DINE: Evolution of manufacturing

North American companies ordered 44,196 robots in 2022, an 11% increase from 2021.
Those sales were valued at $2.38 billion, an 18% increase from the year before.

When thinking about artificial intelligence (AI), many think of tools like ChatGPT or DALL-
E. However, AI is also making enormous headway in the industrial sector, and those advances
couldn’t come at a more critical time.

Today, AI is being used worldwide to improve production times and boost safety in
manufacturing plants in what is referred to as the “Industry 4.0” era. In this piece, we will
discuss why the need for industrial AI is accelerating and highlight some of the companies
that are leading the change.

AI Isn't Taking Over Industrial Manufacturing (Yet): Here Are 3 Reasons Why
Currently, industrial manufacturing is responsible for nearly 24% of global carbon emissions,
and the manufacturing sector as a whole is rife with expensive inefficiencies that make work
more difficult for laborers.

Despite this, artificial intelligence, machine learning and cloud computing have yet to be
widely adopted by industrial manufacturers. While it seems logical to control the massive
amounts of complex industrial equipment needed for manufacturing with digitalization,
technology is not replacing humans nearly as fast as it potentially could.

To understand why, my team and I performed research on over 150 scenarios for applying AI
to the industrial manufacturing sector, and here are three of the snags we found.

Reluctance To Trust Machines Over Humans

While conducting research studies on how to use AI in the industry, we heard a common
refrain: "There's no reason to transition to technology if humans can handle everything."

Let's look at steelworks for this example. In industries like this, the belief is that replacing
humans with machines is difficult or nearly impossible because their expertise is at a delicate
intersection of chemistry and physics. They often use personal experience to develop a
"recipe" for steel that strikes a balance between quality and cost.

In the same way you can't take the head chef out of a kitchen, most manufacturers believe
removing a steelworker from the production floor is virtually impossible. The trade-off for
this expertise is a more considerable margin of error (because they're human) and overall
higher costs.

The truth is that AI doesn't replace good professionals, though. Instead, it pulls low-level
workers up to mid-level workers, improving the quality of work for those who are not already
highly skilled.
Not Enough Clarity About The Purpose Of Working With AI

One major problem we noted in our research is the ethical question that has been raised in other
sectors as well: If something goes wrong, who do we blame? Is it the robot's fault? The
programmer's? The person who was supposed to oversee the robot?

With humans, the chain of responsibility is generally straightforward: This person is in charge of
this process, so it's their responsibility if something happens. With AI, it needs to be clarified, and
this causes reluctance to integrate it into existing procedures.

In the same vein, many manufacturers believe that AI is intended to take away jobs or replace
humans entirely, but this isn't the case. While it does take over routine tasks, it also modernizes
and digitizes jobs that most young people would otherwise not want to do. By implementing tech,
plants can attract and retain new workers.

According to the International Labour Organization (ILO), more than 2.3 million workers die
every year as a result of occupational accidents or work-related diseases. To put this number
in perspective, across the world 167,000 people died in armed conflicts in 2015, according to
the latest edition of the IISS Armed Conflict Survey. In addition to this astounding number,
each year 313 million accidents occur on the job resulting in extended absences from work.

The ILO estimates that the annual cost to the global economy from workplace deaths and
work-related diseases alone is a staggering $3 trillion.

The Slow Acceptance Of Digitalization

One of the main problems the industry faces is a need for more historical data upon which to
build effective AI models. The current lack of processes for collecting and storing data from
individual machines not only makes it impossible to transition to AI in the future but harms
the short-term interests of manufacturers as well.

Manufacturers often don't see the immediate value in cloud connection and data collection, so
they put off any kind of digitalization as a low priority. However, there are two important
benefits that could drive faster adoption: boosting overall equipment effectiveness (OEE) and
getting better returns on core assets. It also greatly improves quality control, which has a
ripple effect on productivity, revenues and worker satisfaction.

Industrial Manufacturing Is Falling Dangerously Behind, But There's Still Time

An effective AI takes two to three years to train on historical data, so the lack of acceptance
has already put the sector behind. Often, the issue of adoption is more of a matter of
economics, and this step is the hardest to take because of the initial cost.

Additionally, case studies prove that integrating AI trained on company data can reduce
necessary human resources, make a plant more agile and improve the bottom line. It also
helps with sustainability initiatives, which have become a pain point for many manufacturers
as the climate crisis looms.
While most operators still prefer to utilize their intuition and judgment on the floor, a
digitized plant makes it easier, safer and more profitable to replace a skilled operator when
they leave.

Right now, there is a growing skills gap that could cause problems in the near future. The
sector will need operators who are both skilled in the manufacturing side and AI capabilities.
This means that the faster manufacturers integrate AI, the more likely they will see future
growth and success as Industry 4.0 takes over.

The face of the industry is changing, following the global trends of digitalization and
sustainability. Industrial manufacturers have been reluctant to make the shift, but since
change is inevitable, it's better to embrace AI now rather than get left behind.
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DHL is the first commercial deployment of Boston Dynamic’s – a subsidiary of Hyundai
Motor (HYMLF) - Stretch Robot, which can grab packages from all corners of a shipping
container without knowing how it was loaded or having information about the individual
packages themselves. Click here to watch of video of it in action.
Emerson Electric (EMR) announced earlier this month that it has entered into a definitive
agreement to acquire National Instruments Corp (NATI) at an enterprise value of $8.2
billion. The acquisition is intended to bolster Emerson’s position as a global player in the
industrial automation industry, particularly in the semiconductor, transportation and electric
vehicle markets.
GE (GE) offers an autonomous robotics system designed to improve productivity using AI
technologies.
In the manufacturing industry, Intel (INTC) is using AI to enable its customers to generate
real-time data to fine-tune workflows.
NVIDIA (NVDA), a major player in many AI arenas, offers IGX Orin, an industrial-grade
edge AI platform with industrial inspection, predictive maintenance and robotics solutions.
Siemens’ (SIEGY) Teamcenter® software for product lifecycle management is
being integrated with Microsoft’s (MSFT) OpenAI Service to harness the “power of
generative artificial intelligence (AI) to help industrial companies drive innovation and
efficiency across the design, engineering, manufacturing and operational lifecycle of
products.”
In February, Microsoft released a technical paper describing design principles that could
guide language models, namely OpenAI’s ChatGPT, to adapt to different robotics tasks,
simulators and form factors. Examples of this can be viewed in this YouTube video or
this one involving a drone.
Rockwell Automation (ROK)’s “Smart Manufacturing” uses AI to anticipate potential
manufacturing process problems and provide proactive solutions, support cybersecurity
measure and preserve product quality.
On April 4, 2023, Walmart announced that, by the end of FY 2026, roughly 65% of stores
would be serviced by automation, and 55% of fulfillment center volume will move through
automated facilities, which it expects could improve unit cost averages by 20%. Walmart is
the largest private employer in the United States, with around 1.6 million workers. In
response to concerns that this will mean material job losses, Walmart U.S. President and
CEO John Furner told investors, “There will be new roles emerging that are less manual,
better designed to serve customers and pay more."
Despite those assurances, the retailer is reportedly cutting over 2,000 jobs at e-commerce
warehouses across Texas, California, Florida, New Jersey, and Pennsylvania. Those cuts are
likely to result from the return to normal following the surge in online sales during the
pandemic.