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Industries Still Struggle With Automation, Consulting Company Says

Bill Koenig
By Bill Koenig Senior Editor, SME Media

Various industries are still struggling with automation despite long-standing efforts, consulting McKinsey & Co. said in a report.

“Organizations in every region and industry are automating at least some business processes,” New York-based McKinsey said. However, it added, that “only a slight majority have succeeded at meeting their targets.”

The report is based on a survey of more than 1,300 people from different regions and industries. The survey was conducted online in January.

“Although automation has become commonplace, the results indicate that success is by no means assured,” McKinsey said.

Manufacturing has entered the Industry 4.0 era, in which “connected” machines provide data to operators. That’s being used to track parts and finished products more closely and to ensure maintenance is performed on time to keep operations running. That’s on top of traditional automation such as robots.

The McKinsey report says automation efforts tend work best on a decentralized basis.

“Respondents at successful organizations are more likely than their peers to say their functions or business units are accountable for delivering automation efforts, with or without support from a central team,” according to the report. “Conversely, respondents at less successful organizations are more than twice as likely…to say a central team is solely responsible for automation delivery across the organization.”

IT’s Role

What’s more, respondents to the survey also said successful automation “relies on the early engagement” of information technology departments. “First, these organizations’ IT teams are more likely to have automated their own processes…Organizations that are struggling to implement automation successfully would do well to elevate the role of IT.”

The report urges companies that are “just launching automation programs” to make “automation a strategic priority from the outset. Ways to put this in action would include defining clear strategic objectives from automation.”

McKinsey describes automation as “a global phenomenon.” It said 57% of all respondents “say their organizations are at least piloting the automation of processes in one more business units or functions.”

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