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Automation and Business Models 0

Posted on 25, September 2017

in Category Blog

Automation and Business Models/blog

There’s been a call for more plug-and-play robotics, machines packaged with pre-programmed IoT connections and skills. The idea is that this will make it easier for SMEs to take the plunge into industrial automation. Right now, the cost of bringing in new machinery, programming it, and maintaining it can be a major hurdle for smaller companies. They may know that the savings in labor would pay for the machinery over time, but many hesitate to make the investment.

At the same time, Rexroth’s Dr. Heiner Lang suggests that flexibility and customization are key to making automation work for the future. He points out that software companies’ business models have shifted completely in recent years. Buying a package off a shelf and using a CD-Rom disk to install it was the norm just a decade or so ago. Now a cloud-based subscription model is the most common way for businesses to buy and use software.

Lang thinks that an equally big shift could take place in automotive manufacturing. We’re not sure how this would look, but it would clearly require changes in the industrial machinery car makers use. Lang acknowledges that a future in which manufacturers change their business models to this degree can’t be predicted in advance.

And this sense that big changes are just around the corner may be part of what makes smaller manufacturers hesitate to take the leap into full automation.

The cost of buy-in for industrial automation is high, and the requirements for change are significant even if a company is doing no more than automating part of their current workflow. There’s a feeling that technology is changing so quickly that committing to current machinery might lead to obsolescence before the machinery pays off its up-front costs.

If business models are also changing fast, a big investment in automation could be completely obsolete before it pays off. Think how you’d feel if you were a software company that invested in machinery to speed up production of CD-ROMs right before the seismic shift to the subscription model.

Lang believes that separating the software from the hardware will be key to providing the level of flexibility manufacturers need now.

We’re specialists in Rexroth electric industrial motion control. The servo motors, drives, and controls Rexroth builds often stay in commission for decades while things change all around them. Whether you need to repair or upgrade your current Rexroth system or to think about the best way to bring automation into your plant with a cost-effective mix of current and legacy components, we can help.