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Home » Robotics? It's Still Cheaper to Do Things Manually for Most Companies. But That May Be Changing.

Robotics? It's Still Cheaper to Do Things Manually for Most Companies. But That May Be Changing.

September 30, 2015
BCG Perspectives

The reasons are simple: economics and capabilities. It is still less expensive to use manual labor than it is to own, operate and maintain a robotics system, given the tasks that robots can perform. But this is about to change.

The real robotics revolution is ready to begin. Many industries are reaching an inflection point at which, for the first time, an attractive return on investment is possible for replacing manual labor with machines on a wide scale. We project that growth in the global installed base of advanced robotics will accelerate from around 2 to 3 percent annually today to around 10 percent annually during the next decade as companies begin to see the economic benefits of robotics. In some industries, more than 40 percent of manufacturing tasks will be done by robots. This development will power dramatic gains in labor productivity in many industries around the world and lead to shifts in competitiveness among manufacturing economies as fast adopters reap significant gains.

A confluence of forces will power the robotics takeoff. The prices of hardware and enabling software are projected to drop by more than 20 percent over the next decade. At the same time, the performance of robotics systems will improve by around 5 percent each year. As robots become more affordable and easier to program, a greater number of small manufacturers will be able to deploy them and integrate them more deeply into industrial supply chains. Advances in vision sensors, gripping systems, and information technology, meanwhile, are making robots smarter, more highly networked, and immensely more useful for a wider range of applications. All of these trends are occurring at a time when manufacturers in developed and developing nations alike are under mounting pressure to improve productivity in the face of rising labor costs and aging workforces.

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KEYWORDS BCG Perspectives Business Strategy Alignment Food and Beverage Global Supply Chain Management High-Tech/Electronics Industrial Manufacturing labor costs lean manufacturing Supply Chain Analysis & Consulting supply chain IT Supply Chain Management: Industrial Manufacturing Warehouse Automation
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