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Leveraging Robotics to Improve Your Post-COVID Strategy

Josh Kern, Analyst

Our clients often ask us how they can implement robotics in their organization’s operations as one piece of their digital transformation efforts. Recent disruptions to manufacturing and supply chain operations due to COVID-19 have renewed this interest, with many clients wondering if they can use robots to replace or supplement human workers. As we discussed in our recent report, “Building Robotics Solutions,” robotic systems usually take a long time to deploy, unless there is an off-the-shelf platform that has been built with your specific application in mind.

Robotics vendors can be classified according to the level of customization required to get the full solution up and running. Off-the-shelf platforms represent the lowest level of customization, while research organizations represent the highest level. The COVID-19 crisis is increasing demand for off-the-shelf platforms, due to both the rapid deployment times and fast ROIs.

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For example, Locus Robotics builds autonomous mobile robots (AMRs) for material handling in warehouse environments. The company’s off-the-shelf platform is used widely by companies in the logistics and e-commerce industries. Locus recently raised $40 million in funding and announced that its revenue is up 300% year over year. That’s because its platform can be deployed in a matter of days and doesn’t require complex engineering consulting work.

On the other hand, robotics vendors with more customization work involved are seeing a temporary dip in business due to the numerous shutdowns happening around the world. Those vendors require close collaboration with customers to implement the overall solution. We’ve talked to several startups building advanced robotic solutions for the automotive industry, much of which has been put on hold during the pandemic. These vendors are also pausing operations until they can visit customer sites once again. In addition to the fact that automotive production was put on hold, there are usually no off-the-shelf platforms available for automotive assembly, given the complex tasks involved.

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Since mid-March, when the impacts of COVID-19 really started ramping up, we’ve seen off-the-shelf platform startups raise almost $350 million, while startups creating products that require some level of customization only raised about $80 million. Part of that difference may be due to fact that off-the-shelf platforms are highly scalable and therefore have better revenue outlooks. But the concentration in funding around off-the-shelf platforms also signals that investors see technologies like AMRs as short-term solutions to increasingly dire business conditions in industries like e-commerce, healthcare, and restaurants.

If you are thinking about investing in robotics, first check if there is a relevant off-the-shelf platform to help solve your problem. Industries that require more advanced robotic solutions like automotive, energy, and agriculture should still invest in robotics, but with the expectation that the technology is a long-term investment, not a short-term COVID fix.

 

 

FURTHER READING:

Free Access to our COVID-19 Resources

- Blog: AI's Role in Fighting COVID-19: Sifting Through the Hype

- Blog: Battling COVID-19 With Transformational Tech: Singapore Case Study

- Blog: Autonomous Vehicle Deployments Could Accelerate Following the COVID-19 Outbreak

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