How KUKA Found A Better Way To Pay For Robots

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Organizations tend to stick with a good business model, once they find it. Why shake up a good thing, right?

"We have a good business model; we're selling robots ... so, why would we change it?" Christian Liedtke, head of Strategic Alliances at KUKA, said during a presentation at Hannover Messe 2024. "It's not sufficient anymore; you have to look ahead."

Enter outcome-based business, when usage determines how much you pay. And Augsburg, Germany-based intelligent robotics supplier KUKA has extensively analyzed data from its headquarters-adjacent plant to see where an outcome-based model might make better business sense than traditional payment schemes.

"How can we actually help our customers to be more successful?" said Liedtke, who is also chairman of the board for the Open Industry 4.0 Alliance . "Now, we have data — and with data, we can do something different."

Most of us have already seen examples of outcome-based business, Liedtke noted. Instead of purchasing a car, you could try car sharing — paying for a car only while you're using it (often hourly); or you could incentivize an employee, as the Tampa Bay Buccaneers did , paying a $500,000 bonus to NFL tight end Rob Gronkowski for 55 receptions.

And there's an alternative to buying a manufacturing robot: You could pay based on how often you use it. American automaker Chrysler does this via KUKA's production facility in Toledo, Ohio , Liedtke noted, where robots weld Jeep components.

"That's a good business model, and it's working — it's really working," Liedtke said. But the simple reason outcome-based business isn't common across industries is: "There's a lack of interest."