We just completed the new global market study on the Autonomous Mobile Robot market. The market is exploding. In my twenty years of doing market research I have never seen anything like the growth this market is experiencing.
Autonomous mobile robots (AMRs) are a form of automatic guided vehicles (AGVs) that can be implemented without any supporting infrastructure like markers or wires or magnets implanted in the floor or precisely located laser targets.
There are two types of AMRs - those based on fleet management and systems that rely on picking optimization:
- Fleet management solutions typically operate with bigger payloads and route the robots from an origin to a destination.
- Pick optimization robots integrate the movement of machines and people in a process flow designed to increase picking throughput. Pick optimization robots support picking to cartons and totes and consequently have a small payload.
The pick optimization segment, driven by the growth of e-commerce, is by far the faster growing segment. Two of the larger suppliers of these types of solutions are 6 River Systems and Locus Robotics. Jerome Dubois, the cofounder and co-CEO of 6 River Systems, told me that their bookings are nearly 6 times greater than they were in 2017 (this is a calendar year 2018 study), that they have nearly tripled their deployed systems, and their staff has grown by 150%. "So, the growth is happening - we have had a full slate of projects in progress since mid-year. No question about it. Business is strong!"
Lior Elazary, the CEO of inVia Robotics, also reported stellar growth. inVia Robotics also competes in the pick optimization segment where a layer of robotic control software jointly controls the movements of workers and robots. "We now have over 300 robots in the field and are expecting to add 1000 this year alone." The demand is even higher, but they are running into a limit on their capacity. "One of the factors limiting our growth is the fact that most customers need to deploy the robots in parallel with their current operations. That is, they still need to fill all their orders while bringing up our robotic system in parallel. As a result, we have designed our system to accept arbitrary workflows so we can work with their existing workflow and deploy quickly. This allows our customers to deploy the system without any development on their side so we can integrate the system into the current process, deploy the robots and move to the next customer."
Retail warehouses get very busy in the last year when they need to scale up to support the Christmas surge in orders. Both Mr. Elazary and Mr. Dubois report customers being largely unwilling to deploy this time of year. Mr. Elazary put it this way, "all of our deployments and robots need to be done by September." So instead of having a full year to generate revenues, "we lose the last quarter for any deployments."
We are not only hearing this story from the suppliers. At ARC Advisory Group's Forum in Orlando, Florida, Alan McDonald, a Senior Director of Continuous Improvement at GEODIS, talked about why they are buying as many AMRs, their supplier is Locus Robotics, as they can get their hands on. GEODIS is one of the largest logistics service providers (LSPs) in the world. The labor shortage for warehouses is what drove GEODIS to explore the use of bots within a warehouse. Mr. McDonald pointed out that labor is harder to find today, which makes it more expensive. "Finding labor 10 years ago was significantly easier. Today, we cannot fill every role." One of the problems in a tight labor market is that people will accept a job but move on to another position either before they officially start or within a week or two. This leads to a lot of wasted money in training costs.
Since deploying the Locus bots, GEODIS has seen many benefits. In its 3 plus facilities, the company has 175 bots. Productivity has doubled, and training time has seen a 50 percent reduction since the deployment, and it is easier for non-native speakers to work with these systems than bar code scanners. Depending on the facility, the payback period has ranged from 6 to 18 months. In the supply chain realm, two-year payback periods are the norm. Any payback period under one year is excellent!
But the fleet management segment is growing quickly too. Dirk Erlacher, the CEO of Agilox, reports that their sales more than doubled from 2017 to 2018 and that based on very strong bookings they are projecting that sales will grow by 400% again in 2019.
Melonee Wise, the CEO of Fetch Robotics, also reported stellar growth. Fetch also plays in the fleet management segment. "There's not much limiting our growth. If I had to choose one reason, there's not much familiarity with AMRs in general. Many of the companies purchasing a robot from us have never purchased an AMR before. Our customers and prospects aren't yet well-versed in how to source, implement, and measure ROI. We strive to make this as easy for them as possible, but there is often some latent apprehension because of the novelty of our offerings. I'm seeing a great deal of enthusiasm for our cloud-first approach, which we call "on-demand automation." Because of the cloud and our software, we have AMRs up and running in a matter of hours. That time to value mitigates the apprehension I mentioned earlier. It means pilots can transition to deployments very quickly."
At Mobile Industrial Robots (MiR) and Vecna Robotics the story is the same. "Vecna Robotics has experienced immense growth over the last year," Dan Patt, the CEO at Vecna said. "We've partnered with three out of five of the largest logistics companies including FedEx. We are seeing three times year over year revenue growth and have nearly doubled our headcount from this time last year."
Ed Mullen, the Vice President of Sales for the Americas for MiR, stated "we also expected fast growth in 2018, and at least for us, it has turned out right. Our customers are mainly large multinational companies such as Toyota, Honeywell, Faurecia, Nidec, and Flex, and in 2018 many of these went from testing 1-2 robots on single plants to deploying larger fleets of up to 20 robots on multiple plants worldwide." The company grew 160%.
As far as limitations to growth, Mr. Mullen said, "we don't see many." Indeed, if anything new pricing models will juice growth in this market. "RaaS (Robots as a Service) is a huge topic. MiR will soon start offering a leasing option via an external partner. The leasing option means we are now able to offer a more flexible payment solution. This will allow more companies to adopt this new technology. Many of our current and potential customers want to lease our mobile robots in the same way as they are leasing electronic pallet lifters and AGVs (automatic guided vehicles), which are rented or leased 95% of the time. Companies want to invest in their core business and not in machines." Our study did find dramatic growth in the RaaS pricing option from 2017 to 2018.
And again, it is not just suppliers touting the fleet management style AMRs. At the ARC forum, Tyler Wolfe, the Director and Solutions Architect at Framebridge, was one of the participants on the AMR panel. Framebridge is an e-commerce custom framing company, which allows its customers to upload or mail in artwork or photography to be framed. As the company grew, it knew it could no longer rely on employees moving the components of the custom framing process by hand trucks throughout the warehouse. This system meant that workers spent most of their time simply moving around the facility instead of doing value added work. The Fetch robots would autonomously move the components to the different assembly stations within the facility, eliminating the need for employees to move them.
Some of the robots are also equipped with RFID readers, which enables workers to know exactly where any piece of art is at any time within the warehouse. With the company processing hundreds of pieces of custom artwork, and work-in-process often being difficult to locate, this is incredibly important.
One of the concerns with AMRs is how warehouse workers will interact with the bots. Within a week or two, employees were used to seeing the bots scurrying around the warehouse and were no longer concerned about collisions. Mr. Wolfe said Framebridge got a good ROI. The payback timeframes ranged from 3 to 12 months depending upon how the bots were used. He estimated a 70 percent reduction in indirect time spent by employees moving items around the warehouse.
The autonomous mobile robot market is a very young market taking off like a rocket ship.
