Companies today have limited capital budgets, and when they do have it, they search for the highest impact opportunities. Formic’s solution is a way to automate purely out of operating budgets (OpEx) - paying an hourly or monthly rate for a specified output (for example, $15/hr to move 10 boxes per minute onto a pallet). Our model takes the burden and risk away from manufacturers. There is zero upfront cost in most cases, and instead, only one low rate. Results and savings are immediate on day 1.
Formic owns and supports the equipment. As a part of our full-service offering, Formic handles everything - from equipment installation and operator training to all predictive and reactive maintenance necessary to maximize uptime at no additional cost to you.
Formic is the only provider of robotics that commits to performance service levels. This means, unlike leasing companies, Formic has “skin in the game”. We use our software to design the right robot for the job, to manage and deploy it, and to manage, upgrade and maintain it after it’s deployed (including through programs like our “Formic Flex” offering). Equipment leases typically are just a way to finance the cost of hardware. They do not include engineering studies, performance commitments, equipment reprogramming, or maintenance. Formic’s engineering capabilities work to make it easy and risk-free for you to adopt robotics.
We have public examples on our website under Resources / Customer Stories (here)
Our customers are responsible for providing power, compressed air and network connections as necessary for the robot. Additionally, we will train one or more members of your team as robot-operators, and your team is expected to follow the correct operating procedures. You do not need to have in-house engineering or robotics capabilities, as we do everything in our power to build “turn-key” systems.
Contracts are typically 1 to 5 years. In some cases, we can also offer a brief trial period to help customers feel comfortable with the RaaS model.
Our business model is built off of a simple premise: we are not successful unless our customers are producing. All of our systems are backed by Formic’s committed Service Level Agreement in each contract (for example 5 parts per minute, with 95% availability). We have technicians, field engineers & partners around the country and spare parts in stock that we dispatch in case of any unplanned issues. We also have IoT software that is deployed on each system which allows us to monitor and remotely resolve issues. If we fall short of our SLA commitment we provide you with compensation and credits to make you whole.
Most importantly, we are the only robotics provider that stands behind our performance commitments, service levels and has an incentive to get your robots back up-and-running and no additional cost to you. That means, if there is ever a problem, we are on the same side.
Formic systems are billed monthly, based on a specified hourly rate. The hourly rate depends on the application, your usage rate, and contract term, but it typically ranges from $8 per hour to $40 per hour. In general, longer contracts, simpler applications, and higher usage equate to a lower hourly rate. Another benefit: The overtime rate is discounted from the standard rate! Our systems have saved customers up to 42% on their OpEx relative to manual labor on the first day.
Scoping to deployment can occur in as little as 4 weeks. The actual time depends on your application, how quickly we can gather the information we need, and the lead time for obtaining all the components needed for the system.
To address changing needs, we generally offer one free programming addition per year (sometimes more), barring any new hardware. In the event that new hardware is needed, we can usually work with you in one of three ways: 1) Increase the contract term to offset the additional system cost; 2) Increase the hourly billing rate for the remainder of the contract; or 3) Pass through the additional cost in one single payment.
You should consult with your accounting and tax advisors, but based on the current ASC definitions and standards, many of Formic’s customers consider our systems to be an operational expense that is expensed as it is incurred or accrued (similar to paying for a janitorial service), and not listed on their balance sheet as an asset. As such they take the position that there are no depreciation expenses, accrued depreciation, operating expense contra account, or capital liabilities on their balance sheet. We offer a detailed Whitepaper on this topic, here.
Automating with Formic, the only question manufacturers need to ask themselves is: what repetitive manual tasks can be automated in my facility right now?