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Factors Contributing to the Growth of the AMR Market

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The sustained efforts of companies to overcome the order fulfilment challenges by automating the material handling and mobility tasks, associated with warehouse and distribution centers, is spurring the growth of the AMR market.

According to the Quadrant Knowledge Solutions estimates, the autonomous mobile robots (AMR) market is expected to continue to grow robustly in the coming years.  Its growth is spurred by various factors, such as the growing and pent up demand for AMRs due to business imperatives, increasing need to automate certain tasks due to labor-market dynamics, growing interest among companies to achieve digital transformation of their businesses, growth of e-commerce business and pandemic triggered compulsions, growing awareness about the benefits & advantages of AMRs, and suppliers push. 

Business imperatives

AMRs help fulfil enterprises’ needs to achieve business excellence. Companies perform various activities. Each activity, performed by the enterprises as part of their business, consumes time, resources, and effort. There is always, not only scope but also a need to perform each of the activities in a more efficient and productive manner to achieve business excellence. One of the trusted ways by which enterprises achieve business excellence is through automation; they, over a period of time, automate many of their key activities. But some of the activities that are associated with material handling and mobility, such as the inbound/outbound/in-house logistics, storage, picking & stacking, inventory management, and others have largely defied attempts to automate until now. This is despite the fact that such operations, which are low skilled & despised by workers and repetitive & monotonous in nature, desperately needed to be automated. Automation of these activities presented challenges as they required robots with autonomous-mobility abilities and such robots, autonomous mobile robots, became commercially available only in recent years. With their arrival, the situation has dramatically changed; AMRs meet the enterprises’ unsatiated needs; their deployment enhances operational efficiencies and makes the tasks less onerous for the workers. As a consequence, there is a spurt in demand for them and this momentum continues, providing impetus for the growth of the AMR market.

Labor market compulsions

The drudgery of performing tasks that are repetitive, perfunctory, tedious, and tiring, makes workers detest them; they tend to commit mistakes that result in loss of productivity for their employers. Also, there is a growing tendency among workers not to take up such uninteresting jobs. Because of these challenges, companies are keen to automate such tasks, some of which can be performed by AMRs. This need, felt by enterprises to deploy AMRs to perform such activities, is creating the demand for AMRs. 

A dramatic rise in e-commerce

E-commerce is becoming the preferred mode of shopping for many.  The choices it offers, the user-friendly experience that it provides, and the convenience of shopping & paying for it from anywhere at any time are some of the factors that are driving the growth of the e-commerce industry. Consequently, there has been a dramatic rise in the gross merchandising volume of B2C e-commerce companies. E-commerce companies, driven by their need to ensure timely delivery to their customers, who often expect instant gratification, and the resulting need to continually track and restock inventory of the goods, are using of AMRs to improve the operational efficiencies of the big warehouses and distribution centers they operate. The rapid growth of the e-commerce business is contributing in a big way to the growth of the AMR market.

Order Fulfilment Requirements

While the expanding B2B and B2C e-commerce markets offer excellent growth opportunities for e-commerce companies, the competitive nature of the market puts pressure on them to excel in all their operations. These companies recognize that they can succeed in business only if they ensure customer satisfaction through timely and accurate order fulfilment. Meeting the customer expectations for speedy and correct delivery would require the companies to have effective control over all the operations involved in the order fulfilment cycle so that they are performed efficiently. The order fulfilment activities include sourcing incoming goods from various sources, receiving and storing them, picking and packing goods depending on orders, and shipping the ordered goods.  The associated activities involve inventory management, supply chain management, and supporting the customers who may like to report problems or desire goods to be exchanged/returned. In order to excel in performing these order fulfilment activities, companies have started using AMRs, which help automate the tasks performed earlier manually; automation helps in increasing productivity, achieving efficiency improvements, minimizing errors, and reducing costs. The sustained efforts of the companies to overcome the order fulfilment challenges by automating the material handling and mobility tasks, associated with warehouse and distribution centres, spurs the growth of the AMR market.  

Pandemic dynamics

While the pandemic caused by the virus Covid – 19 has negatively impacted the lives of people, industries,   and the global economy, in many ways it has transformed our lives and businesses.  Seeking protection from COVID – 19, we work from home instead of going to offices, attend webinars instead of going to seminars, and buy & sell goods online which has resulted in the phenomenal growth of e-commerce. COVID-19 generated an increase in demand for online ordering of physical goods. A UNCTAD report states ‘The dramatic rise in e-commerce amid movement restrictions induced by COVID-19 increased online retail sales’ share of total retail sales from 16 per cent to 19 percent in 2020.’ Thanks to COVID – 19 dynamics, new applications are emerging for AMRs. Tasks like disinfecting the premises, such as hospitals, airports, and shopping malls that are frequented by many people are becoming important. AMRs in conjunction with ultraviolet sterilization lamps are extensively used in such places.

Increasing awareness about the benefits and advantages of AMRs

With the increasing usage of AMRs, the awareness is spreading fast among enterprises about

  • – the benefits of using AMRs
  • – comparative advantages of AMRs over automated guided vehicles & forklifts
  • – AMRs’ quick return on investment, affordability, operational ease and safety, demonstrable benefits

These positive vibes about AMRs help the market to expand further. 

Suppliers’ push

Suppliers are also doing their bit to help the AMR market to grow. Some of them are offering their AMRs on a pay-as-you-use or lease basis. A company that is interested in using AMRs in identified applications wants the proof of concept before making the investments in them or getting the low-cost entry to robotic automation can work with suppliers, which offer AMRs on Robotics-as-a-Service (RaaS) or on a lease basis. Thereby companies can avoid incurring capital expenditure and maintenance expenses. This strategy helps push the sale of AMRs.

Quadrant Knowledge Systems expects the AMR market to continue to post healthy growth in the coming years. The factors that are aiding the growth of this market are sustainable in the long term. The technological advancements taking place will contribute to making AMRs smarter, feature-rich, more affordable and user-friendly. New applications will be discovered and users will benefit. 

Author

Rajabahadur V. Arcot

Senior Advisor, Quadrant Knowledge Solutions