RaaS gives small and mid-sized manufacturers the gift of automation

ICON Injection Molding's journey highlights robotics’ transformative effects on operational expenditure, safety and productivity

(Image: Formic)

(Image: Formic)

Industrial robotics installations in North American manufacturing have soared to record levels, experiencing a 12 percent jump in 2022, according to data from the International Federation of Robotics (IFR). The shift signals high interest in automation solutions among large-scale manufacturing outfits and smaller companies in niche industries as well. The surge is being enabled, in part, by startups like Formic, which are bridging the automation gap for small to mid-sized factories through a robotics-as-a-service (RaaS) business model.

Formic’s RaaS model aims to overcome challenges small and mid-sized manufacturers face when integrating robotics into their processes, which generally requires major up-front capital investment, specialized skills and lots of time.

One manufacturer counting on RaaS cutting through these barriers is ICON Injection Molding, an Arizona-based family-owned business that produces specialized plastic parts for the medical and defense sectors. ICON’s robotics experience provides an example of a paradigm shift that’s currently underway in manufacturing.

“For us, deciding to work with Formic came down to the budget and the fact that we didn’t have to make a big capital expenditure,” said ICON Chief Administrative Officer Nicole Kleitsch-Killam. “They take care of all the programming and maintenance for us. It really was a truly no-risk proposition for us, and we’ve developed a personal relationship with them.”

Formic is one of a new breed of robotics suppliers that provides on-demand access to robotics automation with guaranteed uptime and no upfront costs. It assesses a customer’s facility and provides tailored automation solutions based on specific needs. This drive to automate begins with a thorough understanding of the manufacturing process. Formic sends engineers to customer sites to grasp the processes requiring automation, which informs the design, build and deployment of their custom machines.

“We take on the design, the engineering, the assembly, programming and installation. We don’t charge the customer a dime,” said Formic co-founder Misa Ilkhechi. “The customer only starts paying when the automation system is up and running as expected, with an hourly rate ranging from $5 to $25, depending on the task and the number of operators replaced.” Contracts are flexible, allowing customers to swap out automation tools as needed. Ilkhechi says contracts are flexible, allowing customers to swap out automation tools as needed.

ICON’s automation journey with Formic grew out of ongoing struggles relying on manual labor to get the job done. Worker injuries due to hazardous conditions and repetitive, physically intensive tasks had led to high turnover at the company, which resulted in operational inefficiencies that were passed on to customers in the form of higher prices. Although automation was a logical solution, prohibitive costs and risk involved with purchasing robotics systems, along with a lack of expertise regarding how to deploy them successfully, posed significant barriers for the company.

The decision to go with a RaaS system triggered striking changes at ICON, which saw a 40 percent decrease in operational expenditures, 30 percent faster production cycle times, reduced rates of worker injuries and an uptick in internal promotions.

ICON’s experience represents a window into how RaaS automation is helping tackle the manufacturing labor shortage, enhancing factory safety and ensuring the collaborative coexistence of robots and human workers.

“Two of our main problems were that first, nobody wants to work the third shift, which has always been our hardest shift to fill. Even before COVID, people want flexible work hours and manufacturing just isn’t as attractive to workers as it once was,” Kleitsch-Killam said. “Second, we were producing parts that come out of the press at around 300 degrees and require immediate operator handling, and so we were seeing a lot of injuries because of that, and merely giving people personal protective equipment is the least desirable way to eliminate a hazard.”

(Image: Formic)

(Image: Formic)

Those are the sort of problems that Formic’s system was built to solve, with robots capable of working through the night and under conditions that are difficult to make safe for people. In ICON’s case, workers no longer had to touch hot surfaces because robots took on those tasks. The lack of high operational expenditures and quicker production cycles complement the safety gains. Cost savings and high efficiency means higher profits that can translate into expansion and more jobs for human workers.

For ICON, the benefits go beyond just numbers. Operational risks are borne by Formic— in a sense, the RasS provider assumes the client’s risk by providing the system, expertise, round-the-clock maintenance, and ease of use. ICON already had a couple of robots prior to working with Formic but with up to eight different injection mold changes on a given shift, it meant pivoting the robot to eight different programmatic tasks, which required considerable human intervention.

ICON had originally looked into traditional robotics companies for injection molding but balked at the capital expenditure involved. Instead, the manufacturer decided to apply Formic’s $10-per-hour system for a particular customer who was happy with their product and wanted to grow. Automation was essential for taking the customer’s existing mold and ramping up production without adding costs. Formic was able to successfully integrate a robotics system into ICON’s largest 20-year old injection molding press that runs about 25 days per month.

“The programming is easy because Formic handles all of that for us,” said Kleitsch-Killam. “You’re literally just selecting the size of the part that’s being run, and that’s it. The robot knows what to do from there.”

Although automation often raises concerns about job losses, Kleitsch-Killam said ICON isn’t anticipating a workforce reduction because only 30 percent to 40 percent of the business is being automated. Expansion into new areas might even mean workforce growth, though the effects will vary among manufacturers.

Regardless, automation is increasingly becoming an undeniable part of the modern industrial landscape as it solves key production problems. Ilkhechi, who has walked through the doors of over a thousand manufacturing facilities, understood that standard automation models often presented businesses with expensive, risky investments. Purchasing an arm or a conveyor, despite being expensive, won’t do much to aid production on its own. A seamless, fully programmed system that integrates with existing environments is required.

Formic decided to address the challenge head-on. “Rather than a company having to pay when a machine breaks down, we constantly have service engineers making routine visits to these machines making sure they’re running properly,” said Ilkhechi. “With cutting-edge devices and cameras monitoring machine performance, we can predict and address potential issues, ensuring seamless operations.”

With millions of job vacancies predicted in the manufacturing sector by 2030, one of Formic’s primary goals is to address labor shortages. Depending on the region, manufacturing jobs are often the last jobs people want to take, generally. Formic aims to fill these hard-to-fill roles through automation without eliminating jobs, allowing manufacturers to produce more units per operator and opening avenues for worker promotion and more meaningful tasks for humans to perform.

However, the automation journey is not without its challenges. Startups like Formic also face a skilled labor gap as there’s high demand in the tech industry for talent with very specific skill sets who can serve as technical service engineers, project managers, and in other specialized roles. Improving the technology to advance adoption in more industries and use cases requires cutting-edge innovation backed by researchers pushing the envelope. Formic itself is expanding its own workforce to further its goals.

The disruptive RaaS business model and its focus on customer-centric solutions represent a growing part of the manufacturing industry’s shift towards automation. While challenges remain, this ultimately means that businesses for which automation was previously out of reach can now reap the rewards previously only achievable for much bigger companies. ICON’s story indicates that despite robotics’ mechanistic nature, the technology’s personalized solutions can make workplaces more, not less, human centric.