The use of robotic technology in supply chain warehousing is growing at an astronomical rate. Understandably so, as automation is proven to increase production while decreasing production costs, not to mention improve reliability and safety. What was once a nice-to-have is becoming a need-to-have in order for companies to remain competitive. Of course, the shift to automation comes with a heavy price tag and many warehousing businesses just lack the funds. At the same time, NOT investing in robots can quickly put warehousers out of business.
Fortunately, there is a popular business model trend on the rise called Robots as a Service (RaaS) which involves renting robotic technology rather than purchasing it. Much like Hardware as a Service (HaaS), there is no large financial outlay up front but rather manageable monthly payments. Users are able to minimize their initial investment, retain their capital and preserve their credit lines. What’s more, leasing allows for robotic equipment upgrades or add-ons to be made during or at the end of contract terms, a real benefit considering how quickly emerging technology becomes old hat.
Perhaps most exciting about RaaS is its near immediate impact on a warehousing company’s production power and bottom line. ROI is virtually instant when automation is accelerated. Essentially, renting the technology becomes an operational expense, allowing warehouses to quickly get started reaping the benefits.
Historically, building the business case for a transition to robotics has been daunting. Expensive, fixed asset, capital equipment usually requires many layers of management approval. RaaS breaks down the financial barriers, giving boardroom decision makers a fast, low-risk and financially friendly model to accelerate automation.
The flexibility of RaaS lease terms can make a huge difference as well. Agreements can accommodate user seasonality allowing customers to make lower payments during revenue dips, and higher payments when business typically spikes. Flexibility abounds in end-of-term contract options, too. Customers can buy the equipment for a fraction of the original cost (renting to own), upgrade to newer technology, extend the contract term or simply return the equipment.
River Capital Finance teams with top robotic manufacturers to bring complete equipment, financing and support service packages to warehousing businesses. Our equipment financing application is quick and easy to complete and we can get you an answer on approval within hours. Ask us about a variety of tax advantages to RaaS as well.