Are the Robots Taking Over?
Some have a fear that robots are taking over, but the founders of Universal Robots have a different view. They have focused on producing a versatile robotic arm that frees humans from doing the repetitive tasks. Their journey has not been an easy one. From a startup with just a couple of employees their future was questionable at best, but they never gave up.
During the recent Productronica China show their booth caught my attention, as it was constantly filled with people interacting with table-mounted robotic arms. Here’s their story.
Barry Matties: Today I’m here with Esben Hallundbaek Ostergarrd, CTO and co-founder of Universal Robots. Please tell me about Universal Robots, Esben.
Esben Ostergarrd: We founded Universal Robots because we could see a need in the Danish industry, which was to make more flexible robots or make robot technology more flexible. Maybe it's not so surprising we saw this need especially in Denmark, because Denmark has a high salary level and it does not have an automotive industry. So the Danish industry is more varied and flexible, not high volume products and so on.
The existing robot technology at that time was not very well suited for the Danish industry, and we could see that there was a general global need for more flexible production and more flexible robots. That's when we decided to basically quit our jobs at the university and try to build these robots, and pursue our dream of making a reality the kind of robots that we could see the world needed.
We got a small amount of money from a Danish governmental fund and we quit our jobs and started building these robots. Then we spent three years in a basement trying to build the robots, and we actually managed to come up with some prototypes that were functioning and pretty good to start selling. Then we ran out of money. So we didn't have the volume needed to build up the production and a sales network. We were completely broke and our employees were not very happy not getting paid, so they started leaving the company.
Matties: How many employees did you have then?
Ostergarrd: We had two at that time. There were two founders and two employees.
Matties: So when one left, you really felt it.
Ostergarrd: Exactly, and that's never good. On the other hand, we had a robot that we thought could really make a difference. So we really didn't want to give it up. We spent a month not getting paid and paying our employees from our own pockets, and there's a limit to how long you can do that, especially if you also have to buy parts to produce robots to sell robots. We had sold five robots and delivered two. We had gotten some parts we didn't pay for, but we didn't have parts enough to complete the remaining three that we already got the money for.
So our customers were not happy. Our sub-suppliers were very unhappy and they didn't want to give us more before we paid for the previous parts; the phone was ringing all the time with people wanting their money. We just told them that if they filed for bankruptcy for the company, then they would never get their money. That was the worst thing they could do. Their best chance was to hope that we'd somehow pull through.
Actually, more or less by coincidence, we got in contact with an investor that looked at our product and looked at us and said, "The product is good, but you need professional management in this company. Then we would want to invest in it." There was half a year of negotiation, but they basically ended up investing in the company and that was a good thing. They put in a professional manager who had sales experience and commercial experience. At the beginning of 2009 we started building up sales, focusing less on development and more on sales.
Since then we have been doubling the company return every year, and we have been growing a lot – first in Europe and then the U.S., and now we are a global company. In 2011 we started selling in Shanghai and made a subsidiary here; we also have offices in New York, India, Singapore and Barcelona, many offices in the world. So the company has really grown very fast.
Matties: So from two employees that were questionable in terms of staying there, how many employees do you have now?
Ostergarrd: We have 140 now.
Matties: Congratulations.
Ostergarrd: Thanks. We're still actually a pretty small company, but we have found that the kind of robot we make has had a very big impact on the way that the world looks at robots. We've actually managed to change a little bit of the perception of what a robot should be, and that's kind of an interesting journey. Even though we are a pretty small company, we have changed a lot of things. Also, we are a small core company. We have a lot of sub-suppliers that give us all the parts that we put in the robots and we have a lot of distributors and integrators that sell all the robots. So even though we are only around 140 people, we have a large throughput.
Matties: What markets do you focus on? Obviously, we're here in electronics, but are you in other markets?
Ostergarrd: In Europe we are mostly focused on the metalworking industry and the plastics industry, a little bit in the woodworking industry and a little bit in food, and you could say end-of-the-line packaging also.
Matties: That's the beautiful thing about a product like yours. You're not locked in to a single market.
Ostergarrd: Exactly. It is a universal robot that we make. We don't put the hand on the robots, we just have the arm that stops at the wrist. So what we provide is basically a universal moving tool to which the customer can add a hand (tool) of their choice that meets their specific needs.
Matties: So what makes yours better than the other robot arms that are out there?
Ostergarrd: The main difference is we have a different focus. The other arms more or less come out of the needs of the automotive industry, which is reliability, performance, exactly the same motion every time. So flexibility and safety has not really been a big requirement in the automotive industry. Since you can say the world's production has shorter and shorter product life cycles, you need more and more flexibility in the production equipment used in the world. For this reason, we try to promote these selling points with our robots: easy programming, flexibility, and safety. Also the light weight of the robot makes it easy to move around. It all adds up to flexibility, which is the new need we see.
It's a little related to something that we had been thinking a lot about in our company, which is really about making humans do what humans are good at and making machines do what machines are good at. Machines are good at doing the boring things, doing the same thing every time. Humans are good at creativity and knowing what should be done and how things should be. Machines are not very good at that. So we basically want to make technology as a tool for people, to free them from doing the boring things or the repetitive things.
Matties: Well, here in Asia, we're at the circuit board show. Obviously, automation is mandatory. You're hitting this at exactly the right time, it seems.
Ostergarrd: Yes, and this is why we had a product launch here yesterday. We introduced the smallest member of our robot family, a small robot that is very well-suited for the electronics industry, because there are not that many big, heavy parts in the electronics industry. On the other hand, space is always a requirement in all production. So we made a very small, you could say, tabletop robot. The robot we launched yesterday looks a lot like the other two robots we have, but it’s just smaller.
If you think a little bit about it, it's actually kind of different because the five kilo robot we have is intended to replace a human arm for doing repetitive motions. Maybe it's putting things in and out of machines. The ten kilo robot we have is more intended for replacing a worker standing up and using two hands to move parts around. But the new three kilo robot we brought is actually kind of a different thing because it can automate on the table. So you can have a worker sitting at a table, and then on the same table you have a robot installation running. I think this is something new, and it's something that would fit very well into the electronics industry. That's why we are launching it here. It also brings a new aspect to what a robot is and how we use industrial robots.
Matties: Are your robots all stationary/fixed at this point?
Ostergarrd: The robots we have are robot arms. They cannot move around. We see other companies put our robots on mobile platforms and then give them mobility, but that is not the focus of our company. Our company focuses on making a tool for people to automate things easily, and that is simply buying a robot, screwing it on the table or placing it somewhere, maybe attaching it to existing equipment. Then you can simply drag the robot arm around to show it what it should do, and it learns that and does that.
It's really easy to automate simple things. My dad was an engineer; he was working on the water supply of Cebu City in the Philippines when I was small. So I lived there when I was a kid. They had this task of pulling a cable through pipes, and what they did was tie a string to the tail of a cat, and the cat was not always happy about that and it was a pretty painful situation sometimes. Then they would chase the cat through the pipe, to get the string through, and they would use the string to pull the cable through. That's actually when I made the first robot, because I had a Lego cable car with simply a battery pack and a motor. Then you can make a track vehicle that could go through the pipes there.
Matties: So where do you see your company headed next?
Ostergarrd: We see big potential for the kind of robot we make. We know that there are a lot of other companies that have seen the same potential as us and we want to try to be ahead, so we have to move very quickly to maintain this initiative. We have the world leadership right now, this way of thinking about the robots.
Matties: So your programming method of teaching it through motion, is that a patented process that you have?
Ostergarrd: No. That's not patented.
Matties: Is it common?
Ostergarrd: It's not common. I don't think any other industrial robots have it, but as a concept it's not that new. The other robots didn't have the need for it because their main focus has never been flexibility. Especially the German way of thinking, where you have an engineer deciding everything and the guys on the factory floor do not touch but do just what they're told to do. Now this mentality is changing in many
places in the world, where they actually want to push responsibility down to the factory floor, so the guys working there are responsible for everything and doing the right thing. It's a cultural change, you could say. This way of thinking makes it more attractive to have our kind of flexible equipment on the factory floor, that can be touched by the people working there.
Matties: What region has the most interest in robot technology?
Ostergarrd: If you look at the volume, China is by far the biggest consumer of robots in the world right now. Also, outside China, it's pretty big in Asia. If you look at the density of robots per worker, then Germany is leading the game, but the U.S. is also pretty well on this road. I think almost everywhere in the world there is an increasing demand for robots, and I think this is just going one way in the future. In general, the robot market rises around 25% a year, globally.
Matties: You talk about the displacement of people. Not everybody is going to wind up with a job.
Ostergarrd: Well, that's the thing. Every time there's been technological progress that takes the boring work away from people, people have found other ways to be occupied. We've seen that since the first industrial revolution, where we had the harvesting machines that actually freed up 80% of the world's population to do other things. Society normally finds ways. We actually believe and have this vision of the way the future will be. So we see that the previous four industrial revolutions have really freed up a lot of manpower in the world.
First we had the mechanization, then we had the electrification or steam power of industry, then we had the computer-controlled machines like the first robots and the first CNC machines. Right now, especially the Germans are talking about Industry 4.0, which is more or less about internet in production and supply chain software and centers. You can say all these technologies have really freed up a lot of manpower in production, but they have, in our view, also created a gap.
Before, when you had a tailor, he knew his materials, he knew his customers, and he knew his tools. So when a you came in and ordered a dress or suit, you got a personalized suit based on his knowledge, put into the product you bought. This has disappeared over the years. This way of understanding customers' knowledge has been taken away from the products we produce. So now we have these mass-produced products, the Internet of Things, Industry 4.0, and we have the possibility of doing mass customized products, but still it's without a human in the loop. We believe that all these developments have opened a gap that can again be closed if we somehow manage to get a human back in the loop when we do the production. I don't know if there are a lot of microbreweries here in China, but in Europe and the U.S. it's becoming really, really popular.
I believe the reason is not that the beer tastes better. It's because when you buy a beer from a microbrewery, you feel that someone wanted to share something with you. You actually feel connected to the guy who was sitting up at night and putting a little bit more of this, a little bit more of that into the beer, and this is why you buy and this is what you pay four times the price to get. So there is a definite need for people to feel special when they buy a product.
I think the need comes from everything that's mass produced now. We really want to have some of this customization back in our products. By making technology, that allows a new kind of worker on the factory floor, like creative people, people with knowledge and people who know their materials and the tools. Then we can actually make the fifth industrial revolution with these robots that you can once again get the craftsmanship or the passion or the love back onto the production floor. So the products we buy are customized, you could say.
Matties: It's an equalizer as well, when you look at the labor.
Ostergarrd: Exactly. That was the point, because then suddenly there's a lot of need for people in the production. There is a need that all these people need to put the human touch in the products.
Matties: The value-added side.
Ostergarrd: Yes, because machines don't make products for machines. It is humans that make products for humans in the end. So there is a lot of potential there for jobs, and I also think there's a lot of value there, that can be gained.
Matties: The ROI is pretty quick, though, I’d imagine.
Ostergarrd: It depends on where you are in the world, but on the other hand, the ROI is maybe not the main selling point. So often, the machine that is being automated with a robot is actually the expensive part in the equation, and if you get just a little bit more time out of that machine or a little bit more production out of that machine, then it pays for itself. And you have the consistency of quality and so on. We see that in some companies that have bought a lot of our robots, like 50 robots in less than a year; they have at the same time increased the number of staff working with the robots. So we had a lot of cases where they bought 50 robots but got 80 new employees at the same time. So there's evidence that it's not really taking away jobs.
Matties: Well, it's changing jobs. You're right. I bring that up because I see that there is a lot of fear of robot technology in the world. The truth of the matter is that some people are going to be displaced, right?
Ostergarrd: Exactly. The people who did exactly the same for 30 years and have kind of grown into that position and can’t move from there.
Matties: Right. They're locked in, they're pushed out.
Ostergarrd: What you can say is it's good to have an education. It really helps a lot.
Matties: You're living proof of that. Well, congratulations on your success. How many years have you been at this again?
Ostergarrd: We started in 2005. So that makes ten years.
Matties: What are your sales now?
Ostergarrd: The sales from last year were 2,000 units. We expect 4,000 units this year, and then 8,000 units the year after that. It's been growing like this for five years now. We believe we can continue.
Matties: Good for you guys. Thank you very much.
