May 2021 Volume 3

AUTOMATION

Should You Pay Your Robot MinimumWage? By Jon Cocco

In one of my previous roles before becoming a business owner, I worked as a general manager at a global manufacturing company. I had the fortunate opportunity to lead a $500 million business unit operating eight global manufacturing facilities located in China, Czech Republic, Slovenia, Mexico, Brazil, and the United States. I remember relating to the work of Thomas L. Friedman in his best-selling book The World Is Flat: A Brief History of the 21st Century (April 2005) which analyzed globalization, and his view of a new level playing field. The decisions I was making seven years ago of whether to put a new manufacturing cell in China verses in our existing facility in the United States, is not so dissimilar to what forgers are likely trying to decipher today. However, the main difference now is the pace of automation, and how that changes the decision matrix. It is not just about finding the best labor arbitrage anymore. You also must account for automation and what hourly wage you are going to pay for that technology. TheWorld Is Flat Thomas L. Friedman made the point in 2005 that we are now in a world with a level playing field, in which all competitors, except for labor, have an equal opportunity no matter the geographic boundaries. Friedman argued that technological innovation, foreign investment, capital flows, and trade were transforming the world -- breaking down national borders, constraining governments, and triggering grand struggles between nationalism and the forces of economic integration. In his article to the New York Times (1) , he outlines the different stages of globalization: Globalization 1.0 (1492 to 1800) shrank the world from a large to medium size, and the dynamic force in that era was countries globalizing for resources and conquest. Globalization 2.0 (1800 to 2000) shrank the world from a medium to a small size, and it was led by companies globalizing for markets and labor. Globalization 3.0 (which started around 2000) shrank the world from a small to tiny size and leveling the playing field at the same time. I find it intriguing that Friedman’s globalization depiction aligns very closely to the industrial revolutions witnessed starting in 1800s. Now, nearly two hundred years after the start of the first Industrial Revolution, we are in the middle of the fourth Industrial Revolution, often referred to as Industry 4.0. Developments in automation and data in manufacturing technologies have resulted in a new era of smart factories and intelligent manufacturing. These technologies are not only changing how we do business, but for manufacturers, it changes how we make investment decisions.

Figure 1: History of Industrial Revolutions

Three ImportantWays toLookatAutomationDecisions One of our customers at Feedall Automation is Linamar (www. linamar.com). Linamar is among the top 100 automotive suppliers globally in terms of automotive parts sales and has 61 global manufacturing facilities. They know manufacturing and forging as well as anyone, and I have found they are always looking for better manufacturing solutions in their facilities. Early this year, I had the opportunity to speak with their engineers about some of the technology that Feedall was developing for robotic bin picking. In doing so, I learned how they think about automation investments and technologies. In today’s competitive environment,

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