By Eric Peterson | Nov 15, 2021
Mike Halley founded Allied Technology in the 1990s as a contract engineering firm focused on industrial automation. He had previously worked for "a lot of big automation houses, including ABB Robotics," says his son and co-worker, Matt.
When Matt joined his father at Allied in 2010, they were the only full-time employees. The company had lost several key contracts in the wake of the 2008 financial crisis, so the Halleys pivoted to contract CNC manufacturing.
"I started out making parts out of the garage," says Matt. "We had a couple of friends with bigger projects that could give us work."
That soon transitioned to custom automation projects, and the company built a portfolio of work. "We found a couple of robot companies to work with, Universal Robots in particular at the beginning," says Matt. "In 2012, we sold them at a trade show and then we became an integrator. We were one of the first integrators in the country for collaborative robots."
The contract and custom work ultimately led to the PicPac line of stock products. "The idea of having a big automation system with one big line that took three months to six months to a year to install a multi-million dollar project, there's a lot of downtime for customers," says Matt. "His idea at the time was: 'Why don't I put in 10 small machines instead of one giant machine?' We rolled with this idea of 'Let's build small modular machines that are easy to run.' Then if you need to move a machine in or if you're having trouble getting labor, then you can just put another small machine in, and ramp up production that way."
The downtime dropped from months to days. "Your efficiency just went way up and you could still run production," says Matt. "We focused on being this compact machine builder, and it kind of took off from there."
The move has paid off. Allied Technology, eight employees strong in early 2020, has grown to 40 in late 2021 as it doubled the size of its space. The company is on track to ship about 60 machines in 2021 after shipping 10 in all of 2020. "Next year should be closer to 100," says Matt.
Initially developed with food packaging in mind, the product is relatively industry-agnostic, and the robots can be swapped out to handle more weight. "It could be medical, it could be pharmaceutical, it could be the mining industry -- it doesn't really matter as long as they have something that goes on a pallet," says Matt.
This pivot has really taken hold after the onset of the pandemic in early 2020. "We were not doing great at the time," says Matt. "We couldn't get any jobs, but we did get PPP loans and that helped us to just basically focus on R&D to fast-track all of that."
Built around Kawasaki or Universal Robots' technology, the PicPac Palletizer has been a prime driver of growth. It's about size, price, and performance, says Matt.
"Our big differentiators would be moving from cobots -- which are very small -- to industrial robots, and keeping the machine very small," says Matt. "Some people need to build a building to put a palletizer in. Ours is 13 foot by 13 foot, almost the exact same footprint people are now using. And our whole machine is on wheels, so you can roll the machine into place. The conveyor is built into the palletizer, so you don't have to re-teach points or anything like that."
The user-friendly software, developed in-house, is another key feature. It ships from our facility already programmed," says Matt. "You don't have to write any code, you just have to click buttons on the screen. It takes about 15 minutes."
The palletizer often has a one-year return on investment for companies with two workers handling palletizing on one shift. "One of these big palletizing cells from another company could cost at a minimum $250,000 and usually at a max $500,000," says Matt. "Our system is $150,000 or $160,000."
While Allied no longer offers CNC machining for contract clients, the company manufactures at its 20,000-square-foot facility in Broomfield with a big assist from a network of job shops and other vendors.
With revenue growth in the 400 percent ballpark for 2021, Allied Technology is on track to double again in 2022, says Matt.
Matt is succeeding his father at the helm of Allied Technology. "He's moving out of the role as president into chief engineer, and I'm moving into vice president at the moment."
Challenges: "Supply chain is huge for us," says Matt, citing a 16-week lead time for programmable controllers. "Every quarter, I'm ordering 30 machines' worth of inventory and keeping it on the shelf."
Opportunities: Allied Technology's partnership with Kawasaki is a big one. "They asked me to train them on how to sell our palletizing machine," says Matt.
The PicPac Case Packer is an up-and-coming product, he adds. "I'm quoting quite a few case packers, so next year we'll have palletizers and case packers as well," says Matt.
The ongoing labor shortage represents another opportunity, he adds. "It's causing us to make machines that are really easy to use, to maintain, to train people on. So the simpler we make our machines, the less skilled the people you need to operate them."
Needs: Capital and space. Matt says he envisions an Allied Technology facility to service the eastern half of the U.S., but needs financing for it. "We might have to look for outside capital to have cash to grow the company," he notes. "There's a lot to figure out logistically on how to do that."
The company also needs more people: Matt forecasts about 10 hires in 2022.