Robotics as a service: a robot subscription for your warehouse?
Robotics as a service (RaaS) could soon offer companies of all kinds the chance to automate their logistics and industrial processes through a subscription service.
RaaS came about due to the expansion of the “as-a-service” business model, e.g., software as a service (SaaS). Organizations access these shared software solutions via the cloud. Rather than owning the physical infrastructure, they outsource the services they need to an external provider.
In its analysis Automation has reached its tipping point for omnichannel warehouses, consulting firm McKinsey points to a new subscription-based business model: “Many new robotics and automation providers have innovated as-a-service models (XaaS), such as robotics as a service (RaaS) and fulfillment as a service (FaaS).”
What is robotics as a service (RaaS)?
Robotics as a service is a business model that promotes the automation of warehouses and production centers by means of leased technology solutions. As consulting firm Deloitte says, “robots as a service allows a company to have the benefits of robotic process automation by leasing robotic devices and accessing a cloud-based subscription service.”
Leasing logistics robots facilitates the implementation of a flexible warehouse, with processes adapted to fluctuations in product demand. “It also gives organizations the ability to scale up and down rapidly and easily in response to changing market conditions and client needs,” says the Deloitte study.
Accessibility is the key to the robotics-as-a-service model. According to the article Working with robots in a post-pandemic world, published by the MIT Sloan Management Review, “access to the technology is getting less expensive, with robots-as-a-service models allowing companies to pay” by subscription.
It’s important not to confuse robotics as a service (RaaS) with another concept that shares the same acronym: ransomware as a service (RaaS). The latter is a type of subscription-based cybercrime that has major multinational corporations on high alert. Microsoft published an article warning of this kind of cyberattack.
How does the robotics-as-a-service (RaaS) model work?
In the robot-as-a-service business model, the supplier provides the company with a robotics solution that includes cloud-based software that guides the machinery. Cloud computing technology fosters the implementation of robots and lowers installation costs.
Robotics as a service works similarly to software as a service. That is, the customer purchases a variable number of licenses to use cloud-based logistics software that’s maintained by a provider. With the RaaS model, customers don’t own the robotics solution or the technology that enables it. Instead, they purchase pay-as-you-go subscriptions for a specific number of robots as required. The organization pays a regular fee that grants it the license to use the robot for a certain period of time.
Robotics as a service applies advanced technology — e.g., artificial intelligence and machine learning — to boost the throughput of the operations performed in the warehouse. Companies that opt for pay-per-use in industrial robotics have flexible automation processes: the customer increases or reduces the number of robots according to the workload or product demand.
Pros and cons of RaaS in industrial automation
There is much debate today about whether robotics as a service is the future of industrial automation. In the report 50,000 warehouses to use robots by 2025 as barriers to entry fall and AI innovation accelerates, consulting firm ABI Research notes that the consolidation of RaaS could equip companies with more resources to enhance their logistics operations: “If advanced automation becomes possible for mid-size e-retailers, they will be able to fight back against the dominant players and also bring fulfillment operations back in-house, disrupting the relationship between retailers and 3PLs,” (third-party logistics providers).
However, implementing the subscription-based software-as-a-service model does have its limitations. Beyond never actually owning the product, robotics as a service revolves around a more rigid industrial automation model. An automation project involving RaaS can’t be completely tailored to the customer’s technical requirements. Why not? Because to maximize the efficiency of logistics automation processes, the provider needs to analyze the customer’s demands and offer a personalized solution. The robotics-as-a-service model doesn’t allow for individualized solutions that maximize a facility’s throughput.
That being said, the subscription-based RaaS business model can support the implementation of technology solutions in the supply chain. Just as the software-as-a-service model fosters flexible digitization processes in line with customer requirements, RaaS can equip smaller warehouses with the devices they need to raise their productivity. Nevertheless, robotics systems should be deployed hand in hand with rational logistics planning and with tools for monitoring the throughput of each operation.
Robotics as a service: a new business model
Robotics as a service is a further step towards logistics and industrial automation. This business model contributes to flexible logistics. In this environment, customers can expand or reduce their warehouse capacity and the degree of automation based on market demands.
In the not-too-distant future, the robotics-as-a-service model could be another option for companies to automate their processes. Businesses have their own particular demands, personalization needs, and unit loads to be handled. Depending on these factors, some organizations might choose to design and implement a fully automated warehouse. Others, meanwhile, will adopt pay-as-you-go subscription models for their industrial processes.
Looking to raise your company’s logistics performance? Be sure to contact us. One of our expert consultants will work with you on the best solution to make your facility more efficient.