Why would a supply chain VC invest in a robotics AI startup? We explain how important the impact of AI in robotics will be for logistics and look at the barriers to adoption for end-to-end automation.
For most people, on hearing that we invested into the robotics artificial intelligence startup Micropsi Industries, the reaction is either to express fear of the rise of the machines, or to excitedly ask how soon we can expect robots to be serving us our breakfast.
At Amplifier, we are certainly in the excited camp, but for very different reasons. While most people radically overestimate how developed robotics technology is, there is no doubting it has made huge strides in recent years, driven primarily by innovation in neural and vision technology.
Robotics & AI
For robotics, AI has been a game-changer. That AI will ever usurp the human mind is unlikely, because artificial intelligence is a machine. It lacks surprise and creativity, it is by nature deterministic. It has, however, shown the capacity to unlock problems robotics engineers have been trying to solve for decades, making the long-awaited proliferation a reality.
Robotics & AI in the Logistics Sector
For logistics, the impact will be transformational. Warehouse operators face a number of challenges:
- Inefficiency — The average warehouse worker wastes nearly seven weeks per year in unnecessary motion, accounting for more than $4.3 billion in labour
- Labour Cost — 30% of warehousing OPEX is human capital
- Demand Pressure — E-commerce reached $3 trillion worldwide in 2018, pushing the need for additional capacity and high speed fulfillment with same day delivery, widely known as the “Amazon Effect”.
Previous Barriers to Adoption for Automation
Automation and the shift towards fully dark sorting facilities has always had the ability to solve these challenges. Until recently, however, barriers to adoption for end-to-end automation have been too great:
- Contract Length — 3PL logistics contracts now run for an average of three years. These have declined considerably over the last decade as shippers try to cut costs by more frequent tendering, allowing greater flexibility to respond to rapid changes in customer demand. As the 3PL will often develop infrastructure with sizable customers in mind, the reduction in contract lengths is causing additional pressure given the typical investment reaches breakeven only after two years and becomes profitable at year three. Big investments in automation could push the breakeven point back further.
- Manipulation Tasks — In warehouse operations, manipulation tasks can be very complex and highly variable, requiring multiple solutions (i.e. tasks such as identifying and sorting the correct item in a bin of similar but different items).
- Integration and Training costs — 70% of total lifetime costs of a robotics cell is setup, programming and teaching. This cost makes agility in the hardware hard to achieve, for an environment in which agility is a must.
With Micropsi Industries’ MIRAI product these barriers can be reduced, potentially even removing them entirely.
The AI packed into the MIRAI product offers a first-of-its-kind, vision-based robot control system that enables robots to deal with complexity (precision tasks with variance) in production that would be otherwise extremely difficult and/or prohibitively expensive to get around with hand-engineered solutions.
This is impressive enough, but MIRAI also offers another unique feature, vital to encouraging the proliferation of robots at a time when automation can deliver much-needed resilience in the supply chain. Put simply, it allows robots to be trained in eight to sixteen hours using human demonstration alone, with no knowledge or programming skill required. By manually guiding the robot by the robot’s “wrist”, the MIRAI-system gathers information through sensors and uses the data to learn how to do the task on its own. This ability increases the versatility of the hardware whilst reducing the cost of implementation.
“MIRAI isn’t just a different way of programming industrial robots, it’s a way to make them do things they couldn’t do before: the world is messy, so a robot needs a bit of autonomy to deal with the mess. We’ve developed MIRAI for assembly and testing, now we’re excited to explore what it can do in logistics together with Amplifier!” — Ronnie Vuine, Micropsi Industries CEO
We are excited to be working with one of Europe’s leading deep tech AI robotics companies — making industrial and supply chain transformation a reality.
Author: Henry Palmer
Partner, Amplifier Ventures