Tag: automation

OM in the News: Walmart’s Automation Journey Reveals the Real Challenges of Warehouse Transformation

For years, automation has been promoted as the future of warehouse operations. Walmart’s ongoing multibillion-dollar effort to automate its supply chain demonstrates both the promise and the reality of large-scale operational transformation. Walmart relies on over 140,000 warehouse workers to keep goods moving. It isn’t an easy job. A worker might walk 20,000 steps a shift.

The retailer is modernizing a network that supports more than 5,000 U.S. stores while attempting to keep nearly 200 supply chain facilities operating, reports The Wall Street Journal (Oct. 9, 2026). What sounds like a straightforward technology upgrade has turned into a decade-long lesson in OM.

Warehouse processes that seem simple to humans are often extraordinarily difficult to automate. Tasks such as removing products from cartons, sorting individual items, building store-ready pallets, and handling irregularly sized products require flexibility that robots still struggle to replicate consistently.

Walmart has invested heavily in automated storage systems, robotic arms, autonomous mobile robots, and advanced software. These technologies promise faster inventory movement, improved accuracy, lower stockout rates, and more efficient store replenishment. Yet implementation has revealed many operational hurdles. Robots require maintenance, packaging must be redesigned, legacy facilities need retrofitting, and suppliers must sometimes modify products so automated systems can handle them properly.

An interesting operations challenge is that Walmart is redesigning warehouses while they remain in service. Unlike a greenfield facility built specifically for automation, most of Walmart’s distribution centers were constructed decades ago. Integrating new technologies into existing operations adds substantial complexity and risk.

The case also illustrates a broader lesson about process improvement. Automation does not simply replace labor with machines. Instead, it changes the nature of work. While some manual tasks may decline, demand grows for technicians, engineers, and operators who can monitor, troubleshoot, and optimize increasingly sophisticated systems.

Walmart’s experience highlights that automation is a strategic capability, not a quick fix. Competitors such as Amazon have raised industry expectations for speed and efficiency, creating an automation arms race. Companies that pursue automation should be prepared for experimentation, setbacks, and continuous learning.

Walmart’s journey is a reminder that successful automation is not primarily a technology challenge. It is an operations, process design, workforce, and change management challenge.

Classroom Discussion Questions

  1. Walmart chose to automate existing warehouses while keeping them operational rather than building entirely new facilities. What are the advantages and disadvantages of this strategy from an OM perspective?
  2. Automation can improve productivity and accuracy, but it also introduces new costs such as maintenance, energy consumption, and specialized labor. How should managers evaluate whether an automation investment is truly successful?

Guest Post: Robots as a Service– Is Warehouse Automation Going Subscription?

 Dr. Jon Jackson, Associate Professor of Operations Management at Providence College, raises an interesting issue regarding warehouse robotics. Jon has created AI classroom exercises for each chapter of our text. They are found on-line in the Instructor’s Resource Manual.

Warehouse automation typically requires a significant upfront investment. But what if companies could rent the robots instead?

A recent Wall Street Journal article (August 17, 2026) highlights the growing use of subscription-based robotics in warehouses. Instead of purchasing robots outright, companies can pay a monthly fee to use them, potentially changing the economics of automation.

North American companies ordered nearly 18,000 warehouse robots worth $1.2 billion in the first half of 2026; both figures are up from 2025. Simultaneously, the average U.S. warehouse wage reached $26.85 per hour, up 41% over the past decade. Even with the higher wages, nearly 392,000 jobs remain open in the transportation, warehousing, and utilities industries. Together, these trends create strong incentives for companies to consider greater investment in warehouse automation.

Traditionally, investing in robots means committing substantial capital to equipment that may become obsolete or may not provide enough value to justify the investment. A subscription model changes that calculation by shifting some of the financial risk from a capital investment to an ongoing operating expense. Companies can avoid much of the upfront capital expense, scale automation up or down as demand changes, and potentially gain access to newer technology as it becomes available.

This flexibility could be particularly valuable in warehouses with seasonal or uncertain demand. Rather than purchasing enough robots to handle peak demand (and leaving them underutilized during slower periods), companies could potentially add robotic capacity when they need it.

There are trade-offs, however. Subscription fees may ultimately cost more than purchasing equipment outright, and companies become dependent on the robotics provider for technology, maintenance, and service.

From an operations perspective, “Robots as a Service” raises an interesting question: Should automation be treated as a capital investment or as a variable operating expense? As robotics technology improves, the answer may increasingly depend on how much flexibility a company values.

Classroom Discussion Questions

  1. When might renting robots be preferable to purchasing them?
  2. How does a subscription model change the risk associated with investing in automation?

OM in the News: AI-Based Robots

Should companies deploy robots at their plant if they could virtually reprogram themselves to perform new and different tasks, asks Industry Week (May 13, 2026)? We’re nearly at the end of the AI hype cycle, when suggestions for how to leverage the technology become less flashy and more realistic.

Now Siemens has just revealed Eigen, an AI agent that can replace manual coding or programming for programmable logic controllers, distributed control systems, and robotics applications, updating code or instructions to reflect new priorities and goals.

Siemens says that engineering and reconfigurations constitute 70% of the entire lifecycle cost of a robot. If, however, an AI agent like Eigen can shorten the time needed to make these adjustments, it makes the robot more efficient, and small and medium-sized businesses might be better able to afford deploying the technology.

“There’s a kind of new age of automation arising, because with AI assistance to program robots and PLCs, it means you could suddenly automate much smaller lot sizes on a good return of investment,” says the firm’s CEO of its automation division.

Eigen can help manufacturers deal with a lack of coders and programmers. Another Siemens exec adds “We don’t attract the best of the programmers to the manufacturing floor. … So getting programmers to come and code our controllers or robotic systems? That was a scale up bottleneck. Bringing in AI to reprogram things, reprogram the whole process, will be more game changing in the U.S. than in Germany, where I see when people with Master’s degrees on the manufacturing floor, which is not the case in the U.S. Humans must always remain in the loop, however. Agentic AI is like an orchestra and humans the conductors.”

In short, Eigen acts as an AI-agent that handles the tedious, expensive back-end coding of robotics, making automation flexible, cheaper and more accessible to smaller firms.

Classroom discussion questions:

  1. What is Eigen‘s role?
  2. What is the roadblock to more robotic use in small manufacturers?

OM Podcast #48: Cold Storage, AI, and the Future of Industrial Facilities

In this episode of the Podcast, Professors Barry Render and Misty Blessley sit down with David Aschenbrand, Executive Managing Director at Newmark, to explore how cold storage and temperature‑controlled facilities are evolving in today’s operations and supply chain environment. Drawing on his background across logistics, transportation, warehousing, and industrial real estate, David explains how cold storage facilities support food, pharmaceutical, and other temperature‑sensitive supply chains, and what clients look for when developing or operating these specialized buildings.

The conversation highlights how facility design decisions—such as location, building footprint, dock configuration, and proximity to ports—can directly affect labor availability, transportation efficiency, and long‑term operational performance. David shares insights on the growing role of automation and AI in industrial facilities, while emphasizing the continued importance of skilled trades and hands‑on roles that support these operations.
The episode concludes with a discussion of what rising labor costs mean for cold storage operators. Together, the hosts and guest offer a practical look at how operations management, facility design, workforce trends, and technology intersect in modern cold chain and warehouse environments.

 

TRANSCRIPT LINK
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Prof. Barry Render
Prof. Misty Blessley
Dave Aschenbrand

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OM in the News: Six Jobs From the 1950s That Barely Exist Today

The U.S. workforce has transformed dramatically since the 1950s, a decade marked by economic prosperity, suburban expansion, and rapid industrialization, writes History Facts. Some careers that may have seemed stable and essential then, but time, technology, and changing needs have made them and many others all but disappear. Here are 6 jobs that were popular in the 1950s but are now nearly extinct.

Telephone Switchboard Operator. Before direct-dial telephone systems took over, switchboard operators were the backbone of communication, ensuring calls reached the right destination. In the 1950s, the U.S. had about  1,342,000 telephone switchboard operators. It was a demanding job that required quick reflexes. By the 1970s, automated dialing systems phased out the need for human operators.

Milkman. Having fresh milk delivered to your doorstep was once a common part of American life. The local milkman made rounds, leaving glass bottles on doorsteps and retrieving empty ones. This service was necessary before the widespread adoption of home refrigeration. By 2005, this number had dwindled from over 50% of homes  receiving delivery to just 0.4%.

Elevator Operator. In the mid-20th century, elevator operators were essential for manually controlling elevators in department stores, office buildings, and hotels. At its peak, the profession employed more than 90,000 workers. Only a few historic buildings still employ operators today, for nostalgia.

Typist. Secretarial jobs became essential during the Industrial Revolution, as businesses generated more paperwork than ever before. By 1950, secretarial work had become the most common occupation for women, with 1.7 million employed.  While secretarial roles still exist today, the number of workers specifically categorized as “word processors and typists” has declined to 37,200.

Motion Picture Projectionist. Projectionists played a vital role in the moviegoing experience in the 1950s, operating and maintaining film projectors in theaters. By 2013, 92% of movie theaters had made the switch to digital projection. In 1950, 26,000 people were employed as projectionists. By 2023, that number had fallen to 2,610.

Gas Station Attendant. Full-service gas stations were the standard in the 1950s, with attendants pumping gas, checking oil levels, cleaning windshields, and inspecting tire pressure. The 1973 oil crisis, which led to soaring gas prices, accelerated the transition to self-service as both businesses and consumers sought cost-saving measures. (Today, New Jersey is the only state that prohibits drivers from pumping their own gas).

Classroom discussion questions:

  1. What jobs that exist today do you think will be extinct in 20 years?
  2. What new jobs have been created in this past 1/2 century?

OM in the News: AI Is Mining Our Trash for Treasure

Here’s a job the computers can take without much complaint: sorting recyclables. For humans, it is a foul, laborious job that entails standing over a conveyor belt, plucking beer cans and detergent bottles from a stream of refuse. The job pays little and is hard to fill.

At one recycling facility near Hartford, machines are taking over the dirtiest jobs, reports The Wall Street Journal (Jan. 8, 2026). A few workers remain on the line, mostly to watch for hazardous items. Otherwise, the system of conveyors, magnets, optical sorters and pneumatic blocks runs largely unmanned. The technology allows them to sort up to 60 tons an hour of curbside recycling into precisely sorted bales of paper, plastic, aluminum cans and other materials. The material is sold to mills, manufacturers and remelt facilities, which pay more for cleaner bales.

AI is used to instantly spot recyclables and send instructions to machinery down the line at to remove them.

Watching over it all are computers that analyze material as it passes by at 7 mph. The devices use AI to identify recyclables, flag food-grade material, gauge items’ mass, assess market value and calculate points at which a robotic claw might best clasp each piece.

 The U.S. 50% aluminum tariff has lifted demand for scrap metal, while pulp mill closures have left box makers more reliant than ever on old corrugated containers. And consumer goods companies want to reclaim their bottles as states adopt extended producer responsibility laws aimed at reducing plastic pollution.

Part of the problem: Americans’ poor recycling habits are an obstacle to profit. A lot of beer cans and delivery boxes never even make it to sorting centers. A study in Virginia’s waste stream showed that 28% was recyclable, yet the system was stuck at a recycling rate of about 7% no matter how much it spent trying to teach people how and what to recycle.

The big breakthrough in recycling technology has been combining vision recognition systems with pneumatic blocks. Using puffs of air to separate items has proved much faster and more accurate than robotic pickers, which are limited to about 40 items a minute, compared with thousands for pneumatic system.

Classroom discussion questions:

  1.  Why has recycling been so inefficient?
  2. Should job loss through automation be a concern?

Guest Post:  Sharpie’s U.S. Comeback– A Masterclass in OM

Prof. Jon Jackson is Associate Professor of OM at Providence College. He created AI classroom exercises–appearing in our Instructors Resource Manual– for every chapter of the text.

Newell Brands (the parent company for Sharpie markers) just revealed how it revitalized one of America’s most iconic writing tools through strategic operations management. The company invested $2 billion to bring production of Sharpie pens back to its Tennessee plant, leveraging automation, workforce empowerment, and supply chain redesign to lower costs while keeping prices stable. It serves as a powerful illustration of how operational excellence can become a source of strategic advantage.

For decades, manufacturing strategy centered on offshoring—moving production to lower-cost countries to chase labor savings. Newell flipped that logic. By reshoring Sharpie production, it bet on process innovation through automation, reports The Wall Street Journal (Oct. 6, 2025). The Tennessee plant now produces pens up to 4 times faster than before, thanks to robots and computer-vision systems that detect defects in real time. (The factory operates around the clock, making 1.8 million fine-tip Sharpies a day). Newell also reengineered workflows, balanced production lines, and embedded quality control directly into the process.

A common fear associated with automation is job loss. Sharpie’s story shows an alternative path. Rather than cutting staff, Newell retrained workers for higher-skill roles such as robotics support, maintenance, and technical troubleshooting. These new roles led to average wages increasing by nearly 50%.

Bringing production back to the U.S. also reshaped Newell’s supply chain. Domestic production reduced lead times, transportation costs, and exposure to global disruptions and geopolitical risks. In doing so, Newell gained not only cost efficient but also greater agility and control over its operations.

While not every company can afford a $2 billion operational overhaul, Sharpie’s success underscores a broader lesson: sustainable cost advantage often comes from process innovation and continuous improvement, not from chasing the lowest labor costs.

 Classroom Discussion Questions:

  1. Why did Newell’s decision to reshore Sharpie production make sense strategically, even though U.S. labor costs are higher?
  2. What other “simple” products could benefit from following Newell’s operational strategy to reshore?

OM in the News: Amazon Is on the Cusp of Using More Robots Than Humans

The automation of Amazon facilities is approaching a new milestone: There will soon be as many robots as humans. The e-commerce giant, which has spent years automating tasks previously done by humans in its facilities, has deployed more than one million robots in those workplaces, reports The Wall Street Journal (July 1, 2025). That is the most it has ever had and near the count of human workers at the facilities.

Mobile robots reposition package carts

Company warehouses buzz with metallic arms plucking items from shelves and wheeled droids that motor around the floors ferrying the goods for packaging. In other corners, automated systems help sort the items, which other robots assist in packaging for shipment.

One of Amazon’s newer robots, called Vulcan, has a sense of touch that enables it to pick items from numerous shelves. Amazon has taken recent steps to connect its robots to its order-fulfillment processes, so the machines can work in tandem with each other and with humans. Now some 75% of Amazon’s global deliveries are assisted in some way by robotics. The growing automation has helped Amazon improve productivity, while easing pressure on the company to solve problems such as heavy staff turnover at its fulfillment centers.

For some Amazon workers, the increasing automation has meant replacing menial, repetitive work lifting, pulling and sorting with more skilled assignments managing the machines. Amazon has trained more than 700,000 workers across the world for higher-paying jobs in mechatronics and robotics apprenticeships.

The number of packages that Amazon ships itself per employee each year has also steadily increased in the past decade to 3,870 from 175, an indication of the company’s productivity gains.

Amazon is also rolling out artificial intelligence in its warehouses to improve inventory placement, demand forecasting, and the efficiency of its robots. Amazon said it will cut the size of its total workforce in the next several years.

Classroom discussion questions:

  1. Research Amazon’s history of using robotics.
  2. What are the advantages of introducing more robots?

OM in the News: Why Is It So Difficult for Robots to Make Your Nike Sneakers?

It took Nike 8 months to figure out how to automate a way to put the Nike swish on a shoe, only to move onto a new shoe line for which the method no longer worked.

A yearslong effort by Nike to shift part of its manufacturing from China, Indonesia and Vietnam to North America illustrates how tough it is for U.S. brands to wean themselves off the flexible, low-cost contract manufacturers.

In 2015, Nike poured millions into an ambitious effort to partly automate what has always been a highly labor-intensive industry. At the time, rising labor costs in China and advances in manufacturing techniques opened the possibility of finding a new way to make shoes that would rely on fewer workers. The goal: Make tens of millions of sneakers at a new high-tech manufacturing site in Mexico, by 2023.

The plant would still include thousands of workers, but far fewer than are needed in Asia to make the same number of sneakers. Nike’s competitors also sensed an opportunity to rethink a manufacturing model built around hand stitched fabrics and glued soles. The same year, Under Armour announced “Project Glory” using automation to make shoes in Baltimore. And Adidas launched “speedfactories” in Atlanta and Germany, with high-tech machinery to quickly spit out shoes, which we blogged about then.

Nike aimed for large-scale automated production in under a decade, which would save on labor costs and allow it to deliver new models of shoes to Americans faster. It established new production lines that used machines commonly seen in electronics manufacturing. The machines were supposed to build the upper part of a shoe, knit fabric, add logos and glue the sole.

The effort quickly ran into trouble, reports The Wall Street Journal (April 22, 2025). The robots struggled to handle the soft, squishy and stretchy parts that are integral to shoemaking. Another problem was the huge variety of shoes Nike produces. As a result, factory production never became as automated as envisioned. As shoe production increased, the factory personnel swelled to 5,000, twice as many as originally planned and costing more than a similar workforce in Vietnam.

All three firms surrendered in 2019 and stuck with their original Asian locations.

Classroom discussion questions:

  1. Will the threat of new tariffs mean they will ultimately have to bring shoe production back to the U.S.?
  2. Why the failure for all three firms?

OM in the News: The U.S. Made T-Shirt

The U.S. is awash in a sea of cheap imports that has destroyed much of the domestic apparel industry. In 2023, less than 4% of the apparel purchased in America was made here, reports The Wall Street Journal (Dec. 31, 2024).  Then, there is Walmart, whose aisles are piled high with goods this holiday season. But one item sticks out: cotton T-shirts that were made in America and cost $12.98.

The Walmart T-Shirt

It wasn’t tariffs that made the $12.98 shirt economically feasible, says the CEO of American Giant, the U.S. apparel company producing them. It was Walmart’s heft—and guaranteed orders. The country’s biggest retailer—and importer of consumer goods—pledged in 2013 to buy more items that were made, grown or assembled in the U.S. In 2021, Walmart increased its goal and promised to spend billions more each year through 2030.

American Giant said that without Walmart acting as a backstop by committing to buy a predetermined number of shirts over time, American Giant’s suppliers wouldn’t have had the confidence to make the investments in automation and other upgrades that drove down production costs. The company buys yarn that is grown, spun, dyed and sewn in the U.S., contracting with suppliers mainly in the Southeast. It also owns cutting and sewing facilities in N. Carolina and Los Angeles.

How did American Giant get the price down from the $40-$60 it usually charges for a T-Shirt? By automating parts of the process to keep labor costs low, it was able to compete with countries such as Vietnam and China where workers are paid a fraction of the U.S. minimum wage.

“You can make almost anything here, as long as it doesn’t require lots of labor,” says the CEO. To fulfill Walmart’s order for hundreds of thousands of shirts, the company tweaked the design and then spent $1 million on machinery designed to make production faster and more efficient.

The T-shirts arrived in 1,700 Walmart stores and were up against other 100% cotton T-shirts selling for half as much. But those shirts didn’t have any American emblems. Walmart bars suppliers from using the term “American Made” or the American flag on products that aren’t made in the U.S. Despite the success of American Giant and a handful of other apparel companies that have figured out how to produce domestically, it is unclear how much Americans care about buying products made in the U.S.

Classroom discussion questions:

  1. Could American Giant have reshored without Walmart?
  2. What are the key OM decisions that were made?

OM Podcast #26: Operations Management at the Port of Philadelphia

In this latest podcast Barry Render interviews Dominic O’Brien, an executive at the Port of Philadelphia–called Philaport.  Dominic and Barry discuss why the port system is so important to supply chains in the US and worldwide.

 

Transcript

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Instructors, assignable auto-graded exercises using this podcast are available in MyLab OM. See our earlier blog post with a recording of author and user Chuck Munson to learn how to find these, or contact your Pearson rep to learn more! https://www.pearson.com/en-us/help-and-support/contact-us/find-a-rep.html

OM in the News: The Port Strike and Automation

An economically devastating port strike was averted last week after a 3-day work stoppage. Dockworkers secured a 62% pay raise, but the central dispute was never solely about wages, even though the tentative deal that averted the strike will result in dockworkers at the NY-NJ port earning more than $500,000 a year on average.

Port automation could ease supply chains

The ocean carriers, which pay the bills at U.S. ports, can perhaps afford that level of increase. What they can’t afford, and the U.S. economy can’t either, is a ban on the future use of automated cargo-handling technology at ports along the East and Gulf coasts. “Absolute, airtight language that there will be no automation or semi-automation” remains a key demand of the Longshoremen’s union that still must be negotiated ahead of a new Jan. deadline.

Why is this such a crucial issue, and why do port managers adamantly oppose the demand? The key reason is the need to create future port capacity. Since the U.S. is building new port facilities at a snail’s pace, the only way to expand capacity is by handling more cargo more quickly through existing facilities. The only way to do that is with automated cargo handling.

The lack of automation in the U.S.—only 3 port facilities are fully automated, all on the West Coast—exposes ports as an Achilles’ heel of U.S. trade competitiveness. High costs and inefficiency have long been the status quo. Not one U.S. port ranks in the top 50 globally in productivity, reports The Wall Street Journal (Oct. 8, 2024). Charleston is the highest at No. 53.  The consequence of low port productivity is that “instead of facilitating trade, the port increases the cost of imports and exports, reduces competitiveness, and inhibits economic growth,” says the World Bank.

The purpose of automation isn’t to lower costs by replacing workers with machines but to increase it within existing port footprints to accommodate growth. The fully automated Long Beach Container Terminal can handle 12,000 to 15,000 20-foot equivalent units per acre per year versus 1/2 that at a nonautomated terminal.

Classroom discussion questions:

  1. What are the top-ranked ports in the world and how does the U.S. differ from them?
  2. What can the U.S. do to be more competitive?

OM in the News: Meet The Robot Butcher

Meatpacking jobs can be some of the toughest, bloodiest and most dangerous around, and companies such as Smithfield, Tyson Foods, and Cargill have long struggled to fully staff slaughterhouses and processing plants. Workers might have to stand for hours a day, often in cold temperatures, repeatedly slicing livestock carcasses on fast-moving processing lines or moving heavy boxes of frozen meat. The companies have sought for years to recruit enough workers and to run their plants at full strength.

A system at Cargill’s beef-processing plant scans meat for bones and other undesirable materials as it passes through the production line

So meatpackers are increasingly looking to robots for help, writes The Wall Street Journal (April 10, 2024). Smithfield, the largest U.S. pork processor, began rolling out automated rib pullers at its pork plants several years ago, which company officials said helps leave less wasted meat on the bone and relieves workers from some of the industry’s most physically demanding jobs—allowing workers to be reassigned from pulling loins or ribs to food-quality inspection jobs.

Taking hourly workers off the processing line and training them to work with robots that require more technical skills can be challenging for meat companies and employees. Tyson is working with a local community colleges to create a pipeline of potential workers.

Tyson has installed more computers and X-ray inspection technology throughout its facilities to detect bones and other undesirable materials in products. Cargill now operates automated rib-chine saws that cleave off the spine from the carcass, and machine hock-cutters that chop the front off shanks, the part of the leg between the knee and the beef carcass. (Automation has been an industry ambition for some time, especially among processors of chickens—which tend to be smaller, more uniform in size and easier for a machine to handle).

Classroom discussion questions:

  1. Why is staffing so difficult at meat packers?
  2. Identify other potential applications of technology in this industry.

OM Podcast #15: Automation, AI, and Operations at Frito-Lay

In the latest podcast, Barry interviews Tom Rao, Senior Vice President of US Field Operations for Frito-Lay, a division of PepsiCo.  Tom and Barry discuss various operations improvements at Frito-Lay, general plans for how Frito-Lay plans to utilize AI to support the business, and how Frito-Lay is addressing the challenge around labor shortages.

 

Transcript

A Word document of this podcast will download by clicking the word Transcript above.

Instructors, assignable auto-graded exercises using this podcast are available in MyLab OM.  See our  earlier blog post with a recording of author and user Chuck Munson to learn how to find these, or contact your Pearson rep to learn more!  https://www.pearson.com/en-us/help-and-support/contact-us/find-a-rep.html

OM in the News: Robots Are Looking Better to Detroit

United Auto Workers (UAW) members recently approved a labor contract with Ford, General Motors, and Jeep maker Stellantis that included a record 25% wage increase over 4 years and marked the sharpest labor-cost increase for the companies in recent memory. The auto makers did avoid a strike, but the longer term cost was great, reports The Wall Street Journal (Jan. 15, 2024).

Robots weld the body of a Model Y EV at a Tesla factory
The effect from the deals in Detroit quickly rippled through the industry, with Toyota, Hyundai and other nonunionized automakers increasing wages to stay competitive. The contracts were richer than Detroit had planned for, and the auto makers are strategizing ways to blunt the increased costs. Ford said the new terms would add $900 in cost per vehicle by 2028.

So the firms are looking to an old friend to help offset rising labor costs: robots. For decades, car companies increased automation inside their factories. Now, they are looking even more seriously at this approach, to address the rising labor bill and take advantage of more sophisticated technology. Competition from newcomers like Tesla, which has been more aggressive in deploying robots, is also nudging more traditional auto manufacturers in this direction.

The global auto industry is a top consumer of robots, having installed 136,000 new industrial robotic units in 2022. Often these so-called cobots work alongside workers to access hard-to-reach spots or perform tasks that are particularly physically demanding.

Dozens of new battery and EV plants in the works will also open the door to broader use of high-tech systems. It is easier and less costly to install robots in a new facility versus retrofitting an existing one. Plus, it is more streamlined to have updated systems that “speak” to each other smoothly, as opposed to popping in a new machine among older ones.

The UAW may have attained major wage increases, but the trend is making its members nervous about the prospect of machines replacing jobs. “The companies have used technology as a way to cut jobs instead of interjecting robots and technology to make our jobs easier,” says the UAW president.

There are risks to automating. Adding robots to a process for the first time can introduce quality problems. And whatever machines gain in terms of productivity can be zeroed out by the needed personnel to fix or program robots.

Classroom discussion questions:
1. Discuss the advantages and disadvantages of robotics in the auto industry.
2. What is Tesla’s edge?