Robotics and automation solutions will account for 25 per cent of spending in industry over the next five years, McKinsey reports.
Industrial companies are set to spend heavily on robotics and automation but many will need help to complete the journey, according to the latest McKinsey Global Industrial Robotics Survey that shows automated systems will account for 25 percent of capital spending over the next five years.
Industrial company executives expect to see benefits in output quality, efficiency, and uptime. However, many remain wary of the challenge, with the cost of hardware and a lack of internal experience at the top of their list of concerns.
Among industrial sectors the biggest spender on automation over the next five years is set to be retail and consumer goods, with 23 percent of respondents from that sector planning to spend more than $500 million. That compares with 15 percent in food and beverage and 8 percent in automotive. For logistics and fulfilment players, automation will represent 30 percent or more of their capital spending in the next five years.
Among the industrial sectors surveyed, the biggest spender on automation over the next five years is set to be retail and consumer goods.
Activities such as picking, packing, sorting, movement from point to point, and quality assurance are already automated to some extent, and these will continue to see heavy investment over the coming years. Conversely, activities such as assembly, stamping, surface treatment, and welding, all of which require high levels of human input, are less likely to be automated in the short to medium terms.
Where operations can be automated, the benefits include the abilities to work faster and at a higher capacity, as well as to provide high quality. In addition, there are upsides in cost, operational uptime, and safety. On the other hand, environmental and sustainability factors are likely to be less positively affected.
A standout message from the survey is that automation is not easy. The primary challenges to adoption include capital cost of robots and a company’s general lack of experience with automation. Some say that business confidence in technology is low, leading to challenges around conviction and funding. Moreover, expectations of production and reliability gains through automation are offset by the belief that such gains will eliminate jobs and may affect existing contracts. In fact, that is not the case since automation typically leads to changes in workplace roles rather than redundancies.
Many companies currently operate a hodgepodge of legacy technologies and anticipate challenges in implementing a single set of solutions backed by integrated and interoperable programming and platforms for robotics and automation. Of survey respondents, 42 percent cite challenges with finding holistic, end-to-end solution providers across geographies for the scope of robotics technologies of interest to them. Companies are responding to such issues with increased partnerships across legacy-system integrators and robotics start-ups and disruptors that offer cutting-edge innovations.
Survey participants are also concerned about fitting robotics into existing spaces and the potential inability of machines to interface with products. Concerns about safety and cyber attacks also feature as potential areas of jeopardy.
Despite significant capital commitments, many companies are struggling to translate their intentions for robotics and automation into actions, with challenges related to knowledge and return on investment being particularly difficult hurdles. In retail and consumer goods, 60 percent of respondents cite those two factors as barriers to progress. Other headwinds include a lack of technological readiness, capability and system reliability.
Challenges that industries face present robotics and automation providers with a significant opportunity to help build the capabilities required to automate at scale or provide support for this effort. However, those vendors will need to provide convincing answers to the questions raised by their customers and work hard to differentiate themselves from their competitors.