For over 40 years, Ron has been a innovator, business owner and consultant to multi-million dollar businesses, helping create real measurable client value, in revenue, margins, growth planning and innovation. He is the author of Finding Your Crack in the Market: Secrets to Marketing Niche Domination and Small Business Success.

Business news and politicians alike seem to think robots will take all our manufacturing jobs.

Redlands, CA – It is true that we see new manifestations of robots and Artificial Intelligence (AI) in public places like McDonald’s new ordering kiosks, and Home Depot’s self-checkout registers. We also hear about automated cars, self-driving trucks and robots making everything. But will they really take all our jobs?

Cab drivers may lose jobs, but most of us will simply become passengers in our own cars. Home Depot seems to need the same people to “help” self-checkout due to all the problems, and McDonald’s checkout service doesn’t take cash, or tell you that “the shake machine is broken today.”

So will robots really take all these jobs over and put all manufacturing employees in the street? To help answer this question for the Inland Empire, we researched the issue, and had a long discussion with Ontario, California’s Nick Tonti of Trinity Robotics Animation. Nick will be on the panel discussion on this subject at the upcoming Manufacturing Summit in Riverside on February 14^th.

Anyone in manufacturing knows new technology takes time, and in fact, automation of all types has been going on in a big way for half a century. Many call this advanced manufacturing.  Forbes magazine reports that robotics in factories will grow to nearly $120 billion this year.[i]  This is an 18% increase over last year.

IDC tech-based industry research firm, the source of the Forbes article, also forecast the 2022 robot, drone, and related technology service will jump to $210 billion. Half will be driven from the manufacturing industry. The International Federation of Robotics says that is about 630,000 units.

What is different in automation is the integration of computers, sensors, 3D printing and use of Artificial Intelligence to drive robots and machinery in general.

Economics always drives investment decisions and may be the reason the digital transition is picking up speed. A McKinsey Consulting study indicated that 68% identified digital manufacturing as the top priority. Interestingly, India, China, and Brazil beat Germany and the U.S. for the percentage who made it a top priority. This perhaps is due to the existing digital infrastructure compared to high labor ratios in developing countries. 63% of American companies say it is the top priority.[ii]

Good managers, however, agree with HP CEO, Dion Weisler, “. . . that radical changes are difficult.”[iii] The McKinsey report confirms this. Despite being a top priority, just less than 30% of the surveyed manufacturers actually rolled out relevant solutions company-wide.[iv]

Many companies don’t adapt to newer technology until they build a new facility.  In-place implementation often becomes incremental. However, with an overall plan in mind, new technologies can be used in the middle of the line without changing the full line. Robots can do complex operations in the middle of the line such as drilling and fastening, inspection, welding, painting, and material handling. New advances in artificial intelligence, computer speed, “vision,” and microelectromechanical sensors, allow robots to work alongside humans. They have safe systems that move arms slowly and stop when touched for safety. This flexibility allows small, manual steps to become automated one job at a time.

According to Manufacturing Tomorrow magazine, robots come in five basic types. They are used for material handling 38% of the time. This is highly valuable for heavy lifting and repetitive movement.  29% of the robots are welders, 10% are used for assembly operations, and 4% do dispensing of fluids such as glue. Other uses are finishing such as grinding, cutting, deburring, sanding, and polishing.[vi]

The media hype also says that human firings will soon follow in huge numbers. As a result 60% of American adults think robots and AI will put many jobs at risk.[vii]  This does not seem to be true.  Forbes reported in November 2018, that while robots are increasing and joining their carbon-based counterparts, humans still do 72% of the tasks. 1.7 million robots work with 345 million real workers.[viii] In the U.S. there are 189 robots for every 10,000 workers. Germany has 309 for every 10,000 employees.

Nick Tonti, of Trinity Robotics Automation, says it will be a long time before robots really take over. “Today we are selling to existing plants to increase production using existing people,” Nick says. “Many applications are to supplement humans or extend the workday, not to replace them. Our robots can lift more than a human, so we take the drudgery out of work and add a dimension of safety as well,” he says.

Manufacturers evaluate new capital expenditures in a few ways. Some manufacturers look at the long road to digitizing their processes. Smaller ones need flexibility to change production processes, start and stop different products and react to changing market niches. Because they are small, they have to be nimble with the dropping cost of robots and automated processes. Tonti says “some companies see robotics as a strategy for change and survival, not just a ROI”.

Of course, the classic evaluation is to look at costs and drive them down. Human labor is one of the costs that tend to go up and can cost even more in benefits, time off, and injuries. So managers attempt to lower costs by evaluating a hardware purchase against variable costs. When the costs equal the capital investment, the return on investment is calculated. Some call this the pay-back. A robotic arm can pay for itself in 18 to 24 months. This payback is a strong incentive to add robots.

But buying a robot or automated machine is not a panacea. While a robot can make more robots, Tonti cautions, “Building a part or machine is just the first step of the total process. Each new product must be designed with the process in mind, then programmed, then set up for each new task and process. While AI (Artificial Intelligence) is happening, it still must have humans help it understand what to do. For instance, a visual sensor that looks for and picks up a certain object, needs to be told what it looks like and how much pressure to use when picking it up. Sure, it can do some learning later.” Robbi the robot does not come ready to find a bolt out of the package, you have to tell (program) it to recognize the exact bolt.

The notion that companies will just put material in the receiving door, and a product will come out the shipping door is a company that knows little about the true complexity of making complex things. Using Amazon as an example of how selling and delivery has changed rapidly is probably a poor comparison to the highly complex and technical manufacturing processes that make today’s products. Yet this is not to suggest that the factory is not changing.

Highly efficient and automated factories may change the dynamics of foreign competitors as the U.S. lowers the labor component in each new product, however gradual it may be. The automated machinery and robotic market itself needs thousands of skilled workers to design and program machines and then do the training necessary for the remaining workforce. New advances tend to open more creativity as it has during the full tenure of the industrial revolution.

While some workers will be displaced, we have over one million unfilled jobs they can retrain to fill. Lowering costs of more efficient production and closer shipping increases buying power and standard of living here at home. Productivity of factories means higher wages, the only way more money is truly available to give raises.

New automated manufacturing and robotics has a way to go, but it’s got a good start.

Manufacturers: Be sure to check out the MCIE Manufacturing Summit Information.

Contact Ron Burgess

Sources

[i] Forbes magazine, “Industrial Robotic Arms Race Leaves Experts Asking What Manufacturing Slowdown?” Rich Blake

[ii} McKinsey and Company, How digital manufacturing can escape pilot purgatory By Andreas Behrendt, Richard Kelly, Raphael Rettig, and Sebastian Stoffregen

[iii] World Economic Forum, “Accelerating a more sustainable industrial revolution with digital manufacturing,” by Dion Weisler

[iv] McKinsey and Company, How digital manufacturing can escape pilot purgatory. By Andreas Behrendt, Richard Kelly, Raphael Rettig, and Sebastian Stoffregen

[vi]Manufacturing Tomorrow magazine, “Robots in Manufacturing Applications,” by Len Calderone

[vii] “Indeed, Who’s Afraid of Automation?” Jed, Kolko

[viii] Forbes magazine, “Robots Replacing Humans In Manufacturing? Not So Fast, New Study Says,” Susie Dunas.

Header Image Credit – Depositphotos – 141951164 – 2/8/19 – RedFusion

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