Warehouses are increasingly adopting automation to streamline operations. Many robotics providers offer different financing options for businesses. This leaves businesses wondering if they should purchase or lease warehouse robots.
Below, we discuss the Robots as a Service (RaaS) model in more detail to help you make an informed decision for your warehouse operation.
What is Robots as a Service (RaaS)?
RaaS is a business model where a robotics provider leases robots to customers through a subscription-based contract, rather than selling them outright. This model lets companies access robotic technology without the permanent commitment and fixed upfront costs that come with purchasing robotic systems. RaaS models typically include the physical robots as well as software updates, maintenance, and support when needed.
The biggest draw toward RaaS is cost efficiency, flexibility, and scalability. With RaaS, businesses can scale their robot usage up or down based on their budget and needs without the financial commitment of robot ownership. This is particularly beneficial for businesses that experience fluctuating demand based on specific products or time of year, as well as smaller operations taking their first steps into automation.
The Benefits of Owning Robots
Though owning robots requires more of an upfront investment, this option is beneficial for companies with long-term automation needs. If warehouses require tailored solutions and complex system integrations, owning is often the best choice. Purchasing gives warehouses greater control and the ability to customize and fully integrate the system with other business systems and processes.
When considering purchasing warehouse robots, it’s important to keep in mind that the upfront investment is typically high and involves ongoing costs for staff training, maintenance, and support. However, with thoughtful planning, preparation, and integration, the ROI benefits are invaluable..
The Benefits of Leasing Robots Through RaaS
Leasing robots through a RaaS model gives small to medium-sized warehouse operations the opportunity to trial automation solutions without the permanent financial or operational commitment. Instead, they pay a recurring fee for the use and maintenance of the system. This setup is ideal for businesses needing operational flexibility and wanting minimal responsibility in terms of long-term maintenance and upkeep.
Leasing also gives warehouses the opportunity to keep up with the latest automation technology and trial innovative solutions with a risk-free approach. Operators can test how automation fits into their operation and evaluate the productivity gains before making a long-term decision.
RaaS models usually offer limited customization of robotic systems, making them suitable for operations that aren’t looking for a highly adaptable or fully integrated system to start.
Factors to Consider When Choosing Between Purchasing and Leasing
Financial Considerations
The first consideration when deciding to purchase or lease warehouse robotics is to analyze your budget for a robotic system. RaaS is often more viable for businesses that prefer operational expenditure over capital expenditure. If long-term savings are a bigger priority (and initial funds are available), purchasing may be a better fit.
Technical and Operational Needs
Businesses must next consider the technical requirements of their operation. If tailored solutions and extensive system integrations are needed, purchasing is often the better choice. For those needing simple integrations and scalability, RaaS may be more optimal.
Speed of Deployment
Businesses wanting to deploy a robotic system quickly may prefer a RaaS model. This is ideal for businesses that need to ramp up operations quickly for fluctuating market demand or seasonal changes.
Potential Challenges with Leasing Through RaaS
RaaS programs offer warehouse operators many benefits, but it’s important to consider their limitations as well.
Robotic systems must successfully integrate with existing warehouse systems, whether they are purchased or leased, to meet operational needs and achieve efficiency gains. With RaaS, there may be limitations on customization options, which may hinder integration in warehouses with highly specialized or unique operations. Businesses should work closely with their robotics provider, assessing current systems and processes to ensure that integration is possible and the necessary maintenance and support can be delivered.
Final Thoughts
The choice between owning or leasing robots depends heavily on a warehouse’s specific needs, financial capabilities, and long-term goals. Working with a robotics partner to evaluate your unique requirements will help determine the right solution for your operation.
Contact us to schedule your workflow assessment and explore Prime’s financing options to determine the right solution for your warehouse operation.
