Paramount Tool Co. Inc. in Holland has been in business since 1967, giving its team a front-row seat to the automation industry’s evolution over the last five decades.
As a custom machine builder that primarily works with automotive clients but also services the furniture, agriculture, heavy equipment and aerospace industries, Paramount is staying busy facilitating shifting customer demands against the backdrop of the COVID-19 pandemic.
“Historically, (automation) really happens in bursts — it’s not a steady, constant stream,” said Paramount Tool Sales Director Joe Carlisle. “Usually, that’s indicative of an economic shock or something where humans become more expensive. It’s just kind of the typical nature of what we do. … I think the impetus for change is usually a shock to the system.”
That shock has been one that manufacturers throughout West Michigan have contended with for the last eight months, when the emergence of COVID-19 brought some segments of the industry to a complete standstill while others had to shed portions of its workforce either temporarily or permanently.
Manufacturers are turning to automation to overcome the negative symptoms that the pandemic has inflicted on their companies — and local automation businesses are benefiting as a result.
In fact, not only are automation companies tasked with meeting the short-term needs of their clients, but some also suggest this might usher in an automation boom with long-term effects.
Opportunity in crisis
Automation was evolving at a steady clip even before the pandemic. A report from global management consultant McKinsey & Company revealed that the U.S. had 0.49 robots per 1,000 workers in 1995, which more than tripled to 1.79 robots per 1,000 workers in 2017.
Industry executives expect to see a comparable boom out of the COVID-19 pandemic that came with the recession around 2008 and 2009.
“It’s an economic crisis that drives a lot of this,” Carlisle said. “(In 2009) companies started to look at different avenues to do things and that was one of those big spikes. Here we are in 2020, a decade later, we have another one of these — we’ll call it an opportunity. It’s economically driven.”
During the pandemic, automation companies have found a more captive audience among clients and potential clients. Many manufacturing executives have used the slow period to reassess operations and general efficiency.
It’s because of this opportunity that Paramount Tool ramped up its marketing efforts.
“We ended up doubling down on our marketing campaign. For us, it ended up being really positive,” Carlisle said. “Everyone was working from home. We had a captive audience in the sense that they didn’t have all these projects going on.
“For us, that marketing piece got us in front of a lot of new people, being able to talk to them and work them through new technology — stuff they really hadn’t looked at in the past.”
Workforce shortages — a challenge before the pandemic — became even more pressing for manufacturers, which found themselves looking to fill the gaps with automation.
“(The boom in automation) has been driven by people, primarily the lack of getting people,” said Mark Ermatinger, CEO of Zeeland-based Industrial Control Service Inc., which provides automation solutions, products and training. “They still have a labor problem.”
He cited a plastics company that reduced its footprint and staff after losing some automotive business.
“Now they’re busy and it’s hard to get people to come back,” he said.
Ermatinger, who is also the founder of the Advanced Manufacturing Expo, said he has seen a definite rise in automation demand that’s concentrated in large, capital equipment with high ROI.
He added that most manufacturers are simply looking to bolster operational efficiency rather than lean on automation to enhance the quality of their products.
“The better the times are, the higher the expectations for quality control,” Ermatinger said. “That’s because (clients) can buy a part from many different sources, so the pressure to make those parts consistently is quite high — competition is quite high. For most (manufacturers), it hasn’t been a quality issue. The pandemic has slowed everyone down, which means the desire to automate for quality purposes has decreased. Right now, they need to be efficient.”
As manufacturers turn to automation as a lifeline, far fewer barriers exist to get there than once thought.
Joe Campbell, Universal Robots’ senior manager of applications development in North America, said sticker shock and a lack of understanding were typical objections to automation, specifically the collaborative robot arms Universal produces. The company is based in Denmark but operates a facility in Ann Arbor.
With lower prices and a greater consciousness of the ROI, Campbell is finding that a whole new crop of manufacturers is embracing some form of automation.
“We’re selling to companies that I never would have made a sales call on in my 40-year career,” Campbell said. “They’re too small. You have a 10- to 15-man shop and the probability that they’re going to buy a quarter-million-dollar robot cell is next to nothing. It just doesn’t happen.”
Campbell said Universal Robots helps ease the learning curve through a free online tutorial program called the UR Academy, which trains users in the fundamentals of operating and programming cobots.
The benefit of a cobot over traditional automation is that it is flexible and can be redeployed. Traditional automation is bolted to the ground. During the pandemic, Campbell said Universal Robots has seen “exceedingly high” interest among manufacturers. He dispelled another common misconception that automation requires an all-or-nothing approach.
“We tell our clients that you don’t have to solve a million dollar problem — maybe start with a $75,000 problem first,” Campbell said. “We use this phrase a lot: We believe our cobots are ‘incremental automation.’”
With the pandemic inducing a quicker shift to automation, Ermatinger is optimistic about the manufacturing sector. He sees the industry rebounding to pre-pandemic levels over the next couple of years.
“After 2022, you’re going to see a good solid eight years of the roaring ’20s again,” he said. “In preparation for January forward, we see automation as continual growth and high growth.”
EDITOR'S NOTE: This story has been edited — the initial version mistakenly attributed a stat on robot use to the Federal Reserve Bank of Philadelphia.