The manufacturing and
robotics sectors have become tightly intertwined in recent years, thanks to the
rapidly growing importance of factory automation.
On factory floors ranging from relatively
small machine shops to giant automobile plants and electronics factories,
computer-driven equipment plays a vital role in manufacturing worldwide.
The sophistication of the equipment ranges
from simple computer-aided machinery that cuts fabric prior to it being sewn
into final garments, to robots that make highly accurate and sophisticated
welds in car factories, to robots that can rapidly assemble tiny electronics
components and solder them in place with blazing speed and great accuracy.
The First Industrial
Robot
The first
industrial robot to be installed in a major manufacturing plant was probably a
machine named Unimate #0001, utilized at a General Motors diecasting plant in
Trenton, NJ beginning in 1959.
The
primary force behind the Unimate was an American named Joseph Engelberger
(sometimes referred to as the “father of robotics”) of the Consolidated
Controls Corp.
of Bethel, CT.
These
efforts led to the establishment of a related firm, Unimation, Inc.
By the late 1960s, automobile manufacturers
were racing to install robotic units such as automated welders in their plants
worldwide.
As the decades went by,
Japanese and German firms grew to be world leaders in factory automation equipment
and robotics.
This trend was directly
tied to the growing dominance of Japanese and German
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The manufacturing and
robotics sectors have become tightly intertwined in recent years, thanks to the
rapidly growing importance of factory automation. On factory floors ranging from relatively
small machine shops to giant automobile plants and electronics factories,
computer-driven equipment plays a vital role in manufacturing worldwide. The sophistication of the equipment ranges
from simple computer-aided machinery that cuts fabric prior to it being sewn
into final garments, to robots that make highly accurate and sophisticated
welds in car factories, to robots that can rapidly assemble tiny electronics
components and solder them in place with blazing speed and great accuracy.
The First Industrial
Robot
The first
industrial robot to be installed in a major manufacturing plant was probably a
machine named Unimate #0001, utilized at a General Motors diecasting plant in
Trenton, NJ beginning in 1959. The
primary force behind the Unimate was an American named Joseph Engelberger
(sometimes referred to as the “father of robotics”) of the Consolidated
Controls Corp. of Bethel, CT. These
efforts led to the establishment of a related firm, Unimation, Inc. By the late 1960s, automobile manufacturers
were racing to install robotic units such as automated welders in their plants
worldwide. As the decades went by,
Japanese and German firms grew to be world leaders in factory automation equipment
and robotics. This trend was directly
tied to the growing dominance of Japanese and German automobiles, and the
decline of the American auto industry.
Meanwhile,
China has official hopes to be a world leader in factory automation
technologies by 2025, and it is investing accordingly under its “Made in China
2025” plan. America is attempting to
improve its global stance in industrial robotics and automation through the
establishment of “Advanced Robotics Manufacturing Innovation” centers, which
have attracted backing from both government and corporate funds.
The ever-growing
drive for efficiency and quality, both at the factory and in the supply chain,
will make automation technologies more and more vital. Robotics and automation assist manufacturing
in a wide variety of ways, far beyond final assembly. Robots can control the warehouse, delivering
parts to the factory floor on an as-needed basis. Computers and sophisticated software help to
design, model and test products prior to their actual manufacture, and then
upload final instructions to computer-driven factory equipment. The design of components and sub-assemblies
are, to a dominant degree, conducted through computer-aided design tools (often
called CAD-CAM) that can be tightly coordinated with the factory floor.
Global Manufacturing: The worldwide manufacturing
sector is estimated by Plunkett Research at $14 trillion (in terms of value
added) for 2019.
Manufacturing Revenues and Employment in the United
States: In the U.S.,
analysts, executives and government can clearly see that manufacturing is on
the upswing. A bigger question, however,
is whether or not American manufacturing is perhaps entering a period of
renaissance. The answer is both yes and
no. Manufacturing employment in America
has increased modestly in recent years, including growth of about 152,000
during the 12 months ending in July 2019.
There were approximately 12.9 million people employed in manufacturing
in the U.S. as of mid-2019, down dramatically from 19 million in 1980.
The American
manufacturing sector will benefit over the long-term from a broad range of
trends, including trends in global trade, low natural gas prices, a growing U.S.
population, and strength in certain key industries, including machinery,
pharmaceuticals, health technology, chemicals, petroleum products, aerospace
and equipment for transportation and construction. However, advances in factory productivity,
including growing investment in robotics, will dampen job creation in
manufacturing plants. In other words,
factory output can increase faster than factory employment due to growing
investment in robotics and factory automation.
Improved supply chain practices will also enable manufacturing to boost
output faster than growth in factory jobs.
The American
manufacturing sector will generate about $2.21 trillion in value-added during 2019,
equaling about 11.6% of GDP. This is
down significantly from 20% of GDP in 1980.
What is “Value-Added?”
In manufacturing,
value added is the increase in the price (value) that a company adds during the
manufacturing process. For example, a
window manufacturer may purchase sheets of glass, raw aluminum, plastics and
paints from its suppliers. It fabricates and combines these materials to create
a finished window. The value added is
the difference between the cost of the raw materials and the price of the
finished window. Value added is a common
measure of manufacturing output.
Future Drivers of
Manufacturing Growth in Developed Nations, Including The U.S.:
1) A substantial research & development (R&D) base
2) Engineering and scientific expertise
a) A substantial base in higher education
3) Regional manufacturing centers
a) Logistics and supply chain support and
infrastructure
4) A substantial base in advanced technologies
a) Robotics and factory automation
b) IT networks
c) Additive manufacturing
Source: Plunkett Research, Ltd.
Today, the growing
use of robotics as well as the rising wages and other costs in offshore
manufacturing centers, particularly China, is fueling intense debate about the
future of global manufacturing in general.
Supply chain managers on the corporate side, along with analysts and
planners on the government and economic side, are attempting to develop
strategies for dealing with the evolving manufacturing segment on a
nation-by-nation basis. To begin with,
costs are clearly rising substantially in China, which has long been the
world’s manufacturing growth engine. Wages
there have been rising steadily, over a period of several years.
At the same time,
demographic changes are having a significant effect. Due to China’s lengthy history of “one child
per family” regulations, the Chinese workforce began shrinking in number in
2011, while the senior segment of the population is growing at a rapid
clip. Put another way, China is facing a
massive aging problem (far more challenging than the aging population in the
U.S.), while the number of young workers available to fill the factory ranks is
tipping into serious decline.
Due to the
development of a large network of universities across China, a growing
percentage of young people are obtaining college degrees. These better-educated people, upon entering
the workforce, generally do not want to work on the manufacturing floor, which
they feel is beneath them.
These trends are
having multiple effects on manufacturers in China. 1) As discussed above, firms are paying much
higher wages than they did in the recent past; 2) There is a national emphasis
on increased investment in robotics and more to factory automation, in order to
reduce China’s reliance on human workers; 3) The bigger companies are becoming
more multinational in nature, moving much of their basic manufacturing to
lower-wage nations such as Vietnam and Bangladesh; and 4) Chinese manufacturers
are moving up-market, where the manufacture of technically-advanced products
such as aircraft creates the ability to pay higher wages while taking advantage
of the growing cadre of engineers who are graduating from China’s universities. The Chinese government has an official
strategy, designated “Made in China 2025,” of boosting investment in high-value
technology-based manufacturing industries, including aerospace, semiconductors,
automobiles, pharmaceuticals and robotics.
While China struggles
to adapt to its changing costs and demographics, manufacturing has been booming
in many lesser developed nations that offer lower costs for real estate and
hourly wages. Such nations are found in
Asia, including The Philippines, Laos, Cambodia, Pakistan, Bangladesh and
Vietnam. However, Africa is likely to
become one of the world’s basic manufacturing hubs for unsophisticated items
such as apparel. Africa offers an
abundance of raw materials, one of the world’s largest supplies of young
workers, a rapidly growing population, a growing transportation infrastructure
well positioned to serve markets in Europe, Asia and the Americas, as well as
extremely low costs.
In Asia’s more
developed nations, particularly Thailand, Taiwan, Korea, and Singapore,
manufacturing of high value items has grown at a soaring rate over the long-term,
including automobiles, electronics and pharmaceuticals. India is often thought of as a center for
business processes outsourcing, but it also has a significant and growing
manufacturing base. To a large extent,
this manufacturing is in heavy industries, such as steel and petroleum products. However, the manufacture of sophisticated
products, such as pharmaceuticals, has become significant.
One of the biggest
beneficiaries of China’s rising costs is Mexico. Mexico’s manufacturing sector has been
perfectly positioned to grow, thanks to a) its proximity to U.S. markets; b)
NAFTA—the North American Free Trade Agreement; c) existing low-cost
transportation infrastructure for shipments to and from the U.S.; and d) the
relative ease of doing business between U.S. and Mexican companies. Mexico is positioned perfectly to grow with
the recent trends of reshoring and nearshoring, where many U.S. companies want
their manufacturing plants and suppliers to be closer to home. Recently, the Mexican manufacturing sector
has also been boosted by the availability of shale natural gas that can be
imported from the U.S. at low prices.
Gas exports from the U.S. to Mexico increased dramatically along with
rising gas production from American shale wells. The Trump administration vowed to focus on
renegotiating NAFTA, with the hope of making it more beneficial to American
businesses.
Robotics and Factory Automation:
The International Federation of Robotics (IFR)
estimated the total, worldwide base of operational industrial robots at the end
of 2017 was about 2.1 million, and this base will expand to approximately 3.1
million by the end of 2020. The global sales
of industrial robots during 2018 was placed by IFR at 384 thousand units.