The Rise of the Robots
Manufacturing was revolutionized in the 1980s when the first robots were introduced for the assembly line. Since then, robotic technology has become much more sophisticated and is used in every industry sector at multiple points of product development. Robots have even invaded the home!
Due to the increased use of robotic technology, average robot prices have fallen by 40-50 percent since 19901 and their ability to continue to operate for long periods of time in tasks that require accuracy continues to be improved with greater precision and control, enabling advances in manufacturing accuracy and productivity. As a result, the robotics industry is expected to grow at a rate of 10 percent annually over the next decade, from 2-3 percent today.2
Advances in robotics coupled with other geopolitical, economic and technological megatrends are driving the redistribution of value chains in many industries around the world. Production centers are moving closer to market for instance; often “reshoring” back from Asia Pacific and Latin America toward developed nations like the United States and Europe as the global wage gap continues to shrink (Chinese manufacturing wages rose on average by 15 percent annually between 2005 and 2011).3
A 2014 study by UK manufacturers’ association EEF and law firm Squire Sanders revealed that one in six UK manufacturers had reshored production in the last three years. In Europe, reshoring will also be aided by the European Commission’s recently published goal to increase manufacturing’s share of GDP from 15 percent to above 20 percent by 2020, returning its share to where it was 15 years ago.
As robots become cheaper, more dexterous and easier to operate they will continue to deliver improved productivity and reduce the need for outsourcing across many industries. According to the Boston Consulting Group, 2015 has marked the beginning of another robotics revolution.
The impact on industry
It is expected that four industries will spearhead this movement. These include computer and electronics products; electrical equipment and appliances; transportation; and, machinery – largely because tasks can be automated to dramatically reduce costs.
Alongside petroleum, coal products and primary metals, the plastics and rubber industry is expected to have robots perform 10-20 percent of tasks globally by 20254 – categorizing it as one of the most automatable sectors with adoption most likely to be seen in high-wage economies only.
Currently, robots are used across the plastics and packaging industries in injection molding and end of line processes, amongst others, as a means to automate and reduce costs by eliminating the need for operator intervention. Still, it’s estimated that approximately 86 percent of tasks in plastics and rubber-products plants could be automated – such as material handling, assembly, welding and machine operation – but manufacturing wages are expected to remain relatively low limiting the financial benefits of automation, especially in low-wage emerging markets.
As the global plastic packaging market grows – it is expected to reach $370 billion by 20205 – and consumers become more concerned with food security, safety and ultimately food waste, automation will move higher and higher on the investment agenda. This is especially the case for the food and beverage packaging sector which currently accounts for 69 percent of all packaging consumed globally.6 Integrated and intelligent automation solutions can provide process improvements, quality control and management, reporting and analysis,regulatory compliance, energy savings and manufacturing intelligence.7
In the near-term, robots are likely to be adopted only in high-wage economies in the plastics and rubber industry, but with future decreases in robotic prices this is expected to increase as greater flexibility, speed and efficiencies in packaging production operations become clearer.8
Aside from the obvious benefits in production, robots have also proved valuable in many other applications – from lawn mowing and floor cleaning to medical surgery and bomb detection – resulting in the population of industrial robots to be well over 1.5 million units today.9
2The Robotics Revolution: The Next Great Leap in Manufacturing, bcg.perspectives, https://www.bcgperspectives.com/content/articles/lean-manufacturing-innovation-robotics-revolution-next-great-leap-manufacturing/
3Made in America, Again, BCG, http://www.bcg.be/documents/file84471.pdf
4Industries and Economies Leading the Robotics Revolution,bcg.perspectives, https://www.bcgperspectives.com/content/articles/lean-manufacturing-innovation-industries-economies-leading-robotics-revolution/
5Plastic Packaging (Rigid Plastic Packaging and Flexible Plastic Packaging) Market for Food Beverages, Industrial, Household Products, Personal Care, Medical and Other Applications –Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2014–2020, WhatTech https://www.whatech.com/market-research/industrial/45738-explore-the-global-plastic-packaging-market-that-is-expected-to-reach-us-370-25-billion-by-2020
6Unwrapping packaging, Ernst Young, http://www.ey.com/Publication/vwLUAssets/Unwrapping_the_packaging_industry_
7Robots, Reality and Revolution, Raconteur, http://raconteur.net/business/robots-reality-and-revolution
8Industries and Economies Leading the Robotics Revolution, bcg.perspectives, https://www.bcgperspectives.com/content/articles/lean-manufacturing-innovation-industries-economies-leading-robotics-revolution/
9International Federation of Robotics (IFR), http://www.ifr.org/
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