Industry Overview
- Warehouse management consists of multiple processes that can potentially be automated across six key steps: (1) receiving; (2) put-away and storage; (3) picking; (4) packing; (5) dispatching; and (6) returns
- The market for automating this process flow is expected to reach USD 30.2 billion by 2026, growing at a compound annual growth rate (“CAGR”) of 10.5%
- There are four primary player groups in the warehouse automation landscape who are vying for a piece of this pie: (1) automated guided vehicles (“AGV”); (2) autonomous mobile robots (“AMR”); (3) Personal Assistant (“PA”) AMR; and (4) automated storage and retrieval system (“ASRS”)
- The AMR segment of players, in particular, is expected to command a USD 6.7 billion opportunity by 2026, growing at a CAGR of 19.7%
- Asia has emerged as a key growth region for the AMR market, with China, in particular, showcasing considerable potential, while other countries also experience rapid growth in their industrial output
Technology
- There exist several key types of hardware that are being utilised by different players across the warehouse management lifecycle (e.g. automated forklifts, aerial vehicles, etc.)
- Robot-as-a-Service (“RaaS”), in particular, has grown in popularity as smaller eCommerce traders emerge, custom development remains expensive, and demand fluctuation hampers direct purchase models
- Software-focused offerings are also on the rise, but there remains a shortage of modular offerings for plug-and-play use
- Owing to the relatively more flexible payment and renewal terms offered by subscription models, we are seeing a shift away from perpetual licensing deals for software
Looking Ahead
- In terms of tailwinds, there are considerable growth drivers being witnessed in the form of warehouse software, robotic automation, wearable technology, big data, cloud computing, and the internet of things (“IoT”)
- However, there remain certain headwinds to be reckoned with as well, including inaccurate inventory, suboptimal picking, poor space utilisation, demand fluctuations, high labour costs, and quality control
- Moving forward, we see significant room for improvement for warehouse robotics companies in the following three types of areas: (1) strategic (e.g. customers, channels, offerings, geographic, and partnerships); (2) operational (e.g. scalability, human resources, risk management, regulatory compliance, and corporate governance); and (3) financial (e.g. revenue drivers, cost drivers, and profitability)
