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As robotics and AI reshape food manufacturing at unprecedented speed, traditional capital expenditure models are struggling to keep up. Here, food robotics solutions provider Chef Robotics explains why Robotics as a Service (RaaS) is gaining traction across the food industry, offering manufacturers a more flexible, scalable and future-proof alternative to upfront equipment investment – without the financial risk and rigidity of CapEx.

Food manufacturers have long relied on capital expenditures (CapEx) to acquire essential equipment for their operations. This traditional approach – purchasing equipment outright and depreciating its cost over time – makes sense for one-time purchases of static assets. In the fast-evolving realm of technologies like robotics, where software and AI advancements occur at a blistering pace, this model proves less practical. 

Enter Robotics as a Service (RaaS), a relatively new alternative tailored to deliver evolving robotics capabilities and meet the needs of modern manufacturing. Let’s explore what RaaS is and why it is rapidly becoming the preferred purchasing strategy for many manufacturers. 

RaaS vs CapEx: Understanding the key differences

Understanding CapEx Investments

CapEx involves a large upfront purchase to acquire a piece of equipment outright. For instance, a food manufacturer investing in a new facility may purchase a host of conveyors and sealers. These assets get added to the balance sheet, and as the plant utilises the equipment, asset value depreciates over time. Due to the often substantial sticker prices of equipment, CapEx investments usually require a lot of upfront planning, involving coordination across operations, engineering and finance to get the scope over the line. Capital approval timelines can often stretch over several months.

This purchase model for automation has made sense for manufacturers who expect to see stable or growing volumes of a consistent product over several years, where changes in machinery are rare. Over the years, an equipment purchase pays for itself and delivers return on investment (ROI) to the manufacturer. However, at the time of purchase, manufacturers are unable to predict unexpected costs and additional needs that can quickly add up over time, increasing the total cost of ownership (TCO) of machinery and automation equipment. These items can include software updates or post-install customisation, spare parts and maintenance support or consultations.

Understanding Robotics as a Service (RaaS)

RaaS operates on a subscription-based model, much like Software as a Service (SaaS), which has taken root in the cloud software space. Before SaaS, if companies needed to purchase software like a customer relationship management system, human resources software like payroll or an enterprise resource planning, they installed on-premises servers. The advent of SaaS antiquated on-premises solutions because SaaS products are easier to onboard, more affordable and less risky than their on-premise counterparts.  

Similarly, RaaS does not require manufacturers to pay a large upfront CapEx fee but a yearly recurring fee that covers all aspects of a robotics solution, including:

• Core hardware and software 

• Initial deployment support and training

• End-to-end support, including maintenance

• Software and AI updates

Food manufacturers can think of RaaS as a staffing agency for robots. Service providers become an extension of their team, dedicated to ensuring the solution’s success. As a result, RaaS is comparable to an OpEx cost like labour.

The benefits of RaaS: Why it makes sense for the F&B industry

All-inclusive pricing and faster budget approvals

RaaS offers predictable pricing that simplifies planning and eliminates unexpected costs for food manufacturers. As RaaS subscription fees include hardware, software, maintenance and updates, the vendor bears the cost of these items. Manufacturers can avoid unexpected costs for items like a replacement part or software adjustments needed to support a new process or product. Most importantly, RaaS gets billed at a yearly flat rate without any hidden fees. 

The pricing structure of RaaS products shortens budget approval processes from years to months. Budgeting gets simplified to a fixed, predictable amount, in contrast to potentially high unexpected expenses that arise when CapEx purchases need repairs or changes. 

Faster time to ROI

With minimal upfront investment and often short deployment time, RaaS enables manufacturers to realise a ROI much faster compared to traditional CapEx models. As RaaS matches the profile of a labour expense, manufacturers can see a payback period of months instead of the years typically required for large CapEx investments. Decision makers can allocate capital to other critical opportunities instead of reserving it for a specific piece of machinery on the production floor.

Latest technology and future-proofing 

The RaaS model ensures that food manufacturers have continuous access to cutting-edge technology, including software updates, hardware upgrades and new features. In times when AI models get more powerful every week, and technology that was cutting-edge a year ago is now obsolete, these continuous updates are critical to getting the most value out of a robotics solution.

This future-proofing approach keeps a food manufacturer’s operations competitive and mitigates the risk of being leapfrogged by a competitor adopting a newer robotics solution with more advanced artificial intelligence models.

Scalability and flexibility

RaaS is adaptable to a food manufacturer’s changing needs – whether that involves onboarding new products, introducing new SKUs or deploying additional robots to boost throughput. To streamline purchasing, many RaaS contracts even include provisions for added robots to allow for faster deployments and help incorporate the cost advantages of larger order volumes. This flexibility enables manufacturers to scale their operations seamlessly and stay responsive to market demands. 

The flexibility inherent in RaaS is especially crucial for industries such as high-mix food manufacturing. Manufacturers dealing with numerous SKUs – often changing daily with frequent new additions – rely on RaaS providers to continuously train AI models and optimise for best-in-class results. These recurring costs are similar to the hosting fees that streaming providers like Netflix incur to deliver content globally.

Alignment of interests

Under the RaaS model, a service provider’s success is directly tied to the customer’s success. Food manufacturers will only renew or expand a service contract if they see strong, positive value from it. To guarantee their own success, many RaaS providers thus invest heavily in their deployment services and customer support teams. By focusing on delivering ongoing value, RaaS fosters a partnership that prioritises mutual benefit and long-term success.

Why RaaS is the smarter choice for many food manufacturers

RaaS offers a predictable, cost-effective alternative to the high upfront investments and unpredictable follow-on costs of CapEx investments. The continuous improvements that go along with the RaaS model ensure that food manufacturers remain at the forefront of technological advancements, driving higher yields, better quality and increased production to meet demand.

Ultimately, a RaaS provider’s success depends on creating exceptional value for customers. Providers like Chef Robotics are committed to building lasting partnerships with food manufacturers, ensuring every deployment delivers tangible benefits. As a result, manufacturers can focus on their core strengths – producing high-quality goods – while their robotics systems keep pace with the future.