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How Robotics as a Service (RaaS) Can Be a Cost-Effective Option for Processors

Manufacturers in a budget bind can potentially alleviate labor woes by incorporating RaaS into their business model.

Robotics as a Service Seminar Snaxpo RaaS
"RaaS is more than just robots, it encompasses all types of manufacturing equipment," said Bryan McClelland, sales director at Formic, explaining RaaS to attendees at this year's Snaxpo show.
Michael Costa

The adoption of automation is an ongoing process in the food manufacturing and packaging industry, with the eventual goal to replace risky, injury-prone jobs and soften the labor crunch. However, one major roadblock for manufacturers is the cost of automation. Some companies don’t have the upfront capital to spend, while others are worried they’ll never realize ROI on their purchase.

Within these business gaps, RaaS (Robotics as a Service) is emerging, with a similar model to SaaS (Software as a Service): an operator signs a contract for a certain timeframe to use a piece of automation equipment—like a palletizer, for example—and is charged an hourly rate for that usage, while the RaaS provider handles all installation, maintenance, and ongoing support for the duration of that contract, according to Bryan McClelland, sales director at Formic, one of several RaaS providers in the industry. “We stop getting paid if the equipment breaks down,” he said.

A RaaS provider will assess what exact equipment a manufacturer needs based on their production goals, rather than the processor guessing what might work in their operation. RaaS is also different from leasing equipment, McClelland notes, since leasing often means the customer assumes all risk with the equipment as well as any needed repairs or upgrades during the length of the contract.

At the recent Snaxpo conference in Orlando, McClelland explained RaaS for an audience of snack producers, co-packers, and emerging brands, but his advice can be applied to any food or beverage manufacturing operation on a tight Capital Expenditure (CapEx) budget.  

Fear of automation

Automation is often mentioned as the salvation to solving the industry’s ongoing labor problem, but automation is not a risk-free venture, and comes with several caveats for cautious processors. Those concerns, according to McClelland, include:

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