Exploring the impact of automation on global manufacturing

Discover how automation is revolutionising global manufacturing and transforming industries

Aluminum cans passing through a factory assembly line
Aluminum cans passing through a factory assembly line

The experience of manufacturers around the world during the pandemic has changed the industry permanently, according to an article in Forbes. Manufacturers now recognise that they cannot rely on manual processes alone; automation will be critical to ensure they can remain efficient, agile and less reliant on scarce skilled resources.

The market for global industrial automation had already reached 175 billion US dollars by 2020 and it is set to grow at a compound annual growth rate of 9 percent until 2025, reaching a total of 265 billion US dollars, according to a forecast by Statista. The adoption of robotics will also increase according to the firm, with global shipments of industrial robots increasing from 422,000 in 2018 to 518,000 in 2024. 

What’s Driving Change?

So, apart from the impact of the pandemic, what’s driving this change? One key factor is that managing risk is now a priority for manufacturers. They face challenges on the supply side as well as the production side as wars, climate change and economic turmoil disrupt traditional supply chain resilience. That makes it essential to make the most efficient use of production resources to minimise waste and maximise productivity. 

Automation is proving to be the key, delivering a range of important benefits:

  • Improved labour productivity
  • Reduction in labour costs
  • Lower risk in areas of labour shortages
  • Reduction or elimination of waste, cutting material costs
  • Reduction of human error, improving quality and reducing waste 
  • Minimal downtime 
  • Reduced production lead times 

Those production benefits can also deliver strategic business benefits, including:

  • Faster time to market
  • Increased profit margins 
  • Improved competitiveness
  • Stronger market position
  • Reduced risk

Automation on the Production Line 

Industrial automation is delivering those benefits in three key areas of production:

  • Fixed automation
  • Programmable automation 
  • Flexible automation

Fixed automation is associated with high-volume production of single components where design changes are minimal. Machines are programmed to perform the same task continuously for extended periods with simple automated control systems. However, if the manufacturer has to make design or component changes, there will be downtime while production staff change tooling. The system is efficient, but lacks flexibility in a production environment where change is important. 

Programmable automation, associated with batch manufacturing, goes a step further and enables manufacturers to produce more components or products on the same machines. Batch sizes can range from a few units to thousands of components. Despite the savings in equipment costs, this process also requires downtime to make changeovers. 

Flexible automation overcomes the challenge of downtime by enabling automated changeovers. This process is associated with real-time or on-demand production and allows manufacturers to produce a number of different components that use similar tools. To add further flexibility, the equipment can be connected to a cloud-based network so that production staff can manage the changeovers remotely from any location. 

Automating Production-related Processes 

Automation is not just confined to the production line. It can simplify and speed up critical processes that keep businesses moving forward - time-consuming processes like data entry or transfer, order processing or handling customer enquiries. Automation takes away the repetitive work and lets employees concentrate on the jobs that really matter. 

Automation also offers scale, enabling manufacturers to reduce capacity in a downturn or scale up to meet new demands. Either way, production staff can be confident that the processes will continue with the same consistency and quality.  

Automation throughout the order-to-production process gives manufacturers the agility to compete effectively in global markets where automation and real-time responsiveness are becoming the norm. 

Software is the Key to Competitiveness

Software and data are essential components of efficient industrial automation. The data available from automated production processes enables manufacturers to plan, manage, prioritise and scale operations effectively. 

The right MRP software can provide full visibility of manufacturing operations and can be programmed to provide alerts that minimise downtime or eliminate the risk of running out of essential materials. With flexible automation solutions, software can also be used to plan and scale up production quickly to take advantage of new market opportunities. 

Transforming Productivity

Industrial automation has the potential to continue improving productivity and competitive advantage as global manufacturing continues to recover from the pandemic. 

In the United States, for example, manufacturing output fell at a 43-percent annual rate after the pandemic began – the largest decline since World War II according to the  US Bureau of Labor Statistics, However manufacturing output continued to grow steadily through the second quarter of 2022 and was 3.5 percent above the level in the fourth quarter of 2019, the last quarter not affected by the COVID-19 pandemic. Labour productivity in manufacturing was 4.7 percent higher in the second quarter of 2022 than in the fourth quarter of 2019.

Adding these figures to the data on investment in automation, the results are a strong indication of the impact of labour efficiency and automation on manufacturing performance.