John Amrhein believes the time is now for companies that want to launch automation solutions into their operations to follow through.
Amrhein, executive vice president and partner at Wyoming-based Orka Automation LLC, is optimistic heading into 2024. Citing lower forecasted interest rates and a sense of normalcy in the automotive sector following UAW strikes, delayed launches and lower consumer demand, Amrhein expects automation solutions providers to experience full pipelines and longer lead-times on projects in 2024.
“My recommendation to the companies that are sitting on the sidelines is: ‘Let’s go. Let’s do it now,’” he said. “Your production might be a little bit lower, but … there’s not going to be a lot of automation company capacity when companies start spending again.”
Despite setbacks in 2023 for some sectors, such as warehouse automation, West Michigan’s automation activity has ramped up in recent years, in large part as a response to labor shortages. Solutions providers forecast more of the same growth in 2024.
“We’re optimistic about our company, but we’re also optimistic about the future (of automation),” Amrhein said.
Last month, Orka Automation announced a $2.5 million expansion to meet customer demand and streamline operations in light of some recent acquisitions.
Founded in 2017 to meet requests for automation solutions from sister company Component Engineering’s customers, Orka Automation during the pandemic experienced surging demand from customers on two fronts: those that had already been adopting automation solutions and those that were dabbling in the field as a result of pandemic-related labor shortages.
Heading into 2024, Amrhein said the company is still seeing growing demand and purchase orders from customers in industries such as consumer products, electronics and medical devices.
While automation demand from the automotive sector was softer in 2023, he has a brighter outlook for 2024.
“I’m confident that EVs will do well … and that we should see strong launch activity next year. Depending on interest rates, consumer demand should improve and we’ll hopefully see more activity coming from there,” Amrhein said.
Other West Michigan automation companies also appear to be bracing for new surges in demand in the new year, even after steady growth in 2023.
“2023 has been a good year with a lot of odd economic conditions for our customers,” said Scot Lindemann, CEO of Mission Design & Automation, noting that manufacturing in the U.S. appears to be resurging from pandemic-related challenges, including through onshoring efforts and turning to automation to resolve labor shortages.
“With harder-to-get labor, the demand is there (for automation), so the automation business continues to be growing well even though the economics have been strange for three years,” he said.
Mission Automation’s growth has been evident in recent years. In 2021, the solutions provider wrapped up a roughly $5 million expansion in Holland, adding a new 50,000-square-foot facility to support more large-scale projects. Earlier this year, Lindemann told Crain’s Grand Rapids that the company already has been contemplating its next expansion as the new facility is at capacity.
The more that access to technology advances, the more automation becomes a viable solution for challenges in manufacturing and other industries, he said.
“As advanced robotics, software, AI and vision systems continue to get better and better and easier to implement, automation becomes feasible in a lot more markets where, maybe in the past, the technology was too difficult or too expensive to be implemented well,” Lindemann said.
Lindemann also sees continued effort and emphasis on supporting this new technology from an education standpoint in the near future.
Recent data from market analysis firm Lightcast — as highlighted in a Lakeshore Advantage report on smart manufacturing — indicate that West Michigan produced 202 graduates in automation engineering in 2021.
As well, the number of automation engineers in the region has increased by 40% over the last five years and is expected to grow another 15% in the next five years, according to the data.
“Finding technical people to support the newer technology is getting easier every year,” Lindemann said. “Of course, there’s a talent crunch to find good people, but the schools are stepping up their game and the education system is doing a better job than ever.”