Dive Brief:

• Swiss robotics company ABB is investing $20 million to increase production at its Auburn Hills, Michigan robotics headquarters and manufacturing site, the company announced March 16. 

• Renovations are currently underway, which won’t include expanding the facility’s footprint, but instead focus on “modernizing existing space” to increase production capacity by 30%, the company said in an email.  

• The project is slated for completion in November, with a focus on better serving customers in the EV, healthcare, packaging and logistics sectors, according to the release. 

Dive Insight:

The new equipment at the Auburn Hills facility will use digitally connected manufacturing cells, with production performed by mobile robots.

Robots at the site will take on tasks such as screw driving, assembling and material handling, which ABB said would relieve workers from such assignments.

The project will create 72 jobs supporting ABB’s robotics packaging and logistics headquarters in Atlanta, Georgia, as well as at its robotics life sciences and health care hub at the Texas Medical Center in Houston, Texas.

With completion of the renovation, nearly 90% of robots delivered to customers in the US, Canada, Mexico and South America will soon be made in Auburn Hills.

ABB is pushing to increase production of its robots as more companies look to adopt the technology. In a survey the company conducted in 2022, it found 43% of respondents planned to use automation and robotics to build supply chain resilience.

“As the global mega trends of labor shortages, uncertainty, the near and reshoring of production, and a desire to operate more sustainably accelerate, more businesses are turning to automation to build resilience while improving efficiency and flexibility,” Sami Atiya, president of ABB Robotics and Discrete Automation, said in a statement.

The same trend is being seen across the industry, with experts noting the technology can help alleviate ongoing labor constraints. Tim Shinbara, vice president and CTO for the Association for Manufacturing Technology, projected that more manufacturers will add automation and robotics to their operations in 2023.. 

Tyson Foods President and CEO Donnie King said the company is eliminating “laborious, difficult, high turnover” jobs on the company’s quarterly earnings call in November 2022, but did not specify how many.

The meat giant has seen quicker than anticipated progression of its automation efforts, King said. Workers whose jobs are cut would be reassigned to other open positions in the company, he said.

Earlier this year, Tyson announced the implementation of aggressive strategies to improve volumes of meat products to meet higher demand. These included increased automation, specifically for the difficult task of chicken deboning.

The strategy helped the company meet demand in the last quarter as it became better equipped to handle supply issues. Tyson reported chicken volumes rose 1.1% year-over-year in the last quarter and beef volumes increased by 5.1%. Pork volumes decreased by 1.1% compared to the previous year, due to a lower supply of hogs and declining export demand, King said. Prepared foods volumes were flat in the quarter.

Fiscal year 2022 sales were $53.28 billion, which the company said was record breaking and beat analyst predictions. King said improving on-shelf availability for its products in the last quarter allowed the company to meet demand.

“This is supporting improved volume performance across our portfolio of prepared foods products as we are continuing to see price elasticities remain below historical levels,” King said.

The company’s corporate structure has come under scrutiny from legal analysts in recent months after John R. Tyson, son of the company’s chairman, became CFO. It was further complicated last week when Tyson was arrested on charges of trespassing and public intoxication in Arkansas.

On the earnings call, Tyson apologized to investors for his actions, stating that they are “inconsistent with our company values, as well as my personal values.”

King said the company’s independent board of directors is “overseeing a thorough review of this matter,” but answered no further questions.

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By Lumen

What is a smart factory? A smart factory uses advanced technology, such as the Internet of Things (IoT), to optimize production processes within a single manufacturing facility. Advanced technology is deployed to gain data about and increase control of, manufacturing operations to enhance productivity. Many consider the smart factory complete once IoT devices are installed, producing data and measuring improvements. There is nothing wrong with that answer, and this is the type of smart factory approach that many manufacturers implement today. Other firms operate on the maxim “if it ain’t broke, don’t fix it.” This acknowledges the potential advantages of how technology enables the smart factory, but focuses on other issues more strategic in nature, such as supply chain management.

These are components of the same journey that will eventually be taken – one that takes the manufacturer from the smart factory to the smart manufacturing enterprise.

Point solutions versus comprehensive plans

The smart factory approach solves specific challenges in operations: for example, monitoring machine health. These point solutions generally stop at the factory’s doors. In contrast, the smart manufacturing enterprise connects the advanced technologies used in the production process (smart factory) to other parts of the business, such as supply chain management and product development. For the smart manufacturing enterprise, advanced technologies are building blocks of a larger strategy that weaves together operating technology (OT) with information technology (IT).

Let’s look at an example: remote access to data. Plant managers and technicians need access to their plant’s operating data, but they may be at home, in a satellite office, in an airport or walking down the street. The data is incredibly valuable to the manufacturer, but also to bad actors looking to steal the data or penetrate the enterprise. Manufacturers often use multiple layers of security to protect data and OT systems, which may not be designed for today’s modern networking and security standards. Within the factory, data is often replicated from OT systems to IT systems as means to lower potential areas of attack.

Secure Access Services Edge (SASE) is a set of integrated technologies that provides a framework for securing remote data access. SASE builds profiles for users, devices and access channels to properly authenticate both the user, the particular data that the user is permitted or restricted to use and the security of the connection being used. For example, SASE could protect against data breaches that often occur over public Wi-Fi connections, most notably at airports. SASE can also be configured for devices that need access to data from other remote devices. SASE helps isolate components of your network to contain worst-case security scenarios. Those IoT devices expand the attack footprint for attackers and have to be secured, as IoT is already pushing a lot of computing out to the edge. So, securing the smart factory at the edge is important as well.

Integrating across the enterprise

With the right connections, IoT can help manage the supply chain through inventory tracking, warehouse integration and other automated functions. Some factories have built digital twins for long-range management and planning, but they can’t exist in a vacuum. They need the data from machines to be accurate models of the enterprise’s needs. Likewise, sustainability reporting is an increasingly onerous compliance requirement. Once again, IoT can produce data, but it needs to be integrated with other systems to process and present it properly. The smart manufacturing enterprise involves the integration of various systems and technologies to optimize the entire manufacturing value chain. Smart manufacturing allows for real-time decision-making and optimization throughout the entire manufacturing process, leading to increased efficiency, productivity and agility. Consider mapping your journey to becoming a smart manufacturing enterprise today.

This content is provided for informational purposes only and may require additional research and substantiation by the end user. In addition, the information is provided “as is” without any warranty or condition of any kind, either express or implied. Use of this information is at the end user’s own risk. Lumen does not warrant that the information will meet the end user’s requirements or that the implementation or usage of this information will result in the desired outcome of the end user. All third-party company and product or service names referenced in this article are for identification purposes only and do not imply endorsement or affiliation with Lumen. This document represents Lumen products and offerings as of the date of issue.

Building manufacturer Admares is establishing its first U.S. factory in Waycross, Georgia, the company announced May 31.

Admares specializes in the mass production of buildings in the residential and hospitality sectors. The $750 million factory will produce structures for the housing sector and is expected to begin operations in late 2025. 

The company is relocating its global headquarters to the U.S. to fully ramp up its smart factory operations to address the need for housing in the country, Admares said in an email to Manufacturing Dive. There was a 6.5 million single-family home supply gap as of 2022, according to a Realtor.com report.

The upcoming 2.5-million-square-foot facility is also expected to create over 1,400 jobs in administration, management, engineering, IT, logistics, assembly, robotics maintenance and production. Construction is expected to begin in early 2024 and the hiring process will begin later this year, Admares said in an email.

Admares chose Waycross due to its access to major highways and rail connections and its proximity to the Port of Brunswick, Founder and CEO Mikael Hedberg said in a statement.

Georgia’s location on the East Coast is also an ideal site to service nearly the entire eastern side of the U.S. housing market, the company said in an email.

With its shipbuilding and offshore industry experience, Admares’s buildings at the smart factory will use robots and automation lines managed by line workers, according to its website. Robots and assembly line workers will complete the welding, cutting, painting and tiling that construction workers usually carry out.

“With the rise of modern industrialization practices, we have combined our expertise to create a revolutionary robotic-driven manufacturing process that allows entire buildings to be manufactured at a factory rather than on a traditional construction site,” Hedberg said in a statement. “With our advanced technology, we are adopting successful practices that are common in other advanced industries.”

The building manufacturer has been collaborating and prioritizing smart factory investments in recent years. In December 2021, Admares announced plans to build six fully automated and robotized factories within the next five years, including in the Middle East, U.S. and Europe.

In October, Admares entered into an agreement with Siemens to deploy Siemens’ software to design its smart factories. The software will be used for creating, analyzing, documenting and managing Admares’ products.

When Houman Salem, founder and CEO of Argyle Haus of Apparel, puts in a fabric order, his Los Angeles-based supplier requests the order by fax — a machine Salem said Argyle Haus doesn’t have. To accommodate this, Salem said his team has to jump through hoops to print, scan and send the order.

“We’re talking about a very old and low-tech industry,” Salem said. “It’s not something the younger generation is gravitating towards. It’s not as fun and cool as tech.” 

Apparel manufacturing facilities are often family-run companies but younger generations aren’t interested in taking over the business, according to Salem, and the current owners are resistant to change. 

“They’re getting ready to retire and it doesn’t make sense to overhaul their entire system, so instead they just keep things running the way they are,” he said. 

The lack of successors for these businesses has its repercussions. Eventually, Salem said, these facilities will close shop and a few power players will remain, forcing brands to look overseas to manufacture goods. 

Salem said at one point California housed approximately 9,000 apparel factories. Now it’s down to about 2,000 and is continuing to dwindle. 

Built-in manufacturing costs impede tech investments

Cost is another hurdle to tech adoption. Manufacturing costs on average in the United States are higher than overseas, according to Salem, particularly in its largest manufacturing hubs like California and New York.

The fashion and garment industry in Los Angeles, including textile mills, cut and sew facilities, wholesalers and distributors, is a $15 billion per year industry, according to the California Fashion Association. Los Angeles also has the largest cut and sew apparel hub in the country, according to L.A.-based Garment Worker Center. More than 45,000 garment makers work in the city’s garment-manufacturing sector and sew clothes for some of the country’s largest brands, including T.J. Maxx, Revolve, Ross and Fashion Nova, the report found. 

However, the state’s garment and manufacturing facilities' biggest cost drivers are wages, insurance and taxes, according to Salem. “For example, I have to pay the highest workers compensation rate for my manufacturing employees,” he said. “For every $100 of wages, we have to pay $18 in workers compensation.” Meanwhile the national average in 2023 is 93 cents per $100, according to insurance company The Hartford.

The multitude of regulations and inspections on manufacturing facilities in California, particularly related to gig workers as highlighted in the state’s AB5 law, makes staying compliant difficult compared to other states with looser restrictions and leads to heavy fines as well, said Salem. The fines, which range from thousands to millions of dollars, reduce companies’ ability to invest in technology and automation, Salem explained. 

But for manufacturing companies, operating facilities in these hubs are vital because that’s where the labor force is.

These excess costs are then offset to brands, which as a result turn to offshore factories with lower human labor costs and fewer regulations, but more manual systems and processes, said Salem. According to a 2020 report published at the University of Delaware, the United States offers one of the highest minimum wages for garment workers at about $1,160 per month. In comparison, Indonesia’s garment workers were making a minimum wage of $181 per month.

“The things that hold companies back may be lack of skills or lack of funding,” said Inna Kuznetsova, CEO of ToolsGroup, a supply chain planning and optimizing firm. “They often get caught in a chicken and egg situation where you need to invest in technology to reduce the spending of inventory, but spending on inventory is so high that you can’t spend on technology.” 

This is also true of companies looking to bring work back into the U.S. “If brands are going to invest in reshoring their manufacturing process, they’re going to invest in modernized warehouses and manufacturers,” said Matt Jackson, vice president of digital innovation services at Insight.

Targeting the supply chain

Even with high costs, clothing manufacturers in the U.S. were forced to invest more heavily in technology over the last three years because the COVID-19 pandemic exposed issues with demand management and supply chains, said Jackson. 

According to Kuznetsova, the pandemic threw off retailers’ monthly inventory predictions, especially as lead times for shipments from Asia began taking eight months or longer compared to four to six months prior to the pandemic. 

“Leading up to the pandemic everything was about cost control and driving the absolute lowest cost and getting the cheapest supply chain possible,” said Jackson. The supply chain was relatively stable and retailers could use basic tools or Excel to manage inventory, Kuznetsova said. The technology, however, provided little help in optimizing how much of what item they needed. 

Now Jackson sees most technology investments going toward AI and data analytics to address some of these issues by boosting efficiency, which increases profitability and improves sustainability. This is because it doesn’t replace a core part of the brand’s business but still allows them to respond more quickly to customer demands and trends, Jackson said.

“We’ve seen new investment in modeling around demand,” said Jackson. “Understanding when they are going to see spikes in demand, what’s happening in the market, what are the trends and what are other fashion companies seeing.”

Brands such as Abercrombie & Fitch, one of Jackson’s clients, have been allocating funds for AI and data analytics to get products to customers more quickly and fulfill demand.

Another aspect of the supply chain process that has seen the most innovation is placing orders in showrooms, according to Whitney Cathcart, co-founder of AI mobile body scanning solution 3DLook and formerly a consultant focused on automated processes and digital innovation.

Previously, retailers would come into the showroom and fill out a physical order form, but now there are systems like NuOrder and Joor that have digitized this process and are widely used. NuOrder’s cost starts at $600 per month, its website states, and Joor’s costs range from $5,000 to $20,000 per year, according to Inc.

“If anyone is still doing it by hand, it is by choice,” said Cathcart. “Some people are like, ‘I’ve been doing this for 30 to 40 years so I’m going to continue doing it this way.’”

Apparel development innovation falls short

Another aspect of the manufacturing process that is still very manual is apparel development, which, unlike some aspects of managing the supply chain, is very expensive to automate. 

Apparel development has three stages: pattern making, cutting and sewing. The industry has made great strides in automating cutting and using software to develop patterns, said Salem. 

While cutting technology is available, the automated machine isn’t widely used due to its high cost, which Salem said is upwards of $500,000. The machine doesn’t completely eliminate human labor either. A worker must place the fabric in the machine, which rolls it out and cuts, and someone has to come pick up the stack and deliver it to the sewers. 

On the other hand, the sewing process is almost impossible to automate and most manufacturers still use conventional methods like hand stitching or sewing machines. The cut and sew process is one of the top expenses in apparel manufacturing due to its reliance on manual human labor, representing about 35% to 40% of the total cost. 

It’s easy to use robotics to manufacture goods for cars or planes due to their rigid structure, but clothing, not so much, said Cathcart. Fabric is malleable and creating clothing requires layering fabrics of different weights and stretches. “To think you’re going to automate that whole thing is incredibly complex,” she said. 

That’s not to say there haven’t been attempts at finding a solution. Sewbo, which launched in 2016, is a machine that chemically stiffens fabrics to allow robots to sew garments. The chemical used is polyvinyl alcohol, a polymer that is already in widespread use for textile production, according to its website. 

Jon Zornow, founder of Sewbo, told Fashion Dive in an email that it is developing its technology with a team of industry partners including Saitex, which is one of companies Levi’s uses for denim production; Bluewater Defense, a manufacturer of uniforms for the U.S. Department of Defense; and Industry Sewing and Innovation Center. However, its tools are still in development and evaluation, and are not currently used in production. 

Softwear Automation has found a way to automate the sewing process as well, but exclusively for T-shirts. The company created a robotic system called Sewbots Workline, which uses cameras to map the fabric while robots steer through sewing needles. In 2017, Softwear was tapped by Adidas to create 800,000 tees per day — a volume that wouldn’t be possible with manual human labor.

“The fashion industry, in general, from how we concept, to how we create, to how we sell, has been a very slow sector to innovate,” said Cathcart. 

But these emerging technologies show that change is afoot. “There has been a lot of innovation and forward movement, and it’s picking up pace because consumers have so much power,” said Cathcart.

Dive Brief:

• Most of the increase in U.S. wage inequality over the past 40 years can be attributed to declining wages experienced by workers in industries that automated rapidly, according to an October 2022 paper by researchers at the Massachusetts Institute of Technology and Boston University.
• The researchers found that the inflation-adjusted earnings of men without a high school degree dropped by 15% between 1980 and 2016. Automation particularly reduced wages for those working in industries such as manufacturing, where employers introduced numerical-controlled machinery and industrial robots. Those working clerical jobs in industries that introduced software-based automation were similarly affected.
• The paper presents “a more stark outlook” on automation’s impact on earning power compared to more nuanced outlooks, MIT said in a press release, but it “does not obviate other nontechnological theories completely,” Daron Acemoglu, an MIT economist and co-author of the paper, said in the release.

Dive Insight:

The findings come as organizations continue to build in pay increases for 2023. A recent Willis Towers Watson survey found that U.S. employers planned to boost salaries by 4.6% in 2023, up from 4.2% earlier in the year.

Despite the news, not all worker groups benefit equally. A 2021 analysis by the Conference Board found wage gaps between white and Black men, for example, were wider between those with a bachelor’s degree than those without. Moreover, Black workers were underrepresented in jobs and sectors that saw the largest increases in top earners during the preceding decade, the Conference Board said.

Meanwhile, worker shortages in recent months have led to some high-profile instances in which employers turned to automation where they lacked staff. This was the case for several major grocery store chains going into 2022, according to Grocery Dive. Later in the year, fast food brand White Castle made headlines for introducing robotic fry cooks in an effort to ease labor pressures, Restaurant Dive reported.

Federal data do not identify workers that are most at risk for job losses due to automation, according to an August report by the U.S. Government Accountability Office. However, the GAO noted that U.S. Census Bureau researchers have found that companies reporting a greater degree of technological adoption were more likely to report a greater increase in the skills needed to work at their companies.