How Robots Will Redefine Competitiveness

Industrial robots—machines that can be automatically controlled and reprogrammed and that can manipulate objects and move along three or more axes–were first introduced in Europe, Japan, and the U.S. in the 1960s. However, adoption rates have remained surprisingly low in industries that long have been at the forefront of automation. Because robotics systems have historically been so expensive to own and operate, they are found mainly in large factories owned by corporations with big capital budgets.

HOWEVER, a number of economic and technical barriers to wider adoption are beginning to fall.  It is expected that growth in the installed base of robotics will accelerate to around 10 percent annually during the next decade.

Three major trends are speeding global industries toward an inflection point at which advanced industrial robots will become much more commonplace:  greater cost-effectiveness for robots when compared with human labor; technological advances that are wiping out barriers to adoption in key sectors; and the arrival of systems that smaller manufacturers can afford and easily use.

Accessibility for Small Manufacturers

The steady improvements in cost, performance, and functionality of robotics systems are driving another force in the next manufacturing revolution: the wider adoption of robots by small and midsize manufacturers. Until recently, such systems have been prohibitively expensive and overly complex for enterprises with limited capital budgets and engineering resources.

The new generation of innovative systems is putting robots within the financial reach of small enterprises. Universal Robots, for example, markets the UR5, an industrial robot that is designed for material handling and assembly and has a base price of $34,000. Its two arms rotate along six axes, resulting in remarkable flexibility for a machine of that price. By our analysis, the total cost of installing such low-cost generic robots can range from $50,000 to $100,000 when accounting for associated costs and the project management required to make it all come together. Universal says that the average cost of installing the UR5 is around $50,000. Two of Rethink Robotics’ robots—Baxter and the company’s high-performance robot, Sawyer—are designed for precision applications, such as machine tending and circuit board testing. Each costs around $40,000, including accessories, warranties, and installation. Because they can be redeployed quickly and easily across multiple product lines, the Rethink robots can be used in high-mix environments that are impractical for conventional industrial robots.  In addition to their low cost, the UR5 and Rethink robots can easily be moved by hand and repurposed by workers with no programming experience.

As economic and technical barriers continue to fall, robots are becoming accessible for more companies. The production efficiencies will spread beyond individual factories through entire supply chains, industries, and national economies.

>>Read more by Harold L. Sirkin, et al., bcg perspectives, September 23, 2015