RED LIGHTS SPELL DANGER............... OR DO THEY?
Oil prices standing at record levels, stock market gyrations, the sub-prime and banking crisis , housing markets headed south and that harbinger of uncertain times, the gold price at a new peak; hardly an indication of propitious times ahead. Nevertheless, the recession much forecasted, refuses to arrive and whilst a downturn in economic activity seems inevitable, let us hope that the worst case scenarios of the doom-mongers are avoided. It is often said that the capital equipment market is the first into recession and the last out. But although activity levels are uneven, this is only what we, in the special purpose machinery industry, have had to learn to live with. And there seem to be few signs of a dramatic downturn in investment just yet. Moreover it is essential that investment levels are maintained if we in the developed economies are to successfully compete with the emerging and lower cost nations. As an example, one of our customers is an owner managed business, but its competitors form part of much larger groups, which are stock market listed. An unequal struggle you would think, but whilst the competitors "mind the cash", our customer has invested heavily over recent years, not just in equipment, but in research and training. RNA has participated in this with the supply of several robot guided vision systems, through its association with SVIA, the market leader in this field. The virtuous circle of investment, cost reduction, innovation and growth has seen this company prosper and consistently take market share away from the competitors. This illustrates some of the inadequacies of short termism and it is still something of a mystery as to why businesses still use the 12 months payback as their yardstick for investment decisions. There was an argument for caution in the 1960's through to the 1980's, but we have just had an unprecedented period of stable inflation and interest rates. It doesn't add up that you can borrow money at under 10% and still expect a 100% return on your investment in the first 12 months; the benefits of taking a longer view are self evident. Acknowledging the need for shorter product life cycles and duration of contracts, RNA are responding with flexible automation; equipment which can accommodate component changes and new products. This provides customers with usability which can extend the life of the equipment and assist with minimising the investment risk. Tool less changeover of RNA vibratory feeders is now possible in seconds. SVIA vision guided robots can handle multi parts and new additions to a range in an easy teach process that takes only minutes. Also RNA offer a pouch and sachet feeder, which can provide a consist gap to feed a flighted conveyor; again with minimal changeover between products. There are some signs that small owner managed businesses which have resisted automation are now seriously considering this option. This is in effect being forced upon them, given price pressures and with overheads already cut to the bone, there are now few palatable alternatives. Nevertheless there are still a few diehards who will never change. At a recent exhibition I heard one visitor say to his father "that robot is doing the job that Joe does". The response "that's right son and when you own the business you can buy one, but not while I'm around". The truth is "Joe" has probably been doing that job for many years and an investment could have paid itself back many times over by now. In the end, businesses need to see beyond the red lights and invest to maintain their competitive advantage. Stuart Brettell Managing Director RNA Automation