Investing in industrial robots: Smart finance
Author : Neli Ivanova, Siemens Financial Services
10 July 2023
With the UK still lagging behind other G7 countries on its adoption of industrial robots, Neli Ivanova of Siemens Financial Services (SFS) in the UK explores how specialist finance can help to support investment to keep UK manufacturing world-leading.
Alongside other automation technologies, robots are helping with productivity and efficiency. Automation is changing the face of global manufacturing, and this is, in large part, driven by widespread adoption of industrial robots. These robots support more efficient, precise and flexible processes. On the factory floor, the latest robotic automation technology performs a range of manufacturing tasks – welding, cutting, assembling parts, labelling, handling raw materials, product packing – using sensors, controllers and actuators.
The automotive and F&B sectors are the UK’s largest purchasers of automation technology respectively, according to the British Automation and Robot Association (BARA). Automotive manufacturers, for example, can use robot grippers in modular production strategies to streamline assembly with incredible accuracy. Assembly lines are then easily adaptable to different vehicle variants, making for a more efficient and flexible process.
In F&B, things have moved beyond the days of just end-of-line palletising, picking and packing. Manufacturers are now also making use of more advanced robotics earlier in the production process, reducing errors and boosting throughput.
It’s no surprise then that take-up of robots in global factories reached an all-time high in 2021, according to the International Federation of Robots’ (IFR) latest World Robotics report. Well over 500,000 new industrial robots were installed, reflecting a growth rate of 31 percent, year-on-year – well above pre-pandemic levels.
Neli Ivanova, Siemens Financial Services
UK catch-up
However, the UK lags well behind the adoption trend, with installations down 7 percent, and robot density the lowest of all the G7 nations. This contrasts sharply with the whole of Europe, which saw a 24 percent increase in installations, led by Germany (28 percent), Italy (17 percent) and France (7 percent).
Given the UK’s longstanding and robust manufacturing presence, manufacturers must consider the risks of delaying investment in robotic automation technology. If the gap continues to widen, UK businesses may lose the edge to their European competitors.
As argued by MAKE UK – The Manufacturer’s Organisation, “the technology to turn the situation around already exists and the opportunity is significant.” In fact, a report from the UK government identified that the application of automation and robotics in UK industry could contribute £6.4 billion to the UK economy by 2035. However, even greater take-up of the technology would encourage further growth and contribute to: improved industrial resilience; the creation of new roles along the supply chain; and international competitiveness.
Investment barriers and solutions
One barrier to investment, particularly for SME manufacturers, is the sheer scale of capital expenditure required to adopt new technologies. That’s why smart financing solutions will be essential in accelerating this transformation and helping manufacturers to move forward in their digitalisation journeys.
Such techniques can step in and help to bridge the gap between what a manufacturer can invest, and what is needed to see meaningful return on investment.
Smart financing is offered by specialist financiers who have a deep understanding and knowledge of the industry and relevant technology, and can enable the acquisition of technology and equipment for competitive advantage, in a financially sustainable way, tailored to an organisation’s business and cashflow needs. Specifically, smart finance makes investments possible and affordable by aligning costs with revenues.
Additionally, it offers three major advantages over generalist finance: technology expertise which understands real business outcomes; a breadth of financing solutions which can meet the organisation’s exact needs; and smooth, sophisticated processes which make the use of smart finance seamless and easy.
Robotics are already a staple of the manufacturing space, making processes faster, more efficient, and more agile. For the UK to remain at the forefront of industrial production, further investment in robotic automation technologies is not only essential but urgent. While the initial costs of investment may be off-putting to some, smart finance is available to bridge the gap. With the help of specialist financiers like Siemens Financial Services, manufacturers can acquire new technology and maintain their competitive edge.
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