Automation is driving manufacturing growth and potential

Manufacturing’s growth depends on automation, but there are some potential challenges companies face in implementing automation.

By Chris Vavra January 18, 2023
Courtesy: Chris Vavra, CFE Media and Technology

Automation and manufacturing insights

  • Automation is a rapidly growing part of manufacturing that touches nearly all end markets and industries today.
  • Automation can improve real-time decision making, quality control and the ability to predict what will happen next and give manufacturers the insights needed to improve their business.
  • Acceptance is growing, but some companies need to overcome financial and cultural barriers to fully adopt and embrace automation as a solution.

Automation is a $100 billion market compromised of robotics, software and artificial intelligence/machine learning (AI/ML) and hybrid markets that take advantage of the Industrial Internet of Things (IIoT). Gaurav Mittal, managing director, technology and business solutions, Thomas H. Lee Partners, said automation touches nearly all end markets and industries today, and it will continue to grow, according to his presentation “The Growth Opportunities for Robotics from the Venture Capital Perspective” at the A3 Industry Forum in Orlando.

Automation is driving economic growth, Industry 4.0

Automation, Mittal said, will be a key force driving global gross domestic product (GDP) growth. Historically, employment growth and productivity were about even in terms of GDP. That is going to change because the workforce is getting older overall, and there is less need for people on the plant floor. Automation can fill the gap by providing the productivity needed to continue achieving future economic growth.

Automation is driving Industry 4.0, as well, with the introduction of digital technologies designed to improve business efficiency and user experience in ways such as:

  • Process quality control

  • Predictive maintenance

  • Dynamic scheduling and panning

  • Automatic and robotic processes

  • Real-time decision-making.

Because of automation advances through Industry 4.0, companies can make better and smarter decisions. Robots allow them to automate operations that were previously done by humans, and give humans ability to do better and more meaningful jobs. Mittal said 12 million new jobs will be created by automation by 2035 with a 40% expected increase in productivity through AI.

“We are early in the automation adoption, and there is a great deal of maturity potential,” Mittal said.

Gaurav Mittal, managing director, technology and business solutions, Thomas H. Lee Partners, presenting “The Growth Opportunities for Robotics from the Venture Capital Perspective” at the A3 Industry Forum in Orlando. Courtesy: Chris Vavra, CFE Media and Technology

Automation can address five manufacturing concerns

On a more granular level, automation can improve the bottom line while addressing five concerns many manufacturers are worried about for today and the future.

  1. Labor shortage. Automation cuts down on high turnover and low availability labor while improving productivity and output.

  2. Inflation. Mittal admitted this is a major concern for companies today, and automation can help reduce input costs while offsetting wage costs, as well.

  3. De-globalization. Automation helps enable onshoring and can reduce costs companies might incur through shipping their products from other countries.

  4. Supply chain. Automation delivers higher throughput and visibility while improving a company’s overall service and decision-making.

  5. Sustainability. Mittal said this is an area he’s especially intrigued by because automation can help reduce energy use and the physical footprint by helping companies make better decisions while using fewer people in day-to-day operations.

Five factors affecting pace of automation adoption

In theory, manufacturers integrating more automation sounds great, but it’s not going to happen overnight. Mittal noted five aspects holding some companies back from fully embracing automation in their facilities.

  1. Technical feasibility of automation applications. Automation technology has to be invented, integrated and adapted into solutions for specific use cases. While that has improved over the years as automation’s foothold is increased, not all solutions are the same, and each company has unique problems.

  2. Hardware and software costs related to automation. This can be a barrier, particularly for smaller companies, which don’t have the immediate resources on hand. Barriers to purchasing automation are dropping, but it’s going to be a constant process.

  3. Labor market dynamics. Mittal said the supply, demand and costs of human labor affect which activities will be automated. The labor market is currently constrained, which is encouraging companies to adopt automation, but the aforementioned hardware and software costs can be a challenge.

  4. Economic benefits of automation. The return on investment (ROI) needs to be tangible and show higher throughput and increase quality along with labor cost savings. That ROI, Mittal said, is more clearly realized than before.

  5. Regulatory and social acceptance of automation. This is one of the most challenging barriers because preconceived notions take time to change even when automation makes business sense.

Companies need to adapt and find the winning application where they can take those steps toward a more automated and efficient future. “You need to adapt in the current environment,” Mittal said.

Chris Vavra, web content manager, CFE Media and Technology, cvavra@cfemedia.com.


Author Bio: Chris Vavra is senior editor for WTWH Media LLC.