Why Autonomous Factories Are Essential

The Workforce Shortage is Critical

As CTO of Smart Industry at TNO, Jeroen Broekhuijsen is responsible for activities within the NXTGEN High Tech project, a billion-euro initiative jointly funded by the government and industry. The ultimate goal is to build autonomous factories capable of producing high-tech products. But these autonomous factories aren’t just an engineer’s playground. The primary reason for this focus is the severe workforce shortage affecting the high-tech industry and virtually every other sector. "You can throw as much money as you want at the problem, increase your HR budget tenfold, but the reality is, there are simply no more people available," Broekhuijsen explains, highlighting the current state of the manufacturing industry in 2024. And this shortage doesn’t just concern engineers. “Even workers from Romania are hard to come by.”

Broekhuijsen illustrates the issue with the example of a Dutch shipyard that needs 100,000 hours of welding to complete a ship. While order backlogs aren't an issue, the shortage of welders is. Companies have three options: source welders from even further afield, retrain all staff as welders, or capture welding skills in software or machines so that less-skilled workers can handle the job. Or, even better, use robots. "That’s smart industry," says Broekhuijsen.

Important for SMEs Too

The skilled worker shortage resonates with many companies, especially smaller manufacturers who are key to flexibility in the Dutch high-tech ecosystem. However, not every business recognises the urgent need to innovate, digitalise, and automate. "It starts by asking, ‘How can you develop and where are you headed?’ Many companies don’t have a clear answer to this question," says Broekhuijsen. For small and medium-sized enterprises (SMEs), innovation is often hampered by their size. A team of ten people may struggle to innovate due to a lack of time, money, and experience. Additionally, a company’s profit margin must be robust to fund such initiatives. "Not all SMEs have strong enough margins," Broekhuijsen points out. Even companies with sufficient margins may feel no need to innovate, which he views as a lose-lose scenario.

While innovation in smaller companies often goes unnoticed due to acquisitions by larger players, some SMEs in the Netherlands are making strides towards autonomous processes. Broekhuijsen cites Boers & Co, a precision machining company where materials are delivered by Autonomous Mobile Robots (AMRs), robots load the machines, and AMRs transport the finished parts to the next station. Another example is Frankenhuyzen, a tool grinding company that developed an algorithm to automatically translate CAD drawings into the correct grinding programs for creating milling tools. "Two employees manage ten machines, only occasionally intervening for exotic materials," says Broekhuijsen. These examples reflect the direction of projects under NXTGEN High Tech: capturing the knowledge currently in people’s heads and embedding it in automated manufacturing processes.

Automating Decision-Making

While these companies are progressing towards autonomy, there’s still a long way to go. The journey towards autonomous factories is evolutionary. "Autonomy is about automating decision-making based on data, which is different from automation," explains Broekhuijsen. The real challenge lies in trusting the algorithms. Just as airplanes have flown on autopilot for years, we still have pilots in the cockpit in case the computer misses something. "Would we board a plane with the same confidence if there were no pilot, and the plane flew fully autonomously?" Broekhuijsen asks, drawing a parallel with the manufacturing industry. In many processes, algorithms already perform tasks without us realising it, simply because we trust them.

The concept of an autonomous factory hinges on trust—whether we trust that the decisions made by algorithms are correct. Broekhuijsen believes we might see autonomous supply chains before we see fully autonomous factories. A key factor in achieving this is a shift in mindset, from withholding information from supply chain partners to embracing full transparency. Only then can suppliers provide guarantees based on autonomously made decisions.

The Role of Tech Giants

Autonomous factories and supply chains will require software capable of making the right decisions. This is the fundamental building block for autonomy in manufacturing. But will companies like Amazon, Microsoft, and Google provide these building blocks and shape the future of manufacturing? Broekhuijsen doesn’t think so. While tech giants will supply the infrastructure, their focus remains on scalability. “Large players make technology accessible, driving adoption and creating scale,” Broekhuijsen explains. Despite European efforts to develop proprietary data spaces, he believes open-source solutions remain too complex for SMEs. For these companies, the solution needs to be as simple as ticking a box: "It has to work out of the box, and the tech giants have nailed that."

Moreover, tech giants can leverage their billions in revenue to invest in infrastructure, which Broekhuijsen says is essential. "It’s unrealistic to think we can build cloud platforms in Europe that are both effective and profitable from the start. And it’s unrealistic to think we can outsmart Amazon." In this ecosystem, it’s the manufacturing players that will offer the solutions, something in which tech giants have little interest.

SCSN Network

One Dutch initiative that could play a crucial role in autonomous supply chains is the Smart Connected Supplier Network (SCSN). This industry-driven solution allows ERP systems from different providers to exchange information automatically, without the need for custom programming. In the Netherlands, many suppliers are already using this module, and major ERP developers in the manufacturing sector have adapted their software accordingly. At the Hannover Messe, the second phase of SCSN was announced, focusing on exchanging data for digital product passports and reporting carbon footprints—two key components of the European Green Deal. "Companies can no longer avoid standardised data exchange," says Broekhuijsen. Sustainability concerns, coupled with workforce and resource shortages, could drive greater vertical supply chain integration.

Innovate or Contractor

This evolution will impact smaller SMEs, many of which have barely begun to digitalise. Those that fall behind will likely end up as contractors for larger companies, predicts Broekhuijsen. "There will always be a market for local executors," he notes, but where today simple products are made in bulk, the future will see more complex components produced. Is this the market for online platforms? The question is whether a platform will become large enough to dominate, forcing smaller manufacturers to operate under its umbrella. If that happens, production becomes "manufacturing as a service." Alternatively, platforms could offer software as a service and allow local players to handle their own orders. "The Netherlands is launching an ambitious "Productivity Delta Plan" on a national scale – a groundbreaking initiative to transform the industry and make businesses more productive than ever through innovation."