Universal Robots: Automating SMEs to re-energise manufacturingNovember 29, 2017
AS Malaysia approaches the third year of its Eleventh Malaysia Plan (2016-2020), re-energising its manufacturing sector has grown to be a priority. A key focus is enhancing productivity using Industry 4.0 technologies such as artificial intelligence and robotics.
The government has made notable attempts to encourage automation among small- and medium-sized enterprises (SMEs) in the manufacturing sector as part of its push for modernisation of production processes. SMEs are a huge business segment comprising nearly 47,700 firms, but they have been slow in leveraging automation for growth.
One initiative by the Ministry of International Trade and Industry (Miti) is the Soft Loan Scheme for Automation and Modernisation — a scheme helping SMEs to finance acquisition of automation technologies by offering loans up to RM20 million at a low fixed rate. To enable more companies to automate, Miti has recently proposed increasing the funding for this scheme in the upcoming Budget 2018.
Yet these efforts by policymakers will be futile if SMEs themselves do not see the value of deploying such technologies. A shift in mindset is needed and two pertinent questions need to be addressed: What can small- and medium-sized manufacturers gain from automation? How can they transition from their legacy systems?
Benefits of automation for SMEs
Advanced technologies such as collaborative robots (cobots) — robots that work alongside people — can increase the efficiency of production processes and expand production capacity, ultimately delivering higher productivity at lower cost. It is believed that the adoption of automation is projected to increase production output per worker by as much as 30%.
Robotic automation also reduces errors and material waste, offering greater reliability in producing consistent, high quality output. By automating repetitive processes, SMEs can reallocate their employees to higher value activities that eventually allow these employees to move up the value chain.
These are important factors for businesses to remain competitive in the global landscape where multinational companies (MNCs) are looking for supply chain partners with fast, streamlined processes and quality products. Manufacturers that can fulfil their orders nimbly will get a greater share of their orders.
Conversely manufacturers unequipped to meet MNCs’ scale and quality demands will end up losing a large revenue stream. The Malaysia Economic Monitor Report (June 2014) noted that MNCs in Malaysia sourced less than 40% of their inputs from local firms, compared to 46% in Vietnam and 82% in China.
Ensuring a smooth transition
Despite recognising the benefits of automation some SMEs are unsure how to transition to more advanced systems without drastically affecting their current operations. It may seem daunting to business owners who do not have sufficient liquidity to invest in expensive equipment or programming experts to run sophisticated systems. Others worry that their existing machines will be rendered obsolete.
The transition does not have to be a shake-up. SMEs can take measured steps towards automation.
They can begin by seeking cost-effective solutions such as cobots. They come with a smaller price tag compared to most traditional robots and setting up the equipment is very affordable. Cobots’ lightweight, compact size and built-in safety mechanisms facilitate their seamless integration into existing operations, eliminating the need to overhaul the existing production infrastructure.
Cobots can also be easily integrated with other machines, allowing business owners to continue using current machinery for a new purpose. For instance an existing conveyor belt can be reconfigured to feed product parts to the cobot for automated assembly.
One may think that a smaller investment will yield smaller outcomes. Contrary to this notion, using affordable cobots can have significant impact on production cost and efficiency. The highly adaptable cobot can be efficiently deployed for varied functions across different production lines. With this flexibility SMEs can manufacture a wider range of goods, including introducing new products into the market at low volumes. They can also swiftly respond to fluctuating consumer demand without having to buy different types of machinery.
Cobots are also a viable solution for SMEs that are currently unprepared for large-scale production. As cobots can be used with other machinery or accessories to cope with varied production demands, they remain effective when production volume grows or changes.
Another way to ensure a smooth transition, especially for SMEs that lack programming experts in their hire, is adopting user-friendly technology. Equipment that can be easily programmed shortens the time employees take to deploy the equipment. This also means employees can focus on developing new skills for higher value activities such as product design or research and development.
Success needs concerted effort
For Malaysia to succeed in re-energising its manufacturing sector, there must be a concerted effort from the government and SMEs. Success hinges on how the government addresses the needs of SMEs to adopt automation through the upcoming Budget, as well as whether SMEs respond positively to government schemes in overcoming both tangible and psychological barriers to automation.
By Shermine Gotfredsen
Gotfredsen is general manager at Universal Robots, SEA & Oceania