Barriers to entry for advanced manufacturing continue to come down as automation becomes a more viable option — even for job shops — through what’s becoming known as modular manufacturing.
Vickers Engineering Inc., a Tier 1 and Tier 2 supplier based in New Troy, Mich., has become a breakthrough story in the automation industry, growing from approximately $10 million in revenue in 2010 to a projected $60 million in 2019.
“Our competitive advantage is absolutely automation,” Vickers CEO Matt Tyler said last month during an Industry 4.0 webinar presented by the Michigan Manufacturing Technology Center West and MiBiz.
But in 2006, the company was apprehensive as it was automating jobs that had become too difficult or unsafe for its employees, Tyler said.
“We decided to put a robot in play and we were scared to death,” he said. “We knew nothing about robots. We didn’t know how to maintain them. We didn’t know how to program them. We thought our customer base was going to rebel. We were wrong on every single point, famously.”
The automation was cheaper, easier to maintain, and more reliable than the company expected and throughput increased 20 percent, according to Tyler. In addition, instead of resisting the technology, Vickers’ employees on the manufacturing floor embraced the automation and started to “fight” over who got to operate the machine, he said.
By 2010, Tyler’s mentality around automation had flipped.
“It’s changed the game,” he said. “We are absolute believers and we have no idea how anyone could operate any other way.”
As he began to give talks around the country on his own company’s success story, Tyler was surprised by how few companies knew how to get started in automation — and how many of the manufacturers that adopted that technology struggled with integration. Vickers Engineering had developed an automation team because it couldn’t find the right integration company, according to Tyler.
“We recognized that we had a good group and we recognized that we had a story to tell,” Tyler said.
In 2017, Vickers spun off its internal integration team and formed Red Rabbit Automation LLC with a mission to deliver automated systems capable of completing a manufacturing process with minimal human interaction. However, what developed was even more game-changing, according to Tyler.
The Redeployable Robot (RR) design from Red Rabbit is a fully automated robotic cell that can reduce initial investment, shorten implementation times and allow for greater flexibility from initiation.
“The traditional (automation) infrastructure has a lot of cost involved in it,” said Corey Carolla, vice president of corporate development at Red Rabbit. “What we were tasked with was something that had some adaptability, had the ability to change with a job shop, and had the ability to change with a market that ebbs and flows and has ups and downs.”
The result was a modular “turnkey” cell that is scalable and able to be picked up and moved with a forklift. The independent cells are a cost-effective solution for small to medium-sized manufacturers that are looking for increased productivity and efficiency, according to Carolla.
“The culture is changing in our industry and it doesn’t have to be a high-volume, high-part … situation,” he said. “(Automation) can work when it comes to a traditional job shop.”
The ease of the Redeployable Robot comes from having features like customization and fencing encased within the unit, which decreased implementation expenses, according to Tyler.
“A robot is easy to redeploy,” he said. “It’s all the other integration costs that surround the robot that requires very custom engineering time and cost that is traditionally gone if you have to make a change.”
Unlike with other options, manufacturers don’t need to invest heavily or repeatedly in customization expenses with a Redeployable Robot. In fact, the cell can be treated as a machine or any other asset that can be bank financed and resold, Kevin Wright, vice president and equipment finance officer at Cleveland-based Key Bank, told MiBiz.
“You can resell this type of equipment, and it makes banks have much more of an appetite to be able to finance that,” he said. “It’s easier to sell than something more traditional where you have the belts or robots or engineering from different vendors. That is difficult to resell in the marketplace, and so banks have a tough time putting a residual value on that type of equipment.”
The Red Rabbit equipment also qualifies for a Section 179 deduction, which was enacted to help small businesses by allowing them to take a depreciation deduction for capital expenditures in one year.
As product life cycles get shorter, Carolla predicts modular manufacturing will spread and ultimately help manufacturers and end-use customers alike.
“At the end of the day, the product that you deliver to your customers is truly the thing that matters,” he said. “But how we get there and how that process changes is what makes it special.”
Made in Michigan is supported by the Michigan Economic Development Corporation, offering a comprehensive suite of programs and services to support your company needs for continued growth. Visit michiganbusiness.org/pure-partnership for information. This sponsorship is advertising. It has no effect on editorial consideration in MiBiz.