Robots in business are transforming from fantastic ideas to everyday news. Transporting robots operate in the kitchens in some of McDonald’s restaurants in Ukraine delivering orders to the express pick-up window. Fozzy Group has begun introducing robots in the warehouse area in its distribution center in Kyiv region. Robots for sorting and transporting heavy loads are tested by Nova Poshta.

Pavlo Pikulin is a Ukrainian businessman whose belief in robotics is so strong that he has already invested $1 million of his own money in production. His company, Deus Robotics, built 40 robots in 2021 and is planning to manufacture 1,000 devices in 2022. Pavlo had other business projects before the robotics company. He has been creating online games since 2010. He has made about $5 million from one of them — Battle of Zombies.

This capital helped him start building robots, a long-standing dream of his. In an interview for Retailers, he told the story of his company, about the difficulties he faced, the most valuable thing in robots and how to evaluate their performance.

Hardware vs software business

I have always wanted to create robots, because they combine hardware and software. Artificial intelligence finds its practical application and is truly embodied in robots. This business requires big investment. So I aimed to earn money to invest it in a business I had long dreamed of.

An online product can be sold globally with nearly zero investment. In case of sophisticated high-tech equipment, you need to make, deliver, install and maintain it. Scaling up manufacturing globally is much more expensive than selling a product, e. g., an online app at Google Play to each country of the world. The task priority is incomparable in terms of costs and complexity.

I have already invested more than $1 million, and some other investors additionally provided $1 million. We are planning to raise up to $20 million for the construction of a robot mass production facility in Ukraine in the near future.

What does it take to open a robotics company?

Robotics is a complex, multi-component task that requires the input from various experts. They include engineers to design robots; developers to program robot indoors navigation; other specialists to create the RMS (Robot Management System) for the integration with customer warehouse management systems. There is a team that develops analytics for making the management interface. Experts and professionals are also needed to set up mass production. We brought together experts in related areas who could offer great expertise.

We had our first customer before we finished the logistics robots, and we knew exactly what kind of problem we were dealing with. There are numerous works done by humans at any warehouse such as order sorting, picking and transferring cargoes. We develop robotic solutions specifically for these tasks.

We currently have three robots that sort cargoes and parcels; transport racks; and transport pallets. We are releasing three new models of robots next year to perform other tasks, including picking up parcels from racks and shelves.

What are the difficulties of developing and putting robots into operation

Our robots work on even floors. The integration of our robots into existing business processes is another issue. We need to take much effort to explain customers how to use and integrate our robots into their business processes.

Any software has faults and errors at the development stage. We predict worst case scenarios — e. g., a human can block the way for the robot or breach safety rules — and work hard to ensure our devices are as safe as possible.

What does a robot look like from the inside?

Robots are about software rather than hardware. They are not too complicated in terms of mechanics: they don’t contain any unique technology that could not be reproduced. The most difficult part is to develop the intelligent solutions for detecting obstructions, moving the device, defining its coordinates, preventing collisions of thousands of robots. This type of robotics systems are most complex and valuable.

Our robot is a wheeled platform containing a master computer which administers all processes, and a set of sensors receiving data from the environment, reading QR codes from the floor and detecting predicted and unpredicted obstructions. The robot is equipped with batteries to work at least eight hours fully loaded. The sorting robot features a conveyor to drop cargoes into a basket or transfer them to another conveyor. The racking robot includes a lifting mechanism. Platforms vary in carrying capacity. This is a key parameter which defines the price of the robot. The higher its carrying capacity is, the more expensive components and the more powerful batteries must be used.

Carrying capacity as a robot’s key parameter.

Our sorting robots can transfer goods that weigh up to 30 kg, while heavy robots can move pallets with load capacity of up to 1 ton, or up to 300 kg for racks. We made 40 robots in 2021 and expect to build 1,000 devices in 2022.

What is needed to put a robot into operation

Obviously, robots cannot operate without data transfer, which is very important. We can easily solve the issue of a weak Wi-Fi signal at a warehouse, if any.

Our robots cannot operate at subzero temperatures. Robots for a cold storage warehouse are considerably more expensive. We do not have these models so far but plan to make them in the future.

The most important task is to integrate robots in the user’s business processes. We must be ready to teach personnel how to interact with robots to ensure maximum efficiency. WMS platforms vary depending on the customer, and we need to design a versatile system that could be integrated with any type of WMS.

What size of business is suitable for using robots?

Our robots can work perfectly in small companies, however, adjusting business processes is a complex and time-consuming task. High time expenditures of key personnel seem to be unreasonable if you need to integrate one or two robots. It would be cost-effective to introduce this type of equipment if your warehouse requires at least 20 robots.

One robot can carry 100 loads per hour. 20 robots operating 20 hours each can handle 40,000 loads per day. These can be racks or parcels. The need to handle at least 40,000 loads daily is a good reason to integrate robots. However, we are developing special software to speed up and simplify the integration process for small businesses. It’s only a matter of time before you can buy a robot in a store and run it yourself.

How to calculate the RoI?

We are preparing a warehouse simulation with robots before they have been supplied or even built. Even if you have not built your warehouse yet, we can provide a virtual presentation of the effective robot and human interaction. There is no fully robotized warehouse now, so robots operate together with humans.

We simulate a scenario reproducing the user’s tasks. Say, you need to sort 1,000 items per hour. Assuming that this requires X workers where a conveyor is used to help people, 30%, or three times, fewer workers are needed if you use robots.

The logistics market has demonstrated huge growth over the past two years, and this trend continues to exist. This caused workforce deficit: it is difficult to find workers to do these jobs. The market will continue to grow, and our top priority task is to increase human performance using robots for meeting the demand for logistics solutions. Robots will not deprive humans of their jobs. Rather, machines will help increase work efficiency dramatically.

The cost of a robot’s work is lower than that of a human work. This means that your investments will return from the first day if you rent. However, if you want to purchase and integrate robots in your workflow, you should expect RoI in 1 to 3 years.

Market volume and prospects

Ukrainian customers currently require 20,000 robots, the figure that will exceed 100,000 in a couple of years. Our present production capacity is insufficient, and we are planning to build a plant to build between 400 to 1,200 robots a month. We expect to complete the construction in 10 months.

First of all, we want to hit the local market. We will enter foreign markets with a finished product which could be demonstrated in the context of Ukrainian businesses. I don’t see why we should start with European or US customers: Ukraine is closer, there is a market demand, and it’s much easier for us to automate warehouses in Ukraine and then scale up to the rest of the world. We will prove our solutions are functional, efficient and reliable using the example of our Ukrainian customers. This will be our competitive advantage.

Competition with China and the pioneer’s story

Not many people are involved in the construction of robots. Cheap workforce is China’s key advantage. But it becomes unimportant when robots are built by other robots. Highly skilled professionals are needed to organize this type of production, and Ukraine has them. We estimate that it’s more cost-effective to have production facilities in Ukraine than in China if you want to build up to 2,000 robots per month. We offer something China does not have. Yes, they provide more solutions and have been making robots for some time now. But our solutions are better than similar Chinese products in terms of quality of software, a key element in robots.

We are not stretching for profits and are determined to expand and capture a large part of the market. In Ukraine and beyond.

Deus Robotics will not be a profitable business in the near future, because we’ll invest all our revenue to our development and growth. This is an ordinary situation.

Pioneering the market is the most challenging task. We watch a market emerging and developing.  There aren’t many companies out there you can learn from. But pioneers’ determination and perseverance always bring their rewards due to more expertise, know-how and experience necessary to hit the robotics market when it reaches its full potential. Robots will be everywhere soon: outdoors, at home, in retail, recreation, air transportation industries, etc. There will be robots everywhere. And we will be the ones who will build them and develop their software.

Reported by: Julia Belinskaya

Photo: Anastasia Rozhynska