Industry in the time of robots
26 Nov, 2019

Industry in the time of robots

An in-depth analysis of the barriers and challenges surrounding automation in modern manufacturing.

Automation is creating new opportunities for safer, cleaner and more productive work environments. In the face of this change, the primary objective of manufacturers remains the same. They must keep globally competitive by saving time, reducing costs and responding more effectively to customer demands. Mobile robots are already widely used in manufacturing facilities and centers. Here, they can help optimize order picking, cycle counting, and material and product movement. Deploying a new generation of smart autonomous vehicles with sensor technology can provide even further opportunities for optimization.

However, to gain optimal value from AMR, businesses must be confident in the benefits of this new technology and fully understand the potential barriers to implementing it. To find out more, we reached out to top level decision makers from across the world including at DHL, Toyota, Keurig and Siemens*. Not only did we gain a comprehensive understanding of the challenges and barriers today’s manufacturers face as outlined in this report. But we were also able to recognize five clear maturity profiles of business leaders in relation to their adoption of supply chain automation.

Thomas Visti, CEO


*We spoke to 117 US business leaders across a variety of industries including Automotive, Electronics, 3rd party logistics and FMCG. The report was complemented with 20 interviews with global management representatives from manufacturers and distributors including DHL, Toyota, Siemens and Keurig. Further insight was gathered from desktop research and analysis of publicly available information relevant to the objective of the study

Meeting market demands with innovation

As the pressure increases on manufacturers to keep production high and costs low, while consumer and market demands fluctuate, supply chains are becoming increasingly complex.

Add to the picture a shrinking workforce, changing legislation and stiff foreign competition, it can feel like business is no longer about competing but survival.

In order to ensure a competitive edge, business leaders must invest in futureproof technology and prioritize responsive processes. However, while automation has transformed manufacturing over the years, there are still implementation gaps in the supply chain. Autonomous mobile robots have the potential to provide significant business value here, by facilitating a lean, optimized supply chain. In fact, the vast majority of industry leaders we spoke to expect AMR to have a positive impact on the future of their industry.

Most also believe it will be realistic to implement AMR into their internal logistics within the next five years, if not sooner. However, while the adoption rate of AMR varies between industries, one thing is unanimous – investment in innovation sees no sign of slowing. Barriers that could delay or prevent implementation – such as unclear business value, workforce competencies and cyber security concerns, must be addressed.

Executive Summary

Our report highlighted three key areas where business leaders faced challenges to the implementation of AMR:

01: Unclear business value

While early adopters of AMR have seen real and measurable results, there can be a reluctance from some manufacturers to invest in technology while it’s still in its infancy. A lack of clear insight into the business value of automation can drive this. But as old-fashioned processes struggle to keep up with increasingly complex supply chains, business leaders must prioritize gaining this insight, or run the risk of being left behind.

For businesses to keep competitive on a global playing field, logistics processes must get increasingly lean and responsive.

The greater the role of warehousing services and internal transportation, the more important optimizing operational efficiency and productivity is. And while AMR can help, tightening margins and cost-cutting pressures are keeping manufacturers from investing in new technology. They want to see a clear and short-term ROI. In fact, 88% of business leaders from our study said concerns surrounding ROI speed was currently slowing their automation attempts down. Getting a better understanding of the business value of AMR is essential for manufacturers who want to compete

Our research found three clear barriers to creating a clear business value:

Difficulties estimating ROI

Implementing AMR can provide significant business value. Benefits range from optimizing labor and operational costs, to increasing productivity, accuracy and efficiency.

However, increasingly complex and fast changing markets can make it difficult to calculate accurate cost and benefit values. This in turn, prevents the projection of a reliable ROI, hindering attempts for high level buy in. Our report showed that 75% of business leaders understand the positive effects of AMR in the workplace. 59% believe AMR will help them reduce costs. Yet, more than half still have a hard time making a clear business case.

Varying business set ups

Automation is not one-size-fits-all. So, business leaders must allocate enough resources to fully scope the optimal application of AMR.

Components that can vary include floor layout, workforce capabilities, finances, industry trends and geography - to name a few. This variance is an overarching concern for manufacturers in the US. 75% of those we surveyed said that their processes might be too changeable or low volume for automation to be worthwhile. 65% also said they had medium to high concerns about retrofitting their facility space for automation. A lack of relevant case studies makes this harder yet. Leaders may be convinced of the business value of robots in another operational set-up, but not their own.

Problems giving value drivers

Implementing new technology such as AMR is often classed as a technical or engineering investment.

Instead it should be seen as a tool to aid the business as a whole. This is hard without an understanding of the value drivers of AMR. For example, 82% of all respondents said optimizing processes was a top business challenge, yet they did not think automating further would give a high enough ROI. Other key value drivers - such as a reliable flow of materials and 24/7 supply chain - are also not always accounted for when creating a business case. While early adopters can see a clear competitive advantage, innovation must be business lead.

02: Workplace concerns

Today’s supply chains must be innovative, flexible and high-tech in order to keep up with fluctuating market demands. This puts tough pressure on manufacturers to operate in new proactive ways while keep safety standards high. While AMR can improve processes, a competent and willing workforce is needed to complement this technology. Our report found three clear barriers to achieving this.

At a time when business challenges can seem impossible to predict, let alone overcome, automating processes can give manufacturers an essential competitive edge.

However, employers might find themselves in an uncomfortable position. What if the workers they need to work alongside the technology are resistant or incapable? What if they don’t think it’s safe? Our report showed that while manufacturers do want to automate further, a lack of qualified staff, workforce resistance and safety concerns are delaying this. 60% saw hiring and recruiting staff with relevant automation competencies as a business challenge, and the second biggest barrier following ROI.

Our research found three clear barriers to creating a clear business value:

A lack of qualified staff

While AMR can play an important role in lean manufacturing, automation alone cannot, and will not, be a silver bullet.

A variety of complementary human skills are essential for optimal results. These could range from preventing security breaches and technological malfunctions, to programming and performance monitoring. However, 64% of all respondents said a lack of qualified staff prevented them from intensifying the automation of their business. What’s more, we can see that the business leaders who are most confident in their workforce have already implemented autonomous robots. Those with the most concerns are unlikely to do so for another two to five years, running the risk of falling behind.

Workforce resistance

It is estimated that more jobs will be created from the implementation of robots, than will be replaced.

However, there is still a clear and understandable fear on the shop floor about what automation really means to the workforce. It’s therefore reasonable that manufacturers may be reluctant to implement new technology if they think it could lead to decreased staff productivity or morale. Employers might also be concerned that employees could physically damage or hack the units. Though more than 40% of the surveyed business leaders do not see AMR as a mechanism to reduce labor costs, employers can find themselves vulnerable if they don’t address these issues quickly and appropriately.

Safety concerns

When considering any changes on the shop floor, safety must be a serious consideration.

In fact, 72% of manufacturers said collisions and other shop floor accidents were either a very challenging or challenging business issue. Therefore manufacturers should look to AMR, which can actually help keep staff healthy and safe by taking on repetitive, risk-prone work. 63% said they thought AMR would help improve worker safety

However, the increasing working relationship between humans and autonomous mobile robots can create new complications. Employers may feel hesitant to implement technology if they, or their staff, are not completely comfortable with their mobility and autonomy. If manufacturers want to benefit from these next-generation robots, they must address safety challenges.

03: Digital vulnerabilities

System security is an understandable concern for business leaders wanting to implement digital technology in the workplace. They are squeezed by the need to innovate, yet at the same time must safeguard their business and staff. In order to benefit from the business gains that automation can provide, decision makers must be fully aware of the security challenges that must be overcome.

Since the implementation of computers in the workplace, there have always been concerns surrounding digital vulnerabilities.

So, it’s understandable that an increasing need for automation on the shop floor can also generate worry.

In fact, while 78% of our survey respondents said they are looking to implement AMR on the shop floor in the next two years, nearly 82% of them highlighted concerns related to the cyber security of these interconnected systems.

However, warehouse automation is now a necessity for businesses to scale, compete and survive. The use of autonomous mobile robots in warehouses and factories is set to accelerate over the next five years, so issues surrounding safety and security must be addressed sooner, rather than later.

Our research found three clear barriers to overcoming these digital challenges:

A vulnerable, online supply chain

An isolated malicious attack is a problem, an entire fleet of hacked autonomous mobile robots is a disaster.

As supply chains become more digital and IoT becomes more prevalent, vulnerability to cyber attacks increases. Interconnected devices and systems mean that a localised attack can have rapidly spreading effects on an entire company.

In fact, our study showed that while a 24/7 ‘always on’ supply chain is a huge reason many business leaders want to automate, 40% are concerned about the security challenges this could bring.

Worries surrounding the vulnerability of operating systems can delay advancement. 47% said they would wait until the technology was further proven and established before implementing.

Unauthorized access to data

Sensitive data stored in the cloud has always been vulnerable if not safeguarded properly.

This is no different with AMR, which share data between themselves and other operating software in order to react intuitively. Here, lax security systems and flaws leave businesses vulnerable to intellectual property theft. While safeguarding measures can help prevent this, our report showed that business leaders may not have a full understanding of these.

In fact, of the report respondents who outlined that concerns about digital vulnerability would prevent them from implementing AMR, 38% of those said they were not confident they fully understood the technology landscape.

A lack of safeguarding resources

Adequate cyber security measures can help alleviate the above concerns. However, there must be also be adequate resources to implement, maintain and pay for these.

Further financial resources and a security savvy workforce must also be available in order to respond rapidly, should there be breaches. In fact, our report showed that half of the respondents who were concerned about cyber security, also said they also felt they lacked the adequate relevant talent in their workforce. AMR adopters who do not consider safeguarding issues surrounding the entire AMR lifecycle – from pre-purchase to disposal - can leave their company and staff vulnerable.

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