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Why manufacturing transformation will change Australia’s economic trajectory

Manufacturing and automation is now more top-of-mind than ever before.  As Industry 4.0 takes root in businesses across the globe, the opportunity to embrace highly-advanced technology and new, forward-thinking ways of working has never been greater. From smart cities and cashless payments to autonomous vehicles, there is no shortage of buzzworthy, headline-grabbing advances in modern industry.

One innovation that has become particularly important is intelligent manufacturing or smart factories. A combination of cyber-physical systems, automation, and the Internet of Things (IoT), these facilities have the potential to rapidly transform business. Therefore, it should come as no surprise that Australia has identified and embraced the benefits that this industrial wave holds. Automation adoption among Australian manufacturers has picked up substantially in recent years. According to the Australian Manufacturing Forum, there are around 83 robots per 10,000 employees in the country. This trumps the global average of 74 robots per 10,000 employees.

Global consulting company, Mckinsey, has also identified the economic potential that the rapid introduction of robots could hold for the country. In its 2019 Australia’s Automation Opportunity: Reigniting opportunity and inclusive income growth report, the agency noted that this opportunity could add $1.1 trillion to $4 trillion to the economy over the next 15 years, providing every Australian with $4,000 to $15,000 in additional income per year by 2030.

“As the country faces a modest 2 per cent GDP growth this year, and some economists speculate that the country could even face a recession in the wake of the recent bushfires and the coronavirus (COVID-19), is it perhaps time that Australian manufacturers grab hold of this automation potential and reshape the industry?” asks James McKew, regional director at Universal Robots.

Curbing Economic Concerns
As close economic allies, China’s halt on production has had significant impact on the local supply chain. Here, McKew notes that advancements in AI and specifically, cobotics, can be used in areas where it’s unsafe for humans to work or more simply Australian workers are unwilling to do the monotonous tasks to which cobots are so well suited.

“One of the latest and most exciting robotic breakthroughs, collaborative robots or cobots – robots that work alongside human operators safely - enable businesses to improve cost efficiency, productivity, and output quality. These intelligent tools foster a more inclusive workspace, too, by relieving workers from strenuous, repetitive and sometimes dangerous tasks so they can focus on higher-value assignments,” McKew said.

Cobots are user-friendly, flexible, compact, safe, and have a lower Total Cost of Ownership (TCO) compared to traditional industrial robots. TCO includes both direct and indirect costs, including maintenance, factory floor upgrades (including the ease a cobot can be re-deployed), employee training, and safety barriers, all of which are factors that typically apply to traditional industrial robots. Cobots are also less costly to set up, which further makes them a financially attractive option for manufacturers turning to automation for the first time.

What can we learn from the COVID-19?
Besides finding a vaccine or a cure, automation has now also been lauded as one of the safest ways to bridge the gap between the virus and service delivery.

In light of the global COVID-19 outbreak, the opportunity exists to further understand and implement automation across the country, placing Australia in a stronger manufacturing position and improving its global competitiveness rank.

“The World Economic Forum’s 2019 Global Competitiveness Index revealed that those economies that have invested in innovation capabilities are best placed to revive productivity and weather a global slowdown,” said McKew.

While Australian manufacturers are lagging slightly behind global and regional peers in Industry 4.0 adoption – compared to Korea’s 631 robots per 10,000 employees – the country is renowned for its high number of SME and micro-businesses in local manufacturing. “Many of these producers are hampered by costs, which could reduce as the uptake of automation on the factory floor increases. To better compete as a major player in global supply chains, they should embrace the digital transformation with haste,” said McKew.

McKinsey supports this notion, estimating that between 25 per cent and 46per cent of current work activities in Australia could be automated by 2030, helping to drive a renaissance in productivity, income and economic growth.

Utilising robotics and Industry 4.0 technologies, the pivot to intelligent manufacturing may just be the solution that helps countries in beating coronavirus now and future viruses that might arise.

 

 

 

 

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