Manufacturing Automation: Shaping the Future of Industry

Global manufacturing is entering a transformative era in which innovation, efficiency, and sustainability all converge under the banner of automation. These technologies—which include the use of robotics, smart workflows, machine learning, and more—are reshaping production processes as we know them, enabling industries to reach new heights in adaptability and resilience. From streamlining supply chains to reducing waste, automation accelerates productivity and forges new paths for long-term, sustainable growth.

At Reynders, McVeigh, we consider manufacturing automation to be much more than a mere technological shift; it’s a critical driver of economic and societal progress that continues to gain traction at home and abroad. In this discussion paper, we will explore the impact of automation on global manufacturing, taking stock of its benefits, the companies leading the way, and the broader trends shaping the future of industry.

The Engine of Progress: Automation’s Role in Manufacturing

Automation has evolved into a cornerstone of competitive manufacturing. Fixed automation is one of the most common types deployed by highly industrial companies with complex, manufacturing-heavy supply chains. It focuses on repetitive tasks requiring speed and precision, and is marked by a high initial investment and subsequent high volume production rates. Industries that harness fixed automation include automotive industry production lines, often featuring sophisticated robotic arms and other automatic processes, such as assembling massive car chassis and complicated drive trains.

Beyond individual industries, automation enables cross-sector improvements in sustainability. Automated production lines reduce material waste, enhance energy efficiency, and facilitate compliance with environmental regulations. By integrating technologies like real-time monitoring and predictive analytics, companies can align profitability with environmental stewardship, meeting the demands of socially conscious investors and regulators alike.

Workforce Transformation

Automation’s impact on the workforce will continue to evolve as it gains more of a foothold in industrial operations. By 2030, McKinsey estimates that up to 30% of biopharma manufacturing jobs could end up becoming automated, cycling out some roles while creating demand for new ones. [1] Emerging positions such as digital trial leads and bioinformatics specialists, for example, were born from this automation-induced evolution.

As this new era of manufacturing matures, the need for targeted reskilling and workforce development rings louder. Companies that proactively invest in education and training may be better positioned to maximize the potential of their workforce as global trade volatility accelerates.

This workforce transformation will be key to freeing workers from hazardous and monotonous jobs in manufacturing, allowing them to focus on higher-value and higher-skilled contributions along the supply chain. Consider that already, numerous sectors deploy robotic systems to handle dangerous, disproportionately accident-prone operations like welding and special material handling. Today, these collaborative robots (“cobots”) work alongside humans, bringing greater efficiency and measurable safety improvements. Countries like Germany and South Korea lead the way in this regard, with robot density surpassing 1,400 units per 10,000 workers, underscoring automation’s growing prominence worldwide.[2]



Industry Momentum: Automotive and Biopharmaceuticals

A real-world example of this harmony of efficiency, safety, and creativity can be found in the automotive industry, where robots and humans increasingly collaborate. This partnership demonstrates that automation, when paired with strategic workforce planning that builds toward long-term transformation, can enhance productivity without sacrificing the human element. Robots have long been integral to assembly lines, but their role is expanding as the industry transitions to electric vehicles. They facilitate the production of EV batteries, lightweight materials, and advanced components, all while meeting the demands of increasingly stringent government regulations. Policies like the European Union’s plan to phase out gas-powered vehicles by 2035[3] underscore the urgency of automation in achieving such goals.

Alongside the automotive industry, biopharmaceuticals stand out as another ideal arena for growth in manufacturing automation. In biopharma, robotic process automation (RPA) streamlines regulatory tasks, while machine learning accelerates drug discovery by predicting molecular interactions with unprecedented accuracy. These automated solutions can translate directly onto company balance sheets, as research shows that leveraging these technologies can lower general and administrative expenses to as little as 3.5% of revenue, compared to the industry average of 7%.[4]

Moreover, automation awards enormous benefits to biopharma companies in regulatory compliance, supply chain management, and drug discovery. By automating up to 70% of routine tasks, biopharma companies can reallocate resources to innovation and accelerate the delivery of life-saving treatments.[5]

Trends and Challenges: Automation’s Path Forward

The Trump administration’s second stint at the helm involves major implications for manufacturing automation. The promise of aggressive trade policies could significantly influence the future of automation; proposed tariffs on critical imports, such as semiconductors and raw materials, aim to bolster domestic manufacturing. While these measures may create opportunities for reshoring, they could also increase costs for industries reliant on global supply chains.[6]

Simultaneously, bipartisan support for the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act, which was ushered in by the outgoing administration, did much to spur investments in U.S. semiconductor manufacturing. Companies like Intel and Taiwan Semiconductor Manufacturing Company (TSMC) have committed billions to domestic facilities, supported by federal funding.

Achieving global competitiveness will require sustained investment and collaboration. Experts caution that while the CHIPS Act is a significant step forward, further measures may be necessary to secure U.S. leadership in semiconductor production.[7] The Trump administration’s handling of this powerful industry warrants close attention.

Automation technologies provide solutions to these challenges. Flexible automation, for instance, allows manufacturers to rapidly adapt production lines in response to policy changes or supply chain disruptions. This agility is critical in navigating the complexities of a volatile global economy.[8]

Pioneers of Manufacturing Automation

Schneider Electric and Rockwell Automation are two companies that for years have stayed at the forefront of developing solutions, advancing innovation and maintaining strong foundational standards in manufacturing automation. Let’s take a deeper dive into each.

Schneider Electric (SU.PA), a global leader in energy management and industrial automation, has positioned itself at the nexus of sustainability and innovation. It is one of the world’s largest manufacturers of electrical and automation equipment. In the realm of automation, which accounts for 21% of its sales, Schneider builds industry-leading motors and drives that power and control machinery critical to automated processes.[9]

Schneider also leads in automation software development. Its EcoStruxure platform connects machines, enabling real-time monitoring, predictive analytics, and energy optimization for manufacturers and their supply chains. Schneider’s technologies are pivotal in industries like manufacturing and data centers, where efficiency gains are critical.

Additionally, Schneider facilitates the integration of renewable energy into industrial processes, positioning itself as a leader in the global transition toward greener power systems. In our previous discussion paper, we explored Schneider Electric’s role as a backbone player in the electrification megatrend.

Rockwell Automation (NYSE: ROK), the self-touted “largest company dedicated to industrial automation,” is a driving force in digital transformation in manufacturing. It develops software, such as its LogixAI solution, which employs artificial intelligence to control manufacturing operations and floors in real time, reducing waste and enhancing precision. Rockwell produces intelligent devices that enable automation in manufacturing at scale. This includes sensors that detect the presence or absence of items on an assembly line, drives that operate electric motors, and even industrial components such as conveyor systems.

Rockwell is also a leader in lifecycle services, to the tune of 28% of its sales.[10] These turnkey products help customers implement automation into their manufacturing schemes, as well as conduct key maintenance and cybersecurity monitoring.

Both companies reflect our investment philosophy, demonstrating how automation can balance profitability with long-term value for shareholders. With the use cases for automation in manufacturing continuing to expand throughout every corner of industry, both companies are poised to usher this trend forward.

Staying Ahead of the Industry Curve

Automation is more than a technological advancement—it is a transformative force shaping the future of global manufacturing. By improving efficiency, reducing costs, and fostering innovation, automation enables industries to thrive in a resource-constrained world while driving long-term growth.

At Reynders, McVeigh, we view automation as a pathway to both improved profitability and risk management, offering companies a dual benefit: the economic motivation to boost efficiency and the opportunity to reduce costs and liabilities. For more insights into our approach, reach out to our team today.

 

REYNDERS, MCVEIGH CAPITAL MANAGEMENT INVESTMENT RESEARCH

Patrick McVeigh, President & Chief Investment Officer

Eric Shrayer, Senior Vice President & Research Director

Clary Bruning, Equity Research Analyst


Download Paper

Download Infographic

 

[1] McKinsey & Company, ed. “Automation and the Future of Work in the U.S. Biopharma Industry.” https://www.mckinsey.com/industries/life-sciences/our-insights/automation-and-the-future-of-work-in-the-us-biopharma-industry

[2] Assembly, ed. “Global Automotive Industry Employs One Million Robots.” https://www.assemblymag.com/articles/97926-global-automotive-industry-employs-one-million-robots

[3] Abnett, Kate. "EU Countries Approve 2035 Phaseout of CO2-Emitting Cars." Reuters, March 28, 2023.                                                            https://www.reuters.com/business/autos-transportation/eu-countries-poised-approve-2035-phaseout-co2-emitting-cars-2023-03-28/.

[4] McKinsey & Company, ed. “Automation and the Future of Work in the U.S. Biopharma Industry.”                                                       https://www.mckinsey.com/industries/life-sciences/our-insights/automation-and-the-future-of-work-in-the-us-biopharma-industry

[5] Ibid.

[6]  Washington Post, ed. “Trump Tariff Plans and Their Economic Impact.” https://www.washingtonpost.com/business/2025/01/06/trump-tariff-economy-trade/

[7]  CNBC, ed. “Trump Likely to Uphold CHIPS Act Despite Campaign Rhetoric.” https://www.cnbc.com/2024/11/07/trump-likely-to-uphold-chips-act-despite-his-campaign-rhetoric-experts-say.html

[8] Encyclopedia Britannica, ed. “Automation.”

[9] Schneider Electric. Integrated Report 2023. https://www.se.com/ww/en/assets/564/document/463535/Integrated-report-2023.pdf.

[10] Rockwell Automation. "Rockwell Automation Reports Fourth Quarter and Full Year 2024 Results; Introduces Fiscal 2025 Guidance." News release, November 7, 2024. https://www.rockwellautomation.com/en-gb/company/news/press-releases/Rockwell-Automation-Reports-Fourth-Quarter-and-Full-Year-2024-Results-Introduces-Fiscal-2025-Guidance.html.



DISCLOSURE: This material is propriety and represents the current, good-faith views of Reynders, McVeigh Capital Management, LLC (“RMCM”) at the time of publication. It is for informational purposes only and should not be transmitted or reproduced to any 3rd party without RMCM’s permission. While this material includes a selection of current RMCM themes and recommendations, it is not a complete list of the themes or companies that RMCM recommends to its advisory clients. References to specific companies are for illustrative purposes only and should not be relied upon as investment advice or as a solicitation to transact in a particular security or in a particular manner. There is no guarantee that any particular investment will be profitable and past performance not indicative of future results. All investments involve risk. Please consult your investment advisor before making any investment decisions.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed, and RMCM disclaims any duty to update any of the information and data contained herein. Certain statements may be deemed forward-looking, but any such statements are not guarantees of any future performance, and actual results or developments may differ materially from those discussed.

 By clicking on hyperlinks, you are leaving the RMCM website and entering a third-party site. RMCM is not responsible for information contained on the third-party sites. 

 
Previous
Previous

Manufacturing Automation in 2025: Challenges and Opportunities in a Shifting Economic Landscape

Next
Next

Jamie Hobkirk quoted in Yahoo! Finance