What Does the Robot-as-a-Service Model Look Like for Warehouse Automation?July 02, 2020 by Akshay Kumar
The Robot-as-a-service business model has become increasingly popular, as companies like ForwardX Robotics and Mobile Industrial Robots are exploring different business models to reach out to potential customers.
Industrial automation and intelligent robotic solutions have proven to be beneficial for warehouse automation and inventory management. Their adoption rates have risen sharply due to high commercial viability, quick ROI, and reliable efficiency in automation solutions.
Many tend to be conservative towards technology adoption, and robots have only recently established it’s placed in their effectiveness and efficiency.
Robot-as-a-Service (RaaS) for Warehouse Automation
Different robotics companies have been exploring the most appropriate business models that can fetch suitable and scaleable consumers. Analogous to the Software-as-a-service (SaaS) model, the RaaS business model allows buyers to use robots and its services only as per need and pay for the services availed and duration they use the robot, without owning it.
This model has lesser obligations on the user for maintenance, support, and operational and functional hazard responsibility. The model allows users to try using robots for their application and continue adopting these technologies.
The introduction of robots to warehouse and inventory management applications has gained momentum in the past five years but has a high entry barrier. This barrier includes high initial infrastructure setup costs, high cost of purchasing a robot fleet (buying a couple of robots does not help a big warehouse speed up operations significantly). The current pandemic has also introduced cash-crunch and revenue is bumpy as well. It has also exposed the need for flexibility and variable demand handling for the supply chain.
In such dynamic scenarios, logistics companies are reluctant to invest heavily in warehouse automation solutions. The RaaS model allows such consumers with the means and reservations to use robots flexibly, and not give up on technology adoption. This ensures cash flow for the robot companies as well, who would otherwise find it difficult to sell the robot. RaaS subscriptions for robots is a low-risk action and promises an instant return on investment with minimal capital and only operational costs.
ForwardX Robotics is a Beijing-based robotics company with offices in San Diego and Phoenix in the U.S. The company builds computer vision-powered autonomous mobile robots (AMRs) for warehouse automation. ForwardX builds primarily two warehouse goods transportation platforms, the X200 and the X500 AMRs with 120 kgs and 280kgs payload respectively. Both robots use cameras as their primary perception device for autonomous navigation solutions.
ForwardX Robotics Raas Business Model
ForwardX attempts to balance technological outreach with the changing business model. The company is providing RaaS-based solutions for their mobile robots for logistics and material handling applications. ForwardX RaaS model is an attempt to align with the operational goals of the businesses.
ForwardX Robotics’ X200 and X500 AMRs. Image courtesy of ForwardX Robotics.
ForwardX provides FLEX and MAX solutions optimized for goods motion in warehouses for replenishment, moving, picking, packing, and shipping processes. Companies using ForwardX’s RaaS model can continue to expand their business using these solutions while avoiding several capital-related limitations.
Mobile Industrial Robots (MiR) & Business Model
Mobile Industrial Robots is an industry leader that develops collaborative autonomous mobile robots for warehousing, goods transportation, warehousing, and other generic logistics and fast-moving consumer goods applications. The company’s robots have various high load capacities ranging from 100 kgs to 1000 kgs. These robots have standard laser and proximity sensors along with several cameras for autonomous navigation.
MiR1000, MiR250, MiR200, and MiR100 robots. Image courtesy of Mobile Industrial Robots.
MiR aims to provide affordable financing models for their robots while acknowledging the limitations in capital and technology adoption bottlenecks. The company provides a four year leasing period at a monthly leasing rate of €575 ($711) which has a very high ROI for normal one-shift 160-hours of operation per month and can be extended to two or three shifts for the robot. MiR Finance provides low upfront costs for their robots thus reducing the entry barrier and customers are only liable for operational costs.
RaaS Vs. Purchasing Robots
While RaaS is an economically viable warehouse solution, it is not a long-term solution to permanent automation efforts. RaaS is bound to be more expensive in terms of accumulated operational costs over time, against a one-time purchase cost. Also, infrastructure setup may be required while adding new robots or swapping the robot hardware ( as the hardware is highly correlated with the warehouse scene) during each RaaS effort. Customizations possible on the robots per user are also limited.
Raas eases the path to robot adoption in industries, but the long term financial feasibility of the solution to consumers as well as robot companies is still doubtful. Since robots are prone to wear and tear and need maintenance and support, the service model may not beneficial enough for robotics companies unless the robots have long lives, which is yet to be explored as not a lot of robots have been in deployment for long periods of time.