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Automation: Positioning Companies for Reshoring & COVID-19

by Freedonia Industry Studies

March 24, 2020

Companies that have embraced a high level of automation are better suited to keep operations flowing in the age of social distancing.

But for most industries, this is not new. In fact, this trend has been underway for quite some time. Some industries have adopted automated processes as a way to produce goods in the US that are more cost competitive with those sourced from Asia, particularly since rising employment costs and trade uncertainties with China had already made goods produced overseas not always the given lower cost alternatives they once were.

More manufacturers are noting another benefit to high-tech operations: flexibility. Greater use of technology allows companies to better operate in a world where uncertainty is a common condition.

Automation also allows manufacturers to develop the next generation of products and to perform more complicated tasks via innovations in advanced software and sensors. These underlying software and sensor improvements are leading to product developments that span capital goods industries.

However, one potential downside to automation at a time like this is that the skilled labor pool capable of servicing this equipment is small. If qualified technicians are out of commission with illness, it would be a lot harder to get replacement personal who can handle these pieces of equipment than it would be to just add more unskilled labor to a more manual manufacturing process.

For more information, see The Freedonia Group’s coverage of industrial components and machinery and equipment industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


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