I recently completed ARC Advisory Group’s research on the mobile warehouse robotics market. This global market has been growing extremely fast and I forecast it continue growing at a rapid pace. In the process, I expect robotics suppliers to obtain labor resources from adjacent or similar markets to support their growth. Much of the demand increase will be driven by the needs of rapidly expanding e-commerce fulfillment operations. And some will be from the displacement of more traditional warehouse technologies, such as AGVs and manual forklifts. A market with such robust growth has some interesting dynamics at play. Here are a few:
Fast, Flexible Functionality
This robotics research is focused on mobile robotics that travel under their own control with a level of autonomy adequate to perform intended tasks based on current state and sensing without human intervention (for a more detailed scope definition, see Taking Stock of a Hot Technology Market). Fulfillment centers are operating in a time of frequent change, so they value the ability to easily adjust automation to their frequently changing requirements. I see flexibility as a common thread across the various categories of mobile warehouse robotics. Some bots carry heavy loads, others light. Some move independently of workers; others move in concert with them. There are a couple that work as sortation systems and one or two that move three dimensionally. But they all offer their given capabilities with a greater level of flexibility or adaptability than traditional forms of automation that serve a similar warehouse function.
Warehouse Labor Shortages will Drive Growth while Implementation Labor will Inhibit Growth
It has become increasingly clear that the difficulties of attracting new warehouse labor and retaining existing workers are a longer-term, structural issue. A number of ARC Advisory Group research initiatives have shown that the lack of available labor, rising labor costs, and limited labor reliability are widespread concerns for warehouse operators. These difficulties are leading warehouse operators to adopt more warehouse automation and robotics. Mobile warehouse robotics allow operations to be less reliant upon labor, to obtain higher levels of productivity from existing labor, and to provide workers with a more engaging work environment.
At the same time, there have been widespread shortages of talented warehouse technology implementation staff. This has been a multi-year constraint on both the WMS market and the warehouse automation market. These labor constraints are expected to also inhibit the growth of the mobile warehouse robotics market. ARC expects the global mobile warehouse robotics market to grow at such a rapid pace that it will need to draw upon labor from similar industries that employ those with applicable or transferrable skills. We expect that robotics providers will have difficulties expanding their product development and go-to-market capabilities at a rate sufficient to support the rapidly growing demand for these solutions, causing a drag on market growth.
Asia as an Early Mover
Supply chain technologies have a general pattern of adoption and growth across regions. Software emerged in North America, quickly followed by Western Europe, then parts of Asia, and finally Latin America. Automation tended to emerge in Western Europe, followed by North America, parts of Asia, then Latin America. However, the regional growth pattern of the mobile warehouse robotics market is progressing differently.
Product development is occurring at a rapid pace within the mobile warehouse robotics market. Perhaps more significant is the pace at which technology diffusion is occurring. The release of new technology within the market is often quickly followed by similar technology releases by other providers. There are likely many factors driving this rapid technology diffusion – including the ability to reverse engineer mechatronics and a large amount of venture capital funding for numerous companies to utilize toward product development. Robotics companies in Asia are developing and selling mobile warehouse robotics at scale and warehouse operators in Asia are quickly adopting the technology, as well. Publicly noted examples include Geek+ deployments at Nike, VIP.com, and Winit in Asia; and Hikrobot deployments at FAW-Volkswagen, Yanfeng Automotive Interiors, and BOE Technology. The rapid adoption of these technologies in China is due in part to the lack of a legacy automation installed base and the ability to add robotics to operations within existing warehouse infrastructure.