Industrial Automation Acceleration in the Post-Pandemic Era

Stratus Technologies APAC VP Edward Chow says as nations place greater confidence in the future of reliable industrial automation and look towards bridging the gaps in infrastructure capacity with Industry 4.0, enterprises must step up or risk being left behind.

By Edward Chow

The coronavirus pandemic has changed the way we work and experience everyday life. For enterprises, the continued spread of Covid-19 is putting huge stress on business and it will require changing business ideas and strategies to improve profitability. In particular, there is an upward trend in adopting emerging technologies to improve industrial automation.

According to Juniper Research, it is estimated that annual expenditure on edge processing in the Far East and China will reach USD 4.6 billion by 2024, or 41% of total global spend. As Ravid Jesuthasan, a member of World Economic Forum’s Steering Committee on Work and Employment, said in a recent interview with CNBC, “We know from history, every time we’ve had a recession, we’ve come out of it with more automation, and we’re in the mother of all recessions right now.”

To determine how industries are adapting to the challenges created by COVID-19, E-works, CCID Consulting, and other industrial research media and organizations surveyed manufacturers on the impact of COVID-19 and drew two highly consistent conclusions:
Firstly, manufacturing enterprises with a low automation level and high dependence on workers were severely impacted by the pandemic. Some workers were unable to return to their jobs and with no available persons to takeover, production was repeatedly reduced, resulting in enterprises having to decrease capacity or even halt production.

Secondly, enterprises with greater automation had fewer losses. Because they have implemented automated equipment in their facilities, they are less dependent on human labour. As such, these facilities are able to run normally with only a few workers on-site to operate and monitor these machines. This has enabled operations to continue whilst keeping employees safe with social distancing enforced.

For example, Sunshine Technologies, a Chinese supplier of thermopile IR sensors, operated at 40% employee capacity during the height of the pandemic. The percentage was similar in its downstream customers who produced thermometers. However, Sunshine was able to resume its production to 60% capacity, whereas its downstream customers were only at 30% capacity. Sunshine has automated production lines, but the downstream customers had less automated production and more assembly lines which are dependent on human labor.

Another example is ASE Group, a leader in the semiconductor assembly and test industry, which had already established 9 lights-out factories by the end of 2019. This number will be increased to 15 factories by the end of this year. Lights-out factories only need a few engineers to maintain the equipment. No humans are needed during production, making 24×7 production possible. The Weihai-based ASE factory has opened another production line and is running at full capacity now, even though only 60% of employees have returned to work.

The compelling advantages of automated production lines enable companies to increase market share and accelerate business recovery in the post-pandemic era.

The International Federation of Robotics predicts that by 2022, an operational stock of almost 4 million industrial robots are expected to work in factories worldwide. These robots will be integral in automating production to speed up the post-Corona economy. This trend is partly due to enterprises hoping to introduce industrial robots and automated production lines to reduce dependence on labor as soon as possible.

To some extent, the coronavirus outbreak has accelerated corporate efforts to upgrade their facilities and enhance automation, but it is merely a catalyst. There are three overarching factors that drive enterprises’ change in outlook and accelerate their transformation with industrial automation.

First, from the view of the industrial status quo, demographic dividends gradually fade away, labor costs soar, and customized demand stands out. Enterprises have to initiate transformation internally through automation and intelligence to reduce their worker dependence, without compromising on quality, efficiency and cost competitiveness.

Second, in terms of technical development, technologies like cloud computing, IoT, 5G, and AI are maturing after years of development. A larger number of industrial scenarios have been constructed based on these technologies. In particular, development in edge computing is accelerating the fusion of IT and OT technologies, diminishing the hurdle of industrial automation for enterprises.

Third, in terms of policy support, there is increasing government support for development in intelligent production in APAC. In Singapore, for example, SGD38 million will be invested in research and development for hyper-personalization in manufacturing on top of a 70% government subsidy to allow manufacturers to address specific customer needs. In Malaysia, the government is offering 80% subsidy plus tax exemption on robotic shipments.

Frost & Sullivan’s research: “Role of Governments in Promoting the Industrial Internet of Things (IIoT) in Asia-Pacific”, indicated that manufacturing economies in APAC are increasingly aware of the need to bridge the gaps in infrastructure capacity with Industry 4.0, and APAC governments are taking steps to encourage IIoT adoption to bolster their manufacturing sectors.

The coronavirus outbreak has accelerated industrial automation to a new level. The fact is that the integration of information technologies into traditional industries has already been picking up pace and issues inhibiting the development of industrial automation are being readily resolved.

For example, enterprises had to previously consider integrating various data bus standards and industrial protocols to interconnect and collect data from workshop appliances. This was costly, time-consuming, and produced inaccurate results. Now, with the development of edge computing and IT & OT fusion, a highly reliable edge computing platform will no longer experience such issues.

With industrial automation rapidly developing as well as the accelerated fusing of IT and OT, enterprises are becoming increasingly dependent on edge computing platforms with better real-time performances to acquire and process industrial field data. This requires edge computing platforms to not only support common industrial protocols and offer quick deployment at industrial sites but also possess extremely high availability and provide real-time visualization of the status of equipment and systems.

The post-pandemic world will see businesses rushing to digitalize and build up existing modernisation efforts. No doubt the current global uncertainty has highlighted the need for industrial automation as a stepping-stone to achieve digital transformation. Only then can businesses maintain an edge with greater agility, customer focus, smart-everything automation and tight control of cybersecurity, collaboration and communication. As more confidence is placed in the future of reliable industrial automation, it is vital for enterprises to step up or risk being left behind.

(Ed. Stratus Vice President APAC Sales & Services Edward Chow says he has more than 20 years’ experience in tech and industrial solution enterprises. Prior to Stratus, he held the role of General Manager at TSI Asia Pacific HQ. Chow says he has a Degree of Electrical Engineering from the University of Waterloo and a Master of Business Administration from the University of Toronto. Chow is a Chartered Financial Analyst. Featured image by Photographer Javon Swaby.)