We recently had a wide-ranging conversation with our friend Jim Beretta of Customer Attraction and The Robot Industry Podcast about important developments in industrial automation. We touched not only on the current-state outlook for automation and the power of data, but also on five crucial trends that are driving the industry.
1. The Importance of Data
Jim pointed out a foundational takeaway early in the discussion, saying, “Data is the new oil. Businesses that learn how to properly find it, extract it, process it, and use it will have a leg up on their competitors.” It is important to note that the supremacy of data will not be limited to large manufacturers and automation providers. Businesses at all levels will need to master the basics of becoming more data driven. This kind of mastery includes four key elements:
- Know what information is needed to run your business and where to get it
- Identify what data is available to generate the business insights you need
- Understand how to collect and process the data, especially from silos in your tech stack
- Figure out how to act on the information once you have it
As you move toward being a data-driven organization, keep in mind that it is unlikely you will “get it right” on the first try. Develop the habit of starting with small, manageable projects. This will allow you to “fail fast” and adjust your approach using the business intelligence you collect.
2. The Power of Collaboration
Robots are here to stay and collaboration between humans and machines will continue to increase. Beyond collaborative robots, businesses are looking for other opportunities to maximize (and optimize) the benefits of interaction between people and automation. One example to consider is supervised autonomy solutions, where one human operator is responsible for stepping in and handling exceptions for multiple automated cells.
This approach allows businesses to automate most of a process while using human judgment for elements too difficult or costly to automate in the current environment.
3. Reducing Time to Market
Given the increasing demand for automation, buyers are looking for solutions that will be quick to implement. This trend runs counter to the established automation market where solutions are developed and implemented over longer timeframes. Solution providers should look for opportunities within their own business models for ways to reduce these lead times. Examples include carrying a reasonable inventory of commonly used components or developing standard systems and sub-systems that can serve as core product offerings.
Jim Beretta had an observation to add here, “While discrete automation tasks can be relatively simple, it takes forethought to plan for the expanding family of products that automation is being asked to manage, not to mention the growing demand for autonomy and flexibility. Today’s buyers want suppliers who can assemble and deliver fully tested machines.”
4. The Blurring of Traditional Boundaries
In recent years we have seen a convergence of Operational Technology (OT) and Information Technology (IT). Businesses can expect to see more blurring of traditional roles in the market as things become more connected. Consumers of automation technologies increasingly look to automation providers for help addressing factors like labor shortages and other adjacent business challenges that were once considered “externalities” to industrial automation.
Instead of simply automating a single task, customers are asking industrial automation suppliers to consider adjacent steps when they design and deliver products. As Jim Beretta pointed out, “Customers want machine builders and systems integrators to do more. If you are providing the system, can you also offer a service and maintenance program? Or can you expand your product and services to include the piece of equipment that your core product interfaces with?”
The underlying business question here is whether you can move out of being just the provider of a specific technology to a broader role as a provider of automation as a service. In 2023 and beyond, customers will expect machine builders and systems integrators to add services that eliminate problems, reduce risk, and continually improve the value they get out of their operations.
5. The Merger and Acquisition Factor
The increasing demand for automation will continue to attract merger and acquisition activity. The transition of boomers out of the market will have a compounding effect on this trend. Larger automation companies will continue to acquire smaller businesses. This in turn will create opportunities for small- and mid-sized business owners to cash out.
Additionally, as larger automation companies focus on serving larger manufacturers with the resources to pay for their services, this will create a vacuum in the small- to mid-sized market. Entrepreneurs with an automation background will see emerging opportunities to start new businesses that serve the needs of small- to mid-sized manufacturers.
Continue the Conversation
It is no longer up for debate that robots are going to be everywhere. With advances in artificial intelligence and machine learning, the influence of automation and the centrality of data will continue to change the manufacturing ecosystem through the next decade. Clayton & McKervey’s Industrial Automation group advises clients on adapting their product and service mix to drive growth, solidify their industry position, and open new revenue streams. We look forward to talking with you about your individual business situation. Contact us today to learn more.
*Listen to The Sound of Automation podcast for more insights