According to the PMMI 2022 report, consumer packaged goods (CPG) companies have been steadily embracing robotics. Expanded intelligence, mobility, and sensing capabilities are opening up new applications for robots in processing and packaging.
The majority of CPG companies, about 84%, currently employ robotics in some part of their production line. This figure is projected to increase to 93% over the next five years, according to PMMI Automated Future infographic:
There are multiple reasons for that: from increased food safety regulations to intense competition in the industry. To find out more about the deployment of robotic systems and ways they can enhance CPG operations, I spoke with Svyat Stesin, the CEO of rexR. The company designs, produces, and implements high-speed industrial robots and robotic systems for the automation of pick & place and primary & secondary packaging processes of CPG.
Before we dive into the world of industrial robotic systems, let’s talk about your background. What did you do before entering this field? How did you come up with the idea of developing industrial robots?
After 3 years of working as a stock trader, I decided to change my professional trajectory and discover venture capital investments. Teaming up with a friend, we founded our own venture capital fund and successfully raised approximately $10 million. We then set our sights on companies intent on replacing imported goods with domestic production, mainly in the food industry. It exposed us to the significant issues facing the CPG industry, such as low production efficiency. This experience sparked the idea that automation might be the key to solving these complex problems.
Our vision came to life with the assistance of our very first client, who was keen on integrating a robotic system into his factory's production processes. We gathered a team of experts, primarily from the aerospace industry. So, the first high-speed delta robot in Eastern Europe was developed and our team's entrepreneurial journey began in 2018.
We were convinced that only one business model could be successful in our market, which is becoming a manufacturer of not only robots but also robotic systems, offering our clients turnkey solutions. The concept of modularity was born, and it's the basis of our business now.
Despite the robotics market experiencing a boom in 2018, this wave of excitement had yet to reach Eastern Europe. Nevertheless, we attracted our first serious private investment of $3 million that year.
Great! You mentioned the concept of modularity as a key advantage of your solution in comparison with other vendors. Can you tell our readers a bit more about the industrial robotics market, key players, and solutions they offer?
The market consists of three distinct players. First, there are manufacturers of industrial robots. They don't typically engage directly with end consumers but instead collaborate with integrators.
This brings us to the second group – system integrators. They interact with the end customers, assess their needs, and subsequently decide which robots best align with the specific requirements. While they may not own the robots, they do handle other related components such as frameworks, tech vision systems, and conveyor systems. It's important to note that the robot is just one piece of the larger system. Therefore, the integrator's primary function is maintaining a direct line of communication with the end consumer.
Lastly, we have self-sufficient players who manufacture all components independently, from robots and vision systems to frames, conveyor systems, and software.
Such manufacturers have a unique edge over integrators. By developing and producing all components in-house, they enjoy a greater degree of flexibility in problem-solving. They aren't tied down to solutions provided by other vendors, which means they can design systems with a specific number of axes needed to address consumers’ needs, resulting in more compact and cost-effective solutions. This is what we do at rexR.
How do you achieve such flexibility and efficiency?
Our strategy involves two aspects. The first one is modularity. It’s not a new concept, but it allows for faster implementation due to the use of a set of standardized elements. By combining them, you can address almost any task within a specific industry.
The second aspect is the speed and accuracy with which you can formulate technical and commercial proposals and complete the production process. This is where software plays a significant role.
Our approach involves designing robotic systems in a multi-physics virtual world where we simulate mass, inertia, bounces, and collisions in various scenarios. We utilize AI to plan the robots' trajectories and conduct simultaneous tests on real axes (hardware-in-the-loop). AI, coupled with projections into the trajectory and simulations, enables us to determine with a high degree of accuracy the specific number of robots and the equipment required to tackle a particular task.
In addition, to streamline the engineer's work, we've developed a library of our modular units. These include frames, conveyors, HMIs, vision systems, and grippers. With this library at our disposal, we can provide a solution no longer than 1 week after the approval of the technical task.
It allows our clients to start leveraging their new robotic systems sooner, irrespective of the project's complexity or size.
Why is this becoming critical for CPG companies to implement robotic systems?
Increasing food safety regulations is one of the primary reasons. Human contact with food is one of the major causes of food contamination, contributing to a large number of foodborne illnesses. Automation allows us to enhance food safety for consumers.
Another key advantage of robotic systems is their ability to optimize space use. As these systems enable a more compact setup, areas such as the packaging zone on the production line, which typically requires more space to accommodate human workers, can be significantly reduced.
Finally, the growing competition between CPG companies calls for a diverse product range. As such, the fast and efficient nature of automation presents a significant advantage.
I'm curious to know what steps you are planning to take next. What other markets do you want to enter?
We recognize the enormity of the American market and hope to make a substantial impact on the industry. We've started to collaborate with universities, specifically with Duke University, and we intend to actively involve their graduates in the development and implementation of our solutions.
Moreover, we're open to working with young specialists, as we find it more beneficial to mentor individuals from scratch rather than retraining seasoned engineers who've spent their careers working on distinct systems.
One of our primary strategies for the future is to foster rapid product growth and market expansion. Currently, we work directly with our clients, but to achieve a higher level of presence in the market, we may start supplying our key units to integrators.
This way, we would have several integrators in each state, ensuring a seamless integration at both the software and design levels. Alongside existing market technologies, like CAD systems, we aim to enable any group of engineers to become robotics integrators. We believe that this approach will make the process cheaper and faster, allowing for quicker solution implementation.
Finally, we're currently developing a project idea that revolves around leveraging standardized elements to offer a Robotics-as-a-Service model. Our strategy is to engage not with the holders of CapEx budgets but with operational and factory management. We aim to produce the machine at our expense, requiring minimal advance payment to maintain our customers' interests, and then install it under a subscription model.
As such, customers can start profiting from the first month of machine operation, because the cost of the subscription will be lower than the total cost of manual labor. As part of this strategy, we'll be looking to secure liquidity from banks to implement this solution.