5 Ways Manufacturing CEOs Can Maximize the Robotics Revolution

For all of the improvements introduced by robotic devices and systems at manufacturers from metal shops to electronics factories over the last 40 years, a huge number of tasks are still performed by human hands that clearly could be handled more dependably by machines. But costs of manual labor versus a new robotics system, and the persistent complexity of many of them, have held back many manufacturers.

Until now, perhaps. “Industrial robots are on the verge of revolutionizing manufacturing,” PwC recently reported. “As they become smarter, faster and cheaper, they’re being called upon to do more. They’re taking on more ‘human’ capabilities and traits such as sensing, dexterity, memory and trainability. As a result, they’re taking on more jobs—such as picking and packaging, testing or inspecting products, or assembling minute electronics.

“Robots are taking on more ‘human’ capabilities and traits … and more jobs.”

“Also, a new generation of ‘collaborative’ robots ushers in an era of shepherding robots out of their cages and literally hand-in-hand with human workers who train them through physical demonstration.”

In fact, adds Boston Consulting Group, “Many industries are reaching an inflection point at which, for the first time, an attractive return on investment is possible for replacing manual labor with machines on a wide scale.”

Because of these trends, the firm said, by 2025, the share of tasks performed by robots will rise from a global average of around 10% to about 25% across all manufacturing industries, in turn boosting manufacturing productivity by up to 30%. That will cut labor costs by 33% in South Korea and by 18% to 25% in the U.S., China, Germany and Japan.

Manufacturing CEOs will perform with varying degrees of effectiveness in this transitional era. BCG recommended they “adopt a holistic approach to the robotics transition,” and take the following actions.

1. Understand the global landscape. Each national market will see trends in robotics advance at different speeds because of performance considerations, prices, the flexibility of labor rules and the future availability of workers.

2. Benchmark the competition. If robotics adoption is expected to increase rapidly in their industry, BCG said, CEOs should “assume the total cost of systems will fall” for their company—and for their competitors.

3. Stay technologically current. Will new robotics applications really be able to handle some of the unique demands of your industry? When and at what cost? Manufacturing CEOs must understand improvements in robotics prices and performance to determine when and if to strike.

4. Prepare the workforce. The availability of skilled labor will become a more important factor in the decision about where to locate production. Tasks that still require manual labor will become more complex, BCG said, and the ability of local workforces to master new skills will become more critical. Programming and automation talent will become more important.

5. Prepare the organization. Companies should start preparing now for the age of robotics even if the economics don’t yet favor major capital investment.

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Dale Buss
Dale Buss is a long-time contributor to Chief Executive, Forbes, The Wall Street Journal and other top-flight business publications. He lives in Michigan.

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