A McKinsey & Company report examines the impact of automation on manufacturing, driven by rapid advances in robotics, AI and machine learning.
The main news
- New robotics technologies are cheaper, faster and smarter than ever before.
- 87% of the hours workers spend on production can be automated with current technologies.
- Find out what four things to consider when making a decision about automation.
Automation has been a major disruptor in manufacturing since the Industrial Revolution. Still, a new generation of robotics and related technologies are shaping the landscape of the manufacturing and distribution industries. Indeed, American manufacturing has recently made a comeback thanks to the widespread use of automation and robotics.
Automation technologies that were once cost-effective are now more attainable—and the return on investment is greater than ever. The new generation of robots is not only much less expensive than their ancestors, but also versatile, flexible and able to learn new tasks, even those that were too difficult for machines just a few years ago.
The new generation of robots is not only much less expensive than their ancestors, but also versatile, flexible and able to learn new tasks, even those that were too difficult for machines just a few years ago. Click to tweet
Robots can now, for example, “pick and pack irregularly spaced objects and solve conflicts in large-scale projects, such as in the aerospace industry,” he says. A recent report from McKinsey and Company. Not only that, but artificial intelligence is leveling the playing field between man and machine, and will “enhance the ability to automate work activities across many industries. For example, in a recent experiment, computers were able to read lips more accurately than experts.
Quantifying the impact of automation on manufacturing
McKinsey’s study, which covered 46 countries and 80% of the world’s workforce, determined that an enormous amount of work time could be eliminated or saved through technology automation. Already here.
According to the study, “87% of the hours workers spend on production tasks are automated – more than any other manufacturing job.”
And it doesn’t end there. Even with other jobs in manufacturing (eg, engineering, maintenance, material handling, administration, and management), there’s still a significant opportunity for 45 percent of these work hours to be automated.
Automated pricing and logistics
Overall, the study found that automation has led to increased wages and increased profits globally. The authors suggest that manufacturers’ best choice to capture long-term value from automation is to implement technologies in stages, capturing value at each stage and allowing for future investment.
Many complexities come when it comes to meeting the challenges associated with automation, deciding what to automate, and when to implement technologies to best capture long-term value. Price is only one element, although it is important.
McKinsey suggests keeping the following four things in mind when deciding what to automate:
- Technical feasibility
- Costs associated with developing and deploying necessary hardware and software
- “Supply and demand dynamics” of labor prices and output.
- Benefits beyond labor replacement, such as increased productivity and quality, and fewer errors
American manufacturing renaissance
of Association for the Advancement of Automation “American manufacturing’s embrace of robotics is predicted to usher in a new manufacturing renaissance in this country. As it becomes profitable to manufacture in the United States again, we are seeing companies reverse the trend of consistent outsourcing, rather than relying on cheap labor abroad.
As more operations embrace automation — and as we continue to witness rapid advances in robotics, AI and machine learning — it’s not just U.S. manufacturers who will reap the benefits. Many experts are predicting. Automation in manufacturing creates new and better paying jobs.
Optimists include our own CEO Frank CavallaroHe recently wrote: “From what I see now… I remain optimistic that AI and automation will create more efficient and effective jobs, which in turn will create new (albeit different) jobs. To me, it’s us humans who win over the technological advances of the ever-growing manufacturing industry
