Automation trends in component manufacturing

Discover in-depth insights and begin your journey toward a transformative manufacturing future.

In brief

• A significant majority (80%) of component manufacturers plan to improve their level of automation by the end of this decade.
• While AI holds promise, it isn’t a top priority yet as companies need to reach a certain level of automation before they can benefit from advanced tools.

In the world of component manufacturing, the drive toward automation and digitalization is transforming how companies operate. But what does this shift really look like, and how can manufacturers harness it to stay competitive?

In a recent study, Sandvik Manufacturing Solutions, in collaboration with EY-Parthenon teams, surveyed 341 component manufacturers across North America and Europe to explore their largest challenges and their journey toward automation.

The study explored the automation journey and key challenges faced by component manufacturers, utilizing a framework adapted from autonomous driving to assess and advance manufacturing maturity. This approach enables manufacturers to recognize their current position and strategize their next steps, as outlined in the first report derived from the study.

As we present these findings, we invite you to consider the broader narrative of automation in manufacturing. From the details of the shop floor to the decisions in the boardroom, these reports offer a window into the ongoing evolution of an industry at the crossroads of gradual automation improvements and disruptive technology change.

Access the full report here

Six levels of automation in component manufacturing

Component manufacturers are confronted with two pressing challenges that they must navigate to remain competitive: a landscape of complex customer demands and a diminishing skilled workforce due to post-COVID-19 retirements. In this critical moment, the key to their success lies in strategic automation and a commitment to upskilling employees. This approach will determine which companies will thrive, shaping the future of production in terms of efficiency and cost-effectiveness, particularly within the US and EU markets.

To tackle this, EY-Parthenon teams [AM1] and Sandvik Manufacturing Solutions developed a model based on the six levels of autonomous driving, detailed in a report inspired by the study Six levels of component manufacturing automation[AM2] . Borrowing from the Society of Automotive Engineers (SAE), this framework served as the basis for analysis to understand where component manufacturers currently stand in terms of automation maturity and to explore their ambitions for advancing toward a more automated and data-driven future.

In the report, we outline six levels of manufacturing automation, each representing a stage of technological integration:

• Level 1 represents companies that lean heavily on manual processes, with basic system support for their human workforce.
• Level 2 introduces assisted systems, where automation begins to support production, albeit at a limited cell level.
• Level 3 moves to semi-automated operations, with manufacturing software aiding in resource planning and optimization while operators maintain control.
• Level 4 represents highly automated processes, where automation extends across multiple cells, and digital twins provide optimization insights.
• Level 5 sees the widespread adoption of robotics, offering a fully automated and integrated system that adapts in real time.
• Level 6 envisions “lights-out” production, a fully autonomous factory environment driven by digital components that require no human presence on the production floor.

Where do manufacturers currently stand?

In the survey, manufacturers were asked to self-assess their production sites. The results show an industry in transition, with a significant number identifying with Levels 2 and 3 — signifying a move toward more automated systems, yet with many still on the cusp of deeper integration. Interestingly, a notable portion are at Level 3, where semi-automation is in place but full connectivity across production cells remains the next ambition

For those approaching the most advanced automation levels, sustainability emerges as a concern, suggesting that a strong foundation in data connectivity and systems is necessary to tackle such sophisticated challenges effectively. It is important to recognize that these self-assessments may reflect a degree of optimism, as some companies might base their evaluations on their most advanced production lines rather than the average across their operations.