HOW IN 2024, ROBOTICS AND AUTOMATION WILL HELP NAVIGATE ECONOMIC UNCERTAINTIES
The significant decline in robotics and automation expenditure in 2023 was dictated by global uncertainty. Robot orders decreased 37% in the first half of 2023 compared to the same period just a year earlier, according to A3, amid efforts to recover from pandemics, invasions, global inflation, and other concerns.
Twelve months after a record-breaking year for robot investment in 2022, there was a sharp decline, and while businesses around the world prepare for and carry out their 2024 budgets, the future remains uncertain.
According to HowToRobot, a worldwide network that links potential customers and suppliers in the robotics industry, 2024 will be a year of strategic automation investment as businesses try to navigate these challenging economic times.
On-demand automation
How has the pandemic and other global economic concerns influenced buying power in the robotics and automation sectors when assessing the market decline in 2023 and projecting forward to 2024?
Peters: I believe that many people came to the realization that “if we had automated sooner, we would be in a much better position today” in the wake of COVID and the ensuing labor shortages. This insight led to a number of robotics investments, some hurried and some of which did not produce the desired results.
After these large investments, many, in my opinion, were adapting to the circumstances and making sure they received a return on their capital. At the very least, a lot of our clients tell us this: The demand for automation is still great, but the rush to automate has somewhat subsided.
We still need automation and we will continue to invest, is a common conversation starter with clients. However, we also need to ensure that everyone is on board, that there is a strategy in place for the next time, and that we are pursuing the chances that will provide the highest return on our investment. When they embarked on that voyage in the early months of 2023, supply networks were shaken by a spike in interest rates and other global events.
Businesses reduced their investments and increased their war chests as a result of this uncertainty. The necessity for robots hasn’t altered all that much, I suppose. Sales of robots just followed 2023’s overall demand for investments. In that regard, it was difficult to compare 2023 and 2022 because they were both anomalies. The underlying demand for automation and robotics is still expanding, but we’ll have to wait and watch how things develop in 2024.
How does the perception of automation “taking jobs away” from humans hurt this spending?
Peters: Having the ability to monitor the market objectively is one of HowToRobot’s advantages. Numerous clients come to us each year to explore their automation needs. Not a single person that we asked do this because they wish to dismiss employees.
Knowledge must underpin widespread adoption. That will require some time. unable to automate anything other than that. Ability to learn more. able to present them with choices. explain to us how such answers meet their demands with our assistance. choices cannot be pushed. eventually manifest.
Klausen: All things considered, one of the biggest issues facing businesses is the labor shortage. How do you make the production line stay up if you can’t locate the proper workers and the orders keep flowing in? Therefore, it seems sense that companies would like to have fewer people involved in certain jobs so that those workers may focus on other, more important duties. In essence, you are rearranging personnel in order to fulfill the orders that are being received.
By relieving employees of the most physically taxing tasks—such as heavy lifting, extremely repetitive motion, or working in dangerous environments—this may also enhance the working environment.and robotics and automation are therefore frequently welcomed..
People continue to purchase robots.
How are businesses discussing financial implications of investing in robotics?
Peters: Assume for the moment that you want to automate a palletizing task. Perhaps at a trade event, you run upon a person who owns a palletizer. The person is scarcely known to you, yet he’s asking $400,000 for it. How would you handle that?
For a number of reasons, financing the robot is difficult to come by. Because most banks are unaware about robots and they are still relatively new, it is difficult for the robot integrator to obtain funding for his firm. This implies that the palletizer’s parts must be purchased in advance by the integrator.
Therefore, as a client, you will also need to assist him in covering the cost of those items up front. Maybe after a few meetings and a trade show, you’re giving a guy you haven’t met yet 40% up front. For something you haven’t seen yet, that is 40% up front. Before sending it, he could then request an additional 30%. We frequently witness that. Thus, prior to installation, you are now required to pay 70% or even up to 90%. … Furthermore, your supervisor is observing you closely. These are a few of the items that may make the financial conversations difficult.
Klausen: How to justify the investments is another topic of frequent discussion. We examine it and discuss lowering the number of workers on manufacturing lines since automating requires a baseline of financial benefit. One reason is the reduction of manual work. Other typical ones include raising capacity and productivity, enhancing quality, and cutting down on waste and mistakes.
To compute the business case and determine how much you can realistically afford to spend on a robot, all of these information is required. The business case can also improve significantly when companies consider the advantages of automation more broadly.
What issues still arise while making robots and automation purchase decisions?
Peters: As a firm, one of the things we’ve learned from 2023 is that, often, the first few exchanges between buyers and sellers are very focused on technology and “look what this can do.”
Robots are often intriguing to people. discussions revolve around the question “But do we need it?” after the initial impressions. that it is capable of fixing the things that we require it to do?”
We observe a consumer base that is occasionally lacking and a number of potential technologies. not as concerned with whether the robot is a SCARA or a six-axis robot as they are with finding a solution to their issue. buyers and sellers coming to an agreement in this market as it develops.
Klausen Determining the appropriate level of automation for your automation project is one of the things we also observe in the market. Doing this without professional assistance might be challenging. Unrealistic expectations might result in a project scope that isn’t workable with the technology that is available today.
This might make it challenging to convince suppliers to provide solutions; alternatively, you can wind up purchasing an expensive solution that your production cannot handle.
What does the future hold in 2024 and beyond for robotics and automation spending? Is 2023 an anomaly?
Peters: I don’t believe that robots are any less necessary. I believe that the general 2023 investment appetite was followed by robot sales. One year after the other, you have two significant anomalies. When 2022 and 2023 are compared and plotted on a graph a few years from now, that slight increase will be visible. Overall, there has been and continues to be an increasing need for automation, and we anticipate that this trend will continue in the years to come.
Klausen: I concur. To facilitate adoption as much as feasible, the key question is how to assist suppliers and purchasers in aligning.If you are interested in robotics and automation or want to know more about how to improve production efficiency. Please contact Robotnext today for advice and cost support. Details via hotline: 0909 914 837.
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