Industrial automation solutions are usually pitched to high-volume, mass-market manufacturers or primary materials processors. This can range from consumer electronics and automotive assembly to timber, plastics, chemicals and metal products. While these sectors are somewhat disparate in terms of final goods produced, the fact that they all produce a relatively small variety of goods at a high volume is what unites them.

At the same time, manufacturers that already use automation solutions have a higher propensity to introduce more automation. If automation works in one business case, it’s likely that more automation can be applied to the same repeated processes and products without much worry that tasks – except those where skilled labor is required – will lead to a bottleneck or hold back production overall.

A breakdown showing the distribution of robotics stock in the United States, almost all of which represents low-mix, high-volume firms. Source: St Louis Fed.

This has led to an automation gap. Unfortunately, while mass-market firms have a higher tendency to automate, high-mix manufacturers have just as much of a tendency to avoid automation – even if they miss out on key benefits. Ultimately, this is because the costs often outweigh the benefits if there is a greater variety of products produced. They also sometimes avoid rethinking their processes because of the flexibility they have in relying on skilled labor. 

As it turns out, this order is coming to an end. Chief among the reasons for it are this: skilled labor is in ever-shorter supply. Not enough workers are gaining the skills needed to adequately replace those leaving the workforce, and unit labor costs have steadily increased over the last decade as high-mix manufacturers predominantly fall behind. Autonomous Manufacturing systems can help overcome this gap, and they’re coming along not a moment too soon.

Fearing Incremental Costs

High-mix manufacturers can be casually classified as those who process more than 100 products per year on the same line or those working on batches less than 1000. Obviously, there can be immense variation here – certain manufacturers could be processing many thousands of parts but still have a relatively high degree of changeover, while others can be processing much smaller batches with less changeover, but find themselves working on complex or high-compliance products (this is common in sectors like aerospace).

In fact, industries as varied as those found in “high-volume” sectors can be thrown in the high-mix bucket: everything from aerospace to earthmoving equipment, sheet metal and office furniture, structural steel, industrial machinery and more. Very often, high-mix manufacturers work B2B in building the core capital goods that keep the economy moving. 

This may actually be a cause of some of the “fear” that high-mix manufacturers have in the face of automation. While certain goods are produced with a long lifetime expectation, they are often practically designed, purpose-built and expected to meet very specific customer expectations. The needs from these products can not just change from batch to batch, but year to year, requiring a variety of different models for each target customer that generally don’t allow for rapid automation systems to take hold.

At the same time, any sufficient product mix means that automation systems must be flexible and adaptable – something they just haven’t been very good at up until now. Automation systems often rely on lower levels of precision in order to achieve higher throughput. In the types of industries with high-mix products, there may simply be no need to achieve greater volume, while changing over or reprogramming automation systems ultimately impose more labor than they save. 

Obviously paying a big-ticket engineer, programmer or consultant to redesign your process every few weeks saves less costs than simply paying skilled workers a decent wage, but the nature of the market today may simply mean that either of those options won’t be feasible into the future.

Don’t Want to Reinvent the Wheel?

This is where hesitance towards automation among high-mix manufacturers falls flat. It’s primarily the rigidity of many automation systems – their need for extensive re-engineering to adapt to any kind of changeover – that adds incremental costs for high-mix firms.

Fundamentally, this means that any automation system which can best serve high-mix firms will fundamentally require new technology to come online, and with new technology comes the common concerns about being burned by an “unproven” investment (learn more about the hidden costs of avoiding automation here).

At the same time, high-mix manufacturers are somewhat satisfied with many of their current production processes. In Q3 of 2020, manufacturers were primarily concerned with weakened sales, retaining a quality workforce, insurance costs, trade uncertainties and more. Technical capacity was rarely seen as a business challenge. 

Q3 2020 study of core manufacturer concerns, particularly related to COVID-19. Global uncertainty has its place, but technical capacity has been somewhat of a blind spot in overcoming pandemic challenges. Source: The National Association of Manufacturers.

While large firms are finally more optimistic about the future than smaller ones and the COVID hangover begins to wear off, the fact is that challenges for labor costs, quality, insurance, uncertainties and unpredictable demand all boil down to one thing: technical efficiency.

Increasing technical efficiency with the right automation solution is key, while it can be a profitable process, it also holds the potential to create many more great jobs as well.

Facing Falling Labor Productivity

Due to offshoring and concentration of mass manufacturing in China, Southeast Asia and Mexico, the remaining manufacturing base in North America has remained high-mix. While mass production firms have a higher propensity to both automate and concentrate around certain geographies, material resources or new labor pools, high-mix manufacturers rarely have the opportunity to leverage any of the same benefits without an edge on process technology. 

While the labor supply continues to dwindle in North America, the skilled labor supply is particularly at risk. With the beginning of baby-boomer retirements technically beginning in 2010 (as the first boomers were born in 1945), we have already seen a dramatic rise in unit labor costs and a relative decline in United States manufacturing – all the way to 25 points above index with no significant signs of a slowdown.

These trends are hard to avoid but easy to adapt to – you need to think about growing your technical capacity and flexibility, not just waiting on another cycle to pick your business back up. It won’t be long before things fall flat again.

With that in mind, robotic consistency and productivity can help augment your remaining skilled labor force where they simply may not have enough bandwidth to get the job done today. The improved consistency and quality of work, as well as the reductions in rework that come along with that, only help to improve both the productivity of existing skilled workers and their satisfaction with the jobs they do.

In fact, studies are also beginning to show that the introduction of robotics actually opens up new types of jobs and roles – ones in which humans themselves have more freedom and autonomy to decide how they want to work and achieve their goals, while also increasing both the profitability and employment roles of today’s leading manufacturers. With the current economic uncertainty, these kinds of solutions actually serve to light a candle, rather than “sit and curse the darkness”.

How Autonomy – Not Just Automation – Can Help

For industrial firms, automation can sometimes consume more energy than it requires. For high-mix manufacturers, this applies most of all – the variation of parts and the time required to program automation solutions will often significantly hamper return on investment. 

In this circumstance, however, autonomous manufacturing solutions offer new possibilities to manufacturing firms to reduce total costs and finally benefit from flexible automation solutions. If you add up increases in labor productivity, consumables savings, and the total cost savings that come on both fixed and variable costs, it’s hard to see where an autonomous manufacturing solution won’t simply be table stakes for many industrial firms in the future. 

So, whether it’s a robot, a machine or simply materials handling, finding solutions that can function autonomously – primarily through the use of localization or sensing mechanisms and AI-based decision making is critical. With this in hand, human skills can be imitated, while human productivity can be substantially augments for even small batched of product. All this is a big win for high-mix manufacturers.

Omnirobotic provides Autonomous Robotics Technology for Spray Processes, allowing industrial robots to see parts, plan their own motion program and execute critical industrial coating and finishing processes. Using 3D vision and AI in radically new Shape-to-Motion™ Technology, high-mix manufacturers can finally benefit from the power of robotics on never-before-seen parts with ZERO manual programming. See what kind of payback you can get from it here.