Interact Analysis performs research on markets differently from other analyst firms. I’ve appreciated this British company’s insights. It has been sending a constant stream of reports lately. As I’ve been catching up with a flood of news, I’ve consolidated three recent research reports.
The first from CEO and Senior Research Director, Adrian Lloyd.
Manufacturing Recovery Post Covid
China was the first country to be hit by the COVID-19 pandemic, and the authorities’ fierce suppression of the virus has meant it was the first major region to emerge from it. In the Chinese manufacturing sector, the recovery was particularly striking, to the extent that by mid-April 2020, the operating rate of Chinese industrial enterprises exceeded 90%. Interact Analysis has published its latest update to its Manufacturing Industry Output Tracker (MIO).
This latest edition of the MIO confirms the upwards revisions to predictions made in November 2020. The return to growth for China’s manufacturing industry in Q3 of 2020, and sustained growth in Q4 has turned Interact Analysis’s forecast for the full-year from negative to positive. We now expect that China will enjoy a +1.9% increase in overall manufacturing output for 2020, as opposed to our forecast back in August, which suggested a -3.5% decline. 6.0% growth is expected for 2021. This is good news for China.
Rapid rebound for many industries, including automotive
The national Bureau of Statistics of China has reported that the total value-added of industrial enterprises increased by 2.8% last year. The production of industrial robots, new energy vehicles, integrated circuits and micro computer equipment grew by 19%, 17.3%, 16.2% and 12.7% year-on-year, respectively. Significantly, the growth rate of the automotive industry increased compared to 2019. This is quite exceptional given that on a global level the automotive sector has been a serious casualty of the pandemic.
The recovery of China’s manufacturing confidence from the second quarter of 2020 onwards is reflected in the manufacturing PMI, a market sentiment indicator, which clearly describes a v-shaped recovery coming out of Q1.
In December 2020 China’s (PMI) was 51.9%, down by 0.2% from the previous month, but it was above the 50.0% threshold for ten consecutive months, indicating that manufacturing industry has continued to make a steady recovery.
Of the five sub-indices composing PMI, the production index and the new orders index were above the threshold, while the supplier delivery time index, main raw materials inventory index and employment index were below. The production index was 54.2%, down by 0.5 percentage points from last month, but it still stayed above the threshold, indicating that the growth rate of manufacturing production has slightly slowed down but is still higher than the value posted in August.
The new orders index was 53.6 percent, down by 0.3 percentage points from the previous month, but it still stayed above the threshold, indicating that demand was continuing to grow. The supplier delivery time index dipped just below the threshold from 50.1% in November to 49.9% in December, indicating that the delivery time of raw material suppliers in the manufacturing industry was slightly slower than that of last month and slightly down from the August value. In spite of the slight dips, the scores for these three indices ensured that the overall PMI stayed above the threshold.
The performance of China’s Q3 2020 export market has been a key influencer impacting China’s full-year outlook for 2020. Both import and export operations in the region have been improving. The total value of imports and exports for the first three quarters combined increased by 0.7% year-on-year. Across the year so far, Q1 fell by -6.5%, Q2 fell by -0.2%, and Q3 rose by 7.5%. In December, the growth rate of exports dipped slightly by 3% month-on-month, however, it remained 18.1% up on the 2019 value. As of December, China’s exports have achieved positive year-on-year growth for seven consecutive months.
China’s manufacturing industry recovery is setting the pace globally, and defying expectations. While global manufacturing output growth is expected to drop by -3.9% in 2020, it will increase by +1.9% in China. The latest data suggests that, in 2021, both global and Chinese manufacturing output will increase by more than 6%, as we hopefully leave the pandemic behind us. The robustness of China’s industrial chain has shown through during the pandemic. And increased investment in automation upgrades is likely to further consolidate the position and share of China’s manufacturing industry overall.
The second report is from Research Analyst Mayo Xiao on the industrial robot market.
Recent news for the industrial robots market hasn’t been cheering, but the future for the sector looks good, with global shipments forecast to increase by over 9% in 2021, and a CAGR of 4.6% forecast for the period 2021-2024.
Major revisions in previous forecasts brought about by unprecedented events
The Covid-19 pandemic has not been the only drag on the economy in the past couple of years. Even pre-Covid, 2019 was not a good year. As reported by the IMF in July 2019, the global economy was dipping before the pandemic hit the world. Sino-US tariff wars, weak demand from the global automotive and electronics industries, Brexit-related uncertainty and geo-political tensions all played their part in subduing global growth. Then came the virus to further disrupt an already weak economy.
The robotics industry was hit particularly hard in those two years, seeing continuous negative growth. In our new industrial robots report, Interact Analysis highlights the downturn for robotics by looking at our own predictions made in Q3 2019 in the second edition of the report, and comparing them with revised figures made in the new third edition.
The chart above shows the effect of the slow-down in 2019 on the robotics industry, when shipments fell by 5.4%, and the profounder effect of the pandemic of 2020 when they fell by 5.9%. Put more starkly, there were 80,000 unit shipments less in 2020 than previously forecast.
Although earlier forecast figures for the longer term are not now going to be realised, Interact Analysis has identified strong drivers for the increasing use of automation and industrial robots. These include new industry applications and reducing prices. Revenues are forecast to accelerate in 2021 with an increase of 9.2% in revenue terms and 9.6% in shipment terms. Thereafter there will be a steady uptick in shipments.
All classes of robot except articulated robots are predicted to return to 2019 shipment levels before 2021. The sluggish market growth rate of articulated robots is explained by their predominant use in the automotive industry, which has been hit badly in the past two years. This downturn is predicted to continue. SCARA robots, used for light duty pick and place and assembly operations, have suffered delayed demand in the 3C industry but are predicted to rebound swiftly as their potential for use in different applications is recognised.
Market growth for Delta robots, used in the food and beverage and pharmaceutical sectors will be steady, whilst Collaborative robots are expected to show negative growth for the first time in 2020, but their growth rate is predicted to be an impressive 15-20% year-on-year up to 2028. They are currently strongly established in the electronics sector, but they are a relatively nascent technology offering the potential to be applied across a range of sectors. Cartesian robots are, like SCARA robots, used in material handling. Other applications include pick & place and packaging. Their advantage over SCARA robots is that they offer heavier payload options, and it is these that will drive their market.
The pattern of regional recovery for the industrial robot sector is very similar to that of other industrial sectors. The virus started in the Asian regions, and then moved to Europe and North America, and the infection continues to spread. As a result, normal business operations will resume earlier in the Asia-Pacific region, and this will impact on robot shipments in those areas, most notably in China, where stringent measures had brought the virus under control by May 2020. The impact of the virus on the industrial robot sector in the Asian regions, particularly China, has in fact been relatively small, and the Chinese market is the only one forecast to surpass 2019 levels by 2021. This is in the main due to the large domestic demand in China. Covid-19 has had greater impact on foreign trade.
Interact Analysis predicts that by 2023 all regions will have surpass 2019 levels of industrial robot shipments, with China and North America achieving the highest growth rates.
Suppliers – The Big Four forge ahead – for now. Prices set to drop
Where suppliers of industrial robots are concerned there are many new entrants to the market bringing with them exciting new technologies, but 4 major manufacturers – Fanuc, Yaskawa, ABB and Kuka – took an estimated 58% of revenues in the world market in 2019 and continue to dominate. The market has been led by articulated robot suppliers, because of their many payload options and the industries and applications they can serve but take note of the slowdown in articulated robot sales noted earlier. Things may change, especially with the promised coming of age of the collaborative robot. Japan is home to most leading suppliers, including the world leaders in industrial robots, Fanuc and Yaskawa.
Although the technology used in robots is becoming more advanced, Interact Analysis forecasts the price of industrial robots will continue to fall at a rate of around 3-5% a year from 2019 to 2024 – a likely significant driver of investment by end-users.
Finally, a report from Senior Analyst Blake Griffin about variable frequency drives used for predictive maintenance.
Drives and Predictive Maintenance
Predictive maintenance is fast becoming recognised as one of the more easily exploited applications of that popular but not always easily defined concept in industry – digitalization. Also known as Industry 4.0, digitalization remains a broad concept which can be difficult to justify in terms of investment. One aspect of digitalization, however, stands out as worthy of swift and serious consideration: predictive maintenance. Predictive maintenance can save millions of dollars of lost output by pre-empting production line downtime. In our predictive maintenance report, researchers at Interact Analysis have turned their focus on the ability of motor drives to perform predictive maintenance diagnostics not only on themselves, but also on the equipment they control, potentially saving millions in machinery downtime. This technology, whilst in its early days, is expected to be a key enabler of predictive maintenance initiatives as it opens up a new stream of data for both OEMs and end-users to tap into.
More than just a drive
Motor drives can be highly sophisticated pieces of equipment, capable of performing diagnostics on themselves, and giving signals to alert engineers when maintenance is necessary, thereby avoiding breakdowns and subsequent costly machinery downtime. Companies such as Siemens have recognised the potential of this predictive maintenance technology and offer it as a service to end-users through their digitalization platform called Analyze MyDrives.
However, drives can do more than diagnostics on themselves. For example, they can monitor the status of the motor they are controlling by measuring the voltage and current the motor requires to perform a task in real-time. This data is used to control torque and motor speed, but it can also be used to identify the imminent failure of a component in a motor. Drives vendors will argue that voltage and current measures give more sophisticated insights into motor failure than the standard monitoring of vibration.
As OEMs and end-users are beginning to recognize the value of data housed in the smart devices driving their systems, some drives vendors are developing software for their products which are aimed at making the process of gathering, organizing, and monitoring trends in this data easier. One of the earliest pioneers of this technology, and one of the strongest voices, has been Danfoss. The company has already brought this technology onboard with their VLT AutomationDrive and it is a great example of this trend in action.
Vendors offering drives incorporating predictive maintenance software need to ask themselves these questions:
- What data will be captured, and how?
- Where will the data be analysed?
- What is the most cost-effective option?
These questions have significance in terms of the capabilities of the drive from a predictive maintenance perspective. This is where vendors need be ready to respond to end-user needs when developing their products.
Big players likely to be first in the queue for drive-based predictive maintenance technology
As a general rule, the bigger the motor, the greater the financial loss when it stands idle for repair. We believe the industries that will be first in the queue for motor drives offering predictive maintenance capabilities will be those using the largest and most expensive machinery. Additionally, process industries in which downtime could represent the loss of a batch being manufactured are expected to adopt predictive maintenance early. These industries are likely to include metals, oil and gas, water and waste-water, power, chemicals and pharmaceuticals, and various other sectors involving large industrial processes. As well as being the largest, they are also some of the swiftest growing sectors in the market.
The potential for savings in these areas through predictive maintenance is huge. Automotive, another big player on the industrial landscape, has already started utilizing predictive maintenance technologies. We anticipate these larger industries, often with multiple sites, will use a combination of edge and cloud computing for predictive maintenance analytics.
Smaller-scale industries may be slower to adopt predictive maintenance owing to cost issues, but we can expect these operations to increase their demand for drives that can diagnose issues on the spot, on the motors they are controlling.
Drive vendors offering equipment with smart sensor capability include ABB, Siemens and Danfoss. The ABB Ability Smart Sensor transfers data to a secure server via Bluetooth and can be used on traditional motors, pumps and bearing blocks. The Siemens SIMOTIQ IQ uses Bluetooth to communicate through gateways known as Connect 300 or Connect 400 to the cloud. Predictive maintenance enabled drive vendors include Rockwell Automation, Danfoss, and Schneider Electric. The Schneider AltivarProcess 630, used in a range of settings including pumping, lifting, aeration and compression operations can analyse data on the drive itself, or send it to an external network for processing.
Back in the 90s, I used to haul around a $25,000 vision system in the trunk of my car to perform demonstrations of machine vision technology applications.
Today, there is more video power in my smartphone than in that entire system.
Just like all the technologies we use in manufacturing, vision systems and video have become more powerful and useful,most often leveraging consumer electronics or IT innovations. I visited a small chemical refinery that installed streaming video into its operator interface for a unique, but essential, personnel safety/security application. Located in a rural area of Texas, the refinery operators periodically opened the gates to allow railway cars into the facility or to let the filled cars leave. The open gates became a welcome invitation to the local coyote population. Of course, these guys were not wanted wandering around the facility. The video system watched for incursions and alerted personnel.
Not too long ago, the bandwidth required by that streaming video would have been too expensive or awkward to be economical. Now, it’s just another sensor.
Intelligent Video for Health and Safety
These Covid pandemic days have led to new use cases for video. AT&T identifies a few key examples on their video intelligence page:
- Ensuring social distancing
- Counting people to maintain safe capacity
Infrared thermal imaging has progressed to the point that strategically placed thermal imaging cameras can monitor personnel for fevers—an outward sign of potential Covid infection. We can potentially stop the spread of the virus at the plant entrance.
Another Covid-related application involves contact tracing and social-distancing assurance. These applications require high bandwidth along with sophisticated analysis software—both now readily available. And, both technologies are poised for improvement. We will see 5G installations before long that will improve bandwidth, speed, and latency forvideo applications.
“Outside of these pandemic applications, process plants with hazardous areas have found video sensors to be a perfect solution to determining personnel safety during an incident. Rescue teams need to know who is in the area and where they are. Security teams can be alerted if someone wanders into a hazardous or restricted area.
Intelligent Video for Quality Control
Then we return to the applications I once tried to solve—product quality. While it is best practice to fix the process such that defects are not produced, vision inspection is another step in assuring products that fail to meet specification are not shipped to customers. Taking a feedback loop from inspection information provides a pathway to solving the process problem. As network bandwidth improves and video sensors become smaller, cheaper, faster, these video IoT solutions become more attractive.
5G is the Foundation
Apple released its latest iPhone (one of which is lying on my desk) with great hoopla about 5G. Apple pundits were originally less than enthusiastic about the 5G bandwidth. I have been advising them, along with clients and readers,about the tremendous value that will be unlocked by 5G. It may not be as apparent in an individual iPhone, but we will see a massive shift in business and manufacturing applications.
5G skeptics do exist, but most technologists are decidedly bullish on the possibilities. I think that manufacturers of many varieties will begin deploying the networks for one or two of the reasons that fit them, and then discover that they’ve received more benefit than they expected. Then managers and engineers will have difficulty remembering why there was any debate over moving from LTE to 5G.
As the AT&T Business team puts it in their “Agility Refined” white paper:
5G is the next generation of wireless communications technology. In essence, 5G will put the network edge closer to users and devices. It uses mid-band frequencies and millimeter wave (mmWave) to help accomplish this.
5G offers significantly larger spectrum allocations and enables exponentially increased data rates. It has a reduced range compared to today’s 4G frequencies—but the antennae needed for 5G are much smaller. This will allow for a dense network of small cells, enhancing the current user experience.
As you lay out your 5-year-and-beyond scenarios, this intelligent video powered by 5G will be technology to keep in the narrative.
This post was sponsored by AT&T Business, but the opinions are my own and don’t necessarily represent AT&T Business’s positions or strategies.
One company consistently sending news is ABB. PR on the process side has moved to Europe, but robotic and related PR is still handled locally. I find it interesting that the major European suppliers have moved marketing out of the US, while some US-based suppliers have just pulled back. Not sure what they know about US manufacturing that I should know.
Technology additions to Ethernet have become interesting. They’ve existed a while, but products and momentum are growing. One is 2-wire Ethernet; but this news relates to power over Ethernet. ABB has released a flowmeter. The other news relates to a hot topic—electric vehicle (EV) battery manufacturing. This will remain a focus for quite some time.
ABB launches world’s first Power over Ethernet flowmeters
ABB has incorporated power supply through Ethernet connectivity on board the latest edition of its electromagnetic flowmeter ProcessMaster* and mass flowmeter CoriolisMaster, opening a new chapter in instrumentation and industrial communication.
Power over Ethernet (PoE) offers several benefits for process engineers, as it omits the need for a separate DC power infrastructure, providing power and communications via the same cable. This brings new agility as flowmeters can be installed wherever needed. In addition, ABB 4-wire Ethernet combines classic outputs with future communication protocols. Offering a modular design allows the combination of both worlds and ensures that devices are futureproof, increasing the longevity of the flowmeters.
Furthermore, flowmeters with Ethernet connectivity increase simplicity, flexibility and reliability to operations in process automation, while enhancing real-time visibility of data. Previously hidden data in field devices, such as measurement values on density, conductivity or concentration of the medium, can be unlocked. This in turn will help customers across all industries identify redundant measurement points in their plants to achieve savings along the way.
“ProcessMaster and CoriolisMaster with Ethernet will support our customers’ digital journey towards smart cities and Industry 4.0. Ethernet is the leading communications technology. By incorporating it into the ABB flowmeters, we can help even more customers reduce complexity of operations and lower costs of infrastructure in more plants around the world – safely and remotely.” said Frank Frenzel, Global Product Line Manager Process Flowmeters.
An integrated secure webserver based on the ABB Ability Cyber Security framework ensures robust and secure operations that offer instrumentation engineers support during commissioning and troubleshooting. It also provides access to configuration, diagnostics and measurement data through a built-in QR code. This allows verification of all parts of the flowmeter and provides insights into its operating condition with automatically generated reports.
Combining 4-20 mA or digital outputs with new 1- or 2-port Ethernet makes classic instrumentation truly future-proof, with speeds of up to 100Mbit/s. The flowmeters use various Ethernet based communication protocols, such as simple Modbus TCP or high performance EtherNet/IP. This prepares them for IT/OT convergence, cloud connectivity and the requirements needed for secure and encrypted communication both today and tomorrow.
*Ethernet connectivity for the electromagnetic flowmeter ProcessMaster is currently available in North America only. It will be released globally later in 2021.
Global EV battery production needs significant boost to meet demand
According to the ‘Electric Vehicle Battery Supply Chain Analysis,’ sponsored by ABB Robotics and authored by the automotive intelligence unit of Ultima Media, while 2036 is the changeover year when all-electric passenger vehicles are predicted to overtake sales of ICE-equipped equivalents, concerns over EV battery supply to meet the escalation in demand poses serious risk to the growth of electricity as a clean propulsion fuel, despite plans for 80 new global battery gigafactories.
The report outlines that although Asia leads electric vehicle battery production, Europe will make up vital ground over the next few years while US manufacturers are also planning increases in capacity.
“Automation is key to increasing assembly safety, quality and traceability and delivering battery technologies cost effectively, which is critical to the expansion of electric vehicles.” said Tanja Vainio, Managing Director of ABB Robotics Auto Tier 1 Business Line. “With production speed and flexibility essential to the successful scale-up of the EV battery industry, our cellular production architecture enables manufacturers to quickly validate a cell design and then roll out production cells globally with uniform quality, safety and productivity standards. Roll-outs can be scaled to demand with the flexibility to adjust capacity in real time.”
The report’s researchers point to the importance of battery pack assembly being located close to or within car assembly facilities.
“Co-locating battery pack assembly not only boosts sustainability by reducing transportation, it increases flexibility. A cellular approach to production is easily integrated alongside existing lines. If the demand curve moves, cells can be added or removed quickly to maintain accurate production scale. Our robots are designed to be quickly repurposed as needed, boosting flexibility and adding to our sustainable approach by maximizing the life of each robot we build,” added Vainio.
“We believe that building a robust battery supply chain will create a distinct competitive advantage for OEMs, setting a trend towards maximum production flexibility, whether battery pack production is insourced or outsourced, to further reduce costs and boost productivity,” Vainio added.
The high price of EVs will increasingly create a barrier to further market penetration, reducing vehicle cost has therefore become a whole-industry focus. Given that the battery represents up to a third of vehicle costs, ABB is focused on solutions that improve battery manufacturing productivity.
“Increasingly we see that higher productivity and lower costs are driven by assembling battery cells straight into packs,” concludes Vainio. “ABB is working in partnership with a number of manufacturers, using its systems and knowledge to increase productivity, quality and safety levels, as well as reduce finished pack costs through automated assembly – vital if EVs are to meet their required cost and adoption targets.”
The ‘Electric Vehicle Battery Supply Chain Analysis’ examines the current and future state of EV battery supplies – sources of materials, technologies available, demand analysis and potential risks.
The report is available to download from here
The latest Andy Stanley Leadership Podcast featured Sangram Vajre, co-founder and chief evangelist of startup company Terminus. That company specializes in B2B marketing.
Vajre talked about several things the company’s founders did at startup.
They wrote a book. They autographed 1,000 copies and sent to executives at prospective clients. Instant credibility.
They put together a conference. Many industry influencers were invited to speak. Terminus had a booth. Competitors were also invited to have a booth. The conference was not branded for Terminus, rather Flip My Funnel. There was no keynote from Terminus promoting the company. It was an “Industry Conference.”
Made me pause and think about our market, or industry. Perhaps the closest we have to and industry conference is ARC Industry Forum. Except that it is really about ARC and its clients. Many companies (almost all?) run conference for its customers and prospects. A couple of magazines run conferences. They are mostly centered on advertisers. Speakers are either conference sponsors or a customer of a sponsor. That doesn’t mean in any of those cases the speakers will simply give sales pitches. But it’s not the same as having independent influencers as speakers. Maybe we just don’t have enough of us?
I would do an independent industry conference, but there is only one of me.
Back to Vajre. He developed the PEAK methodology. From the show notes:
- P – Picture of Success: The image of the collective win that rallies the community
- E – Extreme Focus: Identifying the one thing your business focuses on
- A – Authenticity: Being true to your word, revealing your motives and demonstrating that youcan be trusted by your employees and customers
- K – Kindness: Caring for your team and community and keeping your customers in focus insuch a way that everyone on your team sees and feels how they contribute to the win
Work targeted to fleshing out the Edge continues. This news from LF Edge and the Digital Twin Consortium hits one of my keywords—interoperability. Industry does progress.
The Digital Twin Consortium, which coalesces industry, government, and academia to advance digital twin technology, announced a partnership with LF Edge, an umbrella organization within the Linux Foundation, that aims to establish an open, interoperable framework for edge computing independent of hardware, silicon, cloud, or operating system. Through the liaison, Digital Twin Consortium will work closely with LF Edge’s EdgeX Foundry, an open source, loosely coupled microservices framework. The two organizations will identify and solve common problems in the establishment, management, and operation of digital twins through edge computing platforms.
The liaison has been established to:
- Showcase how a common approach to digital twin technology can allow edge platforms connected to real-world entities to interoperate with virtual representations easily and flexibly.
- Accelerate EdgeX Foundry’s adoption of digital-twin-enabling technology and techniques. Specifically, explore EdgeX’s adoption of the Digital Twin Consortium digital twin reference architecture patterns to demonstrate interoperability.
- Collaborate on open-source projects to facilitate the implementation and consumption of Digital Twin Consortium platform stack reference architecture, guidelines, and related deliverables. Collaborate with LF Edge on the language, definitions, and taxonomy used to discuss digital twin technology.
“To advance edge computing, we need a global ecosystem that supports interoperability,” said Arpit Joshipura, general manager, Networking, Automation, Edge and IoT, the Linux Foundation. “With this collaboration, EdgeX Foundry aims to adopt and showcase the Digital Twin Consortium reference architecture and make it easier for developers to connect any digital twin to physical devices/sensors via EdgeX Foundry in their edge solutions.”
“Edge computing enables a new wave of applications and capabilities in many industries, especially when joined with other technologies, such as 5G, IoT, and digital twin,” said Dr. Said Tabet, Chief Architect, Office of the CTO, Dell Technologies, and Digital Twin Consortium Steering Committee member. “The agreement between LF Edge and Digital Twin Consortium sets the stage for a collaboration that will facilitate the integration of edge platforms and digital twin technologies.”
“We are excited about our collaboration with LF Edge’s EdgeX Foundry,” said Dan Isaacs, Chief Technical Officer, Digital Twin Consortium. “Their knowledge and experience in the integration of edge platforms within organizations will be invaluable as our organizations collaborate to advance the use of digital twin technology.”