It has been decades since industrial robots first began to be used on assembly lines around the world. However, in many industries, it’s still cheaper to use manual labor than it is to own, operate and maintain robotics, so their use is still limited. That situation is poised to change, according to new research from Boston Consulting Group (BCG), and companies should take steps to prepare accordingly.

 

The prices of hardware and enabling software are projected to drop by more than 20 percent over the next decade. At the same time, the performance of robotics systems is expected to improve by around five percent each year. The result will be that as robots become more affordable and easier to program, a greater number of small manufacturers will be able to deploy and integrate them more deeply into industrial supply chains, Harold L. Sirkin, senior partner & managing director, Michael Zinser, partner & managing director, and Justin Rose, partner & managing director, at BCG write in a new report, “The Robotics Revolution: The Next Great Leap in Manufacturing.”

 

Many industries are quickly reaching an inflection point at which, for the first time, an attractive return on investment is possible for replacing manual labor with machines on a wide scale, the authors explain. They project that growth in the global installed base of advanced robotics will accelerate from around two percent to three percent annually today, to roughly 10 percent annually over the next decade as companies begin to see the economic benefits of robotics. In some industries, more than 40 percent of manufacturing tasks will be done by robots. The BCG authors expect this development will drive dramatic gains in labor productivity in many industries, and lead to shifts in competitiveness among manufacturing economies as fast adopters reap significant gains.

 

Although robotics adoption will—of course—vary by industry, economy and location, BCG explains that companies need to prepare now. That’s because investing in expensive robotics systems too early, too late or in the wrong location could put manufacturers at a serious cost disadvantage against global competitors.

 

The authors at BCG recommend executives take several actions to prepare for future robotics. As would be expected, they recommend executives be well aware of what their competitors are doing with robotics and understand what they will do. It’s also imperative they stay current with the evolving capabilities of advanced robotics systems so they understand how quickly innovation is resolving technical barriers that, so far, have inhibited the use of robots in their industry, the authors state.

 

There are two tactics that particularly caught my attention. The first is to prepare the workforce. As more factories convert to robotics, the availability of skilled labor will become a more important factor in the decision concerning where to locate production. Tasks that still require manual labor will become more complex, and the ability of local workforces to master new skills will become more critical. The authors explain that it’s vital for companies to prepare their workforces for the robotics revolution, but also to work with schools and governments to expand training in such professions as mechanical engineering and computer programming.

 

Secondly, executives must prepare the organization. Even if the economics don’t yet favor major capital investment, executives should start preparing their global manufacturing operations for the age of robotics, the authors urge. That includes making sure networks are flexible enough to realize the benefits of robotics as installations become economically justified in different economies and as suppliers automate.

 

Considering the complexity and ramifications of introducing, or adding, robotics, manufacturers must be proactive. Once the cost inflection point arrives, robotics installation rates most likely will accelerate rapidly. As is the case with any innovative technology, companies which are prepared to act quickly will be able to rapidly gain global advantage in manufacturing.

 

What are your thoughts on the potential future adoption of robotics? Is the most important step to work with schools to ensure the future workforce is ready for new career paths?