How The Robotics Business Model Is Shifting To Meet Manufacturers Where They’re At

When I was a kid, the idea of a real-life robot felt foreign. Earth was for humans. The Jetsons and their robot maid, Rosie, existed only on television.

Now I work in manufacturing and frequently find myself advising companies that, you know that job you can’t find the right person to fill? That process you haven’t perfected? For that role, perhaps you should consider something a bit more metal.

The pushback, and there is plenty, tends to sound a lot alike. It’s too expensive. Or, it takes too long to set up. Or, we just don’t have the tech skills to handle that sort of thing.

But what if I told you that you don’t need any special skills. That there are folks who will do the setup—and even the maintenance—for you. That it may not be as pricey as you think, particularly when you weigh a robot’s productivity against a human being— or beings — in the same role.

For manufacturers, the fear of robots is real. Manufacturers fear their investments won’t amount to anything, that they’ll be bogged down by maintenance and end up even worse off.

But I say fear not, because these days there are business models that cater to small- and medium-sized manufacturers who don’t have the in-house staff to manage robots on their own.

Make Technology More Affordable with Robotics as a Service

One such model is used by Rapid Robotics, a San Francisco-based company that provides robotics as a service. CEO and co-founder Jordan Kretchmer saw the high costs falling on manufacturers installing robots. Industrial robots could cost anywhere from $40,000 to $500,000, the company says. Even with rent-a-robot programs popping up to lower the hardware burden, manufacturers were stuck with implementation costs often soaring into the six-figures.

As an alternative, Rapid provides both ends of that equation — the physical robot and the implementation, plus ongoing maintenance and reprogramming — at a flat, monthly fee. Their low-risk model shields customers from high startup costs and ensures they’ll be able to adjust and recalibrate the robot as needs evolve. That happens often when it comes to things like injection mold operations, CNC loading, palletizing, packing and labeling boxes, and other tasks that are otherwise ripe for automation. “Those tasks tend to change over a lot,” Kretchmer says. “Meaning if you automate it with a very specific kind of machine and a very specifically programmed robot, the chances that the operation is going to remain the same for the next two or three years is really, really slim these days.”

Rapid’s service is not necessarily cheap. For a basic robotics arm work cell, it costs $35,000 per year — paid monthly — plus a one-time onboarding fee of an additional $35,000. But Kretchmer says those numbers stack up favorably versus the cost of talent, providing companies with positive ROI faster than they’d experience with a large initial investment. Depending on how many shifts you’re running it, the cost of the cobot — or collaborative robot — breaks down to about $6.50 or $7 an hour after year one. The company also offers larger cobots which, at the high end, are priced at $50,000 for a yearly subscription plus $50,000 in one-time onboarding costs. But those machines can replace tasks that usually take two or three people to complete.

Kretchmer ultimately believes RaaS can help companies begin to reshore parts of their operation to build resiliency. “Those little bits and bobs that were so easy to outsource, but that are critical components to really important products,” he says. “Those need to be made locally.”

Get Expert Help to Customize and Find the Right Solution

Rapid Robotics has created a promising model. But it’s not the only way to institute a high-quality cobot into your manufacturing firm.

Just ask the school lunch-maker Innovative Food Services. Founded in 2022, the company grew from a modest restaurant catering business serving 200 or 300 meals a day to a school-lunch focused business that pumps out 9,000 meals daily. IFS has had to scale their operations quickly.

Along the way, one job on the assembly line was constantly creating problems for CEO Thomas Lane’s staff. It was a position at the end of the line in which an employee would take the meal trays and stack them inside large plastic totes, with a lot of twisting and turning and bending along the way. The role was a back killer, and even rotating various employees in an out of it during each day was causing inordinate amounts of strain. So, one day, IFS reached out to MAGNET, the nonprofit manufacturing consultancy I run out of Cleveland.

We worked with a robotics provider to build and deploy a custom cobot that took the place of that difficult, end-of-line job. “Switching over to the cobot, they’re able to line up six meals, pick up all six, move them over and drop them down into totes,” Lane says. “Not only has it increased the speed and the efficiency of our line, but also our worker satisfaction. It was a win all the way around.”

IFS would end up purchasing two cobots, one for each of their assembly lines. Within 60 days of building, plus a couple more to train staff for regular maintenance, the company was up and running. All in all, Lane says the cobots were less expensive than expected, paying for themselves within about 18 months.

“I just encourage other manufacturers to really take that leap if they’re on the fence about it,” Lane says.

The Future of Robotics

It’s difficult to say what’s coming next for robotics. Business models like the one Rapid Robotics deploys are attractive in their simplified, all-in-one approach. But it remains to be seen whether manufacturers are willing to trade-out one-time investments — however large they may be — for the subscription model.

Regardless, there’s a lot to be encouraged about when it comes to robotics deployment, from the largest manufacturers to some of the smallest. Robotics companies are beginning to realize that the average manufacturer needs help implementing their technology, and they’re getting creative and finding implementation partners to provide that expertise. The reward will be sizable: investments in robots contributed 10 percent of the GDP growth in OECD countries from 1993 to 2016, according to one study. And robotics capabilities have only continued to improve.

We may be yet to build the world envisioned on the Jetsons, but robots have arrived and are here to stay — and that’s a good thing for manufacturers.