If your company is like many others at this time in business history, then you’re experiencing a void in your labor force. You may be struggling to fulfill orders on time, not only because of supply chain disruptions, but also because you cannot find a worker to pick, pack, and ship those products. Here’s one way to alleviate the labor issue: Robots as a Service (also called RaaS).
What are Robots as a Service (RaaS)? They are affordable robotic automation solutions that replace human workers, oftentimes at an affordable cost. If you’ve never heard of it, it’s because RaaS is a newer option in the automation industry for packaging. RaaS is a robot that replaces a human worker in a production location where there is a consistent, repetitive motion like packing/wrapping or relocating goods, usually for a flat monthly fee.
RaaS Market Report Coverage
In 2020, the global Robot as a Service market was valued at US $12.6 billion; within eight years, it is expected to surpass US $41.3 billion, registering a CAGR of 15.9% during the forecast period (2021-2028) as highlighted in a report published by Coherent Market Insights. North America is expected to account for the largest market share due to the growing demand from the healthcare sector, and thanks to the rapid increase in North America's development of production capacities, Robots as a Service ideally will be more easily attainable.
$12.6 Billion - 2020 RaaS Market Size of the Market
$41.3 Billion - 2028 RaaS Expected Market Size of the Market
What Has Caused RaaS to Gain Popularity?
Historically, automation has been an expensive endeavor for manufacturing, but the utilization of the "as a Service" model has lowered the barrier-to-entry for robotic installation. The "as a Service" model uses cloud-based technology, which reduces the overall cost of the robot by eliminating onsite servers and computer technology. Companies can incorporate robotic workcells within their assembly lines and warehouses.
"Businesses are increasingly intrigued with RaaS because of its flexibility, scalability, and lower cost of entry than traditional robotics programs. These attributes allow small- and medium-sized businesses to benefit from robotics without the often cost-prohibitive initial investment," according to Forbes Magazine.
- Companies can implement as little as one robotic workcell at a time
- The rental cost is an hourly rate that is only calculated when the robot is working
- Monthly invoices contain an upfront minimum fee
RaaS Offers Solutions for Staffing
“First and foremost, the biggest solution a robot delivers is relative to staffing. It could be because companies continue to face the challenge of fully staffing their operations due to employee shortages, as well as demand for higher wages,” said Rick Holmes, systems and robotics engineer for Associated Integrated Solutions (AIS), the integrator arm of Associated Packaging, Inc.
“In addition, there are jobs that employees just don’t want to do: Menial work, repetitive motion, uncomfortable settings, or dangerous jobs. Other problems include safety and/or risk of injury, speed, consistency/precision, and productivity. Robots show up for work every day; they do not get distracted; and do not tire over the course of a shift. A robot cell is likely to be the most productive asset in the entire plant, and can bring substantial efficiency to your production line.”
Ideal RaaS Solutions
Robots as a Service can support a company's production line by handling hard-to-automate tasks that typically require human involvement. RaaS can support the labor of one employee, or multiple.
End of Line
Automated Polybag Machines
& Case Erectors
CNC, Injection Molding,
& Press Brakes
& Dry Packaged Good
The RaaS Financial Fit
For companies that are concerned that they do not have the capital to put toward an automated piece of equipment like a robot, RaaS allows businesses to benefit from robotic capabilities by removing the upfront cost of typically expensive automation upgrades.
“The need for large upfront capital goes away [with RaaS]. Instead, you are getting a monthly charge that goes into the operating cost in a similar fashion as payroll – basically a “subscription” fee. No large upfront expenditure is needed, just a monthly payment. A company can roll right into robotic automation without the sting of a financial hit,” Holmes said.
RaaS also gives a company the ability to quickly replace one person, whereas traditional automation wouldn’t normally be justified on the savings of replacing just one person. The key to why a company can do this is replication: The goal for RaaS is to replicate solutions to reach the optimal scale.
Choose the Right Financial
& Robotics Model
To understand if your company can profit from the RaaS model, it's important to understand which financial model (operating expenses or capital expenses) aligns with your automation needs. It's also important to understand the different tax implications associated with both financial models. All assets purchased with operating expenses are fully tax deductible; while assets purchased with capital expenses are divided into intangible assets that amortize and tangible assets that depreciate over time.
Operating Expense Project
- High-Mix, Short Batch, Frequent Changeover Production
- Versatile, Cloud-Based, Intelligent Robots
- Need to Quickly Introduce New Technology
- Need Personnel for Upkeep and Maintenance
- Need Solution with High Flexibility and Easily Scaleable
Automation & Integration
Capital Expense Project
- Repetitive, High-Volume Production
- Hard-Coded Robotics, Non-AI Automation, Integration Services
- Integration Purchase, Costs Needs Amortized
- Has Maintenance Personnel, Just Needs Upkeep Support
- Limited Need for Flexibility
Next Steps – What Do I Do Now?
If your company is struggling with labor shortages, and you're still not sure what the right automation solution is, or if you need help producing an ROI, then the next steps are to collect, at minimum, the following information. "There are quantifiable data that should be collected in order to make sure that the correct installation is chosen," said Holmes.
Holmes points to collecting, “Number of SKUs, sizes, speeds, pack or pallet patterns (if applicable), changeover frequency. In addition, the justification factors for the installation, like safety concerns or ergonomic concerns.”
From this data, systems integrators at Associated Packaging’s integration arm, AIS, can help determine the correct model and the number of robots your production line may need. Then, calculations can be made to determine if that RaaS installation brings a solid ROI for your company.
According to Holmes, there are solid steps to take when considering RaaS for your company. “Just like any automation project, Robots as a Service should be a good opportunity for success, not just a blind reach. The justification exercise should still be completed. Automation could be implemented in the operation where there is repetitive motion and relative consistency. Packaging lines and warehouse and distribution centers offer many opportunities for robotic automation,” said Holmes.
How do you evaluate your current production needs to determine if your company can benefit from RaaS?
FIRST review the checklist below to make sure your company's production needs, financing model, and location support the RaaS model.
SECOND define the challenge, or the pain point that needs a solution, in order to produce a potential ROI. Need help calculating an ROI? Let Associated Packaging's automation and robotics division, Associated Integrated Solutions, help!
Define the Production Needs
- Number of SKUs
- Pack or Pallet Patterns
- Changeover Frequency
Define if RaaS Financing Works for Your Need
- Do Robotic Cells Fulfill the Defined Need or is More Upfront Investment Needed for Additional Automation Integration?
- Do You Have Enough Monthly Operation Budget to Cover the Cost?
- Can Ongoing Support and Maintenance Cost Fit in the Monthly Operation Budget?
- Are You Replacing Older Equipment and Need to Include Asset Disposal Costs?
- Are There Any Tax Implications?
Is Your Location Equipped for Raas?
- Does your location allow remote monitoring of equipment by the supplier?
- Networking Infrastructure Within your Facility
- Secure Connection to the Internet
AIS has had success with assessing, recommending, installing, and implementing automation lines for a myriad of industries. Because of the company’s successful installations and continuing technical support of those lines, the team of systems integrators at AIS has a strong handle on assessing if RaaS is right for you and your company.
Why choose Associated Packaging to help facilitate RaaS automation robotics projects? Making sure that your company has a knowledgeable automation project manager is paramount to a successful implementation. Be sure to consult with a systems integrator like AIS, or ask your Associated Packaging sales partner for more information about the possibility of a robotics installation. The project will be vetted properly and AIS can assist with project management and technical support, when needed.
Associated Packaging will be a partner to ensure that the RaaS supplier or OEM supplier gives your company the best possible contract. We make sure you have one point of contact for maintenance overview with RaaS or maintenance management. Our technical department will continue to help with any technicalities or troubleshooting that may pop up. Associated Packaging can also be your one stop shop for the best materials for your new automation robotic investment.