This is the way forward for automation, and why it’s happening now

Automation is currently one of the hottest markets in investments and acquisitions across the globe. My news feed seems to have something big for me every day in the capital markets, going from much anticipated stock listings (Autostore), acquisitions (ABB buying ASTI Mobile Robotics), and venture capital (HAI Robotics securing USD 200M in funding).

Source: Crunchbase.com

When I try to understand an industry, I often find the simplest questions are the smartest. So what about this one:

What’s new?

Surprisingly, automation isn’t something new, automated production lines are as old as when Ford brought the first mass production car to the market. More recently, automation is revamped in fancy policy roadmaps, like Germany’s Industry 4.0 and China’s Made in China 2025.

So what’s really new now, and how is it a game changer?

Working in warehouse automation, I feel two forces are really pushing developments in the last two years: consumer behaviour and technological breakthroughs.

Consumers are raising the bar

On the consumption side, market leaders like Amazon and JD.com have been pushing the boundaries of what’s possible. Retailers and e-commerce giants are raising the bar for online shopping, with faster delivery times and flexible return policies. Most of you probably remember Amazon starting to offer two day delivery to their Prime members in the US back in 2005. Fast forward to China today, and many vendors guarantee next day delivery if not same day delivery. Online grocery shopping services like Pupu guarantee delivery within 30 minutes. Whether you’re in the US, Asia or Europe, consumers all over the globe have higher expectations for online shopping, a trend that has just even started.

“Pupu” Online Grocery in China

The COVID19 crisis has only deepened this trend, with online shopping becoming a real habit, something here to stay. Consumers are getting used to online shopping. And with more and more consumers moving online (yep, even my mom, and let that be a clear sign), this pushes companies to jump onto the automation wagon, or end up left behind.

Technology is becoming lean and affordable

On the technology side, we are witnessing an evolution from heavy CAPEX traditional automation systems like AS/RS and multishuttle, to a more flexible and affordable kind of automation: robots. The quick ROI and the scalability of robots, make it a viable solution for all businesses along the spectrum from start-ups to multinationals.

This shift to robotics has only just started, and will gain momentum with the support of 5G. How is that? In our private lives, we’re all familiar with the little vacuum cleaning robots for our home. But 5G is paving the way for new possibilities, with robots bringing convenience to more and more aspects of our life. In China, we see new innovations popping up every day, going from driverless KFC mobile vendors, to automated parkings, automated carwashes, express delivery robots in hotels, driverless cars not just in metropoles but also in 2nd tier cities…

Autonomous KFC vending machines in Shenzhen

So how are these applications related to industrial automation? As more scenarios open up for automation, more money and other resources are pulled in, speeding up development and innovation. The combination of scale and innovation also helps bring costs down for common hardware incl. chassis, sensors, batteries, as well as more mature software.

Fluffy, The Robot Dog (Boston Dynamics, Ford Van Dyke Transmission Plant)

Faster innovations and lower costs make automation more lean and more affordable, becoming a real option for companies of all sizes and sectors. This is happening right now, as we’re entering an era marked by a democratization of automation.

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