ReThink Productivity Podcast

A Journey into Automation, Robotics, and E-commerce

October 21, 2023 Season 1 Episode 137
ReThink Productivity Podcast
A Journey into Automation, Robotics, and E-commerce
Show Notes Transcript Chapter Markers

Prepare to be inspired. Today, we're chatting with Tim Wheeler, the UK Sales Director for Strongpoint. You won't want to miss this episode as we tackle intriguing subjects like automation, robotics, e-fulfilment, and the ongoing labour shortages. Tim shares his insights on these compelling subjects, giving us a glimpse into the future of retail, and trust us, it looks fascinating. 

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Speaker 1:

Welcome to the Productivity Podcast. This is the first in a mini series with our friends at Strongpoint, and on both episodes, I'm delighted to say he's an old friend of mine, tim Wheeler. How are you doing, tim?

Speaker 2:

I'm very well. Thanks, simon, great to talk to you again.

Speaker 1:

And so you are now the sales director for the UK for Strongpoint Correct.

Speaker 2:

Yes, I am.

Speaker 1:

And I think, as we touched on on a previous episode, you'd been on for another organisation. It's not a UK accent is it?

Speaker 2:

It is not. I am originally Australian, so let's not talk about rugby today. But yeah look, I spent the early part of my career in Australia in automation and technology. I moved over to Europe it's literally 19 and three-quarter years ago, so coming up to my 20th UK birthday, so the accent hasn't really come across yet, as you can tell, but I have been in Europe and looking at global supply chains and technology for many years now.

Speaker 1:

Excellent. So it kind of feels like you might have found your way home with Strongpoint, because you're going to tell us a bit about what they do in a second, but today we're going to talk about automation, robotics, e-fulfillment and the kind of potential issues that they've got around labour shortages there. So, yeah, tell us a bit more about Strongpoint.

Speaker 2:

Yeah, I think you're right, Sometimes the best plans are the ones that you didn't actually plan. And I think, having been involved in the supply chain, in store operations, in labour management, as you know automation technology it is you know it's a great pleasure to be in a company that brings all of that together for a very important purpose. And you know Strongpoint. One of the areas that we look at is e-commerce fulfilment. So we don't do websites and marketing and collect the orders, but once an order exists that a retailer wants to get to their customer, then we can take, you know, the whole rest of that fulfilment chain or, because our products are platformed and modularised, we can do parts of that chain along the way, depending on what a customer needs. So you know kind of a name that actually I hadn't heard of when I joined almost two years ago, but very big in the Nordic region in particular, have been successful for many years and they've been growing internationally of late, because the success that they've delivered in the Nordics actually applies very well around the world and it was a pleasure to join, to bring their story to the UK and really that story is you don't have to be unprofitable in e-commerce and that really is. The big issue is, a lot of retailers have seen the e-commerce piece, the online piece, as being something that clearly you have to do and you have to grow, but you know it's not going to be profitable. Now we can confirm that it can be profitable as well as very attractive to the customers, and it's great to bring that message and those solutions to the UK market.

Speaker 1:

Excellent. So if we focus on kind of the automation part from e-fulfillment and maybe give your definition of what that means for people that might not be familiar, where does strong point in automation start to fit in?

Speaker 2:

Well, it really can fit in anywhere on the network and I say network because e-commerce fulfillment is not a simple thing. There are different elements. There are upstream of the store elements. So many companies fulfill from a warehouse, probably from an existing fulfillment structure, and they'll add their online orders to that upstream of the store or part of the network. Many companies fulfill from stores, so they'll do picking in stores and ship from the store to the customer, or the customer will come and pick it up in a store. And then there are many sort of in between elements, like dark stores, micro fulfillment centers. You can think of them as either many warehouses that are in urban centers or you can think of them as stores that are repurposed for other purposes. And now there are hybrids as well, where we're seeing companies take a store and hive off some of what was customer space and say we'll have a partial dark store within a store for e-commerce, for online fulfillment. So for any given company, the fulfillment of e-commerce can exist, as I say, upstream of the store. It can be various flavors of stores and store like real estate being used for that fulfillment. And then, of course, you have the last mile where, if you're lucky, the customer will come into your store and pick up their order. A lot of the times you have to put in a delivery van and get it to people's houses. And again, there are hybrid models coming where, amazon style, you can have lockers either associated with stores, in the back of a car park, let's say, or maybe out in the world at convenient locations so someone can pick up some product on the way home or on the way from the school run, or something like this. So e-commerce fulfillment is genuinely it's a network these days and it can be quite a complex network and what we try to do is to make that simple so that you have the right technology in the right part of that network, so you have that efficiency, no matter what the structure of your e-commerce fulfillment chain. So to the question of where does automation fit? It can fit anywhere, but I think in particular, yes, the warehouse side of things. So upstream, where you have online commerce, that's ripe for automation, gaining efficiencies and possibilities there and in the store itself and in, as I say, the store like entities, dark stores, micro fulfillment centers then they're also ripe for automation and it's probably worthwhile. We're talking about automation a little bit, defining it because a lot of people think automation, think about where I started my career and these big structural, big metal boxes with robots flying around, very fixed, very expensive, traditional automation and that's what automation was 20, 30 years ago. But now actually there's a much broader span. First of all, those types of solutions have become much smaller, much more flexible, much cheaper actually to implement. So those structural automation solutions still exist and are still an important part of things. But actually there's non structural automation that's becoming important now. You know, robots is obviously the buzzword of the moment, but there are many types of specialized and increasingly general robots that are coming in. There's certainly automation, but there's certainly not the big fixed, structural type things that people used to think of as automation. And then actually some people think of technologically enabling people as a part of that automation spectrum. So when we equip a technology onto an existing part of the labor force and make them more effective, more efficient, make their job easier, in a way, that's automation as well. So it's quite the spectrum when people talk about automation and the trick really is knowing where on that spectrum you should follow, which mixture from that spectrum you should be looking at.

Speaker 1:

Interesting. Yeah, it's a good summary and interesting in terms of the automation. Your mind jumps to the, I suppose, the futuristic end that's been portrayed of robots and everybody being kind of made redundant, so that whole terminator world, if you like, and maybe not to that extreme, but let's hope not. Yeah, yeah, but in that context, in that kind of vibe. So if we think about e-commerce, we know that there's certainly lots of labor challenges, cost of people, then cost to pick that item, cost to deliver that item, and that's kind of spectrum of automation that you've talked about. Where does it start to address some of those current challenges?

Speaker 2:

Well, there's a couple of different challenges that drive the need for automation. The first is actually labor, but it's not, as you say, the old school can we get rid of labor type question. It's actually the labor shortage problem, and over the last actually half a decade really, this isn't a new issue. It's not a post pandemic issue. Labor shortages have been a factor around Europe for a long time. And what do you do if you can't actually get the labor? And that's gonna become increasingly a problem? We simply can't get the people. So at the moment you're seeing labor shortages in a big battle amongst companies to attract and keep Even the unskilled labor force. You just need those people to be doing those tasks. But that battle is gonna become increasingly difficult, to the point where if a company wants to grow, they can't rely on labor force to facilitate that growth, or if they wanna stay where they are, they can't rely on the labor force that they used to be able to rely on. So just the labor shortage is driving. And that's not even to mention cost of labor, which is an effect of that which obviously in an inflationary environment is a problem, and that's a more problematic piece of the inflation puzzle. So labor's an issue for sure. Actually, space can be an important driver. As I mentioned earlier, fulfillment's a network, and if you want your fulfillment network to get closer and closer to the customer, we want to start using store space as a part of our e-commerce fulfillment. You can't put a massive warehouse in a dense city, or if you did, it would cost an awful lot of money. So if there's a solution that allows you to make increasing utilization of your space, then that's something that becomes very important as well. And then, of course, you have the traditional measure just looking at what will my business be over the next three years, five years, whatever the planning horizon is, and if I don't automate, what is the cost profile of that plan? And if I do automate, what is the cost profile of that plan? And, of course, there are usually considerable savings in the cost profile of an automated, let's say, future as opposed to an unautomated future. And that's true whether your business is very mature and growing slowly, or if you're one of these exciting E-com startups that's planning to go through the roof. The problem is it's the same in its nature, different in its quantity, let's say.

Speaker 1:

And do people have different entry points? So do some people do it step by step? Do some people go full automation? How does their cycle work?

Speaker 2:

Very different entry points and it's why I like to think of automation as a spectrum, and it's a spectrum in two ways. It's a spectrum of you know where do you join the automation spectrum, usually at the more simple end of things technology enabling your staff first, and then maybe some smaller parts of the automation spectrum before you reach a scale where you need to go big. But it's also a spectrum in time and the spectrum on your physical network. So you may have in your network a warehouse and you may have some dark stores and some fulfillment from stores. So automation isn't one silver bullet. Actually, it's a number of different solutions depending on where you are on the network and where you are on your journey as a company. So we, what we see is what companies need is a partner who, instead of existing at only one point on that spectrum and saying here's what automation is, here's what you need, they're better to have a partner who sits on all points of that spectrum and can say right now, in this part of your network, here's the automated solution that you need. Right now, in another part of your network, there's a different part of the automation spectrum that you need and, by the way, let's look forward to three years time and make sure that as your business changes in time, your automation solutions can change, whether that's growing or moving up the spectrum from semi-automated to fully automated. But the automation solution needs to change with the company and I think that's the big point for me. As I say, automation many, many years ago was a very fixed thing where customers had this, in a way, a terrible dilemma. They'd look at one of these big structural pieces of automation and they'd think it's going to deliver a return on investment. I can see that. But what if my business changes? Is this thing going to end up being a white elephant with all her stories where that's exactly what happened? It's okay to design automation at a point in time, but what if the business changes? And what's good for me, having grown with the automation industry, is looking at how flexibility, growth and sometimes the opposite of growth sometimes you want to pare down a piece of automation. It's great for me to see how that's all built in to the modern automation solution. So, as an example, you know strong point, a partner with AutoStore, which is a little bit akin to those structural solutions, but it's much easier to grow it with volume, for example, than the old style more fixed automation solutions are. And obviously, when you look at the non structural things, like you know, we do mobile robots of various types humanoid, also, little ones that pick up trolleys and drive them around warehouses and stores these robots are inherently flexible because if you start with four, then it's very easy to put in a fifth, or if you have 20, it's very easy to put in a 21st. So so flexibility is built in and that's, I think, the most important change that's happened in the automation industry is understanding that this, this is not a point in time solution. You start at a point in time, but you need to be flexible with the customer and they might have a plan for what happens, but they can't be certain that in three years time they'll be exactly on that plan. They're going to be plus or minus, maybe a long way, and we need to be flexible so that when that happens we're still delivering the best cost profile and the most effective distribution that we can.

Speaker 1:

Yeah, that makes sense and, like any business, clearly there's diversification, there's change. We wouldn't have predicted the pandemic. So to have that flexibility and be able to move around with it seems like the ideal kind of framework and lots of if we think of grocery, maybe certainly fashion as well lots of people again going back through new concept stores, future stores, lots of talk again around kind of experiential service being a breakthrough for people. How does your kind of automation spectrum help support that?

Speaker 2:

Well, one feature of automation is that it's often very space efficient. So the auto store solution that I mentioned is an extremely space efficient way to handle products and orders. And if you think about, you know, the experiential store and the direction of stores. It's exactly as you mentioned away from you know, old school. Put the product there. It's like a pretty warehouse in a way, a store. Put the product there. People will come, they'll look at it and they'll pick it for you and they'll walk it out the door for you. Now progressing along that experiential spectrum means the story is more about having the right things for people to see. Yes, they might want to sample parts of your product range, whether it be, you know, try on the dress, or try the new food product or whatever it might be. There's an experiential part of things, but that's probably not best facilitated by just stacking product in front of them. So more and more and for a higher and higher proportion of the company's product range, they're thinking how can we make this experiential rather than just stacking inventory? And the ultimate endpoint to that trend would be that the inventory is actually stacked somewhere, but not necessarily for the consumer's viewing In an auto store might be a beautiful example where you take an existing store, if you can store the product much more efficiently in a quarter of that store's real estate and know that when the consumer's chosen what they want, you can easily get exactly what they want their exact order out of that to them. But before they do that they're browsing some other experiential area rather than just the stacked inventory. And that's a direction that even grocery supermarkets at this moment are still very much aisles full of inventory. But they will move in time away from that and knowing that you can store product very densely and fulfill very quickly and very easily, I think that's the way that stores will head and the experience part will be a combination of computerized experience. Somehow whether that's looking at the person's own device, maybe there's virtual reality starts to come in for how you actually experience product and make your choices. But knowing that automation can efficiently store product and efficiently get someone's order to them once they know what they want, that's the direction stores are going to move in.

Speaker 1:

Interesting, and I assume there's also that piece around freeing up colleagues to do the value-adding work, the experiential work, where all the other bits around them are automated or flowing through robots and alike.

Speaker 2:

That is exactly right and actually robots, automation will help with that part as well. But I think, looking at the limited labor and thinking what do we want this limited labor doing? What's the highest value add for us? Then you're right. Often stacking shelves and picking product is. If that can be done more efficiently, then it can free resources up for those customer interactions and stores for a long time. They want everyone in the store to be available for customers if there are questions or I'm looking for this product or tell me about this thing, and having more people, more available for that because some of the more menial tasks are done in another way it can only be a good thing.

Speaker 1:

Yeah, and is it one of these industries? It strikes me maybe is that the technology is moving at a really rapid pace.

Speaker 2:

It really is and I think, maybe even faster than most people realize. And I'll give an example. We Strongpoint, has an investment in a humanoid robot company. So we see one of our core responsibilities to really be on top of all the technologies and bring the right technology with the right maturity level at the right time to the retail market and robots. At the moment people think of the AMRs certainly little robots that pick up a trolley and move it around. They've been around for a little while. They're getting much better. What I find interesting is warehouses have had these kind of technologies, but not so much stores. There exist AMRs. Now we have a partner, cm Robotics, who are really at the forefront here. They can do what these AMRs do in a warehouse, but actually they can learn to navigate amongst people and if you're going to operate as a robot in a store, one parameter is you have to navigate amongst people safely and it's quite striking that surprising to many people that you can have one of these AMRs pick up a trolley, take it around a busy store with people walking around doing their shopping and be very effective at what previously was a. No, we'll do it in a warehouse where it's a very controlled environment where you don't have consumers, you don't have to worry about that kind of stuff. So the technology is advancing there to bring technologies from warehouses into stores, where otherwise that was a difficult challenge. But I mentioned the humanoids specifically Because that's the one that I think we all need to watch very closely, and our partner here, company called 1x, is very special and very much more advanced. I think that people realize they do a humanoid and instead of coming at it from the point of view of industrial automation you know, robot behind a caged wall, where people aren't there, does it's thing. You know whether or not there's a person in between it and the bolt that it needs to put in the car. It's going to do the job. No, no, the future of robotics is safe amongst people, and so we found a company that builds a humanoid and it's designed to be light enough that it's not going to cause damage. Weak enough I know this sounds paradoxical but weak enough that it's safe amongst people. You don't want the extremely powerful robot that decides it's going to clasp its hand and the power is so great that if it's accidentally, you know, around a human, the human gets, gets crushed. Actually, you want robots that are deliberately weak and light in order that they can be safe amongst humans, consumers and, as I say, we were very excited to find a company that this is exactly what they do. And so the physical aspects of the robots are getting, you know, just better and better, but safer and safer, which is of paramount importance at the same time as the software and the AI behind it is getting better and better and more effective and more effective. So I think, I think humanoids are a direction that really should be watched, because they're going to come in sooner and faster than I think anyone realizes.

Speaker 1:

And I suppose I didn't really thought about the fact that once you put them in a custom face environment, there's all those other considerations as well, and for those that don't know what an AMR is, just want to give people an explanation.

Speaker 2:

Oh, autonomous mobile robot. So it's a robot that can move around by itself. They often look like you know most people have watched Star Wars there's a little Star Wars robot that runs around on the on the floor in the first Star Wars episode I'm showing my age here, you know a little tablet on the floor that can pick things up and carry it around, and where they're primarily used, as in warehouses, they can pick up pallets and move them around, as I say, in stores. Now they can pick up trolleys, order trolleys, which is really important because if you're doing store based fulfillment, then you need people pushing trolleys around picking orders for customers in order to move them to a click and collect desk or ship them to someone's house. So those trolley movements are really important and if you can get a robot that can actually navigate a trolley around a store, that's really a big efficiency because your pickers no longer have to do that beginning and end, pick path travel or the travel before they get actually to the picking shelves. So really big efficiencies, but, as I say, a really clever technology, because it's not just enough to be able to pick a trolley up and move it from point A to point B. You need to be able to see people who are not. You know they're, they're doing the shopping. They're not there worrying about what robots are doing. So these, these robots are becoming extremely clever and extremely effective in environments with normal people doing the shopping.

Speaker 1:

Excellent, and is there any specific user case? That's kind of fine tuned for supermarkets, grocery retail.

Speaker 2:

Yeah, I think what's special about grocery retail is temperature. So you know, if I order something online, then you know I'll order some ambient products, but I'll probably order some milk and some ice cream as well, and that is an additional challenge and luckily that's a strong point that we have addressed at times with our automation partners as well. So you know, being being specialized in retail and in particular, looking to the grocery market, we know exactly what the needs are and we can co innovate with our automation partners and say you know, we need to move into these different environments. Temperature is a big one and I mentioned auto store once again because actually multi temperature is particularly important one but if you can get frozen and ambient and chilled all working together, you can actually gain efficiencies that are good for the environment as well. So you know, for example, if you have a frozen piece of automation and surround that by a chilled piece of automation, then you know the cold that bleeds out of the frozen, bleeds into the chilled and actually helps to maintain the temperature of the chilled area. And this saves power, and obviously power bills have been going up as well, as well as space. So it's great that these technologies are now really understanding the challenges of the store environment, of the warehouse environment, the temperature requirements, and coming up with innovative solutions to address them.

Speaker 1:

Amazing. On that note, we will pause there and we will catch up very soon on episode two. Thanks, tim. Thank you, I can forward to it. Thanks, simon.

Automation and Labor Shortages in E-Commerce
The Spectrum of Automation and Flexibility
Future of Retail and Robotics
Efficiencies of Multi-Temperature Automation

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