The notion that a worker shortage is fueling the adoption of automation equipment discounts the role technology can play in helping companies compete.
That’s according to Jeff Burnstein, president of the Association for Advancing Automation, an Ann Arbor-based trade group.
“I think it’s more than just (the talent shortage),” Burnstein said. “I think the drive to automate is being fueled by the need to be competitive. This isn’t just a Michigan story, this is a global story of companies recognizing that the productivity improvements and the quality improvements are essential in order to compete. Automating allows you to do that.
“You have to have the productivity, the quality and the delivery times the OEMs need. It’s up to you to decide how you’re going to do that and the price. But I think what the manufacturing companies are recognizing is that to win that business, they have to be able to automate.”
The need to automate drove orders of robotic equipment to new highs last year. Total shipments of robotic equipment in North America reached 30,875 units in 2016, up about 10 percent compared to 2015, according to new data published by the Robotic Industries Association. Likewise, capital invested in robotic equipment increased roughly 13.1 percent over the same period, reaching $1.81 billion in 2016, compared to $1.6 billion in 2015.
“In a nutshell, it’s the greatest time for the industrial robotics industry to date,” said Alex Shikany, the director of market analysis for the Robotic Industries Association, a subsidiary of the Association for Advancing Automation. “One of the main trends we see is this move by small- and medium-size manufacturers to purchase more robots. There’s a lot of them out there and because of the technology and the prices coming down over time, it’s easier to justify ROI and adopt robots.”
While the vast majority of orders for robotic automation equipment still come from automakers and suppliers, other sectors — including the medical device, consumer electronics and warehousing industries — are increasingly adopting the technology.
Companies involved in the automotive industry purchased around 70 percent of North American robots shipped last year, according to the Robotic Industries Association data.
JR Automation Technologies CEO Bryan Jones in Holland echoes the idea that decreasing costs are driving sales for robotic technology.
“Robotics continue to get more and more cost effective,” Jones said. “The robot that you can buy today for $30,000 compared to the one you could buy five years ago for that, it has a lot more capability (and) a lot more flexible platform.”
According to Jones, the decreasing cost of automation equipment has led many manufacturers to adopt robotics even for less complex tasks, as opposed to investing in traditional mechanical automation equipment.
“Typically, if you had five motions, then for sure you went with a robot,” Jones said. “Today if there are three motions needed to get a piece or a part or application completed, you better strongly consider a robot. Simply from a cost perspective, it’s more cost effective to employ a robot there than it is to design, build and fabricate all those pieces and parts.”
JR Automation generated more than $300 million in annual sales in 2016 and employs roughly 950 workers, Jones said. The company expects sales to continue to grow next year, but Jones declined to speculate by how much.
While JR Automation intends to focus on organic growth, the company plans to acquire or otherwise partner with robotic technology developers to help expand its business. Specifically, JR Automation plans to target software developers and other companies familiar with robotic vision components.
“There are a number of technology components that are needed as the systems get more complex,” Jones said. “It’s difficult to have all those technologies well represented within any one business. Integrating with more technology suppliers within the space is a huge enabler as well.”
In the rapidly expanding field of automation, industry insiders point to technology known commonly as collaborative robotics as a high-growth market.
Unlike other automation equipment, collaborative robots do not require a safety perimeter around them, meaning people can work in close proximity. Normally, collaborative robots have extra safety protocols built in so they avoid injuring the workers.
The advances in collaborative robotics technology have led to a surge in orders for assembly robots, according to Burnstein.
“Assembly was traditionally an area that robots didn’t penetrate because robots have to work in close proximity with people in the assembly process,” he said.
JR Automation also has bet on collaborative robots becoming a larger part of the industry by integrating them into the company’s growth strategy. It currently operates seven collaborative robots in its research and development lab and is “constantly prototyping and demoing new (collaborative) applications for our customers,” Jones said.
However, Jones notes some organizations have needed time to adjust to the shift to collaborative robots.
“There’s a shift that needs to occur around (collaborative robots) because people have thought about caged robots and the safety requirements for so long, that when they see a robot out in the open, there’s just a big mental mind shift that has to occur,” he said.
Despite their rising popularity, collaborative robotics may not become ubiquitous for manufacturers, said Brian Brinks, director of technical services at Koops Inc., an automation equipment builder based in Holland.
Brinks notes that for companies looking to manufacture high-volume parts, collaborative robotic technology could be overkill.
“I personally don’t think that in the automation arena we’re in, that’s something that’s going to be huge, at least for the short term,” Brinks said. “We do hard automation where they need a machine that builds 250,000 parts a year. You don’t need a fully automated robot or system for that. Collaborative robots don’t go as fast and they have a lot (fewer) features. Do I see there’s a niche in the area where collaborative robots will grow? I do, but not in what we do.”
For its part, Koops estimates that continued interest in automation equipment will grow its annual sales by 20 percent next year, according to Brinks. The company generated between $20 million and $30 million in annual sales in 2016.
To accommodate that growth, Koops recently invested $4.9 million in a facility expansion project that will double its production space to roughly 80,000 square feet, according to a previous MiBiz report.
“From our company’s perspective, we’re just looking to take advantage of the environment as well as we can,” Brinks said.