Why did Reliance pick up majority stake in a robotics startup

The robotics startup has built automated warehouses for companies like Coca-Cola, Flipkart, HUL, Pepsi, Marico, Asian Paints, and ITC.

Reliance Industries Limited has picked up 54% stake in Noida-based findustrial robotic automation company Addverb for $132 million.

Our partnership with Reliance after an investment of $132 million in our Series B round will allow us to deliver advanced and affordable robots. It is an opportunity to deploy our robots in omni-channel distribution centers across sectors like e-commerce, retail, grocery, fashion, pharma, digital and petrochemical, Addverb said in a filing.

The robotics startup has built automated warehouses for companies like Coca-Cola, Flipkart, HUL, Pepsi, Marico, Asian Paints, and ITC.

In aninteraction with Analytics India Magazine (AIM), Satish Shukla, co-founder of Addverb said, Reliance is one of our esteemed customers and we had delivered multiple automated warehouses for them for their JioMart business. So there was already a certain level of trust and understanding between us and them.

It is imperative for a business like ours to have an anchor customer who is willing to deploy automation. Reliance has significant presence in Oil and Petrochemicals, Organized Retail, Electronics, Grocery, E-Commerce, Fashion & Lifestyle and has also invested in pharmacy and hyperlocal delivery.

In order to scale these businesses Reliance would need a dynamic and agile supply chain and this would require flexible and automated warehouses. Also, Reliance is betting big on 5G and green energy and one of the biggest benefactors of both these technologies is going to be Robotics. These are some of the synergies that would help Addverb grow along with Reliance, he added.

Also, as a strategic investor, Addverb will also have significant business orders from Reliance for their warehouses across different industries. The advancement in battery technology and 5G will help to make robots more flexible and robust and will allow it for more innovative deployments.

Reliance will be able to create innovative solutions for expansion of their supply chains. Omni-channel fulfillment and Micro-fulfillment are the new trends in supply chain and Addverb has the capability to deliver automation for both the applications and different types of business formats Reliance has.  

Different type of automated warehouses

Goods-to-Person (GTP): Goods-to-person system is used for increasing efficiency and reducing overcrowding. It includes conveyors, carousels and vertical lift systems. If deployed properly, GTP systems can easily speed up warehouse picking.

Retrieval Systems and Automated Storage (RS/AS): RS/AS comes under GTP technology wherein automated systems such as material-carrying vehicles, tote shuttles, and mini-loaders are used to store and recover materials. This system is used by warehouses with spacing issues and high-volume output.

Automatic Guided Vehicles (AGVs): This uses minimal onboard computing power. In this system, the vehicles use magnetic strips, wires or sensors which help them to move across a fixed path in the warehouse. AGVs are ideal for large and simple warehouse environments with a navigation layout.

Autonomous Mobile Robots (AMRs): Comparatively, AMRs are more flexible than AGVs since they use GPS systems to create a more effective route in a warehouse. It also uses laser guidance systems to spot obstacles, which allows it to safely navigate through human traffic. It is easier to program and can be deployed quickly.

Pick-to-Light and Put-to-Light Systems: It uses mobile barcode scanning devices synced to digital light displays. It guides warehouse pickers to place or pick up selected items. This dramatically reduces walking and searching time, along with human error in high-volume scenarios.

Voice Picking and Tasking: A voice directed automation also known as pick-by-voice uses speech recognition software and mobile headsets. The system deploys optimised pick paths to help workers to pick or place a product. It eliminates the need for handheld devices like RF scanners and improves pickers’ safety and efficiency.

Automated Sortation Systems: Sortation is used to identify items in a conveyor system and divert them to a location using radio-frequency identification (RFID), barcode scanners, and sensors. This automated sortation system is used by companies for receiving, picking, packing, and shipping.

Reliance’s rivals

Flipkart introduced robots called automatic guided vehicles (AGVs) at its shipment sorting center in Bengaluru. AGVs put packages in designated slots with minimum human intervention.

Currently, Flipkart has adopted 110 AGVs or “cobots”, which sorts 4,500 packages every hour, when compared to 500 parcels per hour done manually earlier. The adoption of cobots is one example of how Flipkart has consistently built a tech infrastructure for its entire supply chain network.

In 2012, Amazon acquired Kiva Systems, a robotics company, for $775 million, and since 2014 it has installed more than 100,000 robots in 25 of its total 149 warehouses around the world. Amazon’s largest warehouse is one million square feet.

Reliance’s automation push

In simple terms, an automated warehouse management system allows the business to use AI and robotics in daily processes. As the name suggests, automated warehouses eliminate manual tasks that slow down the movement of goods. The issue arises when a product has to make more stops when it moves through a warehouse. This increases the chances of an error or problem to occur. 

Currently, Reliance uses products like Rapido (Pick-Put-To-Light), Dynamo (Autonomous Mobile Robot), Zippy (Carton Shuttle Robot), Quadron (Carton Shuttle Robot) setup by Addverb. Going forward, the robotics company will provide innovative automation solution for Reliance’s multiple formats using a mix of fixed automation like Multi-Pro (Automated Storage & Retrieval System), Cruiser (Pallet Shuttle Robot), Quadron (Carton Shuttle Robot) and Flexible Automation like Dynamo (Autonomous Mobile Robot), Zippy (Sorting Robot) and Veloce (Multi-Carton Picking Mobile Robot.

Reliance will also use Addverb’s enterprise software, Optimus (Warehouse Management System) and Mobinity (Warehouse Control System) across its warehouses.

The COVID-19 pandemic has caused massive disruptions across global supply lines and also led to labour shortage. Since the demand for more output has grown, automation has become a necessity for warehousing industries worldwide.

The company’s retail revenue grew by 16% led by increased growth across consumption baskets amid strong consumer sentiments during festivities, relaxations in COVID-19 restrictions, and increased number of vaccinations.

The business re-established growth in fashion and lifestyle with sales closing above pre-COVID levels. The consumer electronics and grocery also saw rapid growth as lockdowns eased all over India, Reliance Retail said in its third-quarter statement.

In the next five years, Addverb aims to become a billion dollar revenue company with equal revenues from India and from global markets. The firm is working towards expanding its presence in the US and Europe and also scale its team with more focus on the R&D division.

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Akashdeep Arul
Akashdeep Arul is a technology journalist who seeks to analyze the advancements and developments in technology that affect our everyday lives. His articles primarily focus upon the business, cultural, social and entertainment side of the technology sector.

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