According to Statista Research Department, the global market for robots is expected to grow at a compound annual growth rate of around 26% to reach close to $210 billion by 2025. For example, according to Automation World, almost 45% of respondents currently use robots in their assembly and manufacturing operations and almost 25% expect to add robots in the next year. Clients and colleagues are starting to see the value in robots, and they believe it has become critical to think about how this type of automation could help scale the business successfully. It is no longer people vs. robots; it is people and robots.

Robots have been gaining in attractiveness for several years. For example, one key client started down the robot journey over 25 years ago, seeing it as a cost reduction project. Certainly, robots can save labor costs in certain situations, but it is not the only or even typically the most compelling reason to pursue the strategy. Other clients have installed robots to speed up the production process to increase throughput while several others have installed robots to take over repetitive, dirty or hazardous tasks, thereby improving safety and working conditions. Robots have also improved quality, increased consistency, and enhanced flexibility. Thus, even pre-pandemic, many executives were investing in robots.

The pandemic made robots even more attractive. First, robots could stand within 6 feet of employees. Clients with close quarters without robots struggled during the pandemic whereas those with robots (or manufacturing processes not requiring the close proximity of people) thrived. Also, if the robots could take on extra tasks, when employees were out due to COVID, manufacturing and distribution didn’t have to stop. Lastly, most clients had to scale up and/or down rapidly during the pandemic, and those clients with robots were more quickly able to adapt to changing conditions by ramping up or down as needed.

One aerospace manufacturing client had a bottleneck in their EDM (electrical discharge machining) production area. They had several steps prior to EDM and several steps following EDM in their production process. Unfortunately, because EDM required highly skilled resources for complex setups and fine tuning, a bottleneck built up in front of EDM. They tried running overtime, prioritizing jobs, and catching up on Saturdays but they could not increase the output to the level required to meet customer demand. Training another resource would take months, if not years. Then an idea arose to purchase a robot and customize the robot to suite their unique needs. Soon, they were running highly customized jobs and performing all setups on first shift so that the robot could run on 2^nd and 3^rd shift unsupervised. They tripled their output, the bottleneck disappeared, and customers were thrilled. They have continued to expand the use of robots in EDM to scale the business quickly and profitably.

Do robots always make sense? Absolutely not. Another client described the robots on his production floor as both beneficial and wasteful. In this situation, if the production line broke down prior to reaching the robot, there was excess waste because the robot kept running and didn’t realize there was a mechanical failure. It was a bit reminiscent of the “I Love Lucy” episode where Lucy and Ethel couldn’t keep up with the chocolate line and started eating the chocolate. If highly skilled resources are not available, robots could be restrictive rather than flexible, and down more than up. Robots are also not appropriate to all situations. Before wasting time and resources on a poor return on investment, perform a quick evaluation and trial. On the other hand, what is common across every client is the need to consider robots in your technology roadmap. Post pandemic, successfully scaling the business has risen to the top of the executive’s priority list. Thus, evaluating robots must be a top priority.

As originally published in Brushware Magazine on May-June 2021

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People are the #1 topic on our most successful clients’ executives minds. That’s because these clients realize that even the best strategies and plans will fail without people. On the other hand, we have seen clients that appear the least likely to succeed overcome great obstacles to not only become competitive but also to gain a strategic advantage in the marketplace. The secret ingredient is people. As a former VP of Operations and Supply Chain, there was no doubt that my success was directly correlated to the strength and attitude of my team.

Since it is such a key topic to ensuring growth and profitability, we wanted to dig into the current state of the skills gap. As a follow up to our research several years ago when we found that 87% of companies were experiencing a skills gap, we wanted to understand the current state of this topic and how it has evolved as we are knee deep in the technology era. For example, there is quite a bit of discussion on the topic of people vs. robots. Do we need to think about the skills gap if robots can take over? In other circles, the talk is all about artificial intelligence (AI). Will AI transform the industry? For example, there is a concern about this happening in the accounting profession. However, it might just mean we all must trusted advisors to add value to what can be taken over by robots. That is certainly true in manufacturing environments. The skill requirements are changing. Perhaps we need people to interpret data? And how about to get people and technology to work together?

We ran a survey where we asked for your feedback into the following types of questions:

• Which skills do you need the most?
• Are technical skills enough? Or do you need a savvy communicator as well?
• How do you find your best talent?
• Do you offer incentive to keep top talent such as rewards and recognition programs, performance management programs (tied with compensation systems) etc.?
• How have you seen these requirements changing with the hot bed of technology?

A few highlights from what we’ve seen at a cross-section of clients across closely-held businesses to private equity backed companies to global enterprises:

• Broad skills: Companies are looking for a broader base of skills. It is no longer sufficient to be an expert in a specialized area
• Presentation skills: Those who can present ideas effectively succeed whereas the most talented resources will struggle if they can’t get their ideas across.
• Technology overload: Although everyone is interested in the latest technology, we are overwhelmed with all the options. Selecting just enough technology to advance a key point is often the best course of action.
• Your network is your most valuable asset: It doesn’t matter if we are talking about a new hire, sourcing a supplier or getting just the ‘right’ trusted advisor at just the ‘right’ moment, the best way to find these resources is through your network. Are you nurturing your network?

The bottom line is that the most successful companies pay close attention to their #1 asset, their people. This idea extends to your customers, suppliers, trusted advisors and more since your face to your customer will be inclusive of each of these people. As rubber meets the road, navigating your skills base will be of paramount importance.

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We held an engaging executive panel discussion at our APICS Inland Empire spring symposium on the topic, “The Talent Transformation: People or Robots? There is quite a lot of hoopla in the area of Inland Southern California as this geography is larger than all but 24 states (and soon will take over Lousiana) with a strong manufacturing and logistics base yet the threat and opportunity of automation is close at hand. According to a University of Redlands study. Most large metropolitan areas are subject to losing 55% of their current jobs due to automation. In Inland Southern CA, that number expands to 62%.  What will this mean? Disaster or opportunity?

According to a robotics expert with a background in industry, Carnegie Mellon and Harvey Mudd, the CEO of the Inland Empire Economic Partnership (IEEP), a Director at Honeywell and a recruiter and practice lead at Aerotek, we can rest assured that people and robots can co-exist successfully. Of course, this assumes we are proactive about thinking about automation, retraining and educating our workforce and providing the insights and collaboration opportunities such as the executive panel event.

We had some probing questions from the manufacturing and distribution professionals in the audience, but it was unanimous that a solution exists. We also talked about Middle Harbor which is a high-tech area of the ports. This has proven more challenging as negotiations have put some people out of a job yet still getting paid for it. With that said, there were many examples of success with business growing 3 fold while the company doubled the workforce and more. Hiding under a rock is definitely not the route to success. Instead, be a part of the collaborative effort. As a Board member of IEEP and a supply chain expert, I am helping to lead a consortium for advanced manufacturing and logistics success to address just this topic (resulting from the Brookings study research). 

The students from Harvey Mudd presented some exciting robotics research they are conducting with industry on how to successfully navigate cluttered workspaces (as most manufacturing and distribution clients require). Much progress is being made, and robots aren’t going away. There are many positives in terms of consistency of quality, replacing competitive motion tasks, reducing workers compensation and labor risks in addition to cost savings. With that said, there are also some challenges to overcome which were discussed such as what happens when technology goes wrong (such as with the Boeing 737 Max). There is always risks to mitigate and people who are overlooked. The panel discussed the Challenger disaster and the employee who warned ahead of time to the technical glitch.

What are you doing to evaluate technology from a strategic standpoint? Will you be left in the dust? Grocery stores might have been a bit complacent before Amazon bought Whole Foods. Are you complacent? On the other hand, please don’t follow fads. When everyone thought outsourcing was great and Boards insisted on following the trend no matter the total impact, several companies outsourced and were sorry later when service went down and costs weren’t saved. If you’d like an assessment, contact us.

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No matter the industry and geography, the topic of “People vs. Robots” is a hot topic! Certainly, manufacturing has been focused on technology and automation for quite some time to navigate the path to thrive in the modern environment of high costs, regulations, and elevated customer demands. The Manufacturing and Technology Expo is Pittsburgh is going back to the theme of the 1939 World’s Fair, “The World of Tomorrow”. The Manufacturing sector has seen positive job growth not seen in 79 years. As Industry Week says, “We don’t have smoking robots, but we have ones that perform lung surgery.”

Our APICS Inland Empire Chapter is hosting an executive panel and networking symposium on just this topic, “The Talent Transformation: People or Robots?” on April 13th at Harvey Mudd. We have an intriguing panel of executives and experts to discuss automation, robots, IoT, AI and much more. How do we co-exist successfully? 

In logistics circles, there is quite a bit of worry and opportunity. According to a University of Redlands study. Most large metropolitan areas are subject to losing 55% of their current jobs due to automation. In Inland Southern CA, that number expands to 62%. However, it depends on your thought process. UPS automated a section of their facility that reduced the number of people they needed by 100 yet they ended up hiring as they absorbed additional volume. Additionally, it depends on whether you are furthering your education and skills. We find proactive employees and employers in our Association for Supply Chain Management (ASCM)’s APICS certification classes who want to learn and grow.

For Inland Southern California, we have a particularly unique opportunity or challenge, depending on how you want to look at it. According to a Brookings study, we must focus on advancing the capabilities and competitiveness of local firms in opportunity-rich manufacturing and logistics industries. What an opportunity for us to leverage technology hand-in-hand with talent to THRIVE.

If you are interested in discussing whether your organization is prepared to leverage these opportunities and what priorities should emerge, contact us. We are experts and would love to see the U.S., California and the Inland Empire take advantage of this tremendous opportunity to enable scalable, profitable growth.

Find out how to navigate disruption and achieve peak performance.

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March 19, 2019

The hot topic in manufacturing, supply chain, healthcare and other industries is the war on talent. No client believes he has enough “high-skilled” resources yet most also feel challenged in finding resources regardless of skill level. 

On the other hand, there are statistics and studies showing that there is a talent transformation underway. According to a university of Redlands study, Most large metropolitan areas are subject to losing 55% of their current jobs due to automation. In Inland Southern CA, that number expands to 62%. Thus, what are we doing to get ahead of these trends? 

I am the president of the Association for Supply Chain Management (ASCM)’s Inland Empire chapter, and we are hosting an executive panel and networking symposium on this hot topic. We have a powerful lineup of panelists to discuss and debate the talent transformation and the impact of technology and automation. 

• Paul Granillo – CEO of the Inland Empire Economic Partnership (IEEP)
• Cindy Elliott – Global Go-to-Market Strategy Manufacturing and Supply Chain, ESRI
• Jerry Hsiung – Robotics expert, Carnegie Mellon & Harvey Mudd
• Jermaine Waltemeyer – Recruiter/ Practice Lead, Aerotek

Lastly, we will be adding a manufacturing/ supply chain executive to the panel as well. Seats are going quickly. Learn more and register here.

One tip to implement this week: 

Certainly, if you are interested in getting ahead of the curve in manufacturing, supply chain, healthcare and more in terms of technology and talent, join us at our symposium. It is bound to give you a few ideas!

In addition, join us at APICS-IE for our webinars, tours and programs as we will be talking about this topic and seeing it in action. For example, we will be scheduling a webinar on the digital transformation as well as tours of facilities at various stages of automation. There are also other groups that focus on these topics. For example, the Manufacturing Council of the Inland Empire (MCIE) has its annual summit in February, and the IEEP hosts the Supply Chain Summit which will be on April 26th.

Additionally, of course, there are tons of on-line resources such as the National Association of Manufacturers. And, one key to success is to expand your network so that you have resources and connections that can support your growth and advancement. Think about connecting with a colleague and start a conversation.

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June 22, 2018

According to the Wall Street Journal, robots are taking on pharmaceuticals and food preparation. In pharmaceuticals, companies like Eli Lilly and GlaxoSmithKline are investing heavily in automation to radically change the process of drug discovery. If robots can handle thousands of samples around the clock, although costs will decrease or be reallocated to more valuable tasks, these results pale in comparison with the vast opportunity to develop drugs quicker! Are you radically re-thinking and innovating with speed in mind?

Meanwhile, a burger joint will open in San Francisco that makes $6 burgers entirely by robot.  Creator is betting that robots can create burgers more efficiently and better (with techniques borrowed from Michelin-star chefs) than humans.  Now the question will become – when the robot curious wears off, will people frequent a robot run burger shop?  Regardless, the question really becomes – are you considering whether robots or automation might benefit your customers and business value? 

What Should We Consider and/or What Impacts Could Arise?

As much as we warn our clients not to get “too” carried away with robots and technology (as it is easy to chase these ideas down a rabbit hole leading nowhere), it is certainly worthwhile to think about the strategic use of technology as it relates to innovation, providing a superior customer experience and in improving performance.  If it fits with your strategy, doesn’t distract from your priorities (or preferably compliments and enhances them) and generates a return on investment, why wouldn’t you consider every option?

One client leveraged the use of robots (designed uniquely for them by internal expertise) so that they could run a critical operation around-the-clock.  They couldn’t find employees with the appropriate skills to run more than first shift and overtime and were constantly struggling to keep up with orders.  Once the robot got up and running, the bottleneck was virtually eliminated and customers received what they needed when they needed it.  The people on first shift took on the complex tasks, set the robots up to run at night and remained extremely valuable (even more so).  Have you thought about these type of unique innovations to propel your business?  We’ll be starting a new video and interview series, “Innovation: Fast-tracking growth and profits” shortly.  We’d love to hear about your suggestions and innovations. 

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From self-­driving cars to automatic machines, technology is taking over much of society. But should robots be viewed as the ultimatum? Lisa Anderson, author of Will Robots Pay Back?  joined us to share her perspective. Here are three takeaways from our time with Lisa Anderson on Critical Mass Radio Show:

1. Levels of complexity can also be drivers of value. While on the show, Lisa Anderson discussed that running a successful manufacturing business is challenging, but that finding a way to provide superior value and service can be a key way to differentiate yourself in the market. Manufacturing is about more than just the product; it is about the entire customer experience. Finding a way to provide quicker, better service can help you outpace your competition and be successful in the market.

2. You don’t have to be a large company to capitalize on new technology. Rather, technology is pushing its way into companies of all sizes. Successfully utilizing these tools is not about the size of your company but how you customize technological tools and platforms to leverage your business. Technology in and of itself will not solve problems; it all depends on the application of these resources.

3. Information and data are not the same thing. Making intelligent decisions is not about the data itself, but about interpreting this data. Lisa Anderson advised that companies should invest in technology in the most strategic areas of their business, and areas that are most related to driving profits. Internet can help bring different pieces of data so you can strategically predict things such as customer demand, and how to get the right product in the right place at the right time, at the least cost.

June 4th, 2018 by Richard (Ric) Franzi, MBA

Download MP3 11.1MB

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At the Southern California Supply Chain and Logistics Summit conference, there were several keynote speakers from industry icons such as Amazon, UPS, Union Pacific and more.  One might expect quite a lot of interesting insights into the latest supply chain trends yet the most common theme among the presentations tied back to the skills gap.  It boils down to having the “right people” for success – both in terms of employees and supply chain partners.

Several of the themes emerging at the supply chain summit include:

1. Automation: Friend or Foe? With the advance of automation in the supply chain, there is much worry over the impact on people yet several speakers said they HAD to automate and leverage technology just to have a hope of keeping up with the expected growth over the next several years.  When adding in the retirement of baby boomers, will you have the skills to support your business growth?
2. Someone has to be behind the robot – Even though some robots use artificial intelligence concepts, they aren’t programming themselves.  There is someone behind the robot – programming, maintenance and more.  Are you preparing for a job that can be replaced by a robot or are you programming the robot?
3. Robots and people side-by-side- There are some tasks robots can automate and improve upon whereas there are others it makes sense to employ workers.  Are you preparing your resources to see value in both?
4. Matching skills with roles –How does your company stack up?  Another topic of much discussion – mentioned by panelists and attendees alike, the vast majority of executives are falling short when it comes to gaining the skills they feel they need to run their business at the “right” margins.  How clear are you on what you need to successfully run your business?  Or are you living on hope it will all work out?
5. The rise of flexibility – With the rise of e-commerce, we have BIG spikes.  We need to be thinking about how to incorporate flexibility into our thinking.
6. Would you want to be in the role? There are some jobs set up to be thankless (such as drivers in several environments).  If you wouldn’t want to do the job, how can you expect to keep your workforce?

Since having the “right” talent in the “right” place at the “right” time is #1 to success, investing in talent could be your most important investment of the year.  Do you spend as much time thinking about your people (whether current or new) as you do a major machine or technology purchase?  You should!

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I attended a compelling ProVisors presentation for manufacturers and distributors on the latest trends in technology for manufacturing.  Our presenter, Craig Young, discussed the latest advances in technology and what manufacturers should be thinking about to succeed in the New Year.  Robots were front and center in the discussion.    

Fully automated packaging lines should be quite popular with a typical 1-2 year payback – and that is prior to thinking about a vast array of non-financial advantages.  Next up on the robots front is automatic storage and retrieval systems – although a longer payback of typically 5 years, they can bring a host of advantages and increase competitiveness.  And, last but not least, we discussed laser guided vehicles with a typical 10-20 year payback with different advantages.   

What Should We Consider and/or What Impacts Could Arise?

Clearly, throwing robots at every problem is like Maslow’s hammer and the nail quote (if all you have is a hammer, everything looks like a nail).  Don’t do it!!  However, obviously, from the opposite perspective, there is something quite compelling about robots to achieve manufacturing objectives – profitable, scalable growth.  

Robots aren’t new.  I clearly remember a colleague at one of my jobs from 25 years ago when I was in planning/ purchasing/ inventory at Santa Fe Plastics (a plastic injection molding operation that produced consumer products like the jars for face cream) who spent 70% of his time working on a robot.  There were clear cut advantages, even way back then!   Although a lot of executives think about robots from an automation and cost savings perspective, there are more important advantages such as keeping up with growth, replacing people as they retire (since it is a tough market to find good manufacturing resources), 24/7 focus and more.  One of my current clients designed a robot that works around-the-clock.  Since putting the robot in place, they are able to keep up with customer requirements, have precise quality control and have maintained their long-term, high-skilled resources on first shift.  A definite win!  Others have brought manufacturing back to the U.S. – and even to California.

However, robots shouldn’t be viewed as a hammer.  Think about what you need to accomplish and evaluate robots as one tool / solution to a business issue.  We are in the age of the customer experience.  Will robots help or hurt you with this endeavor?  Depending on your specific situation, it could go either way.  Think before jumping. 

January 5, 2018

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April 19, 2017

According to the Material Handling & Logistics, robots are slashing U.S. wages and worsening pay inequality.  That is certainly a provocative statement!  According to new research by MIT’s Daron Acemoglu and Boston University’s Pascual Restrepo, one additional robot per thousand workers reduces the employment to population ratio from .18 percentage points to .34 percentage points and slashes wages from .25% to .5%.  Regardless of the exact figures, it is certainly accurate that robots will replace certain types of jobs.

Is this good or bad?  It is for you to decide based on your circumstances.  Technology and automation can keep you competitive and “save” higher skilled jobs since costs are reduced and so there is less incentive to move manufacturing away from the customer base to a lower cost location.  On the other hand, robots will minimize the number of repetitive jobs needed.  Are you continually building on your skills?  And, are you supporting continual skills building in your workforce?

What Should We Consider and/or What Impacts Could Arise?

We are hearing more and more about technology, automation and robots.  Thus, if you aren’t at least thinking about this strategy, you’ll likely be left in the dust.  With that said, we are the first to say – do not automate for the sake of automation.  Does it support a key need of your business?  Will it help you provide a better customer experience?  Will it help you be more competitive to grow your business?  Think carefully before jumping for the sake of following the popular trend.

If you don’t have a high labor cost environment, will robots make sense?  Perhaps not.  Just like everyone and his brother jumped on the outsourcing craze several years ago and many later discovered it didn’t make sense in their case (often by learning the hard way with unhappy customers), think before you leap.  Stay on top of the latest technology and search for business needs where this tool “fits the bill” to drive business results but do not blindly follow any person or crowd.

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