September 28, 2023

As demand for industrial robots surges, new analysis suggests the rewards are gradual to materialise. In line with the Cambridge College research, robots usually trigger early losses earlier than they will yield a payoff.

The researchers analysed {industry} information throughout 25 EU nations between 1996 and 2017. They discovered that when adoption ranges are low, robots can have a adverse impact on revenue margins. Because the uptake will increase, nonetheless, automation drives the earnings greater.

This U-shaped impact was attributed to the combination course of. At first, companies utilizing robots usually are inclined to deal with streamlining operations — an costly and laborious process. However when automation will increase and the robots are absolutely built-in, the emphasis shifts to product innovation. In consequence, firms discover new income streams and aggressive edges.

“Initially, corporations are adopting robots to create a aggressive benefit by reducing prices,” Chander Velu, a professor at Cambridge’s Institute for Manufacturing, mentioned in an announcement. “However course of innovation is reasonable to repeat, and opponents can even undertake robots if it helps them make their merchandise extra cheaply. This then begins to squeeze margins and scale back revenue margin.”

Velu’s analysis was impressed by the impression of computing. When computer systems first entered workplaces within the Nineteen Seventies and early Eighties, productiveness development initially slowed, earlier than rising once more. Velu wished to know whether or not robots have had related results.

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To search out out, his group first analysed industry-level information — primarily from manufacturing, the place robots are mostly used. Subsequent, they examined robotics information from the Worldwide Federation of Robotics (IFR).

After evaluating the 2 datasets, they deduced how robots have impacted revenue margins. Lastly, the group requested producers for insights about the adoption course of.

“We discovered that it’s not straightforward to undertake robotics right into a enterprise – it prices some huge cash to streamline and automate processes,” research co-author Dr Philip Chen mentioned.

The findings emerge amid increasing industrial automation.  For the reason that Eighties, robots have been broadly used for demanding and repetitive duties, reminiscent of automobile meeting. In newer years, nonetheless, robots have grow to be adept at extra intricate jobs, like advanced electronics manufacturing.

These advances are convincing extra companies to undertake robotic processes. For corporations exploring the probabilities, Velu has some recommendation.

“While you begin bringing increasingly more robots into your course of, finally you attain some extent the place your entire course of must be redesigned from the underside up,” he mentioned. “It’s vital that firms develop new processes concurrently they’re incorporating robots, in any other case they’ll attain this identical pinch level.”

You may learn the research paper within the journal IEEE Transactions on Engineering Management.