The Future of Artificial Intelligence in Manufacturing

“Robots and AI (artificial intelligence) will take over the manufacturing, delivery, design, and marketing of most goods,” says Kai-Fu Lee, author of AI 2041: Ten Visions for Our Future.¹

This bold statement blueprints a future in which AI and manufacturing are inextricably linked, which leads to a few key shifts: 1) the decentralization of manufacturing; 2) large-scale customization; and 3) the promise of a more democratic access to goods. Everyone will be affected: those who design products and services, those who build them, and those who consume them.

Manufacturing revolutions have driven watershed moments throughout history. In the eighteenth century, the advent of the steam engine enabled the vast, logistically complex transportation of people and merchandise . In the early twentieth century, mass production enabled the mass consumption of telephones, cars, and, later, televisions. Automation in food and toy manufacturing heralded a new era, too: Machines dipped ice cream bars in just the right amount of chocolate, kneaded mounds of dough, and assembled dolls in record time.

These technological advances relegated many tedious, rote, and unsafe tasks to machines instead of people. While they eliminated some jobs, however, they also created new ones—many of which demanded more technologically astute operators.

Today, as AI captures more and more market space—just as automation did before it—numerous industries, from manufacturing, health care, and entertainment, to financial technologies and marketing, are experiencing the onset of a complete overhaul.

In this article, we’ll explore how AI is transforming the manufacturing space, as well as the opportunities and challenges this transformation will bring, for those who are shaping the space technologically, and for consumers.

Today, in very concrete ways, AI is creating mass efficiencies in the production of goods and in the supply chain. With the power of interconnected devices and sensors, as well as machine learning (ML) algorithms, manufacturers are “utilizing many machine data points to predict breakdowns, to keep machines in top notch condition, and the production floor running smoothly.”²

AI is optimizing the supply chain and provides efficient data on questions regarding inventory, logistics, expiration dates, factory floor distributions, and more — all things that would previously rely on human estimations, historical knowledge, and, often, guesswork.

Robotics, as well as additive manufacturing—better known as 3D printing—impact the industry in powerful ways, too. For instance, in car assembly, robots protect workers from welding and painting fumes, loud stamping press noises, and even injuries. 3D printing—the construction of a three-dimensional object from a digital model—on the other hand, is now poised to transform nearly every industry, from healthcare and manufacturing, to food, steel, and plastic. In August 2021, for example, the city of Amsterdam unveiled the first 3D-printed steel bridge in the world, made of steel and nearly 40 feet long.

3D printing could also completely transform housing development by automating the design and construction processes, dramatically lowering costs and increasing access.

Another key aspect of AI, virtual reality (VR), also creates efficiencies in the manufacturing space by training builders in assembly or preventative maintenance tasks. Augmented reality (AR), on the other hand, can also provide real-time reporting on the factory floor or in the field, and help to quickly identify defective products and areas for operational improvement.³

While these very real applications of AI in manufacturing exist today, the future is even more promising. The market is projected to reach $16.3 billion by 2027, having registered a compound annual growth rate (CAGR) of 47.9% during the forecast period.⁴

In his TED Talk on the topic, Olivier Scalabre, a senior partner at Boston Consulting Group and an industrial goods expert, calls this growth “the next manufacturing revolution.”⁵ He adds, “The most exciting part…is about producing better, smarter products. It’s about scale customization. Imagine a world where you can buy the exact products you want, with the functionalities you need, with the design you want, with the same cost and lead time as a product that’s been mass produced, like your car, or your clothes, or your cell phone.”

While the promise of this future is exciting, it raises some crucial questions: How will lives be changed as a result of these transformations? Who will lose their jobs? How will we replace these jobs and how will we educate the workforce? Will things really cost less? Or more? Below, we explore some answers.

One of the most impactful consequences of this sea change in how consumer goods are manufactured will be where they are produced. The distance between where things are made and where consumers are located is shrinking: The shift to smaller production bases, argues Scalabre, will make “consumer proximity the new norm,” thereby completely upending the outsourcing model that so many countries with advanced economies have relied on over the past 30 years.

In a perfect world, AI will bring to fruition a sort of happy collaboration between technology and humans; a world where numerous new jobs are created with humans overseeing machines in a way that not only pays more, but also eliminates difficult, labor-intensive, and often dangerous tasks.

In reality, however, while some jobs will be turned into better, more sophisticated ones, AI could also potentially eliminate other jobs, especially those currently held by some of the most vulnerable members of the population. An 2019 Oxford Economics study found that for every robot, 1.6 human-held jobs disappear; by 2030, the use of robots could eliminate as many as 20 million manufacturing jobs worldwide.⁶

This raises questions regarding workforce education, income inequality, and even the possibility of a universal basic income—all topics that affect even prosperous nations such as the U.S., but affect, even more critically, those who live and work in emerging and developing economies.

What aspiring and established technology business leaders must now think about is how to balance the very real, inarguable need for innovation in the manufacturing space with growth that is also humanly ethical and sustainable in the long term.

¹ Lee, Kai-Fu, “How AI Will Completely Change the Way We Live in the Next 20 Years.” Time Magazine. September, 2021.arrow_upwardReturn to footnote reference

² “5 Ways Industrial AI is Revolutionizing Manufacturing” Intraratio.com.arrow_upwardReturn to footnote reference

³ “5 Ways Industrial AI is Revolutionizing Manufacturing” Intraratio.com.arrow_upwardReturn to footnote reference

⁴ “AI in Manufacturing Market Trends.” Marketsandmarkets.com.arrow_upwardReturn to footnote reference

⁵ Scalabre, Olivier. “The Next Manufacturing Revolution is Here.” TED Talk, 2016.arrow_upwardReturn to footnote reference

⁶ “Robots ‘to replace up to 20 million factory jobs’ by 2030.” BBC.com. June, 2019.arrow_upwardReturn to footnote reference