There is a lot of buzz in automation and robotics right now. We are seeing record-breaking investments around the industry, as highlighted by this recent Reuters article and illustrated by the 40,000 robots purchased last year. Having the opportunity to invest in many robotics companies and the joy of leading Formic as CEO, I recently reflected on the state of the industry and wanted to share my thoughts on some of the major forces to watch in 2022.
Resilience, Agility, and Innovation to Combat Enduring Challenges
Unfortunately, supply chain constraints and labor force challenges are not subsiding anytime soon. Manufacturers and suppliers are continuing to dig deep for resilience and creativity. For example, conveyor belts are difficult to procure right now, so the industry is turning to AMRs as an alternative. To combat labor shortages, manufacturers are making the long-awaited leap into automation, with the help of creative services like RaaS. In an industry with historically long project cycles, we’re in a new era where agility is becoming more important every day.
Lowering The Barriers to Entry for Automation
Adding automation has been slow, complex, and inflexible, but that continues to improve at an accelerating pace. There are a lot of companies working on these various complexities - Veo Robotics is simplifying collaborative safety, Vention is simplifying robot cell design and construction, Ready Robotics is simplifying software maintenance across robot OEMs. I think we are in the beginning stages of simplifying automation. There is a future where ordering your automation cell will be just as easy as ordering a product on Amazon, and we want to create that at Formic.
Significant Boost in Automation ROI
Technological capability is improving, robot prices are declining, and RaaS offerings are becoming more available. For manufacturers, this means they can do more with less, which equates to a much better ROI than when they calculated it 3 years ago. For example, by adopting automation equipment, this enables higher capacity and utilization, where factories can operate with “lights out”. More specifically with RaaS provided by Formic, manufacturers don’t pay anything until the equipment is installed and working, which yields positive ROI on day one. Also, at the end of the service term, they can renew and get the latest technology at a renewed low price, which further boosts the ROI.
Investment Acceleration Fuels Deployments at Scale
I believe that one of the biggest themes this year is going to be more companies executing more deployments. The past two years have seen a massive increase in robotic startups, funding rounds, and M&A. Annual funding in robotics has skyrocketed from $4B in 2019 to almost $10B in 2021. This year is off to a similar start with several announcements, including from RightHand Robotics and our company. These investments continue to fuel R&D, but the focus is shifting to wide-scale deployments. This is a critical year to see how new technology performs in the real world and against actual customer use cases. This problem is felt beyond just the world of manufacturing.
Formic’s Vision for 2022
At Formic, we continue to try and make robots more accessible for all manufacturers. That is our mission. From food processing to metal manufacturing and more, our customers are in dire need of automation solutions, but it has been out of reach. This year is a critical year for us as we grow our team and try to help as many manufacturers as possible with our RaaS offering. It’s going to be an exciting year and we’re eager and ready to make an impact.