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Will robots change the paradigm of standard cost analysis?

Lately we are talking a lot about how in a near future the intensive introduction of technology in the workplace will result in the elimination of jobs that will be replaced by robots or various types of automation. There are many studies that differ in the degree of this impact, but according to the OECD (just to mention one), the percentage of jobs with a high risk of automation, and therefore of being eliminated, goes from 6 to 12% among the main developed countries. It is not very clear the time horizon in which this change (disruptive, they call it) will occur, although some speak of the next 10 or 20 years.

However, it does seem that the configuration of production processes as we know them today will change radically. And although it will not affect exclusively the workers with more routine type tasks, the truth is that the fist and most immediate changes will occur on what we denominate direct labor.
This substitution of man by machine is not something new. Just remember how 20 or 30 years ago the factories employed many workers in a semiautomatic production environment. However, it now seems that we are approaching a definitive replacement.
In this context, some of the cost analysis that have been carried out historically may lose their validity or must be updated. This is the case of control through standard costs, where one of the classic elements of study has been, and is, direct labor. We analyze deviations from the standard budget in terms of cost and efficiency, to know the performance of personnel directly linked to production, and implement actions, if necessary.
But in an almost fully automated environment, this analysis no longer makes sense. We will no longer be facing the production staff as a source of deviation, or if there is, it will be a smaller and probably easy to identify, which will lead to move the focus of control to other areas (raw materials, overhead …).
In short, we will see how changes in the structure of production processes will imply, at least, the adaptation of the systems of analysis and control currently in force, whose validity in the future will be conditioned by the degree of transgression of such changes.


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