32 n ROBOTICS AND AUTOMATED MANUFACTURING July/August 2023 www.drivesncontrols.com Automation: heading for a tipping point? Over the past few decades, industrial automation has evolved gradually, with few changes in market structure. But the pace of change is accelerating, thanks to technology disruptions and macro-trends such as reshoring, skilled labour shortages, and environmental, social and governance (ESG) initiatives. Is the day coming when software-defined manufacturing will turn shop floors into “smartphones with robotic arms”? An analysis by McKinsey suggests the answer is yes. According to our analysis, many of today’s most advanced manufacturing technologies – such as digital twins, self-teaching robots, and devices that can do their own programming – will be common in the future. These trends will enable a “software-defined” paradigm for industrial automation. It is harder to predict when this new future will arrive. It may come in 15 years, but it also may come in five years, depending on the speed of technological advances and their adoption in various industrial sectors. The report identifies four vendor archetypes – “hyperscalers”, automation players (including machinery equipment manufacturers); software players; and specialised players – and shows how each of their strategies are evolving. Of the four archetypes, hyperscalers – cloud-service providers that have already disrupted other industries – are changing industrial automation the most. They are moving into the embedded software and hardware part of the automation stack and are starting to grab a larger share of industrial automation spending. Connectivity and Industrial IoT (IIoT), which currently account for about 18% of the industrial automation market, will grow faster than any other part of the market. This is the key source of revenues for hyperscalers. But no provider segment is static. Automation players, software players and specialised players – including systems integrators – are investing in parts of the digital stack they don’t currently occupy. (See Fig. 1) Two scenarios There are two scenarios for the future of industrial automation that differ in the speed at which technology is adopted. The first, more likely, scenario is one of gradual evolution with technology trends being adopted slowly. Standardisation will continue at a slow pace and innovations – such as digital twins and low-code/no-code programming – will be used only for specific applications and industries A second “revolutionary” scenario – involving a much faster transition – is also possible, and would necessitate dramatic changes for both suppliers and manufacturing by 2030. It would involve the rapid adoption of new technologies leading to shopfloors that are driven by data analytics and software, with new business models, widespread use of the cloud, and semi-closed ecosystems with adaptable central platforms. The report goes into detail on the following points: Automation users’ perceptions In a survey for the report, 94% of the users said digital systems will be important to their automation efforts in the future. Their focus has shifted away from self-developed digital systems that often did not go beyond learning exercises. Some 54% of manufacturers now use OEM partnerships in a bid to develop standardised industrial IoT platforms. That’s almost an eightfold increase since 2019. Game-changing technologies Soft-PLCs, digital twins and teachless robotics are among ten key technologies ushering in the future of automation. The report describes how these technologies will revolutionise factory operations. It also identifies inflection points that may cause the technologies to take off. For instance, advances in connectivity and data exchange protocols would probably spur the growth of soft-PLCs; rising labour costs would drive interest in teachless robotics; and AI is a strong enabler of almost all ten of the key technologies. Potential courses of action Industrial automation players can do various things to prepare for the future. Hyperscalers might expand their domain know-how and set up partnerships with established automation players and systems integrators. Automation players might consider moving up the technology stack, strengthening their positions in software and in cloud or IoT platforms. And automation users may want to take steps to expand their digital capabilities, since they will need these capabilities no matter what comes and when. Technical developments and new competitors are altering the shape of the industrial automation market. While no one can say for sure how it will play out, there are steps that all automation players can take now to position themselves for the future. It’s about making selective bold moves while preserving options. The companies that manage this in the coming years will be the ones that lead the way in industrial automation. n The 21-page report can be downloaded from https://drivesncontrols.news/0zqgfj Industry is facing non-linear competition and technological shifts. McKinsey & Co has produced a report examining possible future directions for industrial automation. Four partners at the company – Harald Bauer, David Ebenstein, Giulietta Poltronieri and Jan Paul Stein – outline some of the findings. Fig.1: Strengths and expansion plans for automation’s four archetypes. The chart is based on Web site data and interviews with experts. Source: McKinsey & Co
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