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50,000 Warehouses to use robots by 2025

27 March 2019

By 2025, over 4 million commercial robots will be installed in over 50,000 warehouses, up from just under 4,000 robotic warehouses in 2018, according to ABI Research.

The rapid rate of adoption will be driven by the need for flexible, efficient, and automated e-commerce fulfillment as same-day delivery becomes the norm. Global adoption of warehouse robotics will also be spurred by the increasing affordability and Return on Investment (ROI) of a growing variety of infrastructure-light robots as they are an attractive and versatile alternative to traditional fixed mechanical automation or manual operations.

“Flexibility and efficiency have become primary differentiators in the e-commerce fulfillment market as retailers and Third-Party Logistics (3PLs) struggle to cope with volatile product demand, seasonal peaks, and rising consumer delivery expectations.” said Nick Finill, senior analyst at ABI Research. “Robots enable warehouses to scale operations up or down as required while offering major efficiency gains and mitigating inherent challenges associated with labour and staffing.”

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Automated Guided Vehicles (AGV) and Autonomous Mobile Robots (AMR) Goods-to-Person systems can directly replace heavier mechanised automation that typically requires massive upfront investment and rigid physical infrastructure. Robots enable the optimisation of space in expensive warehouse facilities and can reduce the need for new and costly greenfield fulfillment centres. Mobile robotic systems also offer major flexibility advantages. Robot vendors, such as Fetch, Geek+, and Invia, enable additional robots to be added to or removed from a fleet as operational demands require. They also allow easy and relatively rapid reconfiguration of entire workflows and operations if product lines or fundamental operational requirements change. This is a major advantage in the unpredictable and dynamic e-commerce market.

Thanks to impressive innovation in computer vision, Artificial Intelligence (AI), deep learning, and robotic mechanics, robots are also becoming increasingly adept at performing traditionally harder-to-automate tasks. Economically viable mobile manipulation robots from the likes of RightHand Robotics and Kindred Systems are now enabling a wider variety of individual items to be automatically picked and placed within a fulfillment operation. By combining mobile robots, picking robots, and even autonomous forklifts, fulfillment centres can achieve greater levels of automation in an efficient and cost-effective way.

Many robot technology vendors are providing additional value by offering flexible pricing options. Robotics-as-a-Service models mean that large CapEx costs can be replaced with more accessible OpEx costs that are directly proportional to the consumption of technologies or services, improving the affordability of robotics systems among the mid-market, further driving adoption.

“By lowering the barriers to adoption for robots in the warehouse, vendors are disrupting the wider logistics value chain,” explained Finill. “If advanced automation becomes possible for mid-size e-retailers, they will be able to fight back against the dominant players and also bring fulfillment operations back in-house, disrupting the relationship between retailers and 3PLs.”

These findings are from ABI Research’s report Robotics in E-commerce Fulfillment application analysis report. This report is part of the company’s  Intelligent Supply Chain service, which includes research, data, and Executive Foresights. Based on extensive primary interviews, Application Analysis reports present in-depth analysis on key market trends and factors for a specific application, which could focus on an individual market or geography.

 
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