The rise of system integration firms over the past several decades to help manufacturing companies design and commission industrial robots and other advanced automation systems has predominantly been a boon to larger manufacturers. The business model structure of these integrators evolved along with the demands of the larger manufacturing customers they served as the implementation of these technologies often required changes to a facility’s power structure, floor plan, and operational procedures. The overhead associated with these projects meant that the system integration contract was rarely less than $250,000, thereby putting these projects out of reach of most small to mid-sized enterprises (SMEs).
Joe Campbell, senior manager of applications development, at Universal Robots, notes that the impact of this model has had big effects on the manufacturing industry as a whole. He points out that, in the first decade of the 21st century, large manufacturers were able to grow their productivity with advanced automation technologies by 300%. But smaller manufacturers, with less than 500 employees, were only able to achieve 200% gains in productivity. Of course, a 200% gain in productivity is nothing to be dismissed, but there is clear gap between the automation benefits available to larger manufacturers through the aid of traditional system integration firms.
In response to this gap, Campbell points to the rise of a new type of system integrator—a type of organization he refers to as lean integrators. “The lean integrator evolved precisely to address the SME market’s growing demand for robot installations that yield higher productivity at a lower price point and that can be installed in a fraction of the time of a traditional robot work cell,” says Campbell. “Like the SMEs they serve, lean integrators are small enterprises themselves. The two features that distinguish lean integrators from their traditional counterparts are size and speed.”
Lean integrator business model
Describing lean integrators in more detail, Campbell notes that these firms typically focus on mastering one or two end applications within a regional market and often employ no more than 10 to 15 people, “Their operational footprints rarely exceed 10,000 square feet, and they tend to deploy capital on knowledge workers rather than equipment for vertical integration. All this translates into much lower operational overhead while spurring innovation, which enables lean integrators to be successful even when taking on projects under $100,000,” he says. “It also allows them to commission cobot installations within weeks rather than the months-long process required to integrate industrial robots.”
While, at first glance, it may appear that specializing in serving smaller enterprises would not necessarily be the most viable business model, Campbell says that lean integrators actually address a much larger overall market for their services. “Most manufacturing firms in the United States are SMEs, according to U.S. Census Bureau statistics on U.S. businesses,” says Campbell. “Of the 248,039 U.S. manufacturing firms the bureau listed in 2017, 83% employ fewer than 500 people. And nearly 70% of manufacturing firms have fewer than 20 employees.”
Based on their operations structure, lean integrators tend to favor off-the-shelf peripherals and accessories versus fabricating every tool in-house to meet a customer’s unique specification. “The make-versus-buy debate usually ends with a buy decision,” Campbell says, “keeping overhead down and the speed of execution up. This approach has facilitated the growth of partner ecosystems around cobots (collaborative robots).”
Universal Robots, for example, developed Universal Robots+, a global ecosystem of components, software, and application kits that have been validated and certified to be mechanically, electrically, and digitally compatible with cobots from Universal Robots. “This approach further drives down time, cost, and risk as compared with a traditional automation approach,” adds Campbell.
One of the lean integrator firms that Campbell references is Vectis Automation, founded in 2019 in Fort Collins, Co., by a small team of engineers with expertise in traditional robotic welding applications. With the average age of a U.S. welder being 55 and likely to retire within 10 years, according to research by Deloitte, this makes the services offered by Vectis Automation particularly attractive to manufacturing operations that rely on welding.
To streamline its lean integrator business model, Vectis Automation has partnered with Universal Robots to create a system-level product. Campbell says, “Vectis can then add value by tailoring the cobot, equipment, and software to the customer’s application. The Vectis team’s collective background in welding allows them to bring unique expertise to customer application support and develop software targeted to welding fabricators. They know what makes a good weld, and they’re able to apply that knowledge to the cobot product kit.”
According to Josh Pawley, director of business development and Vectis Automation co-founder, Vectis can install cobots for welding applications in hours or days instead of weeks or months. “One of our customers was removing shrink-wrap from a Universal Robots’ product in the morning and had it in production on their own by the afternoon. And that was a customer who had never used robots,” says Pawley.
CNC machine tending
Another lean integrator is Fusion Cobotics, located near Chicago. This company is not a new lean integrator company, but one that started in 2002 as a traditional integration firm and transitioned into lean integration in 2018 with the use of cobots to tend the company’s CNC machines.
This led the company to begin focusing on helping small to medium-sized job shops performing high-mix, low-volume applications to automate the tending of CNC mills and lathes, as well as press brakes for sheet metal.
Craig Zoberis, Fusion’s president points that, “even by lean integrator standards, Fusion’s physical operation is small. We dedicate 15 by 15 feet of floor space and an engineering staff numbering under 10 people to assemble and test a customer’s system before installing it within weeks of the initial meeting. Such projects require an investment between $60,000 and $150,000, depending on project size, but 80% are under $100,000.”
“Universal Robot’s ecosystem enables everything we do to be menu driven, which is what makes us lean,” Zoberis adds. “Basically, we offer four Universal Robots products—the UR3e, UR5e, UR10e, and UR16e—that we tailor to customer applications for quick deployment.”
Zoberis says Fusion’s customers typically see a 25% to 30% improvement in efficiency, which typically translates into a return on investment in 10 to 11 months.