Boston Consulting Group (BCG)
Canvas Category Consultancy : Company : Strategy
Boston Consulting Group is a global consulting firm that partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. Our success depends on a spirit of deep collaboration and a global community of diverse individuals determined to make the world and each other better every day.
Assembly Line
Can AI Deliver Fully Automated Factories?
The good news for manufacturers is that, based on our research and on-the-ground experience, we believe a significant shift is underway. The entry barriers for implementation that hindered earlier efforts are going to rapidly fall in the next few years. Robots are becoming more capable, flexible, and cost-effective, with embodied agents bringing the power of generative AI into the factory environment. Manufacturers must prepare for the inevitable disruption — or risk falling behind.
Our client chose to adopt a “redesign for automation” approach for its process, products, and layout. This complete overhaul of factory operations added new process steps to improve automation feasibility while removing human-oriented process inefficiencies. For example, our client no longer had to sacrifice valuable floor space for storing inventory that humans can see and reach. Instead, they built second-story vertical storage areas that robots can easily access and navigate. With the freed-up space, they installed more machines to increase output by more than 30%.
Programming and integration is 50 to 70% of the cost of a robotic application. Generative AI interfaces are expected to significantly drive this cost down by providing natural language interface for even non-technical workers to instruct robots. The transformation would be drastic: Instead of one specialized worker for every eight robots, the factory would only require one non-specialized worker for every 25 robots. Industry applications have already emerged. For example, Sereact has already rolled out a voice or text command interface, PickGPT, to interact with robots using simple instructions such as “I need to pack the order.”
Intel spins out AI software firm with backing from DigitalBridge
Intel is forming a new independent company around its artificial intelligence software efforts with backing from digital-focused asset manager DigitalBridge Group (DBRG.N) and other investors. The new entity, which will not be publicly traded and will be called Articul8 AI (pronounced “Articulate AI”), is an outgrowth of work on corporate AI technology that Intel initially carried out with Boston Consulting Group (BCG).
3D Printing Helps Realize the Promise of Distributed Manufacturing
Additive manufacturing offers a solution to the challenges of distributed manufacturing by enabling local and highly flexible production of small quantities. For many use cases, additive manufacturing systems and processes are now technologically ready for small-series production. Applying 3D printing in distributed manufacturing will be most beneficial for producing high-value parts, such as those used in the aerospace and medical-technology industries, or low-volume replacement parts. These are among the transformative technology applications that constitute Industry 4.0.
In 2022, BCG undertook a study, in collaboration with RWTH Aachen University and the ACAM Aachen Center for Additive Manufacturing, to capture insights into how the application of 3D printing in distributed manufacturing adds value and what the prerequisites are for successful use cases. The study included interviews with a panel of approximately 15 leading experts in business and academia, from a variety of countries.
Building the Bionic Supply Chain
To capture the greatest value from their end-to-end (E2E) supply chains, companies need to adopt a bionic operating model. With the help of adaptable key performance indicators (KPIs) that focus on optimizing overall performance in any situation, a platform organization that works cross-functionally, and a data and digital platform (DDP) that enables collaboration, a bionic supply chain leverages the best of what both machines and humans have to offer.
Building a bionic supply chain requires a comprehensive digital transformation where employees as well as leaders play crucial roles. Although the size of the effort is enormous, a bionic supply chain can lead to substantial improvements in performance. It can boost revenue by 4% to 6%, customer service levels by 5 to 30 percentage points (pp), and EBITDA by 2 to 4 pp. Moreover, a bionic supply chain has the potential to reduce manufacturing, warehousing, and distribution costs by 10% to 20% and working capital by 15% to 30%. It’s also more able to react swiftly to sudden changes in demand, supply prices, trade policies, and so on—perhaps the most important consideration of all in the current business environment.