Robot Subscription Business

Robot Subscription Services Let Companies Automate on the Cheap

Wed, 13 Jul 2022 02:50:05 GMT

Robot Subscription Services Let Companies Automate on the Cheap

March 31, 2022 at 5:00 AM EDT

Society has long worried that the widespread adoption of robots will displace workers and eliminate jobs. But rather than fearing the arrival of automatons, Shakerria Grier, a 27-year-old quality auditor at Georgia-based Thomson Plastics Inc. , is relieved to get the help. In late 2020, Thomson began installing robots that take plastic parts, such as fenders for ATVs or covers for lawn mowers, out of hot-molding machines and place them on a conveyor belt that brings them to Grier. In the past, workers had extracted the parts, with Grier making the rounds among nine machines to troubleshoot for defects. “My job is way easier,” she says. “Before the robot, I would have to go to every station and make sure the parts are good. It was a lot of walking.”

The robots are coming—and not just to big outfits like automotive or aerospace plants. They’re increasingly popping up in smaller U.S. factories, warehouses, retail stores, farms, and even construction sites. The pandemic has kicked orders for robots into high gear as companies deal with a labor shortage, rising wages, and a surge in demand for their products. U.S. robot orders jumped 28% in 2021 from the previous year, to an all-time high of almost 40,000 units, according to trade group Association for Advancing Automation , and they’re expected to increase again this year.

At the same time, advances in vision, mobility, machine learning, and dexterity have expanded dramatically the variety of tasks the machines can do.

U.S. Robotics Orders

By industry segment

Source: A3 Robotics

Now, a nascent trend of offering robots as a service—similar to the subscription models offered by software makers, wherein customers pay monthly or annual use fees rather than purchasing the products—is opening opportunities to even small companies. That financial model is what led Thomson to embrace automation. The company has robots on 27 of its 89 molding machines and plans to add more. It can’t afford to purchase the robots, which can cost $125,000 each, says Chief Executive Officer Steve Dyer. Instead, Thomson pays for the installed machines by the hour, at a cost that’s less than hiring a human employee—if one could be found, he says. “We just don’t have the margins to generate the kind of capital necessary to go out and make these broad, sweeping investments,” he says. “I’m paying $10 to $12 an hour for a robot that is replacing a position that I was paying $15 to $18 plus fringe benefits.”

Robotics providers, including Formic, Robex , and Rios , are designing and installing the equipment, providing maintenance, and charging customers a flat fee that competes and usually beats hourly worker wages. The automation providers take on the risk of the equipment operating as advertised in exchange for the steady stream of revenue. While the subscription automation trend is only getting started, it could expand quickly if it follows the same path software did.

The need to automate has never been more pronounced, because more companies are discussing moving manufacturing back to the U.S. to reduce the risks of supply chains stretched thin across the Pacific. The pandemic highlighted the U.S.’s dependence on foreign countries for key components, and the fourfold increase in maritime shipping costs and port delays have helped stoke the highest inflation since the 1980s. President Joe Biden in his February State of the Union speech called on businesses to bring production back to the U.S.

There simply aren’t enough workers in the country to handle a surge of new manufacturing. In December there were 11.4 million unfilled jobs in the U.S., according to the Bureau of Labor Statistics. That’s up 4.7 million from two years earlier.

“People just aren’t showing up for work. Your crop is still growing whether the workers show up or not”

The U.S. lags manufacturing powerhouses such as South Korea, Japan, and Germany on robot density, or the number of robots as a percentage of a country’s workforce. China is by far the largest market for industrial robots, accounting for 44% of installed robots in 2020 and dwarfing U.S. installations fourfold, according to the International Federation of Robotics .

Saman Farid co-founded Formic Technologies Inc. in 2020 out of frustration over many companies’ hesitancy to adopt automation. With the robots-as-a-service model, his company is betting it can break down those barriers by taking much of the complexity and risk of deploying robots off the backs of subscriber companies. Formic is offering to set up robots and charge as little as $8 an hour, aiming first at the most tedious tasks, such as packing and unpacking products and feeding materials into existing machines. The potential market is huge, and it will only grow as the robots become more sophisticated, Farid says.

“We plan to put more than a million robots in manufacturing facilities over the course of our life,” he says. “I can’t tell you exactly when that’s going to happen, but the demand is there. There’s no reason why America can’t be the biggest manufacturer in the world. China doesn’t have any structural advantage other than access to labor.”

Worker attitudes toward robots have shifted as well. The pandemic sparked the Great Resignation, in which many workers reconsidered if they wanted to return to repetitive, tedious jobs. And younger workers, wielding smartphones from an early age, aren’t intimidated by the technology and would rather see robots do menial work.

Robot Density in the Manufacturing Industry

Source: International Federation of Robotics

China data not available.

Rocio Montano, 26, didn’t give much thought to automation when she joined the Southwest Carpenters union in Los Angeles three years ago. Now she uses a small mobile robot that draws the lines on a building’s foundation to mark walls, doors, and other fixtures. The job normally takes two people armed with the age-old tools of tape measures, squares, and chalk lines. But Montano does the work alone with Dusty, as the Roomba-like contraption is called, completing the job faster and more precisely. “I was surprised to hear there was this new technology,” says Montano, who does carpentry work around LA for Swinerton Inc., which got the robot under a services contract. “I never thought that construction would be using robots to get the job done.”

She sees Dusty not as a threat to her job but as another tool. And more robots are coming to construction. There are already machines that apply plaster to walls and ones that drill holes in concrete ceilings to hang lighting and other fixtures. Still, Montano is confident that humans will always be needed to oversee the machines. “It gives me an opportunity to learn more and develop a new skill to work with this robot,” she says. “We can’t hide from technology. We have to face it.”

Robots are also moving into agriculture as vision and machine learning improve. Stout Industrial Technology Inc. in 2020 began selling a machine that’s pulled by a tractor and weeds large fields. The machine’s sensors distinguish between a desirable crop and the unwanted weeds after being fed thousands of photos to teach it the difference, and the device chops down the weeds with a hoelike blade. This is usually backbreaking work done by crews of about 25 people. “Growers have challenges with labor, and people just aren’t showing up for work,” says Brent Shedd, who was hired in November as CEO of Stout to boost production and sales of the machine. “Your crop is still growing whether the workers show up or not.”

The move to robots as a service was pioneered by makers of autonomous mobile robots, the kind that Amazon.com Inc. uses to fetch items from the shelves of cavernous warehouses and bring them to workers, who then pack them for shipping. When Covid-19 hit, companies were suddenly handling e-commerce volumes they expected to reach in five years, and they turned to robots for help, says Apurva Vadera, a partner at robot maker GreyOrange , a company that began by selling automation as a service rather than individual automatons.

The mobile robots cut down on 95% of the walking required in a traditional fulfillment center, which means 250 workers can now handle the same volume as 1,000, he says. “What we bring to the table is that ability for an enterprise to solve for fulfillment problems with our platform, which is completely flexible and configured,” Vadera says. “It is not built for a particular business requirement.”

That’s a model that Rios Intelligent Machines Inc. is also following. Rather than tailoring designs for each customer, the startup focuses on a few common, repetitive tasks in factories such as packing products and manipulating food items. If Rios can’t use 80% to 90% of its standard automation system with a customer, it won’t take them on, says CEO Bernard Casse. Rios cobbles together its own hardware and software with Fanuc ’s robotic arms, Nvidia ’s graphic cards, and cameras from Intel to create the systems. The startup has strategic relationships with large financial institutions to acquire the equipment, he says.

The robots can save companies as much as 60% of labor costs while offering efficiency gains and eliminating production interruptions from workers calling in sick or quitting. “Everyone has been super interested, because essentially, from a customer standpoint, there’s zero risk associated with it,” Casse says.

One of Rios’s customers is Ramar Foods , a third-generation family-owned maker of Filipino foods that had been looking at automation for more than five years as California’s minimum wage crept up to $15 an hour. Still, Ramar, located in the San Francisco suburb of Pittsburg, was hesitant because of the initial cost and the need to hire someone to maintain the machines, says PJ Quesada, a vice president and member of the founding family. Another obstacle was the technology: The company wanted to automate the job of picking up raw dumplings from a conveyor and putting them on a steam tray, and he was concerned that a robot would mangle the dough. “The biggest issue is that upfront investment,” Quesada says. “And we were not convinced robots could adequately do it.”

Rios’s robot sorts dumplings at Ramar Foods.Source: Rios Intelligent Machines

The machine Rios installed won over Quesada and his work crew, which ended up naming the robot My Pal. The robot is much faster and does the work of two employees, who are freed up for other, less tedious tasks, says Quesada, whose company still has 25 unfilled jobs. The cost is competitive with paying a worker and will become even more so as local wages continue to rise, he says. “The repetitive movements are also the ones that have the higher occurrence of injuries,” Quesada says. “Now the robot is eliminating thousands of lower-back rotations from multiple people every day.”

Universal Robots A/S , a pioneer of so-called collaborative robots that can do their jobs safely among humans, works with 300 companies that provide gadgets that attach to the robot arm of its machines, including sanders, grinders, riveters, welders, and grippers, says CEO Kim Povlsen. That explosion of innovation has made the robots much more versatile. “So you take your iPhone—anybody, if they have the know-how, can build an app for it,” he says. “We do the same thing around our robots. It’s a continuous investment to make it easier for anybody to build something on top of the robot.”

Even Robex LLC , a traditional automation systems integrator in Perrysburg, Ohio, whose main business is leasing equipment to customers, has decided to offer robots as a service, dubbed Robex Flexx, to expand its customer base, says President Craig Francisco. “I believe if we didn’t have something like this in place, it would hurt our business eventually.” Francisco says the services model could become a quarter of Robex’s business in a few years. “With minimum wages going up and the need for employers to pay a higher wage, it’s becoming really easy to justify the Flexx program.” Even large companies are interested in the financing model because of capital-expenditure constraints for buying or leasing the equipment, he says.

Francisco says there are risks for robot subscription companies. For the contract to be considered a service instead of a lease, operators like Robex must still own the equipment and allow the customer to return it after a notification period. That’s why Robex won’t take on companies with little or no track record and shies away from customers only looking to experiment with automation. “We do not want somebody that just wants to kick the tires, because we put a lot of money in upfront,” Francisco says. “So we’re very careful that somebody has a real need for automation.”

Thomson’s Dyer, for instance, says his justification for using robots only became greater when the pandemic supercharged already nagging difficulties of finding enough factory workers. “There are simply no bodies to fill open positions,” he says. So now robots are removing parts that weigh about 9 pounds from some of his hot-injection presses, allowing one employee to oversee three of the molding machines instead of one. The robots are also faster and have increased output by about 30%. And there’s a payoff for the humans at his plant, too: With the efficiency gains, the company has increased starting wages for technicians to about $22 an hour from $15, Dyer says.

What has led to the manufacturing labor shortage?

Sat, 18 Jun 2022 03:24:20 GMT

The Manufacturing Labor Shortage

Digital transformation is about extending the benefits of technology to every employee at every level, but those employees are getting harder to find.

Feb 22nd, 2022

Tom Hennessey

In the early days of automation, manufacturing technology was often about replacing workers. Robots could do many repetitive jobs faster for less money, and there was no arguing with the economics. Today, the exact opposite is true. We have a manufacturing labor shortage with no end in sight, which has caused many organizations to accelerate investment in automation technologies to help amplify the performance of their existing staff.

Today, technology has taken on a new role – that of making people more productive. Digital transformation is now all about extending the benefits of technology to every employee, at every level of the enterprise.

There’s only one problem: those employees are getting hard to find.

Today, hundreds of thousands of manufacturing jobs are going unfilled around the world. Companies are even struggling to fill high-paying, entry-level production jobs. Last year, according to a research study by Deloitte and The Manufacturing Institute, the industry had a record number of job openings, and not all due to the pandemic.

What’s more, things are going to get worse. The National Association of Manufacturers is forecasting that 2.1 million manufacturing jobs could go unfilled by 2030 . These unfilled jobs will have a significant economic impact and could cost the industry $1 trillion or more.

Just at a time when digitally transformed manufacturers are poised to enable extraordinary productivity and effectiveness from their employees, they can’t find enough people.

What’s Causing This Manufacturing Labor Shortage?

Part of the problem is finding people with the right skills. But it’s also how manufacturing jobs are viewed by the public. According to Carolyn Lee, executive director of The Manufacturing Institute , many people either don’t know these jobs exist or think of manufacturing as a dead end. “Some just don’t see the point” of a manufacturing career, she says. In a world ruled by technology, manufacturing seems old school.

Of course, the reality is just the opposite. Manufacturing is a high-tech frontier in the application of automation, artificial intelligence, machine learning, digital collaboration, and augmented reality, to name a few examples. As Lee says, “Modern manufacturing careers are increasingly high-tech, high-skill, and high-pay.” And they depend, she notes, on “irreplaceable human skills—things like creativity, critical thinking, design, innovation, engineering, and finance.”

Indeed, certain manufacturing jobs are still being replaced by automation. Self-driving vehicles in warehouses may someday be the norm, although vehicles driven remotely by Augmented Reality (AR) equipped humans are a proven alternative right now. In some industry sectors, “lights-out” manufacturing is a possibility. But in the world of complex manufacturing, most people are not very replaceable.

What Can Be Done?

If technology once took manufacturing jobs away from people, it may now be the key to bringing them back. Working in a manufacturing company is nothing like it used to be. Today it can be a cutting-edge technology experience. Those manufacturers that are investing in modern systems, web-based applications, and highly scalable architectures should be able to use that fact to attract and keep employees.

Offering the ability to work remotely is one obvious example. This was a trend before the pandemic, and it has only been accelerating. A digitally transformed company can support a wide range of remote workers – a staff that increasingly can work anywhere. They can be knowledge workers, office managers, engineers, technicians, or even equipment operators located anywhere in the world with an Internet connection.

The opportunities go well beyond remote work, too. For example, VR (Virtual Reality) can be used as a training tool to develop skills for new workers or those who want to advance. Managers and executives can use the latest AI (Artificial Intelligence) technology to help make decisions and run operations in real-time. AR (Augmented Reality) like smart glasses can be used by plant workers to enhance their work experience and boost effectiveness. Research suggests that 40 percent of organizations will combine the physical work experience with virtual technology in some fashion by 2023.

Many analysts are beginning to talk about the emergence of a shared industry ecosystem where human expertise will be available online as needed, something like Uber for manufacturing jobs.

Each of these factors can help to overcome the manufacturing labor shortage. There is no doubt future innovation we can’t foresee will also be part of the solution.

Back to the Future

Digital transformation is a work in progress and there’s a lot of uncertainty ahead. However, one thing is clear: the manufacturing workplace is being radically transformed and companies need to go back to basics to recruit and keep employees. The Deloitte study recommends reaching out to communities and schools to build awareness, and to “leverage advanced technologies to increase digital fluency.”

Digital transformation is no longer just concerned with streamlining operations and improving efficiency and resiliency. Those things still matter. But now there’s another reason to digitally transform: to attract, keep, and empower people at every level. Now and in the future, an enterprise’s ability to build its human capital may well depend on how successfully it has embraced—and promoted—its digital transformation.

Tom Hennessey is the Chief Marketing Officer at iBASEt. He brings over 25 years of enterprise software marketing and business development experience to the executive leadership team. He is responsible for the strategic growth of the company. Tom earned his MBA at the University of Southern California and holds a BS degree in Management from Northeastern University.

First, Love Yourself

test@looka.com — Thu, 07 Nov 2019 13:57:40 GMT

This is a subtitle for your new post

Write about something you know. If you don’t know much about a specific topic, invite an expert to write about it. Having a variety of authors in your blog is a great way to keep visitors engaged. You know your audience better than anyone else, so keep them in mind as you write your blog posts. Write about things they care about. If you have a company Facebook page that gets lots of comments, you can look here to find topics to write about.

Robot Subscription Business

Robot Subscription Services Let Companies Automate on the Cheap

Robot Subscription Services Let Companies Automate on the Cheap

What has led to the manufacturing labor shortage?

The Manufacturing Labor Shortage ﻿

First, Love Yourself

This is a subtitle for your new post

The Manufacturing Labor Shortage