More Robots Do Not Equal Manufacturing Job Losses

More Robots Do Not Equal Manufacturing Job Losses

The Association for Advancing Automation (A3) today published a white paper entitled “Robots Fuel the Next Wave of U.S. Productivity and Job Growth” in which data from the Bureau of Labor Statistics and a wide range of manufacturing firms document how and why increasing the use of robots is associated with increased employment.

A3 White Paper Robots and Employment

Key statistics from the A3 white paper show that during the non-recessionary periods – 1996-2000, 2002-2007, and 2010-2014 – general employment and robot shipments both increased. Since 2010, the robotics industry in the United States has grown substantially. Even during this period of record-breaking robot sales, U.S. employment increased. This new data is in stark contrast to media coverage and a perception that increasing use of robots causes higher rates of unemployment in the U.S.

At a glance:

  • Robots save and create jobs
  • Robots take care of the dull, dirty, or dangerous jobs
  • Robots extend workplace functionality, improving the bottom line
  • Robots are reviving American manufacturing
  • Robots create better, safer, higher paying jobs

“We are seeing concrete shifts in the factors that resulted in cuts to the U.S. manufacturing work force over the past few decades,” said Jeff Burnstein, president of A3. “Manufacturing automation increasingly provides the flexibility in the variety of tasks robots perform to drive improvements in overall product quality and time to market.”

Burnstein concluded, “One of the biggest challenges we now face is closing the skills gap to fill jobs. Robots are optimizing production more than ever, increasing global competitiveness, and performing dull, dirty and dangerous tasks that enable companies to create higher-skilled, better-paying, and safer jobs where people use their brains, not their brawn.”

Correlation does not equal causation

The white paper overlays graphs of robot sales and US employment. I asked Burnstein if he is trying to show causation from the correlation. He said that was not the intent. “It is not so much to show causation as it is simply to refute the argument,” he told me in an interview preceding the release. Taking the argument that robots cause unemployment, one would expect climbing robot sales to be reflected in declining employment. Statistics do not support that supposition.

Anecdotal evidence

As companies seek to bring manufacturing operations stateside while remaining cost-competitive, they continue to turn to automation to help lead the new wave of productivity and job growth in the U.S.

“The whole premise for our company is to bring manufacturing back to this country, and our new robot fits perfectly with that master plan,” said Geoff Escalette, CEO of faucet-maker RSS Manufacturing & Phylrich in Costa Mesa, California. “Our robot not only makes it possible to increase production speed without buying additional CNC machines, but also helped us open up 30 percent more capacity on existing machinery.”

Robotics also helps companies stay competitive when seeking new talent—particularly those who are interested in long-lasting careers working with technology.

“It’s really an opportunity for us to grow,” reports Matt Tyler, president and CEO of Vickers Engineering, a contract precision engineering manufacturer in Michigan. “Because we have robotics and are able to compete on a global scale, it makes the U.S. more competitive in manufacturing, and that’s good for all of us.”

The white paper includes notes from other manufacturers who both acquired additional automation and people.

The Association for Advancing Automation is the global advocate for the benefits of automating. A3 promotes automation technologies and ideas that transform the way business is done. A3 is the umbrella group for Robotic Industries Association (RIA), AIA – Advancing Vision + Imaging, and Motion Control & Motor Association (MCMA). RIA, AIA, and MCA combined represent some 850 automation manufacturers, component suppliers, system integrators, end users, research groups and consulting firms from throughout the world that drive automation forward.

Schneider Electric Expands Industrial Software Presence

Schneider Electric Expands Industrial Software Presence

Schneider Electric LogoOK, so I was wrong. Well, I was right and wrong.

My analysis of the Schneider acquisition of Invensys (Foxboro, Wonderware, et. al.) centered on European competition. Namely that as Schneider assembled a large industrial technology powerhouse it was looking at Siemens and ABB—its next-door rivals.

Schneider was already a competitor in the electrical power industry. Acquiring the process automation technologies business with Invensys brought it into more complete competition with ABB.

Software

On the other hand, I thought that Schneider might divest the software business partly because it never really had very much in the way of software.

OK, I was wrong.

Schneider announced last week that “it has reached a preliminary, non-binding agreement with AVEVA Group PLC (“AVEVA”) on the key terms and conditions of a combination of selected Schneider Electric industrial software assets and AVEVA (forming the “Enlarged AVEVA Group”).

On the surface this appears to be a strange marriage. In fact, my friend Walt Boyes did an anti-Schneider rant on his blog this morning. Amongst the rumors he alluded to about Schneider management and how Clayton Christensen’s analysis of acquisitions predicted that the acquisition would go south, he also misunderstood, I think, the implications of this move.

AVEVA is a construction engineering software company. It provides the front-end engineering for plants that Foxboro, Triconix, Avantis, and other ex-Invensys brands operate and maintain.

Design to operate

The upshot is that Schneider should be able to provide an end-to-end solution for process industries similar to what Siemens has done for discrete manufacturing with the integration of UGS and the Siemens PLM division.

By the way, this latter is an example of how a large company can beneficially absorb an acquisition. The merger has worked very well. Other European companies have closely watched this acquisition model. I believe that Schneider will have learned from it.

I wonder what implications for the OpenO&M Initiative and the OGI Pilot program—an ongoing effort to use standards to move data from the engineering design database to the operations & maintenance database. AVEVA was a key player.

Transaction details

It is expected that the proposed transaction would:
1. create a global leader in industrial software, with a unique portfolio of asset management solutions from design & build to operations, with both scale and a distinct market position to address critical customer requirements along the full asset life cycle in key industrial and infrastructure markets;
2. unlock additional value at enlarged AVEVA and Schneider Electric through the potential for material revenue and costs synergies, leveraging on complementary end-markets exposures, customer bases and product portfolios;
3. establish a ‘best in class’ management team and increased brand profile for attracting further talent; and
4. realize the full value of the contributed industrial software assets.

The enlarged AVEVA would have combined revenues and Adjusted EBITA of c. £534 million and c. £130 million, respectively. It is expected that the Enlarged AVEVA Group will continue to be admitted to listing on the Official List of the UK Listing Authority and to trade on the London Stock Exchange plc’s main market for listed securities.  Schneider Electric intends to comply with the Listing Rules of the UKLA. As part of the transaction, Schneider Electric would contribute a selection of its industrial software assets to AVEVA and make a cash payment of £550m to AVEVA, (which would subsequently be distributed to AVEVA shareholders excluding Schneider Electric) in exchange for the issuance of new AVEVA shares, giving Schneider Electric a majority stake of 53.5% in the Enlarged AVEVA Group on a fully-diluted basis. Schneider Electric would fully consolidate the business in its Group financials.

In addition to any consultation procedures involving the personnel’s representative bodies that may be required, the transaction remains subject to, amongst other things, the completion of mutual due diligence to the satisfaction of both parties, agreement on the terms of legal documentation, the approval of the respective Boards of Schneider Electric and AVEVA, AVEVA shareholder approval and relevant anti-trust and regulatory approvals (if required). In accordance with the applicable law and regulation of the United Kingdom, a more detailed public announcement has been released today and is available on the AVEVA and Schneider Electric websites as well as on the AMF (French regulatory authority) website.

A further announcement will be made as and when appropriate.

Industrial Safety Index and Awards

Rockwell Automation Safety Maturity IndexRockwell Automation has had an emphasis on industrial safety for quite a few years, now. Five or six years ago, I moderated two Safety Automation Forums. It has done a few since during Automation Fair. This year they held an “America’s Safest Companies Conference” I think in place of it. The commitment to safety solutions just keeps growing.

I should mention that I conducted an interview regarding the Rockwell Safety Automation Builder that has been downloaded more than 200 times.

First, here is a news note about a Safety Maturity Index Tool to help manufacturers achieve best-in-class safety performance. This is a self-guided assessment that gives manufacturers visibility into the effectiveness of their safety programs and the ability to optimize plant performance. Applicable to any industry, any plant size and any location in the world, the SMI tool helps manufacturers see where they measure in safety culture, compliance and capital. Most importantly, it provides recommendations to help achieve best-in-class safety performance.

The three principal components of a successful safe workplace – culture (behavioral), compliance (procedural) and capital (technical) – are equally critical and interdependent in developing a strong, sustainable safety program. For example, creating and maintaining a robust safety culture but not investing in safety technologies and/or complying with standards lowers a company’s ability to provide a safe workplace. Likewise, the possibility of risk remains when manufacturers invest in safety technologies but fail to emphasize the importance of safety culture throughout the organization.

“The benefits of optimizing safety through the SMI assessment can result in fewer injuries and fines, as well as improved plant productivity, greater efficiencies and enhanced employee morale,” said Mark Eitzman, safety market development manager, Rockwell Automation, who is presenting the SMI tool at the America’s Safest Companies Conference in Atlanta on Oct. 28-30, 2013. “Achieving best-in-class safety performance begins with assessing current practices companywide, and now customers can do this on their own.”

Rockwell Safety Award Winners

Rockwell Safety AwardMany manufacturers across several industries worldwide still view plant-floor safety as a burdensome and costly obligation that adds little value to overall operations. To raise awareness and recognize top-performing manufacturers that have realized the widespread benefits of a strong industrial safety program, Rockwell Automation announced its first Manufacturing Safety Excellence Awards commemorating the world’s safest manufacturing companies.

The winners – General Motors Co., PepsiCo Inc. and Procter & Gamble Co. (P&G) – were selected because for them, safety is more than a priority, it’s a core value.

“These best-in-class companies have a robust safety culture that’s defined by continuous improvement,” said Mark Eitzman, safety market development manager, Rockwell Automation. “They take a comprehensive approach to safety by successfully integrating safety practices between the engineering and environmental health and safety (EHS) departments. This enables the kind of collaboration that reaches far beyond simple compliance to deliver improved plant productivity and greater efficiencies, and dramatically lower injury rates.”

Below are the details about the award winners:

  • General Motors’ collaboration with industrial automation companies has played a central role in developing some of today’s most innovative safety-automation technologies that help improve worker safety while also increasing production throughput in assembly applications. That same technology is now helping manufacturers across a wide range of other industries realize similar benefits. General Motors makes safety a visible commitment at every level across the company. It also shows a strong commitment to improving worker safety outside of its own walls by continuously dedicating resources and expertise to help develop U.S. and international safety standards.
  • PepsiCo successfully maintains a rigorous corporate-safety program across its global manufacturing sites. The safety program includes accountability that is driven from the top down, as well as adherence to a set of global standards that are embraced across the company.
  • P&G combines its engineering and EHS functions under the same leadership, which improves worker safety. This is especially helpful because the two departments have a greater understanding of the other’s job and can work toward common goals when upgrading or sourcing new machinery. This collaboration also results in a unified approach to safety-standards compliance and helps ensure consistency across all machinery in all plants. P&G also holds its vendors and material suppliers to the same high standards to help mitigate risk throughout the supply chain.
Smart Manufacturing Integrates IT and Automation

Smart Manufacturing Integrates IT and Automation

Ford CEO Alan Mulally discusses importance of manufacturing.

Ford CEO Alan Mulally

Just saw an update from the Smart Manufacturing Blog regarding the Smart Manufacturing Summit CEO roundtable. Here’s an article from CEO magazine about the summit.

The blog post quotes Keith Nosbusch, CEO of Rockwell Automation, which cosponsored a CEO roundtable discussion at the Smart Manufacturing Summit, “The combination of automation and information is the next wave of productivity.”

Nosbusch stressed that real-time feedback from the consumer will allow manufacturers to apply that information quickly on the plant floor to change what they’re making. “That seamless integration of the enterprise, the supply chain and the plant floor is becoming the next wave of competitive differentiation,” he said.

Check out the blog. Smart Manufacturing encompasses many things, but at the heart is the integration of IT and automation technologies to improve manufacturing processes, profitability, and strategic importance.

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