What We Are Reading: Robots Pick Up More Work at Busy Factories

Wall Street Journal, 5.29.22 - Robots are turning up on more factory floors and assembly lines as companies struggle to hire enough workers to fill rising orders.

Orders for workplace robots in the U.S. increased by a record 40% during the first quarter compared with the same period in 2021, according to the Association for Advancing Automation, the robotics industry’s trade group. Robot orders, worth $1.6 billion, climbed22% in 2021, following years of stagnant or declining order volumes, the group said.

Rising wages and worker shortages, compounded by increases in Covid-19-related absenteeism, are changing some manufacturers’ attitudes about robotics, executives said. “Before, you could throw people at a problem instead of finding a more elegant solution,” said Joe Montano, chief executive officer of Delphon Industries LLC, a maker of packaging for semi-conductors, medical devices and aerospace components.

Delphon, based in Hayward, Calif., lost 40% of its production days during January when the corona virus spread through its workforce. The disruption accelerated the company’s purchase of three additional robots earlier this year, Mr. Montano said.

Manufacturers in the U.S., where workers typically have been abundant and wages stable, have been slower to embrace robotics than those in some other industrialized countries. The number of robots deployed in the U.S. per 10,000 workers has traditionally trailed countries such as South Korea, Japan and Germany, according to the International Federation of Robotics.

The use of industrial robots in North America for years had been concentrated in the automotive industry, where robots took on repetitive tasks such as welding on assembly lines. While auto makers and manufacturers of auto components accounted for 71% of robot orders in 2016, their share declined to 42% in 2021, the automation association said. Meanwhile, robots made inroads into other sectors including food production, consumer products and pharmaceuticals. Executives said improved capabilities are allowing robots to be programmed for more-complex tasks requiring a mixture of strength and nimbleness.

At Athena Manufacturing LP, a fabricating and machining company for metal equipment used in the semiconductor, energy and aerospace industries, Chief Financial Officer John Newman said customers have been ramping up orders, but Athena has struggled to find enough workers to staff a second weekday shift and a weekend shift.

The Austin, Texas, company purchased seven robots in the past 18 months, including one that grinds down the welds on steel frames for holding semiconductor equipment. Mr. Newman said Athena has spent more than $800,000 on robots, including about $225,000 for the grinding robot alone. The investments aimed to increase Athena’s capacity to handle orders, he said, more than lowering costs.

Grinding the welds on a rack typically took an employee about three hours to complete, but the robot is now able to do it in 30 minutes, he said.

Mr. Newman said the robot can apply more force with a grinding tool than a human can, reducing the amount of time needed to create a smooth welded joint. “The robot doesn’t stop to rest, and that’s understandable for a human because it’s a hard job,” he said.

Acquiring the grinding robot took Athena about four years of research and engineering, Mr. Newman said, including help from 3M Co., which supplies the abrasive materials used in the grinding tool wielded by the robot. Athena has deployed six other robots, four of which weld the racks and two that load metal into machines. Most of these off-the-shelf robots were delivered in a few weeks and can be programmed remotely from a phone app, he said.

“The robots are becoming easier to use,” said Michael Cicco, chief executive officer of Fanuc America, a unit of Japan’s Fanuc Corp., a major supplier of industrial robots. “Companies used to think that automation was too hard or too expensive to implement.”

Daron Acemoglu, an economics professor at Massachusetts Institute of Technology, said factories’ increasing reliance on automation will lead to an oversupply of human labor that will drive down wages in the years ahead, unless other U.S. industries can absorb displaced manufacturing workers.

“Automation, if it goes very fast, can destroy a lot of jobs,” Mr. Acemoglu said. “The labor shortage is not going to last. This is temporary.”

At Delphon, Mr. Montano said the company started leasing robots about four years ago to reduce the initial expense. The company now has 10 robots, including four so-called cobots that operate side-by-side with employees.

Delphon’s TouchMark subsidiary applies printing to the surfaces of medical devices, such as catheters. Cobots now are turning and holding the devices while a worker operates a printer that applies the ink to the device. Mr. Montano said two cobots reduced a three-person printing crew to one, saving the company $16,000 a month in expenses.

Two other Delphon cobots assemble packaging for shipping semiconductors and other fragile cargo, which are shipped in plastic boxes. Robots are now being used to clean the 2-inch-by-2-inch boxes with jets of air, dispense a bead of glue inside them and then install layers of mesh and the company’s silicone film padding.

Mr. Montano said Delphon is scaling up robots to work on larger-size boxes. The robots have improved the company’s productivity, he said, resulting in shipments increasing about 15% in 2021 and 2020, respectively, without increasing the company’s workforce of 200 people.

“We haven’t reduced any head count, but we reassigned them to where we needed people,” he said.