Even those that have begun are not yet thrilled with their results. Capgemini’s 2017 study of 1,000 large manufacturers across eight countries and six manufacturing subsectors found 75 percent had a smart factory initiative in place or were working on it, but only 14 percent were satisfied with their success.
For SME manufacturers, before investing big bucks, CEOs need to know they’ll be able to boost efficiency or grow revenue, not wind up with a robot in a corner collecting dust. (In fact, several CEOs at Chief Executive’s recent Smart Manufacturing Summit admitted they had cobots effectively making coffee in the breakroom because they didn’t know what else to do with them.)
Capone recommends starting with a low-cost, high-value task, such as visual inspection. “That’s probably the least costly thing you can do with A.I., to put a camera on a machine to detect if the product is good or bad. You can start using the sensors to collect the data right away.”
Of course, you risk falling for the technology. “Engineers love to try and automate everything, but it may not make business sense—there may not be a return on investment, it may not improve the quality of the product, it may take too long to do the automation, depending on how quickly the customer wants to get their product,” says Bob Eulau, CEO of Sanmina, a $7 billion B2B manufacturer of optical, electronic and mechanical products that began automating its production lines 15 years ago and now has 25,000 machines connected around the world via the cloud. “We talk about the concept of ‘selective automation.’ We are very careful to make sure we use automation in the right places and capture value when we choose to do it.”
By starting small, a company can get experience with the technology, gather data and soon realize the kinds of efficiencies that enable growth—and more investment. Since UniCarriers Americas, a forklift manufacturer based in Marengo, Illinois, began working with robots in 2012, the company has increased automation capabilities by 50 percent and allowed the business to grow enough to double headcount from 300 to 600. “Because we run a leaner operation and
vertically integrate, we’ve become less dependent on outside sources,” says Jim Radous, president. “We control more of the design capabilities and the parts that go into the product and that keeps us more competitive, more internally focused on efficiencies and allows us to stay within a very tight fixed-cost parameter as we add people to our process.”
Keeping that focus on the end customer is paramount to guiding any manufacturing company through digitalization and automation. That, and remembering the value of the most complex and capable machine in their plant: People.
Even the International Federation of Robotics said in its April 2017 report that “less than 10 percent of jobs are fully automatable.” Robots will never be able to handle tasks “requiring high levels of creativity, empathy, persuasion or understanding of which knowledge to apply in which situation.” As such, machines should complement and augment human labor activities, playing a supporting role so that humans can “focus on higher-skilled, higher-quality and higher-paid tasks.”
To get there, CEOs must seek a balance between human and machine so as not to sacrifice the je ne sais quoi that has made American manufacturing competitive since the first industrial revolution. “The human being’s ability to interpret and to initiate and to apply ideas is critical to making things happen,” says Honda’s Shoupe. “We feel like one without the other is a complete loss for us.”