Firms face up to reality after automation boom

More than a third of German manufacturers admit to having over-invested in automation, and many are cutting back.

More than a third of German manufacturers admit to having over-invested in automation, and many are cutting back after finding their systems failed to perform to expectations, according to a new study.

A boom in investment in automation equipment is being follwed by a period of ‘sober realism’, say the Fraunhofer Institute for Systems and Innovation Research and the University of Hanover Insitute for Production Systems in ‘The End of Automation Euphoria’.

In a study of over 1000 facilities with highly automated systems, 35% had already reduced the level of automation or planned to do so. ‘Given the presumable difficulty for decision-makers to admit having made mistakes, the scope of over-engineering is indeed remarkable,’ it says.

Volkswagen’s Hall 54 at its Wolfsburg plant was for a long time held up as an example of high-level automation. But losses resulting from idle time and high maintenance costs cancelled out the expected benefits, says the report. This is confirmed by the survey’s findings that companies with highly automated systems did not have significantly higher value-added per employee.

The main reason given for dissatisfaction was a lack of sufficient flexibility to cope with the shorter production runs increasingly required in today’s industry. Fraunhofer ISI project manager Elna Schirrmeister said that the level of dissatisfaction was much the same across all sectors of industry and sizes of firm. The main differentiator was production volume: ‘Companies involved in small series production were more likely to be dissatisfied. Those doing mass production or single pieces had fewer problems.’


There was also a high correlation between companies which had experienced a large increase in sales in the last two years and those which reported problems with their automation systems. ‘Smaller series sizes clearly set the limits of classical automation,’ the institute concludes.

But Schirrmeister added: ‘People are changing their automation systems but not putting them aside or going back to where they were before.’ Highly automated companies had a lower reject rate, at 5.1%, than those that had not automated, at 6.5%. ‘But companies that reduced their level of automation had a better performance still.’ Their reject rate was only 4.1%. ‘They are not abandoning automation but trying to develop more flexible systems.’

John Kay, professor of manufacturing systems engineering at Cranfield University, said: ‘There is still a need for highly automated systems – for example producing euro coins at the rate of thousands an hour, or pharmaceutical inhalers.’ Welding car bodies is another area where the use of robots is well established.

But he added: ‘Companies are rediscovering the advantages of flexibility and agility that skilled labour can still bring.’

Work by Cranfield and Ford on the company’s Bridgend and Dagenham engine plants aimed at finding the right balance between automation and humans has shown that manufacturing the basic engine can be successfully automated. Automating the fitting of ancillary components can be done ‘but is expensive’.


‘Bridgend is moving away from high automation,’ said Kay, because of high levels of downtime. Humans are much better than robots at dealing with problems such as a component jamming while being screwed into place, he said. People are also much easier to train to deal with minor configuration changes in short runs for different markets.

British Automation and Robotics Association chairman Ken Young said that Japan as well as Germany had recently been drawing back from high levels of automation. He added that the problems were unlikely to apply to the UK to the same extent because Germany had four times the level of robots as the UK and Japan 16 to 20 times.

‘The UK went through all this early on: investing in automation and finding it did not deliver.’ Funding in the mid-1980s by an over-enthusiastic DTI encouraged companies to install robots before they were mechanically reliable, said Young. ‘That had a big effect. A lot of people think that robots are no more capable now than they were back in 1985.’