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Spotlight on: Robotics

What should your business consider when investing in robotics and automation?

How could the manufacturing sector and its supply chain boost productivity and overcome labour challenges? Digitalisation and Industry 4.0 technologies such as Internet of Things (IoT), cloud computing, Artificial Intelligence (AI) and machine learning are part of the solution says Laura Capper, our Head of Manufacturing and Construction. “As well as these smart technologies for process optimisation, it would be great to see greater adoption of robotics and automation in the industry to ensure we remain competitive within the global landscape,” adds Laura.

Contracts Engineering (CEL), a national sheet metal work and metal fabrication specialist focused on partnering with OEMs (Original Equipment Manufacturer) and Tier I suppliers, has invested in two robots and one cobot [collaborative robot] since 2018 to help scale its production and further its growth ambitions.

“Our first robot, which we installed in 2020, has probably been one of the best investments we've made in the business, we've been able to get so much work on it. It's been absolutely brilliant,” says Troy.

He bought the business 11 years ago when its two founders decided they wanted to retire. With a university education in finance, economics, and entrepreneurship combined with a financial background including investment banking and private equity, he knew a good business opportunity when he saw one.

By adopting smart technologies alongside a skilled workforce, some of whom started years ago as apprentices, he’s grown the company into a subcontract manufacturer with clients around the UK and products that ship around Europe, the Middle East and North America. Troy says: “I saw a real opportunity with contract manufacturing. We don't have to pick which industry will grow. We're a ‘picks and shovels’ business manufacturing products for industries already doing well.”

When to invest in robotics?

Troy and the management team decided to test automation on the office side of the business first, to explore how processes could be simplified or stripped out. “It was easier and cheaper for us to learn about automation through investing first in better systems, software and training than buying a physical robot,” explains Troy. “Starting with software is thousands of pounds – depending on your software – compared to approximately £250,000 on a fully automated robotic system.”

By 2018, however, the business had reached a stage of growth where the volume of work from one contract could justify investment in a robot. With data showing the return on investment in machinery and tooling could help make the business more profitable and efficient, Troy made the decision to seek a financing solution.

Choose the right system integrator to accelerate change

Build in time to find a system integrator that can give you the production support you need, advises Troy. It took around a year to scope out what robot they wanted and find the right partner to help the business build and integrate the technology onto the production line.

Contracts Engineering eventually bought a FANUC Robotics solution through Cyber Weld, which specialises in robot welding and systems.

The business benefits of robotics and automation

If your business gets to the point where it’s manufacturing at volume, it could be time to consider a robot rather than rely on manual labour to complete those repetitive high-volume processes. “That’s not what people are good at,” says Troy.

Robotic welding systems can continue working without interruption, 24-hours a day, seven days a week, making them ideal for high volume repetitive production.

Having the robots has opened business opportunities for CEL. It’s quoting for new prospects; talking to existing clients about work it couldn't do in the past and winning it, and the cobot means the business can offer a whole range of solutions it didn’t have before. “We feel we’re ahead of the curve in terms of our size of business in contract manufacturing. Robots are not new, but they’re new to contract manufacturing in the UK.”

It has also extended the company’s reach internationally. CEL has repositioned itself as a high-volume supplier to regional and global companies with factories in the UK. “That's what we can go after now; it’s allowed us to play in a new field. We’ve really built our sales and marketing strategy around OEM and Tier I manufacturers with big factory footprints in the UK. And every one of them exports, which is critical to us.”

Finance considerations and robots

It’s often said UK manufacturing is behind in robotics, says Troy, but that also means there are lots of opportunities, “the proverbial low hanging fruit”. In his experience, there is finance such as a pre-inception facility or asset finance available for businesses with a good investment case that want to buy essential vehicles or equipment.

“When you're talking to banks, they want to know what you are putting on the machine. How quickly do you think you can pay it back? How are you covering the debt payment? What’s your service coverage? What sort of returns are you going to get?”

As well as helping to generate revenue and enhance operational efficiency, capital expenditure is important for the UK economy, says Mark Thomas, Commercial Relationship Manager – Asset Finance at Lombard. “I’m delighted we were able to support Troy’s growth ambitions through an investment in robotics, even at a time of economic uncertainty back in 2020.

“For projects like this, it’s key to work closely with customers at the planning stage to comprehensively understand their requirements and what they’re trying to achieve. This helps us learn more about the needs of UK businesses but also puts us in a better position to assist them and build an even stronger relationship in the future,” says Mark.

The future of manufacturing

Troy and the CEL team are passionate about seeing manufacturing come back to the UK. “We believe too much manufacturing left the country for a lot of wrong reasons. And now there's an amazing opportunity for the UK to become a great manufacturing powerhouse again. We're still eighth biggest in the world, third biggest in Europe, which is a good place to be. But we could be better. There's a lot of opportunities for growth, and we think manufacturing has the brightest future it's had in 40 years in this country.”

 

For more specialist insight on robotics and automation read our webinar key takeaways :
Manufacturing outlook: robotics and automation

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