Case Study Analysis: The Robots Keep Coming

In recent years, the use of industrial robots has been rapidly increasing because they provide several advantages to businesses: they dont make salary demands, they dont take vacations, and they work long hours without complaining or getting tired. But the most important advantage is that robots increase efficiency levels by monitoring worker output, analyzing huge amounts of production data, and improving warehousing and logistics tasks. For example, General Motors has just one-third the number of workers it had in the 1970s, but it now produces more cars than it did then. The steel industry shows the same trend; since 1997, the number of workers employed has declined, but output has increased 38 percent.

During the past decade, thousands of industrial robots were purchased by manufacturers in various countries. Korea now has 531 robots per 10 000 workers, Germany has 301, the United States has 176, and China has 49. The cost of industrial robots has been steadily declining; an industrial robot used to cost about $100 000, but the price has come down to about $25 000. Even small- and medium-sized companies can now afford to buy robots, and this will likely mean even more widespread use of robots. The robotics industry was worth US$10.7 billion in 2014 and is expected to grow to US$83 billion by 2020.

Robots have had a significant positive effect in the area of production management. Here are just a few examples:

* After adding robots to its factory, Vickers Engineering increased revenues from $8 million to $50 million and, at the same time, cut its factory labour costs by one-third. The number of employees actually increased from 100 to 180 because the company has been able to generate more sales revenue as a result of using robots.

* Etalex, a Montreal-based maker of metal shelving, has more than 20 robots in its factory. The robots weld parts, operate punch presses, and stack shelves. They work up to 19 hours each day. By using robots, Etalex has cut its labour costs by about 75 percent. But robots havent reduced the number of employees because the robots have helped the company remain competitive.

* At General Electrics Bromont, Quebec plant, 180 robots now do the work that humans used to do. But employment has increased from 600 to 900 people because the plant has more business now than it used to have because it is more productive as a result of using the robots.

* Kitchener, Ontario-based Clearpath Robotics makes unmanned Kingfisher vehicles that measure tailings in potash mines so that humans are not exposed to harsh chemicals.

* The candy maker Just Born Quality Confections has installed 16 robots with squishy fingers that can pick up and hold those brightly coloured marshmallow treats known as Peeps.

* At Amazons new warehouse in a Chicago suburb, 2000 employees work alongside a fleet of robots filling customer orders.

* A PricewaterhouseCoopers study found that 58 percent of CEOs planned to reduce their employee head count as the result of planned robotic adoptions.

* Several million production jobs could be at risk over the next 15 years.

* The World Economic Forum estimates that 1.6 million manufacturing jobs will be lost globally between 2015 and 2020.

* Thousands of jobs in textile and furniture manufacturing were lost during the past 40 years. Robots account for about 87 percent of the jobs that have been lost.

* McKinsey & Co., a consulting firm, estimates that half of all jobs could eventually be performed by robots.

The possibility that robots will take jobs away from people sounds pretty scary, but there are two reasons why many other experts think that robots and automation will not reduce employment opportunities. First, they point out that even though automation has been steadily increasing for many decades, the number of people who are employed now far exceeds the number who were employed 100 years ago. Although many factory jobs (and other low-level repetitive jobs) have disappeared because of automation, many more jobs have been created because of automation.

In addition to all the jobs that have been created for people who actually make the robots and other automated machinery, millions of other people have jobs that didnt even exist just a few years ago. For example, there are now thousands of jobs for web designers; obviously, these jobs did not exist prior to the development of the Internet. The second reason is that human beings have skills that robots cannot duplicate (social skills, emotional intelligence, creativity, and critical thinking skills), and these skills are crucial to the success of businesses today. Machines can replace the logic/math aspect of human intelligence, but not the spatial, interpersonal, linguistic, and musical aspects.

Questions-Each question is worth 5 marks.

1. Consider the following statement: The use of robots is not a good idea. While they do increase efficiency, they depersonalize the work environment and the positive aspects of human interaction, and this will be lost when robots are introduced. Do you agree or disagree with the statement? Explain your reasoning.

2. Consider the following statement: The quality of human interaction is key to a businesss success. Do you agree or disagree with this statement? Explain your reasoning.

3. Will automation lead to higher unemployment levels because people will be displaced by machines? Explain your answer.

4. When automation is introduced, it increases the efficiency of an organization (otherwise the organization wouldnt make the investment in automation). In what ways does it increase efficiency? List two ways.

5. What is your overall conclusion about the impact of robotics on companies and the people who work in them?