal jour­ney might be unsure of how to move for­ward and need sup­port with the next steps.

What automa­tion brings to manufacturing

There are sev­er­al rea­son behind the man­u­fac­tur­ing sec­tor’s piv­ot towards automation:

1. Effi­cien­cy and productivity
   Automa­tion can work con­tin­u­ous­ly with­out breaks, fatigue, or errors. This results in increased effi­cien­cy, pro­duc­tiv­i­ty, and out­put. Machines can work faster and more accu­rate­ly than humans, which leads to reduced pro­duc­tion time and cost.
2. Cost reduc­tion
   Automa­tion reduces the cost of labour, mate­ri­als, and ener­gy. This allows man­u­fac­tur­ers to pro­duce goods at a low­er cost, which can increase prof­its, com­pet­i­tive­ness, and mar­ket share.
3. Qual­i­ty control
   Automa­tion can improve qual­i­ty con­trol by min­i­miz­ing human error and vari­abil­i­ty. Auto­mat­ed sys­tems can mea­sure and mon­i­tor pro­duc­tion process­es, detect defects, and make adjust­ments in real-time. This results in higher-quality prod­ucts and few­er defects or recalls.
4. Safe­ty
   Automa­tion can improve work­place safe­ty by reduc­ing the need for work­ers to per­form haz­ardous tasks, such as work­ing with heavy machin­ery, chem­i­cals, or dan­ger­ous mate­ri­als. This can also result in low­er insur­ance and work­ers’ com­pen­sa­tion costs.
5. Inno­va­tion and flexibility
   Automa­tion can enable man­u­fac­tur­ers to inno­vate and devel­op new prod­ucts by pro­vid­ing greater flex­i­bil­i­ty and agili­ty in pro­duc­tion process­es. Auto­mat­ed sys­tems can quick­ly adapt to chang­ing demands, cus­tomer pref­er­ences, and mar­ket trends.

Not all that auto­mates is gold

While automa­tion offers many ben­e­fits to the man­u­fac­tur­ing sec­tor, there are also inher­ent risks that should be tak­en into consideration.

Accel­er­a­tion of job losses

Automa­tion is pre­dict­ed to dis­place 20 mil­lion man­u­fac­tur­ing jobs by 20303. Automa­tion can lead to job loss­es, par­tic­u­lar­ly for work­ers who per­form repet­i­tive and rou­tine tasks. This can have sig­nif­i­cant impacts on indi­vid­u­als, fam­i­lies, and communities.

The ‘new automa­tion’ of the next few decades—with much more advanced robot­ics and arti­fi­cial intel­li­gence (AI)—will widen the range of tasks and jobs that machines can per­form, and have the poten­tial to cause much more work­er dis­place­ment and inequal­i­ty than old­er gen­er­a­tions of automation4.

Cyber­se­cu­ri­ty risks

Auto­mat­ed sys­tems are also more vul­ner­a­ble to cyber-attacks, which can com­pro­mise sen­si­tive data, intel­lec­tu­al prop­er­ty, and pro­duc­tion process­es. Cyber­se­cu­ri­ty breach­es can also result in finan­cial loss­es, rep­u­ta­tion­al dam­age, and legal liabilities.

As many work­forces have gone dig­i­tal due to the pan­dem­ic, there has been an increase in net­work attacks and intru­sions from cyber­crim­i­nals. Man­u­fac­tur­ing is one of the most tar­get­ed indus­tries, with net­work secu­ri­ty provider Mor­phisec report­ing that one in five com­pa­nies are tar­get­ed by cyberattacks5. Hack­ers are gain­ing more access to pro­duc­tion sys­tems because employ­ees are telecom­mut­ing, rather than work­ing on-site.

Ero­sion of flex­i­bil­i­ty and agility

Over-reliance on auto­mat­ed sys­tems can lead to a lack of flex­i­bil­i­ty and agili­ty, par­tic­u­lar­ly when it comes to respond­ing to unex­pect­ed or rapid­ly chang­ing cir­cum­stances. In 2017, it was esti­mat­ed there were 1.9 mil­lion indus­tri­al robots around the world, up from 1.2 mil­lion in 20136.(6) That’s an increase of 37% in just four years.

There is a much big­ger price to fail­ure with automa­tion vs a sim­ple MHE-based pick­ing process. As the cost to try an iter­a­tion of a new process increas­es, a team will start to lose their “sand­box” that would allow them to try as many sequen­tial iter­a­tions need­ed to dial a process in. For large invest­ment projects, you pret­ty much have to get it right on the first shot7.

Strik­ing an automa­tion bal­ance in manufacturing

By tak­ing a bal­anced approach to automa­tion in man­u­fac­tur­ing, com­pa­nies can achieve the ben­e­fits of increased effi­cien­cy, pro­duc­tiv­i­ty, and qual­i­ty con­trol while also mit­i­gat­ing the poten­tial risks asso­ci­at­ed with auto­mat­ed sys­tems. Some of the steps can be:

1. Eval­u­at­ing the ben­e­fits and risks
   Com­pa­nies should deter­mine whether it’s appro­pri­ate for their spe­cif­ic needs. This eval­u­a­tion should include con­sid­er­a­tions of cost, pro­duc­tiv­i­ty, qual­i­ty con­trol, safe­ty, and cyber­se­cu­ri­ty risks.
2. Pri­ori­tis­ing flex­i­bil­i­ty and agility
   Com­pa­nies that keep flex­i­bil­i­ty and agili­ty at the fore­front of their automa­tion strate­gies will be bet­ter equipped to respond to unex­pect­ed or rapid­ly chang­ing cir­cum­stances. This may include invest­ing in tech­nolo­gies that can adapt to chang­ing demands, cus­tomer pref­er­ences, and mar­ket trends.
3. Con­sid­er­ing the human element
   Com­pa­nies should con­sid­er the poten­tial impact that man­u­fac­tur­ing automa­tion can have on work­ers and the com­mu­ni­ty and cap­i­talise on oppor­tu­ni­ties to upgrade the knowl­edge base of their work­force to counter poten­tial dis­rup­tions in the hori­zon. This may include train­ing work­ers to work along­side auto­mat­ed sys­tems or pro­vid­ing sup­port for dis­placed workers.
4. Oper­a­tional efficiency
   AI can be used to opti­mize hos­pi­tal oper­a­tions, such as staffing and sched­ul­ing, reduc­ing costs and improv­ing patient outcomes.

Unlock the full poten­tial of your sup­ply chain, pow­ered by data and ana­lyt­ics. With our exper­tise and knowl­edge base, we can help you dri­ve bet­ter deci­sions and deliv­er sus­tain­able results. If you would like to learn more, please feel free to get in touch with us.