November – December 2021 Commentary

”My definition of ’innovative’ is providing value to the customer.” – Mary Barra, chairman and CEO, General Motors Co.
November December Commentary
Illustration by James Yang

My definition of ‘innovative’ is providing value to the customer.
– Mary Barra, Chairman and CEO, General Motors Co.

Automation – Robotic Revolution

More companies are tapping into the efficiencies of robotic systems to offset labor shortages caused by government unemployment subsidies, minimum wage mandates, COVID-19 lockdowns, and a general decline in the number of skilled workers. The turn to automation is transforming labor markets like never before, while colleges and universities are rushing to train the next generation of robotic designers, engineers, and technicians.

Business owners who fail to recognize and embrace such trends will be left behind. The growing use of robots to boost the productivity and quality of consumer, commercial, and industrial applications was inevitable. As the present baby boomer generation of around 71 million individuals — people born between 1946 and 1964 — steadily moves into retirement age, companies have scrambled to find workers to fill skilled and unskilled positions. At the same time, medical advancements and healthier lifestyles are extending human life.

November December Commentary 2The generations that came after the baby boomers are arguably the best educated people in the world. Consider that those born after 1964 have benefited from technological advancements that previous generations could barely envision: the internet, artificial intelligence, machine learning, software robots, and more.

The data revolution has caused a surge in tech-related jobs at the expense of manual labor, but the growing use of software to generate greater efficiencies in the workplace and daily activities has its limits. Hardware enterprises — builders and manufacturers of homes, vehicles, equipment, medical devices, and so much more — aren’t going away anytime soon.

To meet the demand for physical products when the supply of manual labor is declining, companies seemingly can’t automate production tasks fast enough. Think about how businesses adapt when faced with a challenge. The robotic process automation market, or software bots, is projected to grow by double digits for the foreseeable future, according to tech research firm Gartner Inc. The company predicts global revenue will jump nearly 20 percent this year, from $1.9 billion in overall sales last year. 

Part of the growth came from pandemic lockdowns, as business owners worked to keep their operations running by using software bots to complement call centers, process payroll data, or manage mortgage and loan applications. On the industrial front, companies that utilize collaborative robots, or cobots — which work safely alongside workers or automate entire manufacturing processes — are realizing efficiency gains and lower costs.

What’s more, for the first time, annual orders of robots from non-automotive sectors surpassed automotive robot orders in North America last year, according to a report from the Association for Advancing Automation in Ann Arbor. The gains were driven by a strong fourth quarter that was the second-best quarter ever for North American robotic sales, with a 63.6 percent increase from the previous year’s fourth quarter.

As it stands, the growth in automation is here to stay, helped along by pandemic lockdowns, minimum wage mandates, and political directives. To alleviate restrictions, more opportunities for utilizing robotic applications will help companies boost productivity, minimize disruptions, and provide enhanced flexibility.

Manufacturing – Talent Draw

Ford Motor Co.’s announcement in September that it would build a new assembly plant for an expanded lineup of electric F-Series trucks in Stanton, Tenn., northwest of Memphis — along with two separate battery complexes with South Korean partner SK Innovation, one in Memphis and the other in Glendale, Ky., south of Louisville — may not, on the surface, benefit metro Detroit.

While any state would welcome what, overall, is an $11.4-billion investment, our region and state already are benefiting from more than $7 billion in new production and battery investments from Ford. What’s more, most of the automaker’s R&D activities, which include thousands of designers, engineers, scientists, and technicians, are in Dearborn and at Michigan Central Station, its emerging innovation district in Detroit.

The two brain centers are helping drive the work that will go into designing and building the new truck and battery plants in Kentucky and Tennessee, which together will ease pressure on the global supply chain for batteries. Having learned its lesson in relying on foreign suppliers for key computer chips, which has impacted the entire vehicle sector, the automaker is making the right moves to avoid problems.

Ford’s decision to build the new facilities in the central portion of the country also speaks to lower shipping costs relative to having new vehicles built elsewhere. To help draw the key talent needed to expand the industry, the state should redouble its efforts to market our borders as the epicenter of global vehicle research and technology.

Tourism – Grooming Growth

As one of the top industries in the state, the resort and tourism sector received welcome news this fall when Boyne Mountain Resort in Boyne Falls announced Renaissance 2.0, a plan to guide growth and development through the year 2030. Included are national-level attractions, new technology and lift innovations, hotel developments, green initiatives, and more at Boyne’s facilities in northern Michigan.

Other resorts in the state are making recreational investments that will drive economic development and create jobs in an industry that initially was impacted by COVID-19 lockdowns. Once the restrictions were lifted, outdoor recreational facilities saw near-record demand as people gravitated to activities such as golf, skiing, hiking, and boating.

Confident that the demand is here to stay, Boyne Mountain Resort is building SkyBridge Michigan, which it says will be the world’s longest timber-towered suspension bridge. The new attraction is modeled after the Gatlinburg SkyBridge at Boyne’s sister property, Gatlinburg SkyLift Park in Tennessee, and its timber-frame design is a nod to the logging heritage of northern Michigan.

The resort operator also is expanding its use of renewable energy and introducing the next evolution of lift technology with the Midwest’s first Doppelmayr D-Line, a high-speed, eight-person ski lift. The investments are a welcome sign that Michigan can expand economic activity within the four-season tourism industry despite uncertain headwinds.