How Machines—and Minds—Can Reboot Manufacturing
In the GMCI report, these nations—named the Mighty 5 or MITI-V—represent a potential “new China” in terms of labor, agile manufacturing capabilities, favorable demographic profiles, and market and economic growth. But what will be the impact of technology on these new manufacturing centers?
The rise of robots, automation and additive technologies will impact manufacturing industries in both high- and lower-cost countries, creating tensions through new potential jobs losses. Addressing these real concerns over automation and the future of work has been the focus of discussions this week at the Asia-Pacific Economic Co-operation Summit in Danang, Vietnam.
The potential economic—and real human—impact is enormous. By connecting machines and drawing insights from the ensuing data, the Industrial Internet could add $10 trillion to global GDP over the next 20 years. We estimate this impact is at least two times greater than the consumer internet. The challenge for government and business leaders alike will be harnessing this profound change to deliver benefits to society and people.
Across the globe, countries and companies have demonstrated that they can benefit from new technology, while also securing high-impact, high-value jobs for their citizens. What we’re seeing is that they’re not eliminating jobs as people often fear, but are changing the jobs that workers are doing and bringing manufacturing into a sustainable future. A recent study by McKinsey found that half of all activity in the workplace could be automated by 2055, but that any productivity gains will rely on people working alongside machines. Success in this new context will not be determined by working more cheaply, but by working more intelligently.
Highly automated factories
Tapping into this enormous opportunity will require new ways of working—and thinking about work.
GE has a unique advantage here. Our 125-years of industrial knowhow combined with digital expertise has enabled us to develop in-depth understanding about the physics and digital side of industrial assets as well as the structure of workplaces. To see how robots can and will transform manufacturing, let’s take a look at two GE factories and how they’re handling the integration of new technology.
At GE, our factories vary widely in age. Our Bromont factory in Canada has been part of our company story for decades—and then we have new facilities like Hai Phong in Vietnam, which we opened in 2011. What’s the common equation across all our manufacturing operations? Investing in technology and workforce development in equal measure. We support up-skilling, reskilling, and changing mindsets to let employees take control of their systems and processes. In other words, we train our employees to manage robots and automation, not to resent them.
Our newer facility in Hai Phong does about $500 million in annual exports, making it a significant contributor to the Vietnamese economy. When things are going well, it’s easy to get comfortable and stop innovating, but Hai Phong gave themselves a couple of bold goals for the future: phasing out manually-intensive labor, paperwork, and non-value adding jobs, along with eliminating waste and optimizing manufacturing processes. To achieve this, they’ve put in place welding robots, crane-free operations, and moving line manufacturing. Using digital tools to help welding increased efficiency from 12% to 30%, while smart torque improved quality control in manufacturing and increased productivity by 5%.
Bromont, while a much older factory, has a similar robotics story. They introduced robots in their facility back in the nineties, and now has 180 robots in place to do 50 million repetitive tasks that humans used to do by hand. By introducing robots, they have also been able to reduce their cycle time, and scaled from making 4,500 aircraft engine parts in 1983 to more than 3.3 million parts in 2017 – while also increasing employee numbers. The factory has also witnessed a significant decrease in incidents with increased automation. Overall, Bromont has become one of our most productive sites, and a hub for advanced robotic processes, software applications, and intellectual property that is exported around the world.
The biggest change in both locations, however, has been the mindset shift. In Hai Phong, operators can identify and tackle waste. Engineers can analyze data and make decisions to improve safety and quality. Maintenance can anticipate servicing and spare parts, while management can make more timely decisions. Overall productivity at the Hai Phong factory has increased by 20%. While in Canada, a participative management culture greatly contributed to the gains in Bromont. None of this would be possible without empowered employees who can see firsthand that technology can help them, and not take over their jobs.
Employee-robot relations
Whether we’re looking at our operations in Vietnam, Canada, or elsewhere, it’s important to note that the change management required for robotics and automation has been participatory. Employees have not been replaced; they now manage robots and production lines. In order to make this possible, employees were involved in every stage of process improvement and production planning.
Where facilities were once dominated by manual tasks, we now have production that only involves skilled labor. These changes in both technology and working practices underline why the next phase of manufacturing will involve a race to the top—and robots.
Technology will have a defining impact on the entire manufacturing industry, in established and emerging locations. The critical decision for both companies and countries is how they manage this change. It will be companies that don’t simply roll out the robots, automation, and other technology, but train and involve employees in this transformation who will survive—and thrive—in this new era.