The Robots are Ready ... Are you?

By Bob McCutcheon, PWC

The growing ubiquity of robots, indeed, is leaving many spellbound (robotic waiters now serve and clear tables). For others, it may feel less exciting, leaving them wondering if there’s a shorter-than-expected shelf-life attached to what they do for a living. In the industrial space, robots are shedding their cages, where they have toiled for decades, now enlisted to collaborate shoulder-to-shoulder with their human co-workers. They’re working on dangerous and onerous industrial tasks, while also carrying out other tasks of great dexterity and precision such as soldering microchips. As robots take on more, and promise more—and as adoption costs continue to decline—a wealth of options for manufacturers are opening that did not exist even a few years ago. A perfect storm of factors favor robot investment in 2018. While robots have been edging into human work at a rapid pace for some time, 2018 seems to present an inflection point on even wider adoption. A number of trends are begging the industrial sector to take a closer look at robot adoption, including greater pressures to customize products, rising global competitiveness and a tightening industrial labor force. Another trigger is the 2017 overhaul of the U.S. tax code, which will likely free up cash for manufacturers that could be earmarked for automation technology. The package also allows full expensing of equipment expenditures (though set to gradually phase out by 2026). Indeed, robot adoption is already on a crest. Annual shipments of industrial robots in the U.S. rose from 17,000 in 2010 to 41,000 in 2016, according to the International Federation of Robotics. i U.S. venture capitalists invested $937 million in U.S. robotics technology startups in 2017 up from $209 million in 2013, according to a recent analysis by PwC.ii Robot deployment strategies: Six fronts to keep in mind. Despite the excitement over the dawning age of robotics, some adoption programs fall very short of expectation—or outright fail. Here are six fronts new and seasoned robotics adopters would do well to consider before committing investments and time. 1. Assess all costs (especially the hidden ones) to avoid surprises. Make a clear, fact-based assessment of total costs of automating. Measure the net value of automating a job—that is, the increase in benefits (such as cost savings from higher productivity), net the time and resources required to configure and maintain the robots (or any idling or dis-use). 2. Streamline budget approval for swift robotics adoption. Taking too long to approve a capital expense may mean missed opportunities. Therefore, it’s important to create a streamlined budget approval process that doesn’t hamper the quick adoption of robotics automation that supports that strategy. 3. Know your automation know-how. Assessing the available in-house experience in automated systems is necessary to assess what should be outsourced, or what kind of talent needs to be hired. Some include configuring and programming for production jobs; analyzing data for preventive maintenance; managing and repairing robots. 4. Identify what can be automated…and why. Robots are taking on a growing list of tasks— from assembly to materials handling to materials transport. Taking an inventory of all processes that are repetitive or difficult for humans is an important first step in identifying prime candidates for automation. Human skills that are in short supply now or will be in the future are also prime candidates. 5. Choosing future-proofed tech. As robots can take on greater physical and cognitive abilities—via artificial intelligence and sensory functions—some models may lag behind. This makes choosing robots that are not only right for the job just as important as choosing those that are easily upgraded. 6. Plan around safety/workforce issues. Robots can introduce risk and liability, so know which party is liable in case of an accident. Keep apprised of the newest safety standards, such as those set by the U.S. National Institute for Occupational Safety and Health and Robotic Industries Association (RIA). Also, be mindful of data privacy issues when personal data is captured by robotics systems.