More companies are deploying robots to increase fulfillment speed and capacity, cut costs and survive the tight labor market. are leasing bots to quickly implement game-changing automation, with the flexibility to scale up or down as needs change over time. Robots as a service (RaaS) may be an attractive option, but it’s not without risk.

The robot-as-a-service (RaaS) market for global logistics is projected to grow at a compounded rate of over 13%, from $4.3 billion in 2021 to $15.8 billion in 2028. The trend is driven by a confluence of events, including:

• Constant labor shortages and increased labor costs,
• Customer expectations for increased order speed, and
• Changing business conditions that require operations to quickly scale up and down.

RaaS lets customers quickly dip their toe into game-changing technologies without big capital expenditures, while leaning on suppliers for technical support and maintenance. For robotics suppliers, it’s a way to accelerate adoption of their technology.

RaaS is an attractive option to explore in today’s environment, where flexibility and speed are key to competitiveness. But companies considering this route should consider the following:

Total cost of ownership. When calculating TCO, there are many costs that are easily overlooked. Be sure to include the costs of modify the facility, systems and communications networks. Understand how the supplier is doing the complicated calculations for the number of bots, recharging stations and bandwidth, as well as expected uptime and speed. Remember that subscription fees are operating expenses that can’t be depreciated. And when assessing the ROI of the solution, compare the total cost of ownership to the incremental benefit of lower-cost alternative solutions.

Product roadmap and architecture. Some of these new technologies were born in the robotics lab and are trying to find a home in the warehouse. Does the supplier have the experience to solve warehouse-specific challenges? Look at each manufacturer’s architecture. Some put their cognitive layer in the cloud, while others split elements between the cloud and on-site. Be aware of the implications on things like bandwidth and maintenance responsibilities.

Business continuity. Consolidation and product obsolescence are realities as this nascent technology finds its footing. Early adopters of Kiva bots were caught flat-footed when Amazon acquired the robotics company. Be certain your suppliers will guarantee support for your robot fleet and business continuity for your operation. Consider the cost of replacing the fleet if that becomes the only option available to you.

Onsite skills and training. While it’s easy to say suppliers will handle all maintenance issues and provide 24/7 support, they aren’t usually onsite. To mitigate risk of downtime, you may need the skills to support some level of the new technology. And depending on the size of your fleet, you might want to consider a mix of owned and subscription-based assets for redundancy. Also, as with any new technology, you’ll need to prepare your organization to accept and adopt new processes and often new key performance indicators. This may include role-specific communications and training, and new standard operating procedures.

Outlook:

The RaaS model will see increased adoption in the short term, as companies seek ways to deploy these game-changing technologies with minimal up-front cost. Over the long run, the RaaS model will become less financially advantageous to both manufacturers and customers. As with any new technology, there’s a good deal of hype and a few things to consider before jumping in. Move forward carefully, weighing advantages against risks.

Cheryl Falk is senior vice president of global marketing and business development at Fortna.