Is it time for SMBs to invest in robots?

Is it Time for SMBs to Invest in Robots?

October 20, 2015 Tech4BusinessNow Article

Experts predict U.S. businesses—including small- and medium-sized firms—will become progressively automated with the rise of robotics technology.

By Debbi G. McCullough

The robotics revolution is underway—and it appears poised to benefit small- and medium-sized businesses in many ways, thanks to an increasingly attractive return on investment in replacing manual labor with machines.

Currently, installations of advanced robotics in workplaces is growing at 2% to 3% a year, but is projected to increase 10% a year over the next decade, “as companies begin to see the economic benefits of robotics.” That’s according to projections by BCG analysts in “The Robotics Revolution: The Next Great Leap in Manufacturing,” a report published in September that analyzed 21 industries in 25 countries.

Perhaps that growth is no surprise: Robots are expected to spur substantial labor savings costs. By 2025, average manufacturing labor costs will fall by 18% to 25% in the U.S., China, Germany and Japan, thanks to increased use of robotics, according to BCG.

In another report in 2014, “The Rise of Robotics,” BCG projects that global spending on robotics will spike to about $67 billion by 2025, up from $15 billion in 2010. Industrial robots for factory automation will likely account for most investment, but applications for robots are also emerging in sectors such as retail, BCG notes.

In some industries, robots will perform more than 40% of manufacturing tasks, BCG notes, leading to increased competitiveness, labor productivity and significant gains—both in large corporations and small businesses.

“New collaborative robots, those capable of working alongside workers and capable of quickly changing applications, are becoming more available and useful” at SMBs, says Edgar Lobaton, an assistant professor in the electrical and computer engineering department at North Carolina State University. “Traditional robotic systems—industrial robots we see in automaker assembly lines or at mammoth corporations like Amazon—are becoming more ubiquitous with other industries as well.”

Martin Ford, founder of a software development firm in Silicon Valley and author of the newly released book “Rise of the Robots,” agrees SMBs are poised to incorporate robotics—and many already do.

“Modern robots can cook and serve fast food, effectively pick fruit, keep control of huge inventories and stack shelves,” Ford says. And robotic technology is not limited to blue-collar work. “Robots are out there covering news stories, performing online discovery for law firms—jobs typically reserved for paralegals. Radiology takes an extraordinary amount of [investment] with four years of training, graduate degrees and then residency, and yet robotic machines are able to recognize radiology images too,” he says.

Ford sees the service industry as the biggest growth area for robotics. For instance, Momentum Machines, an SMB in San Francisco, Calif., creates robots capable of making hamburgers—400 an hour—and salads and sandwiches.

“This kind of development has huge implications for the corporate fast-food industry, but the company is also targeting SMB restaurants and gas stations as well,” says Ford, who researched the company in his book. “The makers argue they can produce high-end hamburgers for lower cost, with more precision and cheaper than hiring a staff person to do the job.”

Robots within reach

For the past four decades, the cost of investing in robotics held businesses back, according to BCG. It was less expensive to use manual labor than to buy, operate and maintain a robotic system. Now, BCG projects the price of robots will drop more than 20% over the next decade.

“As robots become more affordable and easier to program, many small manufacturers will be able to deploy them and integrate them more deeply into industrial supply chains,” the BCG analysts write.

For example, Rethink Robotics now produces and sells one-armed collaborative robots such as the Sawyer for $29,000. The robot can run and monitor manufacturing machinery, perform circuit board testing and other precise tasks, the company website says.

Ford adds that the giant robots on car-manufacturing assembly lines—typically too expensive for smaller businesses—will soon be available in more affordable versions.

Advancements in technology—better performing vision sensors, gripping systems and information technology—are also driving the trend. “These advancements are making robots smarter, more highly networked and more useful, and at a time when manufacturers feel pressure to improve productivity in the face of rising labor costs and aging workforces,” the BCG report notes.

Lobaton, the robotics expert at North Carolina State University, says that in some industries—such as emergency response and medical scenarios—robots offer increased safety. “Having these robotic tools can lead to more precise surgery. Additionally, in search-and-rescue missions, robotics can help increase the likelihood of finding people, and more quickly,” he says.

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Plus, he says, “Heightened efficiency and productivity leads to heightened profits—and that’s why we’re seeing a lot of momentum and more businesses investing in robotics.”

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Some considerations

Before SMB owners invest in robotics, experts suggest they take the following actions:

  • Look at robotics holistically, Ford says. SMB owners must analyze what additional capability robotics can bring to their business. “Robotics is about saving cost, becoming efficient, but also doing mindless, repetitive or dangerous things that human beings cannot or don’t want to do. Can you deliver value to your customers you wouldn’t be able to otherwise? You must think along these lines as you invest in robotics technology.”
  • Stay in front of the trend, Ford adds. “If you are running a SMB, you want to be out front in robotics developments. Tap into this industry; otherwise, you will get out-competed.”
  • Consider safety. Lobaton cautions SMB owners to note that, for example, some robotic arms may require a lot of space to reach and move around. “If space is a restraint, you may need to try a different platform to keep employees working alongside the robot safely. You must ensure these systems are performing safely by making use of sensor measurements to avoid hurting people.”
  • Consider how you will program a particular platform to tell the robot what needs to be done, Lobaton says. Open-source software is often more accessible; you can modify the system to do whatever you want it to do. “The software is free, online and gives you access to communities using the same arms and same tools for similar purposes,” he says.
  • Prepare the workforce, the BCG report notes. Tasks that still require manual labor will become more complex, and the ability of local workforces to master new skills will become more critical.

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This article was underwritten by HP: Introducing HP BusinessNow, the right technology to help your business grow.