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Automation: Not Just For The Shop Floor

Tue, 12/03/2013 - 10:58am
Tim Haney, Director, Manufacturing Vertical, Information Services Group (ISG)

Robotic technology and automation has revolutionized the manufacturing sector. Today, the automation of an increasingly broader range of knowledge-based tasks and functions is driving the next generation of change on the shop floor.

As we’ve seen, automation is transforming the outsourcing industry and rendering the traditional model of labor arbitrage obsolescent. Low-cost, high-skilled workers are becoming less of a competitive advantage, and where work is performed is becoming increasingly irrelevant.

We’re seeing the impacts of automation in a number of industry sectors — in insurance, for example, software programs can take on sophisticated underwriting tasks; healthcare providers are using programs to automate the review of x-rays and increase the productivity of radiology labs.

While receiving relatively little attention, this new wave of knowledge automation has the potential to make a similar impact on the manufacturing sector. Routine, structured tasks such as monitoring equipment or production processes — tasks that have traditionally required human intervention by onsite technicians — are becoming increasingly automated. This creates the potential not just to optimize existing production and service delivery models but to transform them. 

As automation and other factors continue to erode the comparative advantage of labor arbitrage, current manufacturing jobs could be increasingly repatriated from low-cost manufacturing centers such as China and moved to centers closer to customers. The changes we’ve seen in the past 20 years as a result of robotic technology and automation could be followed by a period of equally dramatic changes as automation extends further into the knowledge sector and further redefines the production process. While tomorrow’s jobs will clearly require new skill sets and be very different from what they are today, it’s increasingly clear that  the fundamental, centuries-old industrial model built on the foundation of cheap labor is rapidly being undermined by smart machines. 

Implementing the next wave of automation into the manufacturing sector will require the ability to integrate increasingly complex and disparate solutions into an integrated whole. It will also require integrating R&D and aligning back office automation of information to shop floor automation of production. Data captured through automated processes will need to be analyzed and used to enable further refinement. It will also require the strategic vision to understand what that “integrated whole” should look like and the best path to get there.

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