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When everything becomes automated what then becomes important

When everything becomes automated

James Hargreaves’ 'Spinning Jenny' started the trend to automation in 1764 and 250 years later it shows no sign of abating.

Rapid change in manufacturing technologies

Breakthroughs in information and communications technology (ICT) are driving automation today. Increased computing power is permitting the processing of complex data from sensors in real time, enabling machines to be more responsive than ever. The more responsive a machine can be to its environment, the greater the chance it will encroach on the domain of work typically done by people.

Protective bars have usually encased machines. However, some machines, such as Automated Guided Vehicles (AGVs), necessarily operate in unenclosed environments. The trend is changing, with previously caged robotic machines becoming uncaged and far more interactive with people. For example, the exoskeletal style robot. This robot works as an augmentation to the industrial worker, facilitating the movement and manipulation of much heavier loads than any individual could handle.

Currently it is mostly large scale manufacturing facilities that employ automation, as their scale is sufficient to offset the cost of implementing complex systems. Trends show an increase in machine complexity in parallel with their cost reduction, thus lowering the entry barriers for where automation takes hold. We can expect that small and medium manufacturing facilities will benefit from automation in the way that large scale plants have. And so, by definition, manufacturing facilities will be the places, which employ automation and robotics.

We have moved from an age where basic machines did simple repetitive tasks, to a time where sophisticated robots can undertake complex tasks.

For organisations and societies postulating the impacts of these technologies, it is best to assume the growth and penetration of these technologies into workplaces will be exponential and rapid.

Similar to manufacturing is the automation of logistics. We already have automatic container terminals, AGVs in warehouses, driverless trains and trucks, and there are early tests of autonomous cars. Additionally, drone aircraft are a reality and drone ships do not seem far off.

People plus machines will equal success

Increased automation will likely level the playing field between low-cost labour countries and high-cost labour countries, as well as large scale facilities and smaller scale ones.

How much this matters depends on the industry in question. In the US, for many manufacturing sectors, labour is less than 20 per cent of the cost of manufacturing. In Asia this may be lower. In high labour cost countries, such as Australia, automation would have a significant benefit for labour intensive industries. Automation offers a way to keep Australian industries globally competitive.

Automation offers advantages beyond cost. We will see, in addition to lower costs, automation brings a degree of process perfection, with benefits of less waste and high reliability.

The skills required to be successful in manufacturing will be process design and technology skills. Those organisations and societies that can mix people and machines well will be successful. The implications of this are far reaching. It might be natural to resist the advance of technology to save jobs. But, in reality, only the embrace of technology will do this. There are very few manual telephone exchange operators in the world, but there are millions of people employed in the creation and distribution of mobile phones and their related technologies.

The marriage of automation to design

Beyond automation, for the producer, there are other concerns. Energy and material costs matter. So too the cost of capital and access to markets. Scale has a role in this – not from the manufacturing need but from a purchasing perspective. As a general rule, the larger the scale, the better the price for energy, materials and capital through pure purchasing power. Depending on the industry these factors matter more or less. These are endowment factors and there is little companies can do to alter these.

For those companies in industries where endowments or privileged assets matter less, the race is on. A 21st Century company, given modern communications, can sense and serve worldwide markets.

As markets shift somewhere in the world, the manufacturing facility needs to respond. In a sense this has always been the case. But ICT, automation and robotics have broadened the playing field, levelled but intensified the competition, and magnified the potential rewards.

Success factors will include a company’s ability to be responsive and agile. Strategy needs to drive ICT, automation, robotics, and people management. The factory of the future will need to support all these factors. When everything is automated, what is important is the astute marriage of automation, facilities, equipment and people.

About Peter Carney

Peter Carney is global the leader of supply chain advisory and analytics at Aurecon. He holds a BSc (Hons) and MBA degrees from the University of Melbourne. He has over 25 years of experience in working with and advising Australia’s largest corporates in mining and manufacturing on matters of marketing, strategy, business development and supply chain improvement.

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