Interact Analysis, a company that specialises in market research on automation processes, has published a report on companies that specialise in the maintenance and implementation of automated warehouse equipment. The study shows that warehouses are becoming increasingly automated and that the market for service contracts to implement this process will be worth 4.3 billion in 2020. The increasing complexity of equipment and the desire to avoid machine downtime are two of the reasons why system builders and original equipment manufacturers are increasingly in demand.

The market for automated equipment is booming

In a study published during the month of May, Interact Analysis looked at the market for automated services in warehouses. In 2020, the global revenue generated by this market will reach 4.3 billion will be allocated to original equipment manufacturers (OEMs) and system builders through the various service contracts they may have signed. The survey predicts that the global market in this area will grow strongly through 2025 to reach $8.7 billion.

Currently, many companies maintain their equipment in-house. The study shows that the trend will be reversed and that OEMs and assemblers will be increasingly solicited for the maintenance of automated systems, and will see the demand increase by 2025. This new willingness of companies is one of the reasons for the increase in revenues in the automated equipment market. However, some companies still consider it profitable to leave their machines without maintenance.

Research by Interact Analysis shows that the potential revenue generated by offering a long-term service contract can double the initial revenue generated by selling the machines. The survey shows that there are high and low points in the life cycle of automated equipment: these would be times when parts are likely to need replacing and when computers and control panels need updating. Like a sine wave, the high points are about every 5 years.

The financial situation for OEMs and system builders in 2020

According to the study:

• 40% of the revenue of companies specializing in automated services was induced by on-site visits to identify and repair problems on equipment, maintenance or preventive visits, and the deployment by OEMs or system manufacturers of full-time or part-time technicians.
• 22% of revenues are associated with services to upgrade automated structures: modernization, modification of existing systems, etc.
• 19% of revenues are associated with remote services, such as telephone services. Furthermore, this figure shows that about 80% of OEM or system builder customers do not necessarily use telephone support systems as soon as they have a problem.

Jason dePreaux, senior analyst for Interact Analysis, spoke around the survey and provided additional insights, including regional specifics for the automated services market:

“In 2020, 80% of automated machine service contract revenue was generated in the Americas and EMEA (Europe, Middle East and Africa). Historically, the adoption rate of service agreements has been much higher in these two regions than in the Asia-Pacific (APAC) region due to lower labor costs in Asia, expectations for maintenance to be included in the project sale, and robust in-house service capabilities by large e-commerce companies. But this situation is set to change. As worker expectations rise and wages increase in the APAC region, and as other factors come into play, such as recent experiences with social distancing and pandemic, we expect the region to set the pace for warehouse automation installations. Indeed, we expect that by 2024, the growth rate of the services market in APAC will be faster than in the Americas or EMEA.”

Translated from Le marché des services automatisés pour les entrepôts devrait doubler à l’horizon 2025