The rise of robotics in manufacturing
Robotics are an increasingly popular investment in manufacturing sectors, as business owners and product developers look for ways to improve efficiency, reduce costs and streamline assembly processes.
As technology develops and become more affordable, reliable and accessible for the average manufacturing business, robotics are a natural area for investment to grow. This trend is supported by a number of recent studies into manufacturing processes and the technology that improves operations.
The growing value of manufacturing robotics
The global revenue of the industrial robotics market is forecast to increase beyond US$40 billion within the next five years, according to a new report by Grand View Research. In particular, the technology was used most commonly in the automotive industry in 2013, with this trend forecast to continue through to 2020.
A similar report from the Boston Consulting Group (BCG) found that annual growth of investments in the robotics sector averages about 2 to 3 per cent year-on-year, with this expected to influence lower labour costs across the globe. As manufacturers invest in high-tech robotic solutions, there is often less need for human workers to perform certain tasks.
Because of the increased investment in robotics, the total cost of manufacturing labour is forecast to fall by an average of 16 per cent by 2025 across the world's 25 largest economic markets.
The BCG robotics study was released as part of ongoing research on the effect advanced technologies are having on manufacturing across the globe. Recent surveys within this program found that 73 per cent of manufacturing executives at companies with sales of least $1 billion believe their companies will increase investments in automation or other advanced-manufacturing technologies by 2020.
Although industrial robots have been utilised in manufacturing sectors for many years already, robotics currently contribute to an average of approximately 10 per cent of manufacturing tasks, according to BCG. By 2025, this is expected to increase to 25 per cent for all manufacturing sectors worldwide.
Why are robotics becoming more popular?
There are a number of factors contributing to the interest in robotics, including growing labour costs, increased demands and a rising need to streamline processes. A focus on worker safety is also having an impact, according to BCG.
As consumers and businesses place more emphasis on quality, manufacturers need to find ways to improve efficiency and processes in order to ensure survival in a competitive manufacturing sector. Robotics are just one area that offers fast and effective answers to these demands.
"As labor costs rise around the world, it is becoming increasingly critical that manufacturers rapidly take steps to improve their output per worker to stay competitive," said BCG Senior Partner Harold L. Sirkin.
"Companies are finding that advances in robotics and other manufacturing technologies offer some of the best opportunities to sharply improve productivity."
Another factor influencing the increased popularity and demand for robotics in manufacturing is declining cost. According to BCG, the average cost of an advanced robotic spot welder has dipped by 27 per cent since 2005, and is likely to fall by another 22 per cent in over the next decade.
Over the same time, the performance of robotics systems, in regards to flexibility, speed, safety and efficiency, is also expected to improve. The combination of lower prices and better outputs should accelerate the time it takes for robots to become a reliable alternative to labour across different sectors.
"For many manufacturers, the biggest reasons for not replacing workers with robots have been pure economics and technical limitations," explained BCG Partner Michael Zinser.
"But the price and performance of automation are improving rapidly. Within five to ten years, the business case for robots in most industries will be compelling, even for many small and midsized manufacturers."
Where are the key growth markets for manufacturing robotics?
Asia Pacific was a key robotics market in 2013, according to Grand View Research. However, China is expected to become a global leader in robotics within a few short years.
In 2014, some 36,860 industrial robots were sold in the Chinese market, up 36 per cent on an annual basis, according to the China Robot Industry Alliance. Currently, China represents the biggest market in global robot investment, yet lags behind its peers in regards to robot density.
According to the International Federation of Robotics, there are just 30 robotic systems per 10,000 manufacturing workers in China, compared with 437 in South Korea, 323 in Japan, 282 in Germany and 152 in the US.
Beyond these markets, investment in advanced technological solutions is growing significantly across a range of nations. BCG predicts strong increases in robotic activity across China, Japan, South Korea, Thailand, Mexico and Brazil.
"Regardless of whether it's time to invest in next-generation robots, manufacturers everywhere should start preparing," Mr Sirkin added.
"They need to understand how costs and automation technologies are changing in their industries and what their competitors are up to. They also need to start training their workforces for new skills. The coming robotics revolution could significantly reshape the global manufacturing landscape."
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