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3 reasons why industrial automation matters

industrial automation - electric bike and wind turbines.

Industrial automation can help reduce our impact on the environment.

Barbara Frei
Executive Vice-President and Chief Executive Officer, Industrial Automation, Schneider Electric
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This article is part of: The Davos Agenda
  • The fourth industrial revolution is transforming manufacturing processes with the use of automated control systems.
  • By educating society and preparing the workforce with new skills we can allay fears about automation.
  • Here are three reasons why automation is something to be embraced.

Over 200 years ago, in the early 1800s, a series of riots erupted in northern England. Weavers and textile workers in Nottingham and other towns, concerned about the effect that introducing mechanized looms and knitting machines would have on their livelihoods, began smashing up the machines. The Luddites, as they were known, clashed with the British Army on several occasions before the movement came to an end.

Rapid change is never easy to come to terms with. Back then, it was the beginnings of the industrial revolution that caused unease. In the decades and centuries that have followed, the speed of technological change has rapidly gathered pace, transforming manufacturing beyond recognition. We’re now in the midst of the fourth industrial revolution – or “Industry 4.0” – and today’s factory production lines bristle with automated control systems, software, computer panels and robots.

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It’s important to acknowledge the worries that industrial automation and concepts like Artificial Intelligence (AI) and the Internet of Things (IoT) can present for workers who’re untrained in these areas, and for poorer economies that lack the resources needed to upskill their labour force.

But equally, it’s important to understand the full – and ever widening – range of benefits that industrial automation brings. As the COVID-19 pandemic has upended supply chains and manufacturing, it’s worth taking stock of why automation is something to be welcomed, not feared.

1. Industrial automation lifts productivity

First, and perhaps most obvious, industrial automation massively increases the productivity of tasks, processes and businesses in factories and on shop floors. Processes that once took armies of workers (think car manufacturing or food processing plants of 20, 30 or 40 years ago) now involve a fraction of that labour – a big consideration in the context of today’s supply woes and the labour shortages that come with slowing population growth in many parts of the world.

But it’s not just about reducing labour costs and getting more done, more quickly. The digitalization of manufacturing, and especially the advent of the Industrial Internet of Things (IIoT), also means increased throughput and avoided downtime as machinery is more efficiently employed and maintained. McKinsey estimates that using sensors on machinery reduces maintenance costs by 10-15%.

IIoT also provides the extra flexibility to adjust output to demand. For example, new open software approaches are more easily upgradeable. That way, if orders change, operators spend less time on reprogramming or re-engineering, which means increased machine availability.


What is the World Economic Forum doing about the Fourth Industrial Revolution?

Finally, accurately configured industrial automation systems reduce error and variability and thus boost productivity. Automating repetitive tasks such as stamping, soldering, welding, material handling and packaging yields consistently high-quality products.

2. Industrial automation arms the industrial workforce

Companies that were slow to deploy industrial automation tools prior to COVID-19 are now being forced to rethink their operations. Lockdowns and social-distancing measures meant workers were often unable to physically get to production sites, warehouses and logistics centres.

This has highlighted the importance of tools and technologies that allow staff to access, monitor, operate and service machinery, control systems and other equipment safely and from a distance.

This includes everything from augmented-reality glasses and other wearable technologies, to IIoT connectivity, advanced analytics and cloud-based technologies, which improve how industrial operations are monitored. Supervisors can make data-driven decisions, adjust output more accurately, and improve real-time operational efficiency – all remotely.

Meanwhile, data sharing and digital traceability technologies have vastly improved companies’ ability to gain visibility and transparency to authenticate the origin of parts and products across their value chains. At a time when businesses are increasingly held accountable for the actions of suppliers and partners, this is now an indispensable way to build trust while making operations more resilient to potential supply issues.

3. Industrial automation can lower industry’s impact on the environment

The third main benefit of industrial automation – and one that’s less obvious – is how it can help reduce our impact on the environment.

Image: Schneider Electric.

Energy and carbon-intensive industries need better control of operational indicators and efficiency levers to reduce their greenhouse gas emissions. Digital automation tools can help with that, as showcased to great effect in a new breed of industrial plants, which manage production, resources and business processes eco-efficiently by overseeing asset and operational data across multiple sites and entire value chains.

Powerful visualizations on dashboards display thousands of data points to track real-time production, giving deep insights into resource management, overall equipment effectiveness, and enterprise-wide optimization.

Even notoriously big-emitting industries in hard-to-abate sectors are converging industrial automation with energy management technologies from a central command point to obtain a better picture of where to save energy and minimize waste.

Why developing the right skills for the future is critical

Clearly, none of this can come without investment in hardware and software – but crucially, also in people.

Industrial automation, almost by definition, means companies require fewer employees and different skillsets. Many old-style manual jobs are vanishing, and being replaced by higher-tech, higher-skilled (and often higher-paid) jobs that didn’t exist even just a decade ago.

For some, this is understandably frightening. So, it’s essential that governments ensure that education systems are geared to fostering the skills needed for the next age of automation.

But the private sector – including companies such as Schneider Electric – also needs to play a role. Whether it’s by mentoring first-jobbers or re-training older employees, or by helping communities beyond their own workforce through training programmes.

In other words, we not only have to embrace industrial automation but also ensure the benefits are well understood and shared with all parts of society.

That way, no one needs to fear automation, or start smashing up machines like the Luddites 200 years ago.

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The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Forum InstitutionalFourth Industrial RevolutionManufacturing and Value Chains
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Institutional update

World Economic Forum

May 21, 2024

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