What emerging technologies may mean for the manufacturing workforce
In developed nations, the history of manufacturing production has been consistently redefined by fresh waves of technological advancement. From the mechanization of the textile industry in the late 18th century to the invention of the assembly line nearly 150 years later, industrial revolutions have directly affected not only manufacturing speed and efficiency, but also the nature of work for millions of people.
Today, many authorities believe the United States is on the precipice of a new industrial revolution, in which cutting-edge digital technologies will disrupt conventional approaches to both production operations and workforce needs. Following are three trends helping to fuel this transition, and what each of those shifts may mean for manufacturing workforce management.
The rise of microfactories
For well over a century, the production industry has been built on economies of scale: The more units you make, the less expensive each one is to build. That model has worked well for many mass-produced lines that require occasional tweaks, such as vehicles, washing machines or smartphones. However, the high cost of reconfiguring large production areas makes it harder for companies to efficiently pilot new product prototypes in short runs, which would allow business leaders to determine which ones have the best potential for larger-scale production.
In response to this challenge, enter “microfactories,” production facilities with a smaller footprint, rapid prototyping expertise and access to advanced technological tools. In the United States, for example, entrepreneurs and do-it-yourselfers can now access a nationwide network of technology-enabled microfactories, many with laser cutters, electronics labs, welding stations, and machine, woodworking and metalworking equipment.
On the other hand, Kentucky-based FirstBuild was opened by General Electric in 2014 as a microfactory experiment to pilot innovative ideas for personal and household appliances. The concept is simple: Bad ideas fail fast. Good ideas move on to limited production and success testing via online sales. If a concept does well at that level, it can be quickly migrated to GE’s large-scale appliance manufacturing complex in nearby Louisville. To date, about a half-dozen products piloted at the FirstBuild microfactory have moved into larger production. Of particular note: inventors receive royalties on all sales.1 After one year in operation, FirstBuild was financially self-sustaining (largely via crowdsourced funding for projects), and it moved an average of one new idea into short-run production per month while testing dozens of others that didn’t survive.2
From an employment viewpoint, microfactories operate much like agile, start-up ventures. In order to assist the “makers”—people who have dreams they want to take for test drives—most of these operations must recruit and retain skilled production and technology advisors to help prototype ideas, as well as business consultants to help makers get the best product concepts to market. That can pose challenges in certain locations where there is fierce competition for such talent. While GE allocated 20 full-time employees to help launch the FirstBuild microfactory,3 the “low volume, high variety” business model means that additional hiring will likely involve scaling up or down based on the success of future product launches. That will put a premium on highly skilled consultants, technologists and advanced manufacturing knowledge workers, most of whom will need to be comfortable with project-based engagements rather than long-term employment.
The internet of making things
While microfactories are effectively small-scale idea labs for testing and launching products, smart factories are technology-enabled offshoots of the so-called “industrial internet of things” (IIoT). This rapidly evolving concept seeks to link production activities with online technologies, big data analytics and end-user mobile devices, which collectively help drive smarter, more nimble manufacturing operations. In a recent IndustryWeek survey, manufacturing leaders forecast that the IIoT’s high potential to deliver automated, real-time insights and customized goods would encourage virtually all U.S. factories to be connected to online production tools within the next five years.4
The IIoT is already delivering benefits in many production-floor operations, which has triggered a variety of changes in line, supervisory and professional staff requirements. For example:
- Machine oversight, incident handling. At a large German electronics manufacturing plant, the IIoT is used to operate nearly 1,000 automated production line controllers. Each part moving through the lines has a product code that can be scanned at each machine location. When the code is scanned, IIoT technology allows the part to communicate its specific requirements for that segment of the production process. Because of this seamless machine-to-machine production management, workers are needed only to oversee the technology assets and handle unexpected incidents.5
- More emphasis on supervisors. A large Connecticut-based tool manufacturer used IIoT technology to improve operational efficiency in a major production facility in Mexico. The key challenge was to figure out how to best solve labor and quality issues for a production line that was frequently reconfigured to make different types of power tools. To attack the issues, the company deployed a real-time parts tracking system, visual dashboards to monitor production and a Wi-Fi-enabled product quality check at the end of the line. As a result, labor efficiency improved 10 percent, and first-pass defects declined by 16 percent. The new system also puts a premium on first-level supervisors, who have greater responsibility for tracking line activity and more authority to stop production when issues arise.6
- Fewer laborers, more engineers. A small Ohio-based injection molding and plastics company, facing the challenge of declining share in its major market niche, decided to diversify by switching its focus to small-volume molding with highly engineered materials. To get there, company leaders used the IIoT to link high-resolution scanning technology with advanced 3-D printing tools, which allowed the business to inexpensively produce product prototypes and customized small-run batches. From a workforce viewpoint, this change reduced direct labor costs on the production floor, but also required the hiring of 15 engineers with specialized credentials in biomedical, chemical and mechanical disciplines. The investment in higher-level professionals was required to ensure strong oversight and problem-solving for 3-D prototyping and customization requests from new customers.7
The robots in the workplace
When people use “robotics” and “manufacturing” in the same conversation, the default talking points generally focus on job losses. While there’s no denying that automated systems have filled some roles formerly held by human workers, a more timely discussion centers around two key questions: Is all global manufacturing automation moving at the same pace, and will increased use of robotics change the nature of human talent needed to run modern factories?
The United States currently is one of the world’s largest users of industrial automation, with a “robot density” rate (number of multipurpose industrial robots per 10,000 manufacturing workers) of 164 in 2014. Meanwhile, South Korea, Japan and Germany all had much higher industrial robot density rates (478, 314 and 292, respectively). However, the U.S. trend line for industrial robotics is slowing relative to other developed and emerging markets. For example, China’s overall robot density is just 35, but that nation increased its industrial automation usage by an average of 40 percent annually between 2010 and 2014. In contrast, the United States posted an 11 percent annualized increase in robotics use during that same time period.8
While an oft-repeated reason for increased robotics use is a reduction in human labor costs, projected growth patterns don’t fit the narrative. In fact, the International Federation of Robotics (IFR) forecast significant increases in industrial robotics usage for several Asia-Pacific nations—including China, Taiwan, South Korea, India and other emerging economies—despite their relatively low cost of labor versus developed markets. Further, IFR noted that rising labor costs could drive China to purchase up to a third of available industrial robotics products in the next two years, despite a sharp downturn in that nation’s economic growth. Overall, industrial robotics sales are estimated to rise 18 percent annually in the Asia-Pacific region, well above the 10 percent yearly rate forecast for the Americas and Europe.9
On the issue of employment and skills, a 2015 study found that increased use of industrial automation from 1992 to 2007 actually led to a rise in both factory productivity and overall wage income.10 That said, low-skill workers were found to be the most vulnerable to job loss by robotic systems, while more highly skilled employees experienced little disruption to hours worked during this period. This observation encompasses what many observers describe as the “blurring effect” robotics is having on formerly distinct white- and blue-collar manufacturing jobs.
Consider this example: An industrial robot now used in many manufacturing plants uses sensors and cameras to safely operate in close proximity with human workers. Assembly workers are taught how to interact with the robot for different production tasks, which allows it to learn, adapt and predict routine human behavior. In that sense, workers operate as both supervisors and collaborators with robots in various assembly operations, provided that they are willing and able to adapt to this rising shift in shop floor activity.11
In any event, it’s clear that tasks such as predictable motion, heavy lifting, high-precision placement or repetitive activity in dangerous environments will be increasingly handled by industrial robots in place of human workers.12
The way forward
Looking ahead, these trends will have a notable impact on manufacturing in the United States.
It’s also a good bet that a rise in microfactories, online production technologies and automation will also drive the creation of more hybrid jobs, where manufacturing employees will need a combination of advanced production, IT and problem-solving skills in order to succeed. Interestingly, this may open up new avenues for manufacturers to recruit and retain tech-savvy millennials, who may have an easier time embracing a more technology-driven workplace.13
 Muller, J. “Big Ideas, Small Scale: How GE is Using the Wisdom of Crowds to Design Better Appliances.” (July 20, 2015)
 Morgan, B. “Fast, Self-Funded R&D Drives FirstBuild.” Industry Week (June 14, 2016)
 Fallows, J. “Why the Maker Movement Matters: Part 2, Agility.” The Atlantic (June 9, 2016)
 O’Marah, K. and Manenti, P., “The Internet of Things Will Make Manufacturing Smarter.” Industry Week (August 14, 2015)
 “Leading Tools Manufacturer Transforms Operations with IoT.” Cisco (2014)
 “61-Year-Old Company Re-Invents Itself with FDM.” Stratasys (2014)
 “World Robotics 2015 Industrial Robots.” International Federation of Robotics (2015)
 Graetz, G., Michaels, G., “Robots at Work,” Centre for Economic Performance (March 2015)
 “Rethinking the Factory,” Arup Foresight + Research + Innovation (June 2015)
 Mesnard, X., “What Happens When Robots Take Our Jobs,” World Economic Forum (January 21, 2016)
 McConnon, A., “How Manufacturers are Recruiting Millennials,” The Wall Street Journal (June 7, 2016)
In three key areas—employee training, safety and engagement―some companies have reaped positive returns on investment.
With much of the manufacturing workforce set to retire soon, companies that make work more personally satisfying will reap the rewards.