Roland Berger Assesses Worldwide State of Automation

TROY, Mich., Oct. 14, 2005 -- Companies in high-cost labor countries should strategically increase their robotics usage in order to be competitive globally, according to a recent study by Roland Berger Strategy Consultants.

Advanced automation equipment provides manufacturers with many advantages and opportunities to cut expenses and improve production flexibility. Since 1990, the cost of robots has declined by more than two-thirds, coupled with major quality improvements.

"Robotics can improve overall manufacturing efficiency, precision, safety, strength and productivity. These factors will have a significant impact on a company's bottom line, if certain important prerequisites are met," said Wim van Acker, managing partner for Roland Berger's North American operations. The Roland Berger study he referred to is titled "Capitalizing on Automatization."

"The use of robotics has become the way to do business in high-cost labor countries," van Acker said.

Van Acker spoke at the AutoMan Global Conference held Oct. 13 in the Detroit area. Organized by Automotive Manufacturing Solutions magazine, AutoMan featured more than 20 speakers and panelists discussing the state of worldwide automation, key business strategies and global challenges.

There is a strong correlation between high labor costs and robotics applications, the Roland Berger study noted. For example, Japan and several European countries have shrunk their labor expenditures since 1995 as they have increased their use of robotics. Yet, even as U.S. companies increased their efficiency in terms of man-hours per unit produced, they are more dependent on manual labor and have seen their costs gradually rise during the past decade, the study said.

The United States uses 63 industrial robots per 10,000 people employed in the manufacturing sector. Germany, meanwhile, has 148 robots per 10,000 workers. In Japan, automation is a much more integral part of the manufacturing process, using up to three times as many robotic applications as North America. Japanese companies also employ a broader definition for the term "industrial robot," using it to describe smaller electronic machines not used by their American and European counterparts.

The standardization of man-machine interfaces is one of the most promising cost-saving developments in the field of industrial robotics, van Acker noted. "Standardization enables workers to adjust more quickly to changes on the assembly floor. Workstations may soon follow workers along the production line, thanks to the increased use of hand-held devices such as personal data assistants," he said. Worker flexibility also will increase with the use of voice-recognition headsets, allowing hands-free equipment operation.

There are currently automated "island solutions" in many factories with a high number of isolated computers and control systems, van Acker said. Isolated systems can lead to higher development and maintenance costs due to the need to continuously update in-house Enterprise Resource Planning (ERP) software programs.

"Integrated control of plant-level processes is necessary to optimize company-wide systems and reduce costs," van Acker said. "Organizational solutions for simultaneous planning and control of production resources is clearly required. We will see operating decisions transferred to the production-process level. Integration of production, transport and warehouse logistics all will be aimed at reducing costs."

Roland Berger is a leading strategy consulting firm with more than 1,600 consultants working from 31 offices in 21 countries across Europe, Asia and the Americas. The company's global Automotive Competence Center of 120 professionals has completed more than 700 projects during the last decade.