The following insight is from McKinsey.
Any minute now, some speculate, workers around the world will be asked to make way for robots.
Their arrival may be welcome in some cases. Our latest research suggests that when robots—or automated manufacturing technology—take over jobs that are oriented around repetitive tasks, operators are able to move onto more exciting and productive work.
This was the case at 16 “lighthouses of manufacturing,” which were identified as part of a joint McKinsey and World Economic Forum project presented at Davos.
It was conceived by Enno de Boer, a McKinsey partner and expert in digital manufacturing, as a way to help the growing number of companies—some 70 percent in a recent report—stuck in “pilot purgatory,” unable to complete digitization experiments because of factors such as low funding or having an overly ambitious scope. The 16 lighthouses will be sharing their lessons and insights with peer manufacturers.
So what is a lighthouse? According to the team, the term describes facilities so advanced in their use of digital tech, automation, analytics, and, yes, robots, that they stand out as beacons among their industry peers.
To find them, the team reviewed 1,000 companies around the world over 2 years, developing 39 use cases, or operational criteria and success factors, that each facility would possess. Forty factories rose to the top, and the team visited most of them to create the final slate.
Along the way, they got firsthand looks at a few eye-popping technologies, like an autonomous truck and train system, digital twinning and massive 3-D printing systems, and a single assembly line that every minute delivers one of seven different car models.
Engagement Manager Adrian Widmer, Senior Partner Katy George, and Expert Partner Enno De Boer
And of course the team saw robots. Lots of them. But the technology in these cases was enhancing workers’ roles, not taking them.
“Digitization is about improving productivity, not cutting costs,” Enno explains. “In most of the innovation we see at the lighthouses, the operator and workforce are leading the change and not subjected to it.”
Adrian Widmer can attest to this. An engagement manager at our firm, Adrian visited ten companies in Europe as part of the project. “Saving a workplace that had been important for generations was the principal motivation behind digitizing the Procter & Gamble Rakona plant in the Czech Republic,” he said.
According to Adrian, the plant was the main employer in Rakovník, a town of about 16,000 people, for more than 150 years. But not long ago, the market had shifted quickly, and the factory suddenly found itself under intense pressure to improve productivity.
“The employees were passionate,” Adrian explains. “They told leadership: ‘This was where our grandfathers worked and where we want our grandchildren to work.’”
So P&G started a program of testing and learning with digital technologies, launching modeling and simulation programs across all operations. It invited all of its operators and employees to think about what problems automation could solve and to identify opportunities that might give a boost to productivity. “They wanted to involve 100 percent of the organization in the transformation,” says Adrian.
As a result, P&G upgraded its existing equipment with sensors and new software, including an industry-first, real-time quality-control system. In 3 years, it was able to increase output by 160 percent and customer satisfaction by 116 percent.
“Because it’s now using leading technologies, it can also attract new talent in a very competitive market,” Adrian adds. “It expects to be operating for the next 150 years.”
Elsewhere, Adrian spent time at the BMW factory in Regensburg, Germany. There, more than 2,000 robots perform different jobs, sometimes side by side with an operator.
“In one case, the company found that people are actually better than any robot when it comes to installing the interior and engine of the car,” explains Adrian. But BMW also found that some of that work requires more strength than the typical worker might possess. So it devised a “co-roboting” system, where a worker’s ability is augmented by a machine.
“The operator on the left side of the car guides the installation,” Adrian explains, “while also controlling a robot positioned on the right side, which can apply tremendous torque to complete the fit wherever needed. So strength is no longer a barrier to entry for this role,” Adrian explains. “It’s open to anyone with the right skills.”
Diego Hernandez-Diaz, who’s also an engagement manager, visited five factories through the project. “I was really impressed by the lengths to which one electronics manufacturer went to help its people learn new skills,” he says. “It built out a fully-spec’d, virtual version of its factory. Employees would wear 3-D glasses to walk through and begin adjusting to their new jobs, even before the new technologies had been delivered.”
Meanwhile, Asian manufacturers in certain markets are using advanced technologies to seize different opportunities. McKinsey senior expert Forest Hou visited eight plants across the region.
In China, for example, demand for labor is high, and workers want to spend their careers at the forefront of their industries. “So leading companies are deploying wearable artificial-intelligence (AI) technologies,” says Forest, “to provide real-time feedback on worker performance and improve their effectiveness and skills, often in a matter of hours.”
“Giving people access to data empowers them,” says Enno. “They touch screens, see what’s happening, identify reasons for quality deviation, and make decisions. Operators in nondigital factories don’t have this control. Your manager just hands you an ‘occasion’ report. Direct access to data democratizes the work process—and puts it in the hands of the operator.”
That’s a familiar trend to firm senior partner Katy George. “Again and again,” she says, “we hear that the highest priority among the lighthouse leaders is upskilling their people.” According to Katy, companies are assembling multigenerational workforces, bringing in new digital, data, and AI scientists to work alongside operators with more than 20 years of operational experience. They’re creating full-scale internal digital academies to keep their employees’ skills up to date. And several are establishing relationships with nearby high schools, community organizations, and local and state colleges to develop curricula that include on-site work experience.
“At one electronics company, the first intern it had brought on later returned as the first graduate of its college program,” Katy says. And everyone around the Lighthouse Project agreed: if we can get the next generation that excited about a career in manufacturing, the future could be very bright indeed.
Read the full article in McKinsey Insights.