It is no secret that competitive pressure has increased worldwide. This also affects small and medium-sized enterprises (SMEs). One way to withstand this pressure is to automate, but so far SMEs in particular have hardly used this option. Why?


Despite the increasing competitive and cost pressure and many other challenges, only comparatively few small and medium-sized enterprises worldwide have used robots to automate their processes. Yet in many countries these companies make up the largest share of firms and economic output: in Malaysia and Singapore, more than 90% of companies are SMEs.[i]


With the help of automation, the problems that plague these companies could be solved or at least eased. Even a small increase in productivity can be a decisive advantage for these companies.[ii] Yet many are hesitant.


Before we explain why collaborative robots in particular could be the solution for small and medium-sized businesses, let's take a quick step back and look at what the problems are in the first place.


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What problems do SMEs face?

Especially from Asian countries, but also from other parts of the world, increasingly strong competition is coming for small and medium-sized enterprises in Europe and the USA, which increases the overall global competitive pressure. To keep up, Western companies need to take action.[iii]


Competitors often have the advantage of cheap human workers, which allows them to keep their costs down. In the past, many firms have responded by moving their production overseas. First to China and then to Southeast Asia or Africa.


But this too brings problems: besides the frequent criticism of the inhumane working conditions that prevail in some factories and the loss of quality that some complain about, the COVID-19 pandemic has exposed other weaknesses of offshoring: the loss of control and the fragility of production chains.[iv]


That aside, a trend has been emerging for some time in countries like Germany and the UK that will also be problematic for many companies: The lack of workers - especially technicians.[v] It is quite possible that especially small and medium-sized companies will have to struggle with this, as large companies have the possibility to offer additional advantages that make them more attractive on the labour market.


With the help of automation solutions, SMEs can reduce their costs and increase their productivity, which makes them more competitive. This would also allow production steps to be brought back and the production chain to be better controlled. Vacant positions can also be filled by robots. Or at least parts of the tasks can be taken over so that the complicated steps can be shifted to existing employees. But if automation is such a great solution, why do so few use it?

Why not just use traditional industrial robots?

Traditional industrial robots - such as those often used in automotive manufacturing to date - tend to be very large and complex machines that are exceedingly costly and not particularly flexible.[vi]


For all these reasons, they are not well suited for use in small and medium-sized enterprises. Many do not produce on mass, but have smaller batch sizes that require greater flexibility in production. Due to their size and complexity - especially when it comes to changing programming - traditional industrial robots are not an ideal solution here.[vii]


Also the high cost, the large area needed for them and the fact that usually the whole production flow has to be readapted to them. Especially for small companies that do not have large savings or large production halls, integrating a traditional industrial robot is not easily feasible and often takes too long to pay off.[viii]

A little insight into the world of cobots

So traditional industrial robots are generally out of the question for small and medium-sized enterprises. But how can they still benefit from the opportunities of automation?


The first collaborative robots were developed in 2004. So this is a relatively new category of robots. What makes them different from other robots is that they are designed to work safely with humans, and to assist their human counterparts in their tasks.[ix]


It took a while - four years to be exact - for them to really find their place in the market with the founding of Universal Robot in 2008. The thing is, rather than simply replacing traditional robots, cobots are opening up new markets and also new application areas or work steps that were previously difficult to automate.[x]


In 2018, their market share was around 3%. This figure looks extremely low at first, but it is important to remember that collaborative robotics is still a very new area, and this market share represents a 20% year-on-year growth.[xi] In fact, cobots are now considered the fastest growing segment of the robotics market.[xii]

Why cobots could be right for your business

But what explains this strong growth? What makes collaborative robots so attractive that they are already spreading so widely so soon after their market launch? There are five key differences between them and traditional industrial robots.


Through them, lightweight robots not only open up new applications, but also new potential customers: Small and medium-sized enterprises. Let's take a look at what these 5 good reasons are why SMEs should consider automating their production with cobots.

1. They can increase productivity

Collaborative robots - just like their larger cousins - can increase productivity. But unlike traditional models, they can also do so by assisting or collaborating with a human in their work.[xii]Although in only a few cases do the workspaces of humans and machines completely overlap, most cobots work in coexistence with humans: Their task is to assist their human colleagues. In research, this type of cooperation has been shown to increase productivity by 50%.[xiv]

2. They are easy and quick to adapt to new tasks

We have already explained: one of the biggest challenges for the use of robots in SMEs is the high demand for flexibility resulting from smaller batch sizes and trends such as mass customisation.


Their lightweight design makes them easy to assemble and reassemble, or even to mount on a mobile platform that can be moved around in the production layout as needed. But also the programming and re-programming of collaborative robots is by far easier and through intuitive user interfaces even feasible for beginners.So you can use a robot in manufacturing without employing a robotics expert. And even though you don't have an expert on staff, you can still adapt the robot to new tasks or setups comparatively easily and quickly.

3. They have more safety features

A key issue when it comes to the use of robots - and especially collaborative use - is the safety of human workers.While traditional industrial robots still largely "blindly" execute their programming and don't (can't) pay attention to what's happening in their environment, collaborative ones, through a combination of various sensors and artificial intelligence, are able to notice when a human is approaching and respond appropriately. Their lightweight design, also helps to prevent serious accidents.[xv]


However, only around 2% of all cobots are installed in fully collaborative applications: A common reason for this is that cobots, when used collaboratively, are not allowed to move at full speed.[xvi] However, in many applications these higher speeds are needed. In this case, additional safety precautions are then needed, but still less overall than traditional industrial robots, which suits SMEs.

4. They don't need much space

Their collaborative lightweight design results in another advantage for small and medium-sized enterprises: They don't need much space on the production floor.This has the one advantage that the space saved by a collaborative robot can be put to other uses. From this point of view, money can be saved, because space is not only scarce in many production halls, but also expensive.[xvii]


At the same time, the small size of the robots also means that they can be more easily integrated into existing production layouts or moved from one location to another. This in turn is a crucial factor for the flexible use of cobots that SMEs need.[xviii]

5. They are cheap to use and install

Small and medium-sized enterprises often have to work with lower cash-on-hand than many large corporations. Investment in new equipment is therefore often limited and needs to pay off quickly.


While traditional robots are often less expensive than cobots (in direct comparison between models with similar reach and payload specs), there are various sources that attest return-on-investment periods of less than a year for cobots in some cases: instead of years, the ROI of cobots is measured in months.[xix] This has a lot to do with jsut how much easier they are to install, implement, program, and use. Whereas with traditional robots, this work almost always needs to be handled by a specialist, with a cobot much of this can be done in house. Not only does this make you more independent, but it can also save a good deal of money. So ROI periods could become even shorter. This can be ideal for companies that have limited cash and can therefore only invest in projects that pay off quickly.[xx]

What you should be considering

So there are many good reasons why small and medium-sized businesses should look into the possibility of integrating a cobot into their operations. Automating production processes can become a real competitive advantage.


Here again are two pointers that have already been briefly touched upon above: Collaborative robots often do not replace traditional industrial robots. Conversely, this means that one should consider beforehand which robot is better suited to fulfil all requirements. It may be that a traditional robot is the more suitable choice - especially if the requirements for speed, reach or payload are high.


Secondly, collaborative robots are equipped with many safety features. However, a thorough risk analysis should still be carried out. On the one hand, to make sure that no hazards arise from the application the robot performs or, on the other hand, from the objects it works with.

Conclusion

Small and medium-sized enterprises have been feeling the global competitive pressure for some time now, and new developments such as mass customizaiton or the global COVID-19 pandemic have definitely not reduced the pressure.


Automation would be the perfect way to face the challenges, but traditional industrial robots are not suitable for most SMEs.


However, thanks to the latest generation of robots, collaborative robots, this is changing: not only can the lightweight robots increase productivity, they are also flexible to use, which distinguishes them from previous robots and is a great advantage for small and medium-sized enterprises.


They also have many safety features, do not take up much space in the production layout and are relatively cheap with very fast ROI periods counted in months.


Collaborative robots are therefore a good option for SMEs to address current challenges and gain a competitive advantage.
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