The market for industrial automation is still growing worldwide, and small and midsize enterprises have been looking to collaborative robots, or cobots, for their increased flexibility and safety. Earlier this month, Universal Robots A/S reported another strong year, with cobot demand leading to a revenue increase of 72% over 2016.
“When I started in 2016, the concept of cobot scaling was still new,” said Jürgen von Hollen, president of Universal Robots. “[Company owner] Teradyne was happy with 62% growth, and in reference to any other industry, that would be a positive.”
“I went on tour, meeting our customers,” he told Robotics Business Review. “I found it difficult to understand why there was so much more we could be getting. That was the start of determining what is realistic and what is the challenge.”
The global market for industrial automation will grow at about 15% from 2018 to 2020, with cobot demand making it a major part of Industry 4.0, according to the International Federation of Robotics.
Lofty ambitions require tools and process
“The benchmark is high when you’re a pioneer in a category and have few competitors,” said von Hollen. “Our ambitions are way higher.”
“The growth rate in the market is between 50% and 60% year over year, and we want to maintain our market share,” he added. “Our 72% growth … I truly believe we can grow a whole lot more.”
“Universal Robots has had such rapid growth, we had so much work to do putting basic building blocks in place,” von Hollen recalled. “We needed tools — for instance, we didn’t have CRM [customer relationship management] or human resources in place at the start of 2017.”
In addition, he said, “we were still running as a small company. All the decision-making was still in Denmark. We had to regionalize and maintain speed, not have bottlenecks in our business structure.”
“We’ve had to scale up our business,” von Hollen said. “We also needed the right people — there may be another 29% growth with reorganization.”
Cobot demand and market share
One of the “best-kept secrets” in collaborative robot arms is Universal Robots’ market share, von Hollen acknowledged.
“From four or five reports, we have a guesstimate of 50% to 60% of the cobot market,” he said. “We see variances of 20% to 25% and a gap of billions in these reports.”
“We have a first-mover disadvantage in that 90% of the market in the collaborative robot space is potential,” von Hollen noted. “Many companies have still not yet heard of cobots or Universal Robots.”
As a result, educating end users is a key step in building cobot demand. “A big driver for the next five years is the awareness piece,” said von Hollen.
Investing in people, places
For Universal Robots, investing in its staff is just as important to growth as setting procedures and informing the market. Space is also becoming a challenge.
“We’re allocating our growth in profit to investing in facilities and people,” von Hollen said. “We had 405 employees at the end of 2017 and 470 now. In 2018, we’ll be hiring about 270 staffers.”
“That’s a testament to the investment we’re making in people,” he said. “We’re not optimizing profit but growing strategically.”
Space is also becoming a challenge for the Odense, Denmark-based cobot maker.
“We’ll need to make a substantial investment — we’ll run out of space in our current facility in 2019,” said von Hollen. “We’re relatively flexible about the location.”
“Our efforts in 2016 and 2017 around operational excellence have been fantastic,” he observed. “We’ve made substantial strides in supply chain — that’s the value of working with Teradyne.”
Growing the cobot ecosystem
Universal Robots is already a leader in Danish and European robotics and global cobots. In addition, it is supporting its users through the UR+ online marketplace and its free Universal Robots Academy for training.
“In the fourth quarter of 2017, we saw bigger companies delivering products for the UR+ platform,” von Hollen said. “We used to sell to them; now they’re coming to us.”
Universal Robots is committed to focusing on its robot arms and leaving elements such as end effectors, sensors, and mobility to its partners.
“The UR+ program is essential to attracting partners who will help us sell more robots,” von Hollen said. “We have to be more proactive in finding partners who can develop solutions. We want to make the best and most open arm possible so that people can use it for anything they need.”
“The academy for me is an extension of our philosophy and vision,” von Hollen said. “Free training helps grow the awareness of what users can do with the technology. We’ve had more than 20,000 users from more than 100 countries participate.”
Last year, the academy grew to include management, sales, and product training for Universal Robots’ own staff and partners.
“We offer a full spectrum of training for the UR world,” von Hollen said. “It’s a big investment in the community that we expect will pay dividends.”
“Larger accounts are moving down the path of adoption, looking for larger volumes [of robots],” explained von Hollen. “Automotive and semiconductor firms are reaching out for a more direct touch — that’s a sign of maturity. We still rely on our partners and sales channel.”
Where is cobot demand the strongest?
“For many years, Asia wasn’t growing at a faster pace than Europe or the U.S. — until 2017,” von Hollen responded. “China, and Asia in general, are now matching the market data.”
“We are very successful in places that are considered tough for selling automation, like India,” he said. “A company there just bought more than 100 of our robots.”
“The reasons for collaborative robots from UR are many — quality, lack of labor, cost of labor,” said von Hollen. “Every region is so different.”
With growing cobot demand comes competition, but von Hollen remains confident.
“We expected new competitors to hit the market last year, but it didn’t happen,” he said. “We’re developing new features and programs to stay the technology leader.”
“Small and midsize enterprises that have never set up robots before are getting the message,” von Hollen said. “Once a prospective customer sees our demo, they want to buy it and get it working quickly.”
Editor’s Note: Robotics Business Review will soon be posting a guide to robot arms, as well as reports on collaborative robots.