factory automation – The OM Blog by Heizer, Render, & Munson

OM in the News: Factories Demand White-Collar Education for Blue-Collar Work

An engineer creates 3-D blueprints to program machines that manufacture customer orders at a parts manufacturer

New manufacturing jobs that require more advanced skills are driving up the education level of factory workers who in past generations could get by without higher education, writes The Wall Street Journal (Dec. 10, 2019). American manufacturers are, for the first time, on track to employ more college graduates than workers with a high-school education or less, part of a shift toward automation that has increased factory output, opened the door to more women and reduced prospects for lower-skilled workers. “You used to do stuff by hand,” said a U. of Chicago prof. “Now, we need workers who can manage the machines.”

U.S. manufacturers have added more than a million jobs since the recession. Over the same time, they employed fewer people with at most a high-school diploma. Employment in manufacturing jobs that require the most complex problem-solving skills, such as industrial engineers, grew 10% between 2012 and 2018; jobs requiring the least declined 3%. (More than 40% of manufacturing workers have a college degree, up from 22% in 1991).

Improvements in manufacturing have made American factories more productive than ever and, despite recent job growth, require 1/3 fewer workers than the nearly 20 million employed in 1979, the industry’s labor peak. The workers that remain do much more cognitively demanding jobs. At Caterpillar, over 80% of job openings require or prefer a college degree. A majority of the company’s production jobs called for a degree or specialized skill.

At Harley-Davidson’s engine plant in Milwaukee, robotic arms now ferry motorcycle pieces, taking over the tough, repetitive work formerly done by employees. The machines have made the workplace safer, mirroring a national trend. In 2018, factory workers were hurt at half the rate as in 2003.

Classroom discussion questions:

How do these changes impact productivity, as discussed in Chapter 1 of your Heizer/Render/Munson text?
How many students in your class are looking for jobs in manufacturing?

OM in the News: What Robots Can’t Do

Most of our blogs about robots extol their cost-saving virtues and the explosion of new and exciting OM applications. “But on the front line of automation, where robots truly are poised to displace humans from their jobs, some cutting-edge technology is testing the best minds in Japanese industry,” writes The Financial Times (Aug. 7, 2017).

Making a bento — little portions of rice, fish, meat, pickles and other delicacies packed in a plastic box and sold for a few hundred yen — is currently a miserable job done by hand on grim midnight production lines, so that Tokyo stores can be filled with lunches by the morning. Tofu or vegetables are soft and irregularly shaped, and are extremely hard to grasp. “There are so many things that robots still can’t do,” says a Japanese robotics manufacturer.

It also takes a lot of people, time and money to get robots working. The engineering can cost 3 to 8 times, sometimes even 20 times, more than the hardware. “The simplest thing we cannot do is exert large force,” says the head of robot maker Yaskawa. “An Olympic weightlifter can lift several times their own body weight, but for every kilogram you move with a robot, the robot will weigh 10kg.” Pound for pound, then, even the average human is 10 times stronger than a factory robot.

Finally, a major challenge is agility. Most robots are single-handed. “We can make the arm but we can’t really make the hand,” says one manufacturer. That lack of agility is linked to one of the biggest practical problems with factory robots: the difficulty of reprogramming them to do something else. There was a time when firms tried to go to full automation on auto assembly lines, but it didn’t work because the vehicle changes. If you wanted the same model in the same color for 10 years you could fully automate it. But, of course, it wouldn’t sell.

Classroom discussion questions:

Summarize all the limitations of robots?
What is the trend for robotic installations?

OM in the News: China’s Robot Revolution

A Kuka industrial robotic arm pours a glass of beer

“China is embracing robotics with the same full-on intensity that’s made it a force in high-speed rail and renewable energy,” reports Businessweek (May 1-7, 2017). Beijing economic planners view it as a stepping stone to a broader strategic goal: dominating emerging markets for artificial intelligence, driver-less vehicles and digitally-connected appliances and homes.

Standing in the way are established robotics superpowers like Japan, South Korea, Germany and the U.S. Yet China has three big advantages–scale, growth momentum and money. It’s home to the world’s fastest-growing robotics market and vast manufacturing sector where companies are under pressure to automate. China overtook Japan in 2013 in unit sales domestically. Guangdong province, for example, announced in 2015 plans to offer $137 billion in subsidies to 2,000 local companies that are looking to automate their plants. In 2016, China installed 90,000 new robots. That’s 1/3 of the world total and 30% more than the year before.

China still lags rival nations when it comes to robot adoption. It had only 49 robots per 10,000 workers in 2015, versus 176 for the U.S., Germany’s 301 and South Korea’s world-leading 531. Yet if China’s robot build-out succeeds, it may be able to stanch the flow of factories moving overseas to escape the mainland’s rising manufacturing wages, which have more than doubled in the past decade.

Demand for robots in China is clear enough. Less certain is whether Chinese robotics companies have the tech savvy to compete globally. Some 800 Chinese robotics companies have set up shop. But many startups buy key components from Germany’s Siemens or Japan’s Fanuc (the world’s #1 robot maker), put them in a robot shell with an arm, and then slap on a Chinese brand name.

Classroom discussion questions:

What is driving the robot revolution in China?
Will this impact manufacturing jobs in the U.S?

OM in the News: The Return of the Twinkie

Debt, pension costs and mismanagement shuttered the iconic Hostess (maker of Twinkies, Ding Dongs, Ho-Hos, and CupCakes) in 2012, writes Forbes (May 4, 2015). It was a cultural moment across the U.S., offering proof of the dire state of American manufacturing. After over a decade of failing health that saw 2 bankruptcies and 5 CEOs, Hostess finally died after the baker’s union pulled the plug with a nationwide strike. The 150 year old firm left behind 36 factories, 5,600 delivery routes and 19,000 jobs, creating something of a national mourning. (Many thought Hostess got what it deserved. Its products–preservative-packed calorie bombs–flew in the face of food trends.) But while you wouldn’t find Twinkies on Whole Foods’ shelves, Hostess had millions of nostalgic fans.

Now, with a new billionaire cake boss, a new factory has arisen in Emporia, Kansas. Tight rows of Twinkies march along the $20 million Auto Bake system with the precision of soldiers in a parade. Yellow robotic arms, which look like they should be welding Teslas, stack snacks with hypnotic rhythm. This 500-person plant produces more than 1 million Twinkies a day, 400 million a year. That’s 80% of Hostess’ total output–output that under the old regime required 14 plants and 9,000 employees.

The recipe was threefold. First, $110 million went to modernizing the remaining factories–everything from automation to improving air flow in the bakeries. Next came a $25 million SAP software system to manage inventory and logistics. But most important was the millions spent at chemistry labs to tweak the recipe formula that would prevent staleness and discoloration. The singular goal: make the Twinkie warehouse-friendly. It’s shelf life was more than doubled, to 65 days. Delivery costs dropped to 16% from 36% of revenue, and Hostess’ retail reach expanded greatly.

In July, 2013–less than 4 months after the new owners took over operations–the Twinkie was back. During the Today show, Al Roker, riding shotgun in a Hostess truck, tossed Twinkies to screaming fans. Fans flocked to stores. Demand was so high that large retailers waived the slotting fees they usually charge brands for shelf space.

Classroom discussion questions:

1. Why did Hostess succeed after its previous failures?

2. List all the OM factors involved in this transformation.

OM in the News: The Rise of Industrial Robots

Robots will replace a growing number of jobs in industries including automotive and electronics in the next few years, particularly in east Asia, according to The Financial Times (Feb.10, 2015). Worldwide sales of industrial robots rose 23% last year and are on course to double (to 400,000) by 2018, driving radical change in many manufacturing sectors. Although robots have been used in industry for decades, recent advances in technology have cut their costs and increased their capabilities, as a new generation of reprogrammable, multipurpose machines comes into service.

The prices of industrial robots have been falling steadily, dropping about 14% in the past 4 years to $133,000 for a typical system, while capabilities have been expanding. Some robots are even cheaper: the Baxter robot from Rethink Robotics has a listed base price of $25,000, making it accessible to smaller companies that might have found it difficult to invest in earlier generations.

Advanced robots are set to cut costs and raise productivity, reducing employment in manufacturing in developed countries, while raising the skill levels demanded of the staff that remain. They are also likely to make labor costs a less significant factor for manufacturers making decisions about where to invest. In the manufacturing sectors that are the most readily automated, including cars and other transport equipment, computers and electronics and electrical equipment, about 85% of tasks can be performed by robots. Historically robots have been very rigid, and unable to apply logic to what’s in front of them, but the new generation will be applying logic to the environment and making their own decisions

The fastest adoption will come in South Korea, Taiwan and Thailand, which have heavy concentrations of the industries that are capable of high levels of automation, higher labor costs than some of their regional competitors, and limited employment protections that would prevent job cuts. Other relatively rapid adopters are expected to be China, Japan, the US, the UK and Canada. The countries likely to be slowest to embrace the new robots include more heavily regulated economies of Europe including France, Italy and Spain, as well as Brazil and India.

Classroom discussion questions:

1. Robots have been around for decades. Why the growth spurt in their use?

2. Why is SE Asia the fastest growth area?

OM in the News: Robots Work Their Way Into Small Factories

“Robots aren’t just for the big guys anymore,” writes The Wall Street Journal (Sept. 18, 2014). A new breed of so-called collaborative machines—designed to work alongside people in close settings—is changing the way some of America’s smaller manufacturers do their jobs. The machines, priced as low as $20,000, provide such companies—small jewelry makers and toy makers among them—with new incentives to automate to increase overall productivity and lower labor costs.

Robots have been on factory floors for decades. But they were mostly big machines that cost hundreds of thousands of dollars and had to be caged off to keep them from smashing into humans. Such machines could only do one thing over and over, albeit extremely fast and precisely. As a result, they were neither affordable nor practical for small businesses.

Collaborative robots can be set to do one task one day—such as picking pieces off an assembly line and putting them in a box—and a different task the next. Some are mobile and able to range freely inside a factory. The use of advanced sensors means they stop or reposition themselves when a person gets in their way, solving a safety issue that long kept robots out of smaller factories.

Classroom discussion questions:

1. Why will factories always need people?

2. What are the advantages and disadvantages of these smaller robots?