In broad terms, Manufacturing has developed through three phases:
- Steam powered manufacturing;
- Electricity powered manufacturing from the early 20th Century onwards;
- Increased and accelerating Automation from the 1970s onwards;
As we continue into the 21st Century we are on the cusp of the “Digital Revolution” transforming the factory floor.
“As we continue into the 21st Century we are on the cusp of the “Digital Revolution” transforming the factory floor.”
The BCG Researchers used 10 “Use Cases” to understand how technology would impact work across 23 manufacturing industries. These Use Cases were:
- Big-Data Driven Quality Control. Using algorithms with historical data to identify quality issues – resulting in fewer jobs for Quality Control workers, but increased numbers of industrial data scientists will be needed;
- Robot-Assisted Production. Flexible robots performing operations such as assembly and packing – reducing the number of people needed for repetitive tasks, whilst increasing the need for those that oversee the work of the robots;
- Self-driving Logistics Vehicles. Fully automated vehicles within the factory – fewer logistics personnel will be needed, but a small number of technicians will be needed to validate that that the vehicles are taking the optimal routes;
- Production Line Simulation. Assembly line simulation and optimisation – with a resultant increase in the need for industrial engineers and simulation experts;
- Smart Supply Network. Monitoring the entire supply chain for improving on decisions – with fewer operations planners being needed, but more supply chain co-ordinators;
- Predictive Maintenance. Remote monitoring of equipment – fewer service technicians will be needed, and more data scientists, systems designers and field service technicians will be needed;
- Machines as a Service. Manufacturers sell the use of a machine rather than the machine itself – leading to increases in production, sales and service staffing needs;
- Self-Organisation Production. Machines automatically co-ordinate their output and activity – with jobs lost in production, and created in data modelling and interpretation;
- Additive Manufacturing of Complex Parts. 3-D printing of complex parts with no need for assembly – with job losses in assembly and welding, whilst creating openings for 3D modellers and 3D Computer Aided Designers;
- Augmented Work, Maintenance, and Service. Fourth dimension facilities operating guidance, remote assistance, and documentation – creating jobs for industrial engineers, whilst lowering the number of service technicians.
“Predictions for the US economy indicate that the number of manufacturing functions that are automated will increase from 10% to 25%, by 2025.”
The research was based in Germany but has applicability to other countries. They concluded that the German economy would grow by an additional 1% per year as a result of the adoption of Industry 4.0. The net gains in employment would be a 5% over the current industrial workforce.
This is in line with predictions for the US economy and adoption impacts. Another BCG study indicated that the number of manufacturing functions that would be automated will increase from 10% to 25%, by 2025.
- As costs for robots fall and productivity increases, the number of humans working in manufacturing will not fall, overall;
- Many workers in the manufacturing sector will need to be retrained in order to fill the new posts that are created;
- The production and assembly jobs that remain (line workers) will be safer and less strenuous;
- The benefits from robotics and increased automation will not be evenly distributed (by nation).
BCG predict that the US, Canada, South Korea, Japan, and the UK that are already installing the most robots – and will benefit the most. Thailand and China are also priotising the installation of robots.
Three quarters of all robots deployed will be in the following applications:
- computers and electronic products;
- electrical equipment;
This will result in South Korea’s labour costs falling by 33% in South Korea.
In the US, China, Germany and Japan they will fall by 18 to 25%.
The slower adoption in Austria, Brazil, Russia and Spain will cause a relative decline in their cost competitiveness in manufacturing.
Sources: BCG.Perspectives, 28 September 2015, “Man and Machine in Industry 4.0”. Markus Lorenz, Michael Ruessmann, Rainer Strack, Knud Lasse Luth, Moritz Bolle. (c) 2015 Boston Consulting Group.
BCG.Perspectives, 23 September 2015. “The Robotics Revolution: The Next Great Leap in Manufacturing.” Harold L. Sirkin, Michael Zinser, and Justin Rose. (c) 2015 Boston Consulting Group.