Manufacturing automation will change our economic trajectory

Manufacturing and automation is now more top of mind than ever before. As Industry 4.0 takes root in businesses across the globe, the opportunity to embrace highly advanced technology and new, forward-thinking ways of working has never been greater. From smart cities and cashless payments to autonomous vehicles, there is no shortage of buzzworthy, headline-grabbing advances in modern industry.

One innovation that has become particularly important is intelligent manufacturing or smart factories. A combination of cyber-physical systems, automation and the Internet of Things (IoT), these facilities have the potential to rapidly transform business. Therefore, it should come as no surprise that Australia has identified and embraced the benefits that this industrial wave holds. Automation adoption among Australian manufacturers has picked up substantially in recent years. According to the Australian Manufacturing Forum, there are around 83 robots per 10,000 employees in the country.¹ Although small compared to some nations, it still trumps the global average of 74 robots per 10,000 employees.

McKinsey has also identified the economic potential that the rapid introduction of robots could hold for the country. In its 2019 report ‘Australia’s automation opportunity: Reigniting opportunity and inclusive income growth’², the agency noted that this opportunity could add between $1.1 trillion and $4 trillion to the economy over the next 15 years, providing every Australian with $4000 to $15,000 in additional income per year by 2030.

“As the country faces a modest 2% GDP growth this year, and some economists speculate that the country could even face a recession in the wake of the recent bushfires and the coronavirus (COVID-19), is it perhaps time that Australian manufacturers grab hold of this automation potential and reshape the industry?” asked James McKew, Regional Director at Universal Robots.

Curbing economic concerns

As close economic allies, China’s halt on production has had significant impact on the local supply chain. Here, McKew notes that advancements in AI, and specifically cobotics, can be used in areas where it is unsafe for humans to work — or more simply Australian workers are unwilling to do the monotonous tasks to which cobots are so well suited.

“One of the latest and most exciting robotic breakthroughs, collaborative robots or cobots, enable businesses to improve cost efficiency, productivity and output quality. These intelligent tools foster a more inclusive workspace, too, by relieving workers from strenuous, repetitive and sometimes dangerous tasks so they can focus on higher-value assignments,” said McKew.

Cobots are user-friendly, flexible, compact and safe, and have a lower TCO compared to traditional industrial robots. TCO includes both direct and indirect costs, including maintenance, factory floor upgrades, ease of deployment, employee training and safety barriers, all of which are factors that typically apply to traditional industrial robots. Cobots are also less costly to set up, which further makes them a financially attractive option for manufacturers turning to automation for the first time.

What can we learn from COVID-19?

Besides finding a vaccine or a cure, automation has now also been lauded as one of the safest ways to bridge the gap between the virus and service delivery. In light of the global COVID-19 outbreak, the opportunity exists to further understand and implement automation across the country, placing Australia in a stronger manufacturing position and improving its global competitiveness rank.

“The World Economic Forum’s 2019 Global Competitiveness Index revealed that those economies that have invested in innovation capabilities are best placed to revive productivity and weather a global slowdown,” said McKew.

While Australian manufacturers are lagging slightly behind global and regional peers in Industry 4.0 adoption — compared to Korea’s 631 robots per 10,000 employees — the country is renowned for its high number of SME and micro-businesses in local manufacturing. “Many of these producers are hampered by costs, which could reduce as the uptake of automation on the factory floor increases. To better compete as a major player in global supply chains, they should embrace the digital transformation with haste,” said McKew.

McKinsey supports this notion, estimating that between 25% and 46% of current work activities in Australia could be automated by 2030, helping to drive a renaissance in productivity, income and economic growth.

Innovation as a failsafe

As pharmaceutical companies are gearing up towards a possible increase in production while new solutions come to the fore, robotics will become a pivotal gear in the manufacturing chain. Robotics in the pharma industry performs a wide range of tasks: from packaging of medical devices and implants to assisting in surgeries. Robot arms can be used for mixing, counting, dispensing and inspection to deliver consistent results for business-critical products. They can also be used for sterile handling and assembly of the small, delicate parts that are used in prosthetics, implants and medical devices.

Utilising robotics and Industry 4.0 technologies, the pivot to intelligent manufacturing may just be the solution that helps countries in beating coronavirus now and future viruses that might arise.

References

1. Balinski B 2019, Australian robotics adoption: where does it stand and why does it matter?, Australian Manufacturing Forum
2. Taylor T, Carrigan J et al 2019, Australia’s automation opportunity: Reigniting opportunity and inclusive income growth, McKinsey & Company