Manufacturing is one of the most important sectors of the global economy, accounting for about 16% of the world's GDP. However, it also faces many challenges, such as rising labor costs, environmental regulations, global competition, and changing customer demands. To overcome these challenges, manufacturers need to adopt innovative technologies that can improve their productivity, quality, flexibility, and sustainability.
One of these technologies is robotics, which has been widely used in manufacturing for decades. However, traditional robotics programs often require high upfront investments, complex integration, and ongoing maintenance, which can limit their adoption by small- and medium-sized enterprises (SMEs) or in emerging markets. That's why a new business model has emerged in recent years: robotics as a service (RaaS).
The Evolution of Robotics in Manufacturing
Robotics is the use of machines that can perform tasks autonomously or semi-autonomously, often with the help of sensors, software, and artificial intelligence. Robotics has been applied in various domains of manufacturing, such as material handling, welding, assembly, inspection, and packaging.
According to the International Federation of Robotics (IFR), there were about 2.7 million industrial robots installed worldwide in 2019, with China, Japan, the United States, South Korea, and Germany being the top five markets. The global industrial robot market was valued at $18.8 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 10.8% from 2020 to 2027.
However, despite the benefits of robotics for manufacturing, such as increased speed, accuracy, safety, and consistency, there are also some barriers that hinder its wider adoption. Some of these barriers are:
• High initial cost: Industrial robots can be expensive to purchase, ranging from tens of thousands to hundreds of thousands of dollars depending on the type, size, and functionality. Moreover, they also require additional costs for installation, integration, programming, training, and maintenance.
• Technical complexity: Industrial robots often need to be customized and integrated with existing equipment and systems, which can be challenging and time-consuming. They also require skilled workers to operate and maintain them, which can be scarce or expensive in some regions.
• Lack of flexibility: Industrial robots are usually designed for specific tasks and environments, which can limit their adaptability to changing production needs or customer preferences. They may also become obsolete or incompatible with newer technologies over time.
Understanding Robotics as a Service (RaaS)
Robotics as a service (RaaS) is a business model that offers robotics solutions on a subscription or pay-per-use basis rather than selling them outright. RaaS providers typically own, operate, maintain, and upgrade the robots and charge customers based on usage or performance metrics. RaaS can be seen as a form of cloud computing applied to robotics, where customers can access robotic capabilities remotely via the internet or a local network.
RaaS Benefits for Manufacturing Efficiency
RaaS can offer several advantages for manufacturers who want to leverage robotics for their production processes. Some of these advantages are:
• Lower cost of entry: RaaS eliminates or reduces the upfront capital expenditure required for acquiring robots and related equipment. Instead, customers can pay a monthly or annual fee that covers the robot rental, maintenance, software updates, and technical support. This can make robotics more affordable and accessible for SMEs or in regions where capital is scarce or expensive.
• Greater flexibility and scalability: RaaS allows customers to adjust their robotic usage according to their changing production needs or customer demands. They can easily add or remove robots from their fleet without worrying about depreciation or obsolescence. They can also access different types of robots for different tasks or applications without having to invest in multiple systems.
• Improved performance and reliability: RaaS providers are responsible for ensuring that the robots are always operational and up-to-date with the latest technologies and standards. They can also monitor and optimize the robot performance remotely using data analytics and artificial intelligence. This can improve the efficiency, quality, safety, and sustainability of the manufacturing processes.
• Enhanced innovation and competitiveness: RaaS enables customers to access state-of-the-art robotic technologies without having to develop them in-house or rely on third-party vendors. They can also benefit from the continuous improvement and innovation of the RaaS providers who have more expertise and resources in robotics. This can help them gain a competitive edge in their markets and increase their customer satisfaction.
Overcoming Challenges and Mitigating Risk
Robotics as a Service (RaaS) offers manufacturers numerous benefits, including increased efficiency and productivity. However, concerns about data security and intellectual property protection may arise during its adoption. To overcome these challenges and mitigate risks, manufacturers should prioritize data security by evaluating potential RaaS providers' protocols and ensuring compliance with data protection regulations.
Robust contractual agreements should safeguard intellectual property rights, ensuring that manufacturers retain full control over their proprietary data. Thorough vendor due diligence, transparent communication, and legal expertise can further reinforce manufacturers' confidence in selecting reputable and reliable RaaS partners.
Starting with pilot projects allows businesses to assess RaaS performance before full-scale adoption, facilitating informed decision-making and successful integration into production processes. By addressing these concerns, manufacturers can embrace RaaS with assurance, revolutionizing manufacturing efficiency and propelling their businesses forward.
Future Outlook for RaaS in Manufacturing
The global RaaS market was valued at $3.3 billion in 2019 and is projected to reach $41.3 billion by 2027, growing at a CAGR of 32.4% during the forecast period . The manufacturing sector is expected to be one of the major drivers of this growth, as more manufacturers adopt RaaS to improve their operational efficiency and profitability. Some of the factors that will fuel the demand for RaaS in manufacturing are:
• The COVID-19 pandemic: The pandemic has disrupted the global supply chains and created labor shortages and health risks for the manufacturing workforce. This has increased the need for automation and remote operations, which can be facilitated by RaaS. RaaS can also help manufacturers cope with the fluctuating demand and supply conditions caused by the pandemic.
• The Industry 4.0 revolution: The fourth industrial revolution, or Industry 4.0, is characterized by the convergence of advanced technologies such as the internet of things (IoT), artificial intelligence (AI), cloud computing, big data, and 5G. These technologies enable the creation of smart factories that are connected, autonomous, and data-driven. RaaS can play a key role in enabling Industry 4.0 by providing flexible and scalable robotic solutions that can integrate with these technologies and enhance the manufacturing capabilities.
• The social and environmental awareness: The growing social and environmental awareness among consumers, regulators, and investors is putting pressure on manufacturers to adopt more ethical and sustainable practices. This includes reducing their carbon footprint, waste generation, energy consumption, and human exploitation. RaaS can help manufacturers achieve these goals by improving their resource efficiency, safety, quality, and compliance.
Conclusion
Robotics as a service (RaaS) is a disruptive business model that is transforming the manufacturing sector by offering robotics solutions on a subscription or pay-per-use basis. RaaS can help manufacturers overcome the barriers of traditional robotics programs, such as high cost, technical complexity, and lack of flexibility.
RaaS can also provide several benefits for manufacturing efficiency, such as lower cost of entry, greater flexibility and scalability, improved performance and reliability, and enhanced innovation and competitiveness. RaaS is expected to grow rapidly in the coming years, driven by the COVID-19 pandemic, the Industry 4.0 revolution, and the social and environmental awareness. RaaS is revolutionizing the manufacturing industry by enabling more manufacturers to access and leverage robotic technologies for their production processes.
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Article sources:
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: https://www.forbes.com/sites/bernardmarr/2019/08/05/robots-as-a-service-a-technology-trend-every-business-must-consider/
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: https://www.sme.org/technologies/articles/2022/january/first-time-automation-with-raas-at-polar-manufacturing/
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