Challenges in Warehouse Robot Adoption: Costs and ROI

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Adopting mobile robots for warehouse automation is gaining traction, but significant cost concerns are slowing down the momentum, according to recent research from Interact Analysis.

Companies investing in these technologies may need to wait two to three years for a return on investment, says Ash Sharma, chief commercial officer and vice president of research for robotics and warehouse automation at Interact Analysis.

“It’s not the cheapest technology, because it’s still relatively new,” Sharma said in a recent interview, noting that outfitting an entire warehouse could cost up to $1 million.

Mobile robots, which autonomously perform tasks like moving goods and assisting with pick-and-place operations, are being increasingly adopted to reduce labor costs and improve efficiency. However, many companies are only partially automating their workflows due to high upfront cost

But the market is becoming more competitive, with major players like Honeywell, Rockwell Automation, and Amazon investing heavily in robotic technologies. Amazon, for example, is testing a new two-legged robot named Digit to further automate its warehouse operations.

For many businesses, the lengthy ROI period of two to three years is a significant hurdle. While large companies like Amazon view automation as essential, others are more cautious due to the substantial investment required.

Interact Analysis' recent survey of 300 global companies highlights these ongoing challenges and the growing, yet cautious, adoption of mobile robots in warehouse settings. Some key points gathered from the survey include:

·       Budget constraints are the top barrier to mobile robot adoption, with a third of companies citing it as a challenge, according to Interact Analysis.

·       Despite the high costs, mobile robots are becoming more popular. Annual revenues in this market are expected to rise from $4.5 billion in 2023 to more than $14 billion by 2027.

·       Gartner, Inc. predicts that by 2027, 75 percent of companies will have integrated some form of "cyber-physical" technology, including mobile robots, into their warehouse operations.

·       Sales of mobile robots are expected to increase significantly over the next few years, with 200,000 units projected to be sold in 2024, and 700,000 by 2027.