In Search of the Fully Automated Supply Chain

Talking about robots is just plain fun. However, the idea that robotic technology will completely control the supply chain is still straddling the line between myth and reality.

We asked the EBN community to weigh in about whether the move to automation will ever translate into a completely automated supply chain. Our readers were pretty evenly split. A little more than 40 percent said it would, but 38 percent disagreed. And almost one in five respondents said it would happen — but not until 2050.

In comparing our straw poll with the realities of the market, the results are not shocking. It's clear that robotics and automation are on the rise. Between 2008 and 2012, robot sales increased 9 percent on average per year, according to the International Federation of Robotics. TechSci Research said in a report released in April (subscription required) that the global industrial robotics market will reach $37 billion by 2018.

“Robotics is the next big disruptive technology with continuously increasing demand for both industrial and service robotics,” the report said. “Robots are used in a wide variety of tasks like assembling in electronic and automobile sectors, machining of metals, plastic parts and handling of all kinds of production capabilities, etc.”

The automotive industry, which is searching for cost savings, has proven the most enthusiastic adopter. The United States, China, Japan, South Korea, and Germany are currently the major markets for this technology. Markets are also emerging in places like Brazil, India, Russia, and Indonesia.

These shifts raise concerns for many. For example, what does automation mean for the employment landscape? “I think we've reached a tipping point and that there will be much less need of people from now on, in manufacturing,” community member JVerity said during a recent EBN chat. “There will be an imbalance between super-efficient manufacturing and masses of people not paid enough to buy the output of all that.”

That sentiment was shared by other members of our community. “I am already seeing consequences of this in unemployment increasing everywhere especially Europe and Asia,” tech4people said.

Foxconn International, which manufactures iPhones and iPads for Apple, has been at the center of this particular conversation. The saga started in 2010, when the company raised wages in its factory after a spate of employee suicides. Now labor woes have pushed the company to embrace automation. Caixin Online reports:

The company's president, Terry Guo, said in 2010 that it would produce 1 million Foxbots, a mechanical arm researched and developed by Foxconn to perform dull and dangerous jobs. The robots would be implemented from 2012 to 2015 to increase the rate of automation and productivity.

However, the road to automation has had its share of bumps. Foxconn has produced only 20,000 of its Foxbots to date, and the expenses associated with research and development have mounted.

Perhaps the issue is not whether to automate, but rather how to balance between automation and human work. “Automation isn't necessarily the total answer,” community member Jim O'Reilly said during the chat. “The auto guys do it because the parts are so heavy.” Combining manufacturing innovations with smart application provides a path to cutting labor costs even without total automation.

Where would you draw the lines? How much is too much when it comes to automation? Share your thoughts below, and let's keep the conversation going.

27 comments on “In Search of the Fully Automated Supply Chain

  1. elctrnx_lyf
    July 4, 2013

    Automation in manufacturing may not be possible everywhere without huge investments. If these investments are not going produce enough returns, then it could be probably not a worth to invest.

  2. Ashu001
    July 4, 2013


    That would be a fair estimate;simply because with the Increasing Uncertainty we have today -Credit/Bank Lending has really,really dried up for most Major /Risky ventures;Any costly venture (which requires a lot of Credit) will face major obstacles going ahead.

    This is especially true if The Company is not Cash rich today.

    Plus one also sees the fact that Unemployment all across Europe has just escalated sharply today-Which Defeats the primary reason to Automate.

    When you can get Readily Available Labor(at cheap rates) easily;Where is the need/incentive to excessively automate?

    I see no such reason today in Europe.

    You can manufacture all your key parts in China(as before) and ship them for Final Assembly to either Spain/Portugal/Greece/Italy where Unemployment is HUGE today(especially amongst the Youth).



  3. Lavender
    July 4, 2013

    Despite the benefits brought by robot and expected growth, the imbalance between product consumption and large unemployment inhibits the automated supply chain process, especially in populous developing countries. Otherwise, unrest will take place.  

  4. SunitaT
    July 5, 2013

    Automation in manufacturing may not be possible everywhere without huge investments.

    @elctrnx_lyf, no doubt initial investment would be huge if we want to implement automation in manufacturing but there are lot of advantages of automation. For example it increased the efficiency of the manufacturing process and thus helps us to  recover the initial cost.

  5. _hm
    July 6, 2013

    Step by step approach as per need may be prudent way. Fully Automated supply chain may add cost and may have many disadvantages. Year 2050 is good time line.

  6. Adeniji Kayode
    July 7, 2013

    Automation will not only make huge demand on investment but on power consumption too.

    Above all, it should lead to more productivity and the only adverse effect it might have on the society is reduction in employment and that will also be for a season.

  7. Adeniji Kayode
    July 7, 2013


    Good points you made there but the purpose of automation is not even toward high employment rate but against it in a way.

    Increase in demand will eventually leads to increase in the use of machines/Robots which will lead to increase in productivity and decrease in employment rate.

    Most manufactureres as time goes on will embrace automation because a machine can do the work of so many people at the same time and at a faster rate

  8. Adeniji Kayode
    July 7, 2013


    Most developing countries are not even ready to embrace automation to a large extent for now, a major problem is power availability and high cost of fuel.

  9. Adeniji Kayode
    July 7, 2013


    That may not be a bad time to go fully automated but that will still be few part of the world though.

  10. SP
    July 8, 2013

    By 2050 may be every home or most of the homes can afford small robots to do household work or be personal assistant 🙂 Yes fully automated supply chain would defintely speed up many things. But when decisions have to be taken and if its not already preprogrammed then it might create slow down and human intervention would be necessary.

  11. SP
    July 8, 2013

    absolutely agreed @Adeniji. Un interrupted power supply is still a big thing to achieve in many developing countries like India. Power can go anytime and there are many areas where there are no power at all.

  12. prabhakar_deosthali
    July 8, 2013

    In my opinion the automation using robots is not just the replacement of man power.

    Robots have many more advantages –

    1.robots can work in hazardous environments such as nuclear radiation, poisonous gases, underwater exploration .

    2. Robots do repetitive work much better than humans without sacrificing the quality

    And of course robots do not need coffee breaks!

    So in a supply chain context robots are better placed than humans for material handling, material assembly, optical inspection, packing etc.


  13. Ariella
    July 8, 2013

    @ prabhakar_deosthal true, I just heard about the robotic flies developed at Harvard. The researhcers believe they can be used to search for people in wreckages and other places too dangerous or too inaccessible to humans.

  14. Hailey Lynne McKeefry
    July 8, 2013

    Certainly, labor costs will factor heavily into automation. I wonder, though, if we need a more complex formulae that takes other factors into account: speed, accuracy, flexibility. i doubt that it can be judged completely on dollars and sense.

  15. Hailey Lynne McKeefry
    July 8, 2013

    I wonder at what point automation will stop being a differentiator and start being table stakes? This seems to be not an “if” conversation but rather “when”.

  16. Marianne
    July 8, 2013

    Hailey, we do need complex formulae — quantitatively and qualitatively.

  17. SP
    July 8, 2013

    @Ariella, Robotic flies…thats sounds just great. When there is a disaster created by nature like Tsunami and recent floods in North India where Indian Airforce has to get into saving and tracing people, these flies can help in the areas where no one can go in. There are thousands of people who are still not traceable.

  18. Hailey Lynne McKeefry
    July 9, 2013

    The hazardous environment piece was one that I hadn't really considered, @prabhakar. The other piece that is important is that the same robot works tirelessly… You don't need two shifts for always on manufacturing.

  19. Ashu001
    July 9, 2013


    I know this is'nt exactly the Forum for This Issue on Finance but Cheap and Plentiful Credit Doled out by Global Central Banks (especially since the 1980s) is the No.1 Factor for increasing Automation in the Supply Chain (as well as other Industries).

    You reduce Credit and then watch how Manufacturers are forced to reconsider humans again(over Robots) in places where Labor is plentiful and Negotiable(southern Europe and all those in part-time jobs in America today-Bartenders and Waitresses are at record numbers according to the latest Jobs report);would love a steady job today with some Hope of progression in the future.

    About the need for Metrics you are correct again.

    Its a need that most certainly can't be discounted.

    And there is the Human Need-If one looks at the Number of Youth Unemployed today(all across the world) sooner or later Governments(Globally) will push for some form of CONTROLS or MANDATES on this issue to as a means to promote More Employment.

    Admittedly a Government Adminstered Solution will never the Best/most optimum solution (I have always believed you have let Free markets operate best);but when did stop the Government from trying to mess things up further?

    Remember a working Citizen is one who does'nt go around Screaming and Protesting and Dreaming of over-throwing the Entrenched Status Quo.




  20. Adeniji Kayode
    July 9, 2013

    SAN DIEGO, June 6, 2013 — An image processing technique that allows small Segway-like robotic vehicles to create 3-D thermal images of burning buildings in real time could help firefighters better assess structures and plan rescue missions.

    The mobile robots, developed by engineers in the Coordinated Robotics Lab at the University of California, San Diego, are equipped with a sophisticated onboard software system that can map and photograph the interior of burning buildings using a pair of stereo RGB cameras. The small robotic vehicle, called FFR, creates a virtual reality picture by gathering data from the various sensors to characterize the state of a fire, including temperature, volatile gases and structural integrity, all while searching for survivors.

    FFR is a robotic scout for firefighters developed by the Coordinated Robotics Lab at the University of California, San Diego. Images courtesy of Jacobs School of Engineering/UC San Diego.
    The research is part of an initiative to develop new robotic scouts that can assist firefighters in residential and commercial blazes.

    A number of these robots working together could quickly develop an accurate, real-time virtual picture of the building's interior for rescuers, who would then use the data to better assess their plan for firefighting and rescue activities.

    Thomas Bewley, a professor of mechanical engineering at UCSD's Jacobs School of Engineering, and his dynamics and control team have built a prototype of the robotic vehicle, which resembles a self-righting Segway that can climb stairs.

    “These robot scouts will be small, inexpensive, agile, and autonomous,” Bewley said. “Firefighters arriving at the scene of a fire have a thousand things to do. To be useful, the robotic scouts need to work like well-trained hunting dogs, dispatching quickly and working together to achieve complex goals, while making all necessary low-level decisions themselves along the way to get the job done.”

    FFR is equipped with stereo cameras that allow the robot to create 3-D imaging maps of burning buildings for firefighters to better assess a structure and plan their firefighting and rescue missions.
    The project represents a collaboration of researchers from the University of Illinois at Urbana-Champaign, the San Diego Fire-Rescue Department, and San Diego-based companies ATA Engineering, L-P3 and Brain Corp. They have applied for large block funding from the National Science Foundation's Robotics Initiative to sustain the project.

    Results of the research will be presented at the IEEE International Conference on Robotics and Automation next year in Hong Kong.

  21. Ariella
    July 9, 2013

    Well, sometimes a steady dose of soma is also necessary.

  22. Ariella
    July 9, 2013

    @Adeniji robotic firefighters could prove very helpful, espeically in light of the 19 firefighters who just lost their lives to a fire in Arizona. 

  23. Ashu001
    July 9, 2013


    Pass me some too!


    On a more serious Note-Don't you feel we have been doing too much sleepwalking for the last decade or so and its now Time to “Wake Up”?



  24. Adeniji Kayode
    July 10, 2013


    I agree with you on that, I was so amazed and really appreaciate robotic assistance when its comes to fire-out break.

  25. Mr. Roques
    July 17, 2013

    I believe there's room for microrobots (or sensors) that help evaluate a person in case of an accident. Have the robot inspect a person and to report back what's wrong with him in a matter of seconds. 

  26. t.alex
    July 29, 2013

    This reminds me of the movie “Surrogate” in which robots are substitues for human in most of the activities such as criming fighting, and battling in war 🙂

  27. SunitaT
    July 31, 2013

    With a fully combined solution, you have the capability to automatically generate drop ship purchase orders, send those PO to your supplier, receive fulfillment info upon shipment to the customer, and receive the bill from your supplier.
    The net result is a sale in which you never touched inventory, but the transaction completely honors the workflow of the back-office solution, allowing you to track sales, costs and related margins all the way down to your financial statements.

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