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The New Warehouse podcast hosted by Kevin Lawton is your source for insights and ideas from the distribution, transportation, and logistics industry. A new episode every Monday morning brings you the latest from industry experts and thought leaders. And now, here's Kevin.
Hey guys, it's Kevin with the New Warehouse Podcast here. I'm at the MHI headquarters today and I'm going to be joined here by Scott Reed who is the VP of Sales at Feeve Intra Logistics and he's representing the CSS industry group today and what we're going to talk about today our topic is right sizing automation. So we're going to talk about what that concept means, how to go about that, and we're also going to talk a little bit about some of the challenges where people kind of
get a little lost potentially in deciding what level of automation is really right for them. So Scott, thanks for joining me here today. How are you? I'm good. Thanks for having me. I appreciate it. Absolutely. Pleasure to talk to you today and learn a little bit about this. So let's dive right into it. Why don't you tell us a little bit about this concept of right-sizing automation? I mean, I
I think we hear a lot about right-sizing packaging, right? I certainly hear a lot about that. But right-sizing automation, what does that actually mean when it comes to the material handling industry? Yeah, so right-sizing automation is all about ensuring that you're putting the right kind of equipment in and also ensuring that you are developing solutions for your customers
that are not only good for the right now, but for the next 10 to 15 years. When companies look at their capacity numbers, they're not looking for the quick fix of what they can do now. They want something that is going to last at least 10 years. So helping them forecast what that looks like is a big part of right sizing. Interesting, yeah. So it's interesting to find the
the fit for now, essentially, and also something that fits 10 years down the road. Yeah, it's an interesting challenge, right? Because, you know, capacities are, they fluctuate quite often. If you look back four years ago with COVID, an event no one could
For C, right? Yeah. Didn't know it was coming, and it exploded our industry. Everyone's capacities were blown up pretty much overnight. Right. And, you know, there was a trend for a while where it was thought, this is going to be permanent. People aren't going to go back to the stores. Yeah. You know, online shopping, now that grandma and grandpa know how to work the computer, right, we can expect this to be a long-term thing. Yeah.
you know, maybe there was a bit of an overestimation in 2020. So there was a bit of a pullback. But what we've seen really in the last 12 months is that the companies that did pull back are now restarting and capacities are coming back and they're coming back strong. Interesting, interesting. Yeah, that's good to hear, definitely, because I know there was like a lot of
uncertainty there for a little bit, right? You know, is it going back to the store? Is it more e-commerce? What's going to happen there? So seeing some of that return, like you just said, I think that's a good thing to hear for the industry as a whole. So now tell us too, I mean, you know, this right-sizing automation, I mean, how does that, I guess for some context there, I mean, how does that compare to maybe, you know, the way that you would go about doing automation, you know, in the past?
Yeah, so historically, automation has been a very concrete thing. It's been something that you put into a building that your customer owns. They're going to be there for a long time. And the process of that automation took two to four years. It was a long process. What we've seen, it's really been a trend for the last, call it five to ten years, is a modular approach to automation. Customers
are moving from owning their buildings to renting their buildings. And they want quick deployments. They want deployments that are robust, scalable, and again, something that will last them 10 to 15 years. And if they've got to pick up a move, they want to be able to pick up that automation and take it with them.
Yeah, absolutely. So that's pretty interesting there. I mean, picking it up and taking it with them, with the move, right? So when you look at something like that, I mean, how do you go about designing a system or thinking about a system to have that flexibility included? So previously, you know, companies would look and say, we have shortfalls in our capacities in certain locations, and they would build their automation strategies around filling those holes. And that was a
one, two, three year process. So they would kick it off and say, we need capacity in Dallas, Texas. So it was a one to three year process to get the capacity they needed to fill that hole. And now customers are looking in the same year and how can we plug holes quickly? So again, the modular solutions, the solutions that allow you to
to quickly adapt and to quickly fill capacity holes and move the flex capacity into different parts of the country because I would say the capacities have become a little more unpredictable. Yeah, absolutely. And I think that's very interesting there to be able to design those systems to have that flexibility. And I noticed you said it was a
something that the customers are challenging these system designers to do. And I think that it's really interesting to think about it in that way. But I'm curious, too. I mean, you mentioned right-sizing the idea of getting this solution in place that works now but will also fit 10 years from now. So if I think about that a little bit, and maybe some people might think, well, does that mean that I'm going to
have something in place that's not necessarily getting utilized right now, but it will be utilized in a few years. Like, why would I get it now ahead of time? Or is it something that you can expand upon? Yeah, I would say the traditional approach has to always develop the automation solution to
be able to handle the flows and the capacities they're expecting for the next seven to eight years. So you are oversizing the system for 90% of the time the system's operating. What I've seen more and more of recently is customers
requiring scalable solutions. So they bring down that upfront CapEx cost, and then they handle it in more of a phased approach, which again, which is where the modular, scalable type solutions, the companies who are more innovative in that space are going to reap the benefits of that because you have offered your customers something that's fundamentally different than what the industry is used to seeing.
And you'll still see that from time to time with your big players, right? The big players are going to do what they're going to do. They're going to implement their solutions, and it's a tried and true system for them. But as you move down into more of the e-commerce space and what I would like to call warehouse and distribution, the flexibility is more important. And you also have a labor issue, right? Right. Our customers deal with labor unions, and it's not just about...
What I would say is the availability of labor. It's about the consistency of that labor. Yeah, that's a good way to put it, yeah. You know, the people who are working, are they consistently coming? You know, is it a group of people that work for two weeks and then quit and then go across the street? So making your automation easily trainable is a big part of this too when you write SaaS things. We'll be back after a quick break.
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Interesting, yeah. Yeah, I think that's a great point about the labor is, you know, that consistency. And I've been warehouse manager and lived through all those things where, you know, you drive in and...
You see that their neighboring warehouse is they're offering like $1.50 more an hour. That's trouble for me. Not to lose everyone. Yeah. So, you know, it's really important, I think, to understand that. But then also, like you said, you know, have this flexibility in the type of solutions you can put in, whether it's, you know, putting something in that, you know, isn't fully utilized from a capacity perspective right now, but will be in the next few years. Or you're looking at a scalable type of solution. So, yeah.
When you look at that, I mean, how do you go about assessing the needs
of the customer and making sure that you're going about it the right approach. You have to look at the facility holistically. There's multiple kinds of facilities we can go into, greenfield, brownfield, facilities that already have automation or totally manual facilities. You have to take all of that into account when you're looking into what exactly the solution that you want to provide is. You look at whatever your customer is, whoever it is,
their familiarity with automation. Because sometimes you're starting from ground zero and you come in and you have to be the subject matter expert for them. You guide them, you take all their data, all the analytics they have or don't have, and you develop a solution for them from scratch. And then you have other customers who have a lot of engineering power, a lot of people on staff. They're building out a network of
And that's a fundamentally different approach for how you were to go about right-sizing their automation. Because they give you a set of parameters, and then you have a little flexibility and a little creative. You can be a little bit creative, but it's not nearly as much as others. So looking at the type of customer, what their familiarity with automation is the first step in my mind. Because then you can make suggestions immediately.
Interesting. Yeah, so I mean, I guess on that side, the familiarity there, like a lot of times I think, you know, I bring this up because this was something I experienced a few years ago. You know, there's little automation in the operation already, right? And then somebody maybe sees a cool video of a robot or something and they're like, oh, let's look at getting that, right? So how would you say, you know, you should take that first step of
into not just going after what looks cool, but getting what actually makes sense right now. - It's an interesting balance to walk, right? Because if you're gonna spend the amount of dollars that you're gonna spend and put a little career political equity behind those type of CapEx expenses,
I think you want a fine balance of both. And that's where having a good system integrator, a good OEM behind you is important. A good partner to the customer is going to make a recommendation that is going to be the right long-term solution for the customer. You know, at Thieve, we don't want to be...
the company that sells you something for the sake of selling it to you. We want to be a trusted partner to our customers. And a part of that is recommending our own technology, other technologies, and leveraging the best the marketplace has to offer. So if I was talking to a warehouse manager or an operations person at a customer who has never seen a piece of automation, I would suggest for them to reach out
to someone who knows what they're doing, whether it's a consultant or an integrator or an OEM, and let them guide you through the process. Yeah, absolutely. I think that's the smart thing to do because we talk about, you know, we're here at MHI, right? We know about ProMed and Modex. You walk in there, I think you're just like,
It is. It is overwhelming. And there's a lot of shiny objects to potentially go after. But bringing that expert in definitely can help you to understand and make the right decision. It might not be like the...
the sexiest solution at first that you're gonna go after, but at least you're doing something that's gonna make sense for you and that you can build on from there. - Right, and there's so many things that you have to consider up front. How much money do you have to spend? How much is labor a problem for you? How much automation can you actually put into place?
again, the availability of your labor, the consistency of your labor. Some systems are much easier to use and maintain than others, right? Do you have a robust maintenance staff? Do you need support from that level? So, you know, when you're buying a piece of equipment, it's not just the capex expense. You have to look at the 10- to 12-year...
or hopefully longer lifespan of that equipment, what is that total cost of ownership? And companies like Afiv can provide that information to you so you are armed and can make the right decision for your business. Interesting, yeah. Yeah, and I think that's really important too, what you just said there, the total cost of ownership. I mean, I think that's super important to understand and see not only what is that price tag, right? I got to sign that check, right? But how much is that going to cost me?
whether it's from maintenance, but also, you know, how much is it going to save me too on other processes, other things that may be connected but not necessarily like directly impacted, right? There's a lot of
external things that are surrounding that, right? To be able to have some type of savings or benefit additionally to those systems. So, you know, I'm curious too, I mean, we're here, MHI, we're talking about CSS as well, the industry group. So how does, you know, the industry group and the membership companies, I mean,
how do they work together to make sure that customers and users at the end of the day are approaching these automation projects in the right way, right? Because I think
If one customer doesn't get it right and has a bad experience, then it certainly looks bad for the company that was working on it. But also for automation in general, it kind of taints it a little bit too, I think. Because that person then goes and tells another operation like,
oh, automation was the wrong way to go, right? Something like that. So how do you guys kind of coordinate together and collaborate to make sure that these end users are getting these good experiences with automation? Yeah, I mean, at the end of the day, it's a fine balance. You never stop learning from the people you compete with. You never stop learning from the people you partner with. And a lot of the times, there'll be projects that you compete with people while you're partnering with them on another project, right? So I think that
What CSS has done and continues to do is put thought leaders in the same room. It puts us in a room where we can have collaborative conversations. We can discuss issues that we've seen and brainstorm ideas on how to fix those issues, both for our customers and for our own internal challenges. So for me, CSS has been...
a great way to network to give me access and clarity into new technologies that others are working on so we can then leverage those technologies for our customers.
At the end of the day, we want what's best for the end user and for the customer because we don't want to sell these people one system. We don't want to be one and dones. We want to have a long-standing relationship and partnership with our customers, and our vendors are a big piece of that. Our partners within CSS, some of the people that we buy equipment from, are a big part of that. And then also...
Innovation is a huge part of it, right? You see, you get challenged.
by others. If you sit at the top of the mountain and you think you have the best product, you're probably wrong. So having exposure and conversations with other really smart people in these types of groups like CSS is super important to drive innovation. - Yeah, absolutely. And I think that's such a great thing to hear, right? That you mentioned there, you know, these are competitors, right? But you're still coming together and being able to learn from each other, right? And move the industry together.
as a whole, which I think is really important for everybody involved. So we talk about these different levels of automation, making the right selection and right sizing that automation. Can you share some examples of some projects you've seen where this has been done properly and maybe some of the reasons why that was and what that looked like?
Been in the industry for 15 or 20 years and seen a lot of really successful projects and kind of seen the shift we talked about earlier from the larger, we're going to oversize the system by this much because these are our projections for...
the next 10 years but what's interesting is during covid you know there was a ton of issues with the supply chain there were a ton of issues with just uncertainty in general right i think some of the most proud projects i've been a part of were those difficult ones the ones where we went in and things were maybe a little different than what we were used to seeing but it was now time to
to take a new and innovative approach all the way from the RFP and procurement process all the way through the project execution. So specifically, without naming any customer names, there's some big parcel movers that simply had to change their thought process. There was a way that in being a part of those conversations with our customers and driving
them while they also drove us to be better those collaborative type conversations with the customer base was invaluable to ensuring that we could continue to deliver upon their expectations and Give them something a little different than what the industry is used to seeing that fee We say we want to be the kinder gentler version of the industry, right? And there's been that shift
towards a very robust, what I would call mechanical industry to maybe something a little smarter, you know, machine learning, AI, some of those types of things. So being a part of that development process is really the thing that I've been most proud of over the last five to ten years. Nice, yeah, yeah. And I think it's great to see that shift a little bit and hear about how some of that has changed. And I think, you
It sounds like at the end of the day, everybody kind of wins from that in a sense, right? The customer and users doing it and the companies that are supporting and bringing these solutions to the table as well are winning from that too as well. I think that's definitely great to hear. So now, if people are listening to this and they're wondering...
you know well we don't have automation yet and and i think you know to be clear there's certainly tons of operations right yeah there's still no automation right right some operations too that are out there still using paper to pick on as well call you out but um yeah i mean you know there's still a lot of opportunity there right for for this market penetration and for automation to get adopted and penetrate a little further down so for people that are
you know just looking to start on this this journey of automation and say journey and i think a lot of people say journey in the industry because you know it truly is like you know we're starting out here and then we're increasing the levels of automation over time as we get more comfortable with it because i think i'm curious your thoughts on this too before we get to this question i mean
there's a balance there a little bit I think between not only just what the operation needs but the comfort level of the operation to bring in automation. So tell us a little bit about that balance there like you know even though you say that oh this operation yeah they could totally use like a full-on
pallet shuttle system or something very intensive at this point, but they haven't done any automation yet. So they need to get that comfort level up. So tell us a little bit about that balance and how do you strategically go about that?
Yeah, I mean, you can't ask somebody to go play in the NFL if they never played high school football, right? Yeah. So, you know, I think exposing them to the automation, either through site visits, taking them to similar types of companies that faced similar challenges to them previously, and really leveraging...
things you've already done existing a customer base you have as long as they had a good customer experience they want to tell everybody about it right right so the easiest way to make a potential customer comfortable someone who's starting to look into automation is expose them to it yeah it's just like anything else in life in general the more exposure you have to it the more comfort
you get to it. So, you know, again, being able to come in and not tear down what they're doing and have been doing successfully for many years probably. Yeah. But pointing out areas of improvement, areas where you can get a quick win for them from an automation perspective, something that's going to make them look good to their bosses. Yeah. Is a really great place to start. Yeah.
And sometimes that means taking a project or doing something that is a little bit lower value, right? Maybe it's not the...
the answer to their problems but you start to expose their issues and they see wow this is now so much easier because we're doing it this way versus the way we were doing it our customers are so much happier because our accuracy is improved you know we aren't having to reprocess this look at how much more efficient we've become in this one section now we can roll that out and duplicate it across the rest of their building and their operation and
Help them lessen the burden of the upfront massive capex. Show them the value all while getting them comfortable and exposed to automation in general. Yeah, yeah. And I think that's a great way to approach it. And I love how you said, you know, kind of get them some kind of
results, some kind of like, you know, little win or something. It's like, oh, okay, this is effective right now. Like, what if I put a little bit more into it, right? And, you know, you kind of get that comfort level up and understanding there. So it's very interesting there. And so, you know, as we wrap this conversation up here, I'm curious, we leave people with, you know, what would be like your one piece of advice for people that are looking to just get started on automation?
I think the one piece of advice, if I only had the opportunity to tell you one thing, it's get exposed to it. Come to ProMat. Reach out to integrators. Come to the MHI website. Look at the partners. See, you know, understand that there are people here that want to help. This industry is a...
is an interesting one to me. It's one that's near and dear to my heart. It's something you don't really know exists until you're a part of it. The work we're doing is impactful, and it matters a lot to the success of an economy. If you can't get a package somewhere, you can't correctly sort things, nothing works. So I would say get exposed.
come come to ProMat and engage engage somebody engage an expert that that can help you and you know someone who can walk you through the process I think is is the absolute best place to start because we can save you a lot of heartache we can save you a lot of pain I'm sure because we've been through it we've we've experienced it for you yeah so let us use our experience to your advantage
All right. Awesome. And I think that's great advice and definitely rely on those experts to come in and pick their brains. And don't be afraid to ask, I think, is a big part of that, too, as well. So, Scott, I really appreciate you joining me here today for this conversation. And if people want to learn more about CSS or Feeb or get connected to Scott, we will definitely put all that information in the show notes for you. So, Scott, thank you once again for your time today.
You've been listening to the New Warehouse Podcast with Kevin Lawton. Subscribe and check us out online at thenewwarehouse.com. Enjoyed this episode? Make sure you are subscribed to the podcast and for more content from The New Warehouse, find us on LinkedIn and YouTube. Links to subscribe can be found in the show notes and for everything The New Warehouse, head to thenewwarehouse.com.