Wednesday, March 21, 2018

Market trends on the Robotics for Logistics


The warehousing and logistics robot market is experiencing strong growth, with many prominent companies showing greater confidence in new robotics technologies that could yield a return on investment (ROI) in less time than it took a few years ago. [1]


The global Robotics market

The following graph, from the International Federation of Robotics and Boston Consulting Group [2] shows the market growth un billions of us$ for the main four sorts of robots:

Source. Boston Consulting Group [2]

  • Military: Including UAV, UGV, UUV and task robots widely used for military applications.
  • Industrial: Including applications for welding, assemble and material handling.
  • Commercial: Including applications such as medical and surgical robots, logistics, agricultural robots, maintenance and construction robots.
  • Personal: With applications as entertainment, cleaning, education and security robot.


The market of warehousing and logistics robotics

Tractica market intelligence firm forecasts that worldwide warehousing and logistics robot unit shipments will increase from 40,000 in 2016 to 620,000 units annually by 2021. The market intelligence firm estimates that global market revenue for the sector reached $1.9 billion in 2016, and anticipates that the market will continue to grow rapidly over the next several years, reaching a market value of $22.4 billion by the end of 2021. [3]

Source. Tractica [3]


IDTechEx research firm gives a different perspective on the growth of Warehousing and Logistics Robotics based on the investment on companies in this arena.

Source: IDTechEX [4]

This data shows the investment data for ground-based 25 start-ups focused on mobile robotics in warehouses/logistics.

Evidently, the interest has increased in recent years in mobile robotics targeting the warehouse/logistics area. Note that this figure excludes some major events: Does not count money spent internally by existing firms to launch such robots; Some start-ups are at seed stage with an undisclosed amount; it does not include acquisitions.

Some notable ones are Amazon's acquisition of Kiva for $775 in 2012, Omron's acquisition for Adept Mobile Robotics for $200m in 2016, and Uber's acquisition of Otto for $680m in 2016. Drone-based delivery robots are not included [4]

Forrester Research predicts a 10% year-on-year growth for online retail in Europe and the US. Online growth in Asia is even faster; for example by the year 2020 the online retail market in China is projected to be equal to that of France, Germany, Japan, the UK, and the US combined.

This growth directly affects the requirement for logistics labor since online retail typically needs more labor per item sold than traditional brick-and-mortar retail. This is because, instead of moving merchandise to a retail store in bulk, the organization must pick and pack online purchases individually by hand. Freight and parcel handling labor goes up as well since these goods must be shipped as separate parcels to be delivered directly to consumers' homes. Added to this, the average weight of these shipments is increasing as consumers can now order large items such as white goods, building supplies, and even furniture online. [6]

Another interesting perspective is from the end customers preference in the B2C market. 


Source: McKinsey&Company [5]

McKinsey&Company conducted a survey of more than 4,700 respondents in China, Germany, and the United States. They used conjoint analysis to better understand consumers’ relative preferences for different delivery options, including their willingness to pay. Nearly 25 percent of consumers were willing to pay significant premiums for the privilege of same-day or instant delivery. This share is likely to increase, given that younger consumers are more inclined (just over 30 percent) to choose same-day and instant delivery over regular delivery. [5]

Therefore, to reduce the delivery time, automation is key, both inside the warehouse and in the last mile.



Conclusions

Logistics Industry is facing a difficult moment, were competitors are innovating very fast to improve the throughput of their operations while reducing costs and delivery time. To do this, the digitalization of the Supply Chain is key, including not only the usage of automated systems and robotics, but the integration with good WMS (Warehouse Management Systems) and the definition of clear procedures and protocols to follow in operations, were manpower and robotics solutions should coexist in a colaborative way.

The market for automated solutions is growing very fast. There are good tchnical solutions ther, but the Logistics Management should be brave enough to leave the traditional methods and enter the world of Automation and Digitalization, investing on proper solutions for them.



Apendix

For more information on automation solutions for the warehousing inductry, visit my previous post about it

Here there are some companies and products compiting in the market of robotics and automation for logistics, just for your reference:



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Reference

[1] Manoj Sahi. Research analyst from Tractica.
[2] Boston Consulting Group. The rise of the robotics. 2014
[3] SDC Executive. Warehousing and Logistics Robotics. 2017
[4] IDTechEX. Mobile warehouse and logistic robots. Oct. 2017
[5] McKinsey&Company. How customer demands are reshaping last-mile delivery. Oct. 2016
[6] DHL. Robotics in logistics. March 2016