An introduction to warehouse automation-as-a-service

Enter automation-as-a-service and robotics-as-a-service: innovative models that are transforming how businesses approach warehouse efficiency.  

Let’s explore these game-changing concepts. 

What is warehouse automation-as-a-service?  

Warehouse automation-as-a-service (AaaS), which sometimes includes robotics-as-a-service (RaaS), is an innovative business model that provides access to advanced automation technologies without significant upfront investments. This allows companies to implement cutting-edge solutions like automated storage and retrieval systems (AS/RS) or robotic piece-picking arms on a subscription or pay-per-use basis. 

Similar to software-as-a-service (SaaS), customers pay recurring fees for the use of automated systems or robots. These fees can be adjusted based on usage or picking volumes, providing flexibility to scale operations up or down as needed. This scalability is particularly beneficial for businesses with fluctuating or seasonal demand patterns. 

These service models typically include comprehensive support, such as maintenance, repairs, and software updates. This arrangement allows businesses to focus on their core operations whilst leaving the technical aspects of automation to the service provider. It also ensures that the warehouse automation solutions remain up-to-date and optimised for performance, without requiring additional investment or in-house expertise from the customer. 

What technologies can you implement through an automation-as-a-service model?  

Automation-as-a-service models offer access to a wide range of cutting-edge warehouse technologies. These include: 

Automated Storage and Retrieval Systems (AS/RS): These computer-controlled systems automatically place and retrieve loads from defined storage locations. AS/RS significantly improve storage density, accuracy, and retrieval speed, maximising warehouse space utilisation. 

Autonomous Mobile Robots (AMRs): These robots navigate warehouses independently, assisting with tasks such as inventory transport, order picking, and sortation. AMRs can work alongside human workers, enhancing overall efficiency and reducing walking time for employees. 

Robotic piece-picking arms: These sophisticated robots can identify, grasp, and move individual items, making them ideal for order fulfilment operations. They significantly increase picking speed and accuracy, especially in high-volume environments. 

Conveyor systems and sortation equipment: These systems automate the movement and sorting of products throughout the warehouse, reducing manual handling and improving throughput. Modern conveyor systems can be integrated with other automation technologies like ASR/RS for seamless operations. 

Automated Guided Vehicles (AGVs): These vehicles follow predefined routes and can handle various load types, from pallets to individual items. AGVs can operate 24/7, improving warehouse productivity and reducing labour costs. 

Warehouse Management Systems (WMS) and control software: Often included in AaaS offerings, these systems manage and optimise warehouse operations, integrating with physical automation technologies. Cloud-based WMS solutions provide real-time visibility and control over warehouse operations. 

By implementing these technologies through an AaaS model, businesses can access advanced automation solutions without significant upfront investments, allowing for greater flexibility and scalability in their warehouse operations. 

What are the benefits and drawbacks of this model?  

The automation-as-a-service and robotics-as-a-service models offer several compelling advantages for businesses looking to enhance their warehouse operations. However, like any business model, they also come with potential drawbacks that should be carefully considered.  

Let’s explore the key benefits first: 

1. Reduced upfront costs: AaaS and RaaS models eliminate the need for large capital expenditures, making advanced automation accessible to businesses of all sizes. 
2. Flexibility and scalability: Companies can easily adjust their automation capabilities based on demand fluctuations or seasonal needs, optimising resource utilisation. 
3. Comprehensive support: Maintenance, repairs, and software updates are typically included, reducing the burden on internal IT and maintenance teams. 
4. Access to latest technology: Service providers regularly update their offerings, ensuring customers always have access to cutting-edge solutions without the risk of technological obsolescence. 
5. Faster implementation: AaaS and RaaS solutions can often be deployed more quickly than traditional purchased systems, allowing businesses to realise benefits sooner. 

While the benefits are significant, it’s important to also consider the potential drawbacks of these service models: 

1. Ongoing costs: While eliminating large upfront investments, the recurring fees can add up over time and may exceed the cost of outright ownership in the long run. 
2. Limited customisation: Standardised solutions may not perfectly fit a company’s unique operational requirements, potentially limiting optimisation opportunities. 
3. Dependence on service provider: Businesses relying on AaaS or RaaS are tied to their provider’s performance and continued operation, which could pose risks if the provider faces difficulties. 
4. Potential data security concerns: Sharing operational data with service providers may raise security and privacy concerns for some businesses. 
5. Less control: Companies have less direct control over the automation systems compared to owned solutions, which may be a drawback for some organisations. 

Businesses must carefully weigh these pros and cons against their specific needs, financial situation, and long-term strategy when considering AaaS or RaaS models. 

How to decide if automation-as-a-service is right for your business  

Determining whether automation-as-a-service is the right choice for your business requires careful consideration of several factors. Here’s how to go about it: 

1. Assess your current operations: Identify areas where automation could bring significant improvements. Consider factors such as order volume, picking complexity, labour costs, and error rates. 
2. Evaluate your financial situation: If your business has limited capital for large upfront investments or prefers to allocate capital to other strategic initiatives, AaaS or RaaS models may be particularly attractive. 
3. Consider your growth projections: If your business experiences significant fluctuations in demand or anticipates rapid growth, the flexibility offered by AaaS and RaaS models could be highly beneficial. 
4. Analyse your in-house capabilities: If your organisation lacks the expertise to implement and maintain complex automation systems, the comprehensive support provided by AaaS and RaaS providers could be valuable. 
5. Conduct a cost-benefit analysis: Compare AaaS/RaaS models with traditional ownership models, considering both short-term and long-term financial implications. 
6. Evaluate your customisation needs: If your warehouse processes are relatively standard, AaaS and RaaS models could be a good fit. However, if you need extensively customised solutions, traditional ownership models might be more appropriate. 
7. Consider your risk tolerance: AaaS and RaaS models shift some control and risk to the service provider. Assess your comfort level with this arrangement. 
8. Examine your industry trends: Research how similar businesses in your industry are approaching automation and whether AaaS/RaaS models are gaining traction. 

By carefully evaluating these factors, you can make an informed decision about whether automation-as-a-service aligns with your business goals and operational needs. 

AutoStore and automation-as-a-service 

AutoStore, working with distribution partners like Element Logic, has developed an innovative automation-as-a-service model that combines ownership and leasing. This hybrid approach allows customers to purchase the static grid infrastructure while accessing robots, ports, and software through a flexible pay-per-pick (PPP) arrangement. This unique model balances long-term investment with operational flexibility. 

The AutoStore model typically requires an upfront investment of 20-40% for the grid infrastructure, with the remainder of the costs tied to actual usage. This structure enables businesses to align their automation expenses with their operational needs, providing a scalable solution that can adapt to changing demand patterns. It’s a novel approach in the warehouse automation market, offering a middle ground between full ownership and pure service models. 

This as-a-service offering is particularly well-suited for specific market segments. Third-party logistics providers (3PLs) can benefit from the ability to easily allocate costs to clients and adapt to varying contract lengths. Fast-growing companies can access advanced automation earlier in their development, accelerating their capabilities without the need for substantial capital outlays. 

The AutoStore model shines in scenarios where the system handles a significant portion of material flow and where the robotic components represent a large share of the total project cost. In these cases, the pay-per-pick approach can substantially reduce initial capital requirements, making advanced automation more accessible to a wider range of businesses. 

Time to try warehouse automation-as-a-service? 

Automation-as-a-service and robotics-as-a-service models are revolutionising warehouse operations, making advanced automation accessible to businesses of all sizes.  

By carefully considering your operational needs, financial situation, and growth projections, you can determine if these innovative models are the right fit for your logistics strategy.