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ANSWERED on Sun 28 May 2017 - 2:56 pm UTC by JD Umiat

Question: How fast are manufacturers automating?

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scavenger 

Customer

 27 May 2017 16:55 UTCSat 27 May 2017 - 4:55 pm UTC 

Hey Friends,

As part of an upcoming marketing push into the manufacturing industry, I want to provide them with a research paper that will be of value to them.

I'll have our marketing folks make it pretty, but I need the raw information to turn into the report.

The question I want to answer is, "Are you automating as quickly as your competition?"

So I'd like to get information relevant to that question, ideally with some industry-by-industry numbers.

I'm assuming it will look something like units produced per employee dropping in industries, or revenue dollars generated per employee increasing. Maybe robots per product or dollars spent on R&D per employee or...I don't really know exactly.

The core thing though is to get a well sourced actionable answer to the question above. I need the reader to be able to say "looks like I'm behind the curve!" or "Looks like I'm ahead of the curve!" when they're done reviewing it.

My goal here is to provide something of actual value, not just the standard marketing pitch of "5 things you didn't know about computer viruses!" which contains information 10 years out of date that appears as the first link on google.

 

JD Umiat 

Researcher

 28 May 2017 02:21 UTCSun 28 May 2017 - 2:21 am UTC 

Hi, Scavenger!

 Robotic automation is a hot topic these days but the type of information you are seeking is quite complex. Do these types of articles work for you?


Automation Investment in U.S. Manufacturing: An Empirical Picture
https://www.mapi.net/forecasts-data/automation-investment-us-manufacturing-empirical-picture


Companies using AI will add more jobs than they cut
As companies embrace automation to stay competitive, these changes will eventually create more jobs than they destroy.
https://www.recode.net/2017/5/10/15612570/automation-ai-acceleration-revenue-growth-financial-upside-mnuchin

 See chart - Revenue growth increases with automation level


Special report: Automation puts jobs in peril
https://www.usatoday.com/story/money/2017/02/06/special-report-automation-puts-jobs-peril/96464788/


7 companies that are replacing human jobs with robots
http://www.businessinsider.com/companies-that-use-robots-instead-of-humans-2016-2/#spreads-robot-lettuce-farmers--harvest-30000-lettuce-heads-every-day-1


Robots replacing workers, cutting cost, raising productivity
https://www.nationalheraldindia.com/news/2017/05/10/rise-of-the-robots-china-takes-a-powerful-lead-artificial-intelligence-robotics-rpa


JD

 

JD Umiat 

Answer

 28 May 2017 14:56 UTCSun 28 May 2017 - 2:56 pm UTC 

Scavenger,

 These latest references along with those posted in my initial clarification should provide sufficient information to start your report. However, if you can pinpoint a specific bit of information you still need after reading through all the links, I will do my best to provide more follow-through in a clarification.


More robots coming to U.S. factories
https://www.usatoday.com/story/money/2015/02/09/bcg-report-on-factory-robots/23143259/

Manufacturers will significantly accelerate their use of robots in U.S. factories over the next decade as they become cheaper and perform more tasks, constraining payroll growth, according to a study out Tuesday. The development is expected to dramatically boost productivity and slow the long-standing migration of factories across the globe to take advantage of low-cost labor, says the Boston Consulting Group report.

"Advanced robotics are changing the calculus of manufacturing," says Harold Sirkin, a senior partner at the management consulting firm.

A handful of nations, including the U.S. and China, are poised to reap the biggest benefits of the automation wave.

About 1.2 million additional advanced robots are expected to be deployed in the U.S. by 2025, BCG says. Four industries will lead the shift - computer and electronics products; electrical equipment and appliances; transportation; and machinery - largely because more of their tasks can be automated and they deliver the biggest cost savings.

About 10% of all manufacturing functions are automated, a share that will rise to nearly 25% in a decade as robotic vision sensors and gripping systems improve, BCG says.

Meanwhile, costs are tumbling. The cost to purchase and start up an advanced robotic spot welder has plunged from $182,000 in 2005 to $133,000 in 2014, with the price forecast to drop another 22% by 2025.

That's prodding manufacturers to replace workers. BCG says manufacturers tend to ratchet up their robotics investment when they realize at least a 15% cost savings compared with employing a worker. In electronics manufacturing, it already costs just $4 an hour to use a robot for a routine assembly task vs. $24 for an average worker.

Within two years, the number of advanced industrial robots in the U.S. will begin to grow by 10% a year, up from current annual growth of 2% to 3%, the study says.

The impact on U.S. factory workers is mixed.

Replacing employees with robots is projected to result in a manufacturing workforce that's 22% - or a few million workers - smaller by 2025 than it otherwise would have been. But factory payrolls are still expected to rise because of an expanding economy and the growing tendency of manufacturers to move some production back to the U.S. from overseas - a trend known as reshoring, Sirkin says.

Indeed, the spread of robotics itself should make the U.S. more productive than many other countries, creating more jobs. BCG estimates reshoring and rising exports will add 700,000 to 1.3 million factory jobs in the U.S. by 2020. Many low-skills jobs, however, will be eliminated while higher-skill positions, such as operating and maintaining robots, are expected to grow.

The U.S. is among six countries that the consulting firm characterizes as "fast" adopters of advanced robotics, including China, Canada, Japan, Russia and the United Kingdom. But it says several countries will be even more aggressive - Indonesia, South Korea, Taiwan and Thailand. The U.S. is expected to be far ahead of a larger number of slower adopters, such as France, Italy, Belgium and Brazil.

==

While the following article from the Wall Street Journal requires a subscription to read easily, I was able to tilt my computer screen enough to make sense of it!

Meet the New Generation of Robots for Manufacturing
https://www.wsj.com/articles/meet-the-new-generation-of-robots-for-manufacturing-1433300884

See the following charts:


 At Work in America - Robot orders in the U.S. in 2014 by Industry
 
 Auto parts - 35%
 Auto - 29%
 Metals - 9%
 Food/consumer goods - 6%
 Semiconductor & electronics/photonics - 4%
 Life Sciences/pharma/biomed - 4%
 Plastics/rubber - 2%
 
 Where They Are - Industrial Robots operating by country/region - 2014
 
 Japan - 306,700
 North America - 237,400
 China - 182,300
 South Korea - 175,600
 Germany - 175,200

==

Some interesting facts:

https://ark-invest.com/research/robots-will-save-manufacturing-billions

The initial cost of an industrial robot (including systems engineering costs) is approximately $250,000.1 Robots also have operations and maintenance costs which we calculate at approximately $10,000 annually. Comparatively, average factory employee hourly wages range from $2 to $47 per hour, depending on the country.2 In addition, humans incur additional training, recruitment, hiring costs healthcare benefits and vacation days are other overhead costs.

Break-even times for industrial robots highlight their beneficial impact in the manufacturing industry. The average service life of an industrial robot is approximately 12 years.3 The present value of the cash flows for each alternative over the 12 years (including employee wages) are discounted to the present value using a 15% discount rate except for Chinese wages, which are adjusted to account for projected increases in wages of 10-15% each year4.

Although a robot initially costs more than an employee, the breakeven occurs relatively quickly. A company replacing factory employees with industrial robots in Germany or the United States will break even in under one year. In South Korea, Mexico, and China, where average factory wages are approximately $19, $6, and $2 per hour respectively, robots cover their initial investment over a longer time horizon, but still relatively quickly. A Korean manufacturer will break even in fewer than two years and in Mexico fewer than six years. In China the break even is approximately nine years.

==


This 148-page McKinsey report is not focused solely on manufacturing, but I imagine you will find a lot of information that proves interesting!

A FUTURE THAT WORKS: AUTOMATION, EMPLOYMENT, AND PRODUCTIVITY
http://www.mckinsey.com/global-themes/digital-disruption/harnessing-automation-for-a-future-that-works

 Access the full report on the middle tab


==

Automation Investment in U.S. Manufacturing: An Empirical Picture
https://www.mapi.net/forecasts-data/automation-investment-us-manufacturing-empirical-picture


Companies using AI will add more jobs than they cut
As companies embrace automation to stay competitive, these changes will eventually create more jobs than they destroy.
https://www.recode.net/2017/5/10/15612570/automation-ai-acceleration-revenue-growth-financial-upside-mnuchin

 See chart - Revenue growth increases with automation level

==

Special report: Automation puts jobs in peril
https://www.usatoday.com/story/money/2017/02/06/special-report-automation-puts-jobs-peril/96464788/

==

7 companies that are replacing human jobs with robots
http://www.businessinsider.com/companies-that-use-robots-instead-of-humans-2016-2/#spreads-robot-lettuce-farmers--harvest-30000-lettuce-heads-every-day-1

==

Robots replacing workers, cutting cost, raising productivity
https://www.nationalheraldindia.com/news/2017/05/10/rise-of-the-robots-china-takes-a-powerful-lead-artificial-intelligence-robotics-rpa

==


JD

 

scavenger 

Customer

 28 May 2017 17:18 UTCSun 28 May 2017 - 5:18 pm UTC 

Thanks! I appreciate your hard work.

These are exactly what I'm looking for -
https://www.mapi.net/forecasts-data/automation-investment-us-manufacturing-empirical-picture

http://www.mckinsey.com/global-themes/digital-disruption/harnessing-automation-for-a-future-that-works

http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/where-machines-could-replace-humans-and-where-they-cant-yet

Do you have anything else in that line of research? The one part I'm not seeing, not sure if it exists, but is on how automation is breaking through (if it is) to smaller companies (20 - 50 million in revenue). What I'm seeing above so far is mostly that massive companies are doing automation, is it penetrating yet to smaller organizations? Or are they just too expensive and too complex?

Also if thats a separate issue, let me know and I'm happy to increase the bounty on this question to get the additional information!

Best,
-Zac

 

JD Umiat 

Researcher

 29 May 2017 02:01 UTCMon 29 May 2017 - 2:01 am UTC 

I haven't found much more specific to manufacturing but these three might be of interest. I will continue to post anything further in another clarification.


This is an interesting perspective on the different levels of automation that can be beneficial to manufacturers and it also includes small and medium businesses.

Shop floor automation: A necessity for competitive manufacturing
http://www.infor.com/content/industry-perspectives/a-necessity-for-competitive-manufacturing.pdf/

What are the different levels of shop floor automation? Shop floor automation has dramatically changed in
recent years, especially in light of the increase in M2M technologies, industrial robotics, and the use of
machine sensors. Even startup manufacturers, growing family-owned companies, and small-to medium-sized businesses (SMBs), can now afford to add automation capabilities to their production
processes. Manufacturers can choose from a wide range of enterprise solutions that offer everything from
the basic ability to track customer orders and jobs in the production queue, to solutions that manage a
virtual workforce of robotics.

Read entire report...


==


Here is another good report which also happens to disuss smaller manufacturers:

The new hire: How a new generation of robots is transforming manufacturing
https://www.pwc.com/us/en/industrial-products/assets/industrial-robot-trends-in-manufacturing-report.pdf

"In the last three or four years we’ve seen sales get much stronger with robots, but the rise
is largely attributed to large companies," added Selke. "The smaller companies are still struggling with their adoption and are slower to adopt new technologies. The cost of entry is somewhat high, and they have
trouble making the leap either because of staff or because of the cost. But the new breed of robots will make it easier for them to find ways to innovate and compete. Even at $35,000 a collaborative robot, it’s a compelling argument to buy one even if you’re a very small operation - it can work 24-hours a day," Selke said.

Small and medium-sized manufacturers will likely need robotics that can accommodate smaller production runs and more
frequent set-ups and re-programming of their robotic workers to adapt quickly for production of new products or variants of existing ones. Bigger growth in robot adoption, then, will likely come when robots can easily produce in small lots situations. Programming a robot can take hours for small specialty batches of product. Most small and medium-sized enterprises will need cheaper and more easily programmable robots to make that happen.


==


Watch this interesting little video about automation in the Creemore Springs Brewery!


VIDEO: Going Big on Automation in a Small Footprint Facility
http://www.engineering.com/AdvancedManufacturing/ArticleID/14256/VIDEO-Going-Big-on-Automation-in-a-Small-Footprint-

 

JD Umiat 

Researcher

 29 May 2017 11:35 UTCMon 29 May 2017 - 11:35 am UTC 

Armed With Don't-Hurt-Humans Sensors, Robots Hit Small Factories
Factory robots prices are falling, allowing the little guy to enjoy the same boosts in productivity that previously only larger companies with deeper pockets could afford.
http://www.newequipment.com/industry-trends/armed-dont-hurt-humans-sensors-robots-hit-small-factories



Using Cobats in small manufacturing plants

the collaborative robot market is set for phenomenal growth

http://www.rethinkrobotics.com/blog/the-collaborative-robot-market-is-set-for-phenomenal-growth-part-1/

http://www.rethinkrobotics.com/blog/collaborative-robot-market-growth/

 

scavenger 

Customer

 29 May 2017 22:18 UTCMon 29 May 2017 - 10:18 pm UTC 

great stuff, thank you!

 

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