Teradyne CEO: Smaller businesses still struggle with robotics

Robot Business

Greg Smith CEO of Teradyne

Teradyne CEO: Smaller businesses still struggle with robotics

Elías Lundström
Corporate Communication & Public Affairs

Many smaller businesses are struggling with robot implementations and need external support in more areas than normally assumed, says Greg Smith, CEO of Teradyne.

The test equipment manufacturer Teradyne acquired collaborative robot maker Universal Robots (UR) in 2015, entering the robot market. Today, eight years later, Teradyne CEO Greg Smith shares some of the learnings gained after selling more than 60,000 UR robots and helping manufacturers across the world automate.

His key point is this: Automation is more urgently needed than ever before, but businesses of all sizes are struggling with adoption. Giant global manufacturers have the scale to support large internal automation teams, but that leaves a huge market opportunity that must be addresses by the robotics industry.

“There is an undeniable need for automation. Every year, the workforce is shrinking while manufacturing output is increasing, leaving a need for higher productivity and automation,” he says.

The labor gap shows in the job opening rates of the US manufacturing industry, which have soared since the outbreak of Covid. By February this year, they reached 5.1% according to the U.S. Bureau of Labor Statistics ­– a significantly higher rate than the approximately 2% a decade earlier. But while robot installations have also been increasing fast, growing at a compound annual rate of 14% globally during 2012-21, they have mostly happened in larger companies, leaving smaller ones behind as suggested by previous studies.

Generally, only the largest manufacturers have the internal expertise to adopt and maintain robotic solutions according to Greg Smith.  

“Smaller manufacturers generally struggle with implementing robots, and especially with keeping them running and reconfiguring them as their business changes,” he says and adds why that keeps some companies from investing in robots:

“They worry what might happen after the solution has been set up. If something goes wrong, they may not know how to fix it and stay operational”.

Smith: Need for more external support and expertise on buying automation

There are solutions that make businesses less dependent on having robotic engineering expertise in-house according to Greg Smith: Some collaborative robots (cobots) and mobile robots (AMRs) are making automation relatively easy to deploy and use because they are fast to set up and require less technical expertise with for example programming.

“Cobots and AMRs have taken a huge step to ease the implementation, and they have a whole ecosystem of providers today that make the technology simple to use. But it doesn’t solve all of the problem,” Greg Smith says.

The bigger challenge, he suggests, lies in providing adequate support, advice, and expertise to customers during their entire automation journey, starting before the actual implementation.

This, he says, includes figuring out where automation makes most sense for the business, how to optimize processes for automation, finding and dealing with the most capable automation providers, and making sure it’s the right fit for what the business needs and can support internally.

“The existing ecosystem doesn’t provide a lot of this type of support to customers,” Greg Smith says referring to the market model for automation centered around distributors and integrators that typically deliver complex, custom-built solutions operated and maintained by the end-user.

For large businesses that already have in-house automation teams and know how to source, implement, and maintain robot solutions, this is less of an issue, he believes:

“It works for large companies, but it doesn’t provide the overarching expertise and support that smaller companies need for buying automation.”

Finding vendors and purchasing a solution, for example, can in itself be a challenging task for those businesses, he explains. Many automation customers have used Google to look for suppliers, which comes with a high overhead on dealing with the providers, making arrangements, evaluating solutions, and handling back-end tasks. These things can easier be solved by a marketplace, he says:

“A marketplace can provide the support that smaller companies need for buying automation. It can help close the gap between what the customer needs and what can be provided to them in the most efficient way,” Greg Smith concludes.