New Smart Manufacturing survey also identifies the top automation investment – and it’s not robots.
The need to balance quality with profitable growth is the top internal obstacle for automotive manufacturers, according to the eighth annual State of Smart Manufacturing Report: Automotive Edition by manufacturer Rockwell Automation Inc. The report collates the responses of 197 leaders from automotive manufacturers, automotive suppliers and electric-vehicle manufacturers across 13 of the largest manufacturing countries.
“Over the last few years, the automotive industry has been tasked with navigating many new challenges and obstacles. From shifts in consumer demand and supply chain issues, to microchip shortages and manufacturing workforce challenges, the industry has been compelled to remain agile. For instance, with the automotive industry’s switch to electric vehicles, manufacturers are having to increase their workforce as they make the transition, not only at their existing facilities but also as they open greenfield plants,” said Paul Epperson, Rockwell Automation’s vice president of auto, tire and advanced mobility in a release. “It is evident from reviewing the survey findings that navigating these challenges by adopting new technologies, while balancing quality with profitable growth, are top of mind for automotive leaders.”
Indeed, 40 percent of survey respondents said balancing quality and growth was the biggest internal risk for 2023. This is down from 43 percent of respondents who cited balancing quality and growth as the biggest challenge in Rockwell’s 2022 survey. Among external risks, shortages of raw materials and microchips—and the ensuing price increases—took top spot with 54 percent of companies surveyed. Inflation was the second-biggest risk, with a response rate of 47 percent.
Addressing Risks with Automation
Automakers’ strategies for addressing the major risks to growth focused on automation and the technologies that support it. On average, automotive manufacturers said they invest 23 percent of their operating budget on technology, with 41 percent of respondents saying plant-floor automation was the biggest priority. Some 38 percent said they will focus on business process automation while 36 percent will invest in the enforcement of process automation. Another 32 percent will be investing in cloud technologies that enable automation on the shop floor and in the back office, and 30 percent plan to invest in the cybersecurity needed to backstop all of this digital connectivity. Unsurprisingly, 54 percent of respondents said they are investing in automation as a way to address labor shortages.
According to the report, more automotive manufacturers ranked automation among their top five technology investments by ROI over the prior year. At 31% of respondents, process automation was the most popular top five choice. Automated mobile robots and automated guided vehicles were second, at 25 percent. In fact, automation and digital transformation technologies took the top seven spots on the ROI list, with machine integration, machine learning/artificial intelligence, cloud/SaaS, Industrial Internet of Things (IIoT) and RPA (robotic process automation) each being cited by more than 20 percent of companies surveyed.
Skill and Knowledge Gaps Inhibit Automation
Deciding to invest in these technologies is only the beginning, and integrating all this new equipment and software is a difficult process that takes a lot of expertise. According to the report, 48 percent of respondents that are currently using or actively evaluating smart manufacturing solutions said their companies lack the required skills to manage these initiatives. Lack of skill set to take advantage of smart manufacturing technology (43 percent) and lack of knowledge on smart manufacturing technology and benefits (39 percent) were also cited. Another 46 percent said employee resistance was a major barrier to technology adoption.
Other barriers to technology adoption in the automotive sector include cost of this technology (38 percent); difficulty of replacing or upgrading legacy systems (36 percent); misalignment between business objectives and smart manufacturing objectives (35 percent); the lack of a clear definition of smart manufacturing value or ROI (34 percent); and resistance from company leadership (33 percent)
Even the act of specifying the technology remains a challenge, as shown by the 26 percent of automotive manufacturers that cite technology paralysis—an inability to decide between solutions—as one of their main obstacles to overcome.
Automakers are Counting on Improved Analytics
The automotive industry will continue to face complex internal and external challenges over the next several years as the supply chain realigns, EV technology becomes more mainstream and customer demands change. The report says that 44 percent of automotive companies are relying on automation to help their business transform over the next five years with 41 percent also counting on tangible results from improving their use of data analytics—a major area of opportunity as 35 percent of data in the auto industry is unused.
Although Rockwell Automation had yet to release its automotive-specific report when this story was published, another report covering a larger range of manufacturing segments is available for download.
