Robotic Automation in Israel May 2021 - Let-Lab

Page created by Sharon Becker
 
CONTINUE READING
Robotic Automation in Israel May 2021 - Let-Lab
Robotic Automation in Israel
         May 2021
Robotic Automation in Israel May 2021 - Let-Lab
Acknowledgement

Let-Lab would like to express our sincere gratitude to Israel Innovation Authority, Manufacturer’s
Association of Israel, the Forum of Advance Manufacturers and BDO Israel for their support. We would
also like to give thanks to Yoav Haimi from the State of Israel Ministry of Economy and Industry for the
insights on Israel’s import and export data for robotics. Lastly, we would like to thank everyone who has
participated in our survey for your valuable insights that made this report possible.

Introduction
According to the latest information by International Federation of Robotics, there has been a steady
increase in installation of industrial robots throughout the years, except for 2019. Asia and Australia
remain the largest adopter with an exponential increase, owing to China’s aggressive robotics
implementation strategy for long term growth.
The global automation market has been on an uptrend, with rising annual installments of industrial robots
from 60,000 units in 2009, to 422,000 in 2018, dipping for the first time in 2019. [10] The slight dip was
reflective of 2019’s global economic slowdown with geopolitical tension by Brexit and the China-US trade
wars. Collaborative robots, also known as cobots, have also seen a drastic increase. In 2018, global
collaborative robot revenues totaled $566.9 million, a 56.6% increase of 2017. The market size of cobot is
estimated to reach $5.6 billion in 2027, accounting for 30.2% of the total robot market.

There would be further growth in the global automation market, especially in areas like 3D printing,
artificial intelligence, and drones where global revenues are predicted to nearly double from 2019’s
figures.

With this rising trend and importance of automation on keeping factory processes optimized given the
capabilities of the industry 4.0 revolution, how does Israel factories fare in its automation uptake? In this
report, we will discuss the use of automation in Israel, specifically the integration of robots from the
collective inputs of integrators, factories and other data points from The Institute for Advance
Manufacturing, The Manufacturing Association, Ministry of Economy and Industry, as well as other global
sources.
Robotic Automation in Israel May 2021 - Let-Lab
The race of implementing robots to increase productivity and quality is a world trend that is also active in
Israel with some factories showing higher adoption than others. Those who do not implement ways to
increase productivity and yield using automation will be forced out of the market by those who do,
especially where labour shortage is of increasing concern in traditional manufacturing. Now, with lower
cost and shorter installation time, there is a greater pressure on factories to explore the use of automation
than ever before, where it may have been too expensive or complicated just 3 years back.

Summary
This is the first attempt to understand the statistics of Automation with an emphasis on robotics. The use
of robots and cobots in Israel shows an uptrend, with a high increase in robotics implementation and
interest. Use cases that were not justified due to their long return on investment (ROI) are now a possible
option. 89% of the respondents plans to integrate more robots in 2021, with 19% planning to integrate
11-25, and 16% planning to integrate more than 25 robots. This finding is evident of the rising trend of
automation in Israel, with the rise in request overall. Robotics which was used in the past for high volume
manufacturing in the automotive and semiconductor industry are now implacable to small and medium
factories across diverse industries.

The number of industrial robot related automation request in 2020 in Israel has increased compared to
2019, with 100% of the integrator respondents indicating an increase in automation request. For the
current state of automation, 44% of respondents are currently expanding the use of robotics and
automation, and another 19% have been integrating it within the past year. 50% respondents have also
indicated that they have integrated industrial robots into production in the past year. Cobots which was
almost non-existent in 2016 in Israel, is now the fastest growing segment of industrial robots with an
annual 50% growth rate globally. [1] Although there is increasing implementation of cobots compared to
before, factories in Israel are still falling behind on the uptake of cobots. Majority of the manufacturers
have not implemented any cobots till date even though there are applications with higher ROI available,
like the Automated Guided Vehicle (AGV) that is expected to grow in the next two years.

With regards to robotics with vision technology, 59% of our respondents have indicated their use, and
another 26% are planning to integrate it. Vision technology has become a critical component for many
robot applications, enabling robots to be deployed for new applications.

KEY TAKEAWAYS

 There is an uptrend in the uptake of robots and cobots in Israel despite the effects of Covid-19, where all
 integrators surveyed has mentioned an increase in automation request in 2020.

 Productivity of factories have increased especially in the Hi-Tech sector, leading to rising wages – a stark
 disparity compared to the traditional manufacturing sector.

 With complexity, cost and implementation time reduced, robots and cobots are making their way into
 traditional manufacturing companies as well unlike before. Traditional manufacturing companies who
 have yet to implement automation needs to reexamine its potential adoption to remain competitive, with
 labor shortage and skills mismatch becoming a greater issue.
The methodology
Israel’s first automation online survey was conducted and twenty-eight results from leading integrators
and factories in Israel were collected. Apart from the collection of real company data via surveys,
secondary research was also conducted from online sources. Responses are mainly from the CEO, project
managers, production engineers and those from robotics and equipment department with knowledge on
the state of automation in their company.

Discussion and findings

Robot Installations

Economists analyzed long-term trends around the uptake of automation in the workplace, noting that the
number of robots in use worldwide increased threefold over the past two decades to 2.25 million. If robot
installations were boosted to 30% more than the baseline forecast by 2030, researchers estimated it
would lead to a 5.3% boost in global GDP that year. [2]

                           How would you describe automation in your
                                    Manufacturing facility

                                        7%                          No automation

                                                      19%           Started to integrate
                                                                    within past year
                    44%
                                                                    Have already been
                                                                    integrating automation

                                                                    Increasing robotics,
                                                30%                 investing in robotics is
                                                                    integral

Of the survey results, 44% are currently expanding the use of robotics and automation, with investment
in automation being an integral part of their company’s operations. Another 30% of respondents have
already been integrating it from the past years, and automation is currently an integral part of their
operation. 50% of the respondents have also indicated that they have integrated industrial robots into
production in the past year. Meanwhile, slightly more than half of our respondents indicating that they
have not implemented any cobots till date. The uptake of cobots is a rapid one given that it has only been
introduced to Israel in recent years. 16% has also implemented more than 5 cobots, which could suggest
the success of its use in factories who have implemented them.
How many collaborative robots did you
                                implement till date
                60%       54%
                50%
                40%
                                      31%
                30%
                20%
                                                   8%                      8%
                10%
                                                               0%                      0%
                 0%
                           0         1 to 5      6 to 10     11 to 25    26 to 50      >50

Collaborative Robots

Collaborative robots, or cobots, are less widely used, but are a rising trend. Cobots are machines that work
alongside humans in a shared workspace unlike traditional robots where they are fully autonomous and
independent. Cobots are also easy to program and train, and over the recent years they have become
much more essential. The global cobot market in 2019 was $981 million, and it is expected to grow to
$7,172 million by 2025 – a compound annual growth rate (CAGR) of 41.8%. The main driver for such a
change is attributed to the lack of skilled human workers and rising labor costs. [3]

Automotive and electronics are still the largest end-user industries for cobots in 2018. However, it is
expected that logistics will surpass automotive to become the second-largest user group in the near
future. [16]

One of the most common uses of cobot systems in a logistics setting is for picking. The physical act of
walking to pick product accounts for 50% of the entire process [4], eating up valuable time and money.
Automated picking is achieved when a robot is used to travel throughout the warehouse grabbing the
correct product, leaving people to do more skillful work in the fulfillment process. These advances in
manufacturing and logistics are improving efficiency – where a human worker could pick between 60 and
80 orders an hour, an automated system can pick up to 300 in the same time frame, according to
Westernacher Consulting [5].

This is in line with our results where pick and place is the second most widely integrated automation
system with 46.2% of respondents implementing it in 2020. Industrial robots are the most widely
integrated automation with 50.0% of respondents having implemented it in 2020. Automation solutions
for assembly comes in third together with process with 42.3% of the respondents integrating it in 2020.
Which automation solution have you implemented in 2020

                  AGV/AMR                          11.5%
                       Cobot                                                34.6%
            Industrial robot                                                                     50.0%
                Exoskeleton          3.8%
       Imaging automation                              15.4%
 Quality control automation                                                       38.5%
             Pick and Place                                                                46.2%
           Machine tending                                       23.1%
                  Packaging                                                 34.6%
                   Assembly                                                            42.3%
                     Process                                                           42.3%
                    Welding                        11.5%
                    Painting         3.8%
                  Palletizing               7.7%
                      Others                       11.5%
                        None         3.8%
                                0%      10%                20%       30%         40%           50%       60%

Apart from picking, and assembly, material handling is another common use of cobots and these three
functions is estimated to hold a share of 68.4% in the cobot market by 2023. On the other hand, the
mobile cobot market will account for 9.7% of the total cobot market by 2023. [6]

The cobots market will be the fastest growing segment by 2024, with growing recognition of their utility,
ease of installation, and well as consistently decreasing price which makes them an affordable and viable
solution for a wide range of applications. Advances in 5G and edge computing would provide cobots with
improved flexibility and easier implementation as well. [17]

Vision Technology

                       Are you using any robots with Vision Technology

                           26%
                                                                           Yes

                                                                           No

                        15%                                59%             No, but have plans
                                                                           to implement
With regards to robotics with vision technology, 59% of our respondents have indicated their use, and
another 26% are planning to integrate it. Vision technology has become a critical component for many
robot applications, enabling robots to be deployed for new applications. Over the years the technology
has matured, with higher performance and lower pricing. Vision technology is crucial in guiding robotic
actions, particularly for complex pick-and-place operations.

The vision guided robots market is set for a rapid growth over the forecast period. In terms of revenue,
the global vision guided robots market accounted for USD 5.97 Billion in 2019 and is expected to reach
USD 12.03 Billion by 2026, growing at a CAGR of around 9.52%. [7] This is driven by increasing need for
automation & safety, high labor cost, lack of skilled labor, and rise in investments in R&D activities.

Automation requests

                    How much increase in automation request did you
                           have in 2020 compared to 2019

                                               11%
                                 22%
                                                                         No increase
How many robots do you plan to integrate in 2021

                                       12%         11%                        0
                                  4%
                                                                              1 to 5

                            19%                                               6 to 10

                                                                              11 to 25

                                                                              26 to 50
                                                         46%
                                  8%                                          >50

Of all responses, all but three company also plan to integrate more robots in 2021, with 19% planning to
integrate 11-25, and 12% planning to integrate more than 50. This finding is evident of the rising trend of
automation in Israel, with the rise in request overall and plans for further integration this year.

Integrators and their potential

According to Lightstream Research findings, Fanuc, Yaskawa, Kawasaki and other Japanese manufacturers
account for at least 60% of the global installed base for robots, meanwhile ABB, Kuka and other European
companies contribute close to 30%. In terms of the value of shipments, Fanuc, Yaskawa, ABB and Kuka
have an estimated 70% or more of the global market in 2019. [9]

The market value of system integrators is estimated to increase from about $330 billion, to more than
$575 billion. [10] The rate and importance of automation to improve the processes and efficiency of
various sectors would only be on an uptrend, especially with expanded capabilities on data processing
with the introduction of 5G and other technological advances.

Reasons for slow uptake of automation

Despite the introduction of technologies such as AI, IoT, robotics, cloud computing, virtual and augmented
reality, 3D printing as well as the upcoming 5G network, digitalization of processes in the industrial
manufacturing industry continues to fall behind in the implementation of these technologies into their
factory operations. Reasons for the slow uptake includes the high cost needed for both retooling and
digitalization of operations, developing digital products and services, and also the fear of current
workflows being disrupted through digitalization, in addition to the need for constant change given how
fast technology is moving. [11]
Productivity and labor
Prior to the pandemic, the productivity of factories has also increased by 30% in 2019 with the increased
implementation of automation. 10% of the increase is attributed by the Hi-Tech sector, while 8% is
attributed from traditional manufacturing companies. Manufacturing production has also increased by
6.4% overall. [13]

With the increase in productivity, the wages of workers in Hi-Tech factories have also increased. For
traditional manufacturing companies however, the wage remains low, where employees earn less than
half of what their counterparts in Hi-Tech firms earn. The total number of jobs in the manufacturing
industry is expected to increase by 13%, the highest of all other sectors in Israel. [12] Traditional
manufacturing companies will need start implementing automation to remain competitive, where labor
shortage and skills mismatch are becoming a greater issue with less people willing to take up jobs in the
traditional manufacturing sector. [13]

Although some jobs are at high risk of replacement by automation, the manufacturing industry struggle
to find skilled, qualified employees with a workforce shortage in the industry. Deloitte has projected that
nearly half of the 4.6 million manufacturing jobs that will be needed over the next 10 years will not be
filled. That is 2.3 million open positions. [14]

Following the introduction of robotic systems into production processes in many industrial sectors, an
increasing number of robotic programmers and maintenance personnel are needed. More competent
workers are also needed with the creation and implementation of advance robotic technologies especially
in this industry 4.0 revolution.

The need for automation in the manufacturing sector is a crucial one. The adoption of automation
technologies will not only minimize the impact of the workforce shortage but increase productivity and
efficiency of factory processes through optimization while cutting the cost spent on labor, errors, and
maintenance in the long run.

Covid-19 Impact

The onset of COVID-19 has also attributed to the accelerated digitalization of processes in areas like supply
chain, operations, employee communication and safety. The adoption of digital technologies to reinvent
these workflows accelerated the transformation of what would have taken 3-5 years to just a few months.
Manufacturers are expected to produce higher quality products in less time, despite greater strain and
challenges to their normal supply chain. [15] This further emphasizes the need to increase the efficiency
and accuracy of their manufacturing processes which can be done through automation.

The import of industrial robots into Israel have seen at least a 30% decrease compared to 2019, based on
the import data for Jan-Sep in 2020. The drastic decrease in import is attributed to the COVID-19
pandemic. Operations and manpower are greatly affected, airlines are disrupted, and Israel experienced
two lockdowns lasting at least two full months. People were unable to work as per normal, and there are
already effectively 800 thousand new unemployment in the first half of 2020. However, despite the steep
decline in import, productivity in factories did not see the same fall. The increase in automation request
as indicated by our respondents for the year of 2020 also implied increased interest in the implementation
of automation and robotics solutions. The pandemic could also have sparked greater interest with more
companies realizing the need to automate their factory processes, such that it is still able to operate with
lacking manpower, to reduce the impact on their business if the pandemic were to sustain.

The global robotics investment value has dipped as well in 2020, from a total value of 12.6 billion in
investment in 2019 to about 4.9 billion for January to July 2020 according to The Robot Report.

Fanuc, Japan’s top pioneering robot maker, reported a 19% year-on-year sales decline in the three months
to June and is girding for a 17% decline in the fiscal year ending March 2021. This comes after a 20% drop
last fiscal year. [9]

However, despite a nearly 61% fall in investments on robotics globally, the number of deals made only fell
by 7%, from 203 to 189. Since the figures in 2020 only accounted for the first seven months and not for
the whole year, the fall in investment is estimated to be 33.3% instead with the estimated total investment
figure of 8.4million. The number of deals would also be comparable to that of 2019, if not higher. This
indicates a consistent interest in robotics, just that the volume of purchase is much lower understandably
with the pandemic since operations have been affected worldwide. Israel also continued to maintain a
4% share of the total robotics investment in the world in Jan-Jul 2020.

Although 2020 witnessed a reduction in investment in robotics, it has also been proven to be a strong use
case against the COVID-19 pandemic where it helped ensure business continuity. The demand for
industrial robots will rise sharply from 2021 on as more companies look to adopt automation solutions,
consistent with our survey findings. The introduction of low-cost robots and innovative business models
such as Robots-as-a-Service (RaaS) are also expected to drive demand from small and medium enterprises
(SMEs).
Issues for factories who are already implementing automation

For factories who are already implementing automation solutions, some struggle from having too many
separate technologies at hand, hindering the modernization of their operational applications. Most
manufacturers are managing multiple IoT platforms and applications across multiple clouds or locally,
making it complex to analyze data to improve processes overall. The solution is to bring together all the
functions and operations across the shop floor as well as tie into the back-end business and data platform.
The key is making the IT deployment simpler, so it runs together with operations, not as a separate
operation to manage. [15]

                                                                    Source: 2020 Honeywell Intelligrated
                                                                    Automation Investment Study

A survey finding by Honeywell has also found that cost and frequency of maintenance is one of the
greatest limitations of automation technology in use at their companies today. Companies also found
solutions difficult to implement despite being able to generate positive business outcomes. [18]

These limitations would need to be resolved for an accelerated adoption of automation across factory
floors. More companies are stepping up however in a bid to solve these pain point. Startups like PhononIA
are working on predictive maintenance solutions, targeting both the high cost and frequency needed for
maintenance. Toyota Industries Corporation (TICO) also recently created a new company, T-Hive, a global
autonomous vehicle software development company to better manage separate IT operations with one
integrated platform. With implementation of automation solutions still in its infancy, companies should
see such limitations becoming less of a concern with further advancement and adoption in the years to
come.

Conclusion

Even against the changing manufacturing landscape due to the onset of the pandemic, figures have shown
the strong interest and growth of robotics and automation. Israeli manufacturing companies are still keen
to take up more automation solutions, with higher automation requests in 2020 than in 2019 despite the
pandemic. A bulk of the respondents also indicated plans to implement more robotics in 2021. The use of
robots is growing due to technological advancements that support an increasing number of applications
within the manufacturing sector and increasing ease of implementation in factories. Cobots are also a
rising trend where Israeli factories are still slow on its uptake despite its high annual growth rate
worldwide. Automation managers and system integrators should investigate how they can facilitate more
adoption, value and growth of factory processes through automation, for optimization and to maximize
productivity.

One way to do this is to have a dedicated worker with new skills on the floor to put automation tools like
robots to work. When workers can easily master the technology, they will expand their skill set and work
collaboratively with the technology to streamline processes and reduce backbreaking, repetitive tasks.

With the onset of labor shortages and rise in competition especially in the traditional manufacturing
sector, factories need to shift their production strategy through the use of automation. Factories need to
re check their assumptions on automation and productivity if they are not actively seeking to automate
process.
References
[1] History of the Cobots - The Cobots from Universal Robot. (n.d.). Retrieved May 3, 2021, from
https://www.universal-robots.com/about-universal-robots/news-centre/the-history-behind-
collaborative-robots-cobots.

[2] CNBC Robots could take over 20 million jobs by 2030, study claims. (n.d.). Retrieved May 3, 2021,
from https://www.cnbc.com/2019/06/26/robots-could-take-over-20-million-jobs-by-2030-study-
claims.html.

[3] Industrial & Manufacturing Trends for 2021. (n.d.). Retrieved May 3, 2021, from
https://www.hortoninternational.com/news/industrial-manufacturing-trends-for-2021-.

[4] 20 Warehouse Automation Statistics That'll Blow Your Mind. (n.d.). Retrieved May 3, 2021, from
https://www.conveyco.com/warehouse-automation-statistics.

[5] The Trend Towards Warehouse Automation. (n.d.). Retrieved May 3, 2021, from
https://westernacher-consulting.com/wp-
content/uploads/2017/11/Whitepaper_Trend_to_Automation_FINAL_s.pdf.

[6] Global automation market revenue by segment 2021 | Statista. (n.d.). Retrieved May 3, 2021, from
https://www.statista.com/statistics/257170/global-automation-market-revenue-by-end-market.

[7] Global $12.03 Billion Vision Guided Robots Market to 2026. (n.d.). Retrieved May 3, 2021, from
https://www.prnewswire.com/news-releases/global-12-03-billion-vision-guided-robots-market-to-2026-
-301157830.html.

[8] ‫ הודעה לתקשורת‬. (n.d.). Retrieved May 3, 2021, from
https://www.cbs.gov.il/he/mediarelease/DocLib/2020/359/16_20_359b.pdf

[9] US, China both lag badly in industrial robot race - Asia Times. (n.d.). Retrieved May 3, 2021, from
https://asiatimes.com/2020/08/us-china-both-lag-badly-in-industrial-robot-race.

[10] System Integration Market Share - Industry Size, Trends Report 2027. (n.d.). Retrieved May 3, 2021,
from https://www.gminsights.com/industry-analysis/system-integration-market.

[11] Industrial manufacturing trends 2020: Succeeding in uncertainty through agility and innovation.
(n.d.). Retrieved May 3, 2021, from https://www.pwc.com/gx/en/ceo-survey/2020/trends/industrial-
manufacturing-trends-2020.pdf

[12] Where the Jobs Are: Israel - GoinGlobal Blog. (n.d.). Retrieved May 3, 2021, from
http://blog.goinglobal.com/where-the-jobs-are-israel.

[13] ‫ התעשייה הישראלית‬. (n.d.). Retrieved May 3, 2021,
fromhttps://www.industry.org.il/files/Econmy/claire/ANNUAL_MACRO1%20_%20y.pdf?utm_source=Inf
oruMail&utm_medium=email&utm_campaign=%D7%9E%D7%92%D7%9E%D7%95%D7%AA+%D7%91%
D7%AA%D7%A2%D7%A9%D7%99%D7%99%D7%94+%D7%A1%D7%A4%D7%98%D7%9E%D7%91%D7%A
8+%287%29
[14] Skills Gap Study. (n.d.). Retrieved May 3, 2021, from https://operationalsolutions.nam.org/mi-skills-
gap-study-18.

[15] Collaboration Empowers IIoT Use Cases | IndustryWeek. (n.d.). Retrieved May 3, 2021, from
https://www.industryweek.com/technology-and-iiot/article/21156086/collaboration-empowers-iiot-
use-cases.

[16] The Collaborative Robot Market – 2019 - Interact Analysis. (n.d.). Retrieved May 3, 2021, from
https://www.interactanalysis.com/the-collaborative-robot-market-2019-infographic.

[17] Cobots Lead the Future of the Global Industrial Robots Market, Finds. (n.d.). Retrieved May 3, 2021,
from https://ww2.frost.com/news/press-releases/cobots-lead-the-future-of-the-global-industrial-
robots-market-finds-frost-sullivan.

[18] 2020 Automation Investment Study. (n.d.). Retrieved May 3, 2021, from
https://sps.honeywell.com/content/dam/honeywell-edam/sps/igs/en-us/support/resources/research-
tools/sps-igs-2020-automation-investment-study.pdf.
You can also read