Prab Robots Inc., of Kalamazoo, Mich., is noteworthy among robot manufacturers. It has been involved, from the outset, with smaller companies, and 60% to 80% of its business is with companies not in the automotive industries.
"I think we have as broad, if not a broader, base than anyone in the game," says Prab president Jack Wallace.
The company owes not only its success to smaller businesses -- during 1981 it sold about 180 units, and had revenues of $17.8 million and net earnings of $740,000, a one-year increase of 161% -- but its existence as well. In 1961, Wallace was fired from his job as general manager of the Hapman Corp., a small manufacturer of industrial conveyors. His response was to get together with another Hapman employee, Charles Larson, raise some money, and buy a competitor, Prab Conveyors Inc.
The company, founded in 1950 by Peter Ruppe and Allen Bodycomb (whose initials yielded Prab), specialized in the production of equipment used to transport and process scrap metal. Attempting to expand his market base, Wallace got involved in the die-casting industry, a fortuitous turn of events, since it exposed him to robotics technology.
"The classic scheme in die casting was to drop the hot parts from the die-casting machine into a water tank and have a conveyor down there to convey them up to a trimming machine. We made a lot of conveyors like that," says Wallace. "The first robot we saw -- it was a Unimate -- was in a die-casting plant, and we were told that it was going to put us out of the conveyor business. Wallace was pretty sure that wouldn't happen, and he was also sure that the unit was overkill for the application. "Our people came back and said, 'Let's make something for half the price that will do the job.' That's how we got started."
The principle has remained intact as the company has grown. "We don't believe in pushing technology," says Wallace. "We're pushing results." The firm's current advertising slogan makes the same point: "Prab Robots Inc. keeps it simple."
It was natural that Prab sell to small companies. Its robots were uncomplicated, it had started out working with smaller firms, and was a small company itself. "An order for 200 robots would have killed us back then," says Wallace.
"The other companies devoted most of their time to going after the automotive spot-welding lines; we've devoted our time to going after the one-here, two-there applications," says Prab vice-president Walt Weisel. "Our biggest user doesn't have more than 20 machines."
A broad market base insulated Prab from some of the shocks that other companies experienced when the recent recession hit the auto and appliance industries, the two largest users of robots. Prab has units in plastics, metal cutting, material handling, foundry, forging, packaging, and nuclear power applications, among others, and now commands 5% to 10% of the domestic market.It continues to manufacture conveyors and scrap-metal processing systems.
The major problem the company has faced is what Wallace calls the "inertia of the manufacturing community." "There's a lot of bureaucratic resistance to doing something new or different," he explains.
"There are many people in middle management," he adds, "who have more to lose by being associated with a bad project than they stand to gain by being associated with a good one." The result is that they play it safe, stick with antiquated technology, and make life difficult for robot manufacturers. "The only way to overcome the resistance is by hard work in the marketing area," says Wallace. "It's a hard sell, but we've seen a tremendous improvement in acceptance over the last few years."
Prab's recent history attests to the success of its strategy. In 1979, it purchased the Versatran robot line from AMF Inc. and, in September of 1981, it went public; its stock opened at $10 a share, and has traded as high as 28. From its base in Kalamazoo, Prab has expanded into a multinational operation, entering into licensing agreements with Can-Eng. Mfg. Ltd., of Canada, Murata Machinery Ltd., of Japan, and F-N Eurobotics, of Belgium.
But Wallace's greatest triumph came in 1972, when his firm purchased the assets of the Hapman Corp., Wallace's former employer, at a bankruptcy auction in Kalamazoo for "a nominal sum."