Alert Innovation, a market leader in e-grocery fulfillment automation, has signed a definitive agreement to be acquired by Walmart. Alert Innovation has been working with Walmart to customize technology for Walmart’s market fulfillment centers (MFCs) since 2016 and began piloting the Alphabot System in Walmart’s first MFC in Salem, New Hampshire in 2019.

“I am proud that Alert Innovation is one of the most innovative and capable automation companies in operation today. Our mission to improve people’s lives through innovation will now be dedicated to Walmart customers and associates which is an inspiring undertaking,” said John Lert, Alert Innovation Founder and Executive Chairman.

“We will continue leveraging our development, manufacturing and deployment expertise to enable Walmart to build and scale MFC technology in its stores. With Walmart, we have the opportunity to positively impact millions of lives through the Alphabot System,” said Fritz Morgan, Alert Innovation CEO.

David Guggina, Senior Vice President of Innovation and Automation, Walmart U.S., said, “We are committed to exceeding customer expectations and serving them in new ways, whether it’s in a store, curbside, or at their home. Bringing the best of Alert’s technology and capabilities in-house will enable us to reach more customers quicker by deploying MFCs with greater speed, providing both an unmatched shopping experience and a competitive advantage in omnichannel fulfillment.”

The Alphabot Aims To Transform How People Shop For Groceries

Last year, Walmart announced it would add automated MFCs to “dozens” of stores, incorporating technology from providers like Dematic, Fabric and Alert. It said at the time that it would test MFC solutions inside stores as well as in buildings adjacent to them.

Walmart is also in the process of building “next-generation” fulfillment centers with enhanced automation capabilities. The first of these four locations opened late last month in Joliet, Illinois.

Pricey automated fulfillment center technology has been a tough sell for all but a select group of chain retailers looking to more efficiently route the high order volumes they see. But the prospects are improving as the technology evolves, experts say. In addition to using Alert’s technology to meet its own fulfillment goals, Walmart likely sees Alert as an opportunity to sell MFCs to other retailers, adding to the growing list of tools like home delivery and electronic scanners that it’s offering to other companies.

Alert Innovation will continue to operate under the Alert Innovation brand based in the Boston area.

About Alert Innovation Inc.

Alert Innovation® is a thought leader in grocery automation, driving innovation that improves lives by transforming how retailers operate and people shop. Alert Innovation is an industry leader in robotic e-grocery fulfillment. The Alphabot® system, designed by the Alert Innovation team is a unique automated fulfillment solution that utilizes patented omnidirectional robots in a temperature-controlled system for fresh, efficient, and high-quality grocery fulfillment. Alert Innovation also designed the Novastore™, a store concept utilizing the Alphabot system, delivering a dynamic and efficient shopping experience.

Expanding Walmart’s Market Fulfillment Center Capabilities Through Automation

By David Guggina, Senior Vice President of Innovation and Automation, Walmart U.S.

We are committed to exceeding customers’ expectations and serving them in new ways, whether it’s in a store, curbside or at their homes. For years, we have been making big investments in technology and infrastructure across our supply chain to test and learn where we can make the biggest difference in fulfilling customer orders. In recent years, we’ve announced investments in technology for our regional distribution centers and next-generation fulfillment centers. Our market fulfillment centers, or MFCs, are a continuation of these efforts.

Today, we are announcing a step forward in the evolution of our supply chain and MFCs. I’m pleased to announce that Walmart has agreed to acquire Alert Innovation, a robotics automation company that develops material-handling technology for automating order fulfillment in retail supply chains. Walmart has been working with Alert to customize technology for our MFCs since 2016. Further investing in this technology will enable us to leverage our store footprint – 4,700 stores located within 10 miles of 90% of the U.S. population – for storage and fulfillment. For customers, this means orders can be fulfilled quickly and conveniently through pickup and delivery, giving them the items they want, when and where they want them. This system also enhances the experience for associates, who are integral to helping us perfect the system.

In late 2019, we began piloting our first MFC in Salem, New Hampshire, using bot technology from Alert specifically built for Walmart. The bot technology is notable within the industry, due to its fully autonomous bots that store, retrieve and dispense orders by moving horizontally, laterally and vertically across three temperature zones without any lifts or conveyors. This provides fewer space constraints inside the MFC and eliminates the need to pause the entire system for bot maintenance.

Bringing the best of Alert’s technology and capabilities in-house will enable us to reach customers quicker by deploying MFCs with greater speed, providing both an unmatched shopping experience and a competitive advantage in omnichannel fulfillment. This is part of our broader goal to introduce the next generation of fulfillment centers and continue to transform our already world-class supply chain.

We are looking forward to welcoming the Alert Innovation team to Walmart and scaling their capabilities. Bringing their expertise to Walmart will help us accelerate our MFC strategy and further strengthen our deep bench of technology and engineering talent. Looking ahead, we will continue to modernize our supply chain operations through investments in robotics and automation in our stores and distribution and fulfillment centers, creating exciting new experiences for customers that are unique to Walmart.

In October 2020, the DoD 5G-to-Next G Initiative (5GI), overseen by the Office of the Under Secretary of Defense for Research and Engineering, announced $600 million in awards for 5G experimentation across numerous U.S. military test sites. Focused on increasing and optimizing the performance of the warehouse, the Albany-based 5G-enhanced warehouse will feature a new ASRS high bandwidth and ultra-low latency solution in tandem with maximum wireless security to allow for the development and testing of autonomous robotic inventory management and augmented and virtual reality applications for improved workforce efficiency in warehouse operations.

The ASRS application system in Albany’s 5G-powered warehouse demonstrates the diversification of fulfillment in today’s landscape beyond e-commerce. KPMG is looking forward to working closely with the U.S. DoD to optimize operations for the United States Marine Corps (USMC).”

The new ASRS scalable automated storage and retrieval system condenses traditional warehouse aisles into a single, vertical structure. Inside the structure, robotic shuttles move in three-dimensional space to allow for additional storage capacity and throughput to support growth without the need for expansion. Accompanied by Federated Wireless’ private LTE network, The new ASRS enables unprecedented capabilities to command an ultra-fast and reliable robotic fleet, ensuring that real-time information is not only reported, but works in conjunction with artificial intelligence routing and correction.

The new Albany facility’s logistics operations include identification, recording, organization, storage, retrieval, and inventory control of material and supplies. Additionally, the ‘smart warehouse’ will create an opportunity for testing, refining, and validating emerging 5G-enabled technologies.

An operator of automated micro-fulfillment distribution centers in densely populated areas is cutting its workforce and shifting its business strategy as grocers and retailers shift their focus to automated fulfillment operations inside stores.

The Israel-based robotics startup, which has placed so-called micro-fulfillment centers in New York City and Dallas, is now focusing on selling its warehouse automation platform directly to retailers rather than building more specialized small MFC distribution sites. Chief Executive Avi “Jack” Jacoby said his customers wanted to use its technology in their existing real estate rather than in new facilities.

“They were telling us, ‘We understand that you’re trying to sell service, but what we want is to power your platform, or your system, with our teams on our premises,’” Mr. Jacoby said. “A large retailer, especially a grocery, they do not want anyone between them and the end customer.”

This pivot suggests that the market for micro-fulfillment centers, which expanded during the pandemic as online retail sales demand grew and companies looked for ways to deliver goods to customers faster, is ebbing as merchants hone their ability to use their stores to fill online orders.

Some companies leased vacant retail spaces for use as “dark stores” for fulfillment and delivery, while others opened smaller warehouses near population centers. The sites make heavy use of robotics to make the most efficient use of limited and expensive urban real estate.

The shift makes the niche logistics business the latest to see a business strategy that gained traction during the Covid-19 pandemic lose its momentum as consumers have resumed prepandemic buying habits. That has some retailers rethinking their heavy investments in online fulfillment.

Terry Esper, associate professor of logistics at the Ohio State University’s Fisher College of Business, said retailers have also fine-tuned strategies for fulfilling online orders that aren’t built around adding distribution centers. That includes delivering from stores and the “buy-online, pick-up-in-store” approach.

“There may be even some erosion of that micro-fulfillment model because a lot of consumers have now shown that they’re willing to pick things up from stores,” Dr. Esper said.

Rueben Scriven, senior analyst at research firm Interact Analysis, said more big-box retailers are shifting their attention to store fulfillment. Many retailers and grocers “at least think more of their fulfillment will come out from stores, and many will actually look to shift all of their fulfillment from stores,” Mr. Scriven said.

Mr. Scriven said he expects demand for micro-fulfillment centers to continue, “but perhaps not to the same extent that some people were thinking two to three years ago.”

Micro-fulfillment vendor companies focused on online grocery and retail fulfillment say their business is growing as they work with stores to build more efficient fulfillment operations.

Takeoff Technologies Inc., a micro-fulfillment system provider, expanded its business in the past year, said co-founder and Chief Executive Max Pedró. The company installs automation to help grocers, pharmacies and other stores fill online orders.

It has 23 sites running compared with 17 last year, with another 115 in the pipeline, Mr. Pedró said. Takeoff works with grocers including ShopRite, owned by Wakefern Food Corp., and Albertsons and Safeway, owned by Albertsons Cos.

Amazon has asked the town for permission to change the use of its Industrial Road building.

An Amazon warehouse in Milford, MA, that the company is planning to close will soon be used to store the Seattle-based company's robots.

Amazon has asked the Milford Planning Board to approve a new use for the warehouse at 8 Industrial Drive. Amazon revealed the Milford closure along with four other Massachusetts sites in August.

In a letter to the Planning Board, Amazon says it wants to use the Industrial Road building to support other warehouses that use robots to fulfill orders.

About 8,800 square feet will be used to store pallets packed with "fabric bin arrays," which hold items in active warehouses. Amazon's robotic picking machines grab items from pockets in the fabric arrays before the items get shipped to customers.

Another 20,000 square-feet of the warehouse would be used to store scores of robotic drive units. The machines, which run on lithium-ion batteries, are about 14 inches tall and up to 3 feet long.

The new use of the Industrial Road site will eliminate a significant amount of traffic going to and from the warehouse, Town Planner Larry Dunkin said. Van traffic around the warehouse has been an aggravation for the town and local residents for years. Amazon still operates a sortation center in Milford along National Street.

According to Amazon, up to 20 employees would work at the facility between 8 a.m. and 5 p.m. daily. The building would also see a steady flow of semitrailers, which would deliver robots and pallets for storage. The company calls semitrailers "line hauls."

"The outbound operation is based on fulfillment center demand signals and does not have a specific number of daily line hauls or an exact schedule. However, we do not expect outbound traffic to exceed inbound delivery traffic," Amazon said in a letter to the Planning Board.

The Planning Board will review Amazon's proposal at a meeting set for Oct. 4.

The new distribution center has enhanced technology to improve service levels to its partners. Advancements include a 210,000-square-foot freezer with a climate-controlled ice cream room, robotics and automation to improve accuracy when selecting, and improved batch pick to reduce emissions and energy demand.

KeHE Distributors continues to expand its network of facilities across the country, opening its latest and largest distribution center in Dallas on Oct. 5. A grand opening will take place that day, with a ribbon-cutting ceremony and site tours.

Spanning nearly 1 million square feet, the new distribution center was built with several high-tech features, including robotics and automated systems that improve selection accuracy. Sustainability was part of the design and construction, too, with an improved batch pick setup that reduces emissions and energy demand. Reflecting strong demand for chilled and frozen natural foods, the Dallas facility includes a 210,000-square-foot freezer, complete with a climate-controlled ice cream room.

A Certified B Corporation, Kehe, with over 6,800 employee-owners,calls itself the largest, pure-play distributor of natural/organic, specialty and fresh products to more than 30,000 natural food stores, chain and independent grocery stores, e-commerce retailers, and other specialty products retailers throughout North America.

“Dallas is the perfect location for this facility due to its prime location that will allow us to expand upon existing as well as new clients,” said Era Vaughn, VP of operations at KeHE. “Additionally, the size and technology improvement in this distribution center will allow us to provide an expanded assortment of items and improved level of service that our retailers expect and deserve.”

According to KeHE, the latest center will contribute to the economic growth of the thriving DFW area. “I am pleased to welcome KeHE to Dallas and District 8,” said Councilmember Tennell Akins. “This project creates over 500 new good-paying jobs for our community, and we look forward to partnering with KeHE as they grow their business in Dallas.”

The unveiling of the Texas facility comes just weeks after the re-opening of a recently-expanded KeHe distribution center in Aurora, Colo. Serving regional independent retailers, that facility added 124,000 square feet across all temperature zones. In late 2021, KeHE began operating a new half-million square foot warehouse in Goodyear, Ariz.

Naperville, Ill.-based KeHE is the largest pure-play distributor of natural and organic, specialty, and fresh products to more than 30,000 natural food stores, chain and independent grocery stores, e-commerce retailers, and other specialty product retailers throughout North America. A Certified B Corporation, the company has more than 6,800 employees.

About KeHE

KeHE Distributors, LLC (KeHE) is the largest, pure-play distributor of natural & organic, specialty, and fresh products to more than 30,000 natural food stores, chain and independent grocery stores, e-commerce retailers, and other specialty products retailers throughout North America. With over 6,800 employee-owners, KeHE, a Certified B Corporation, drives its mission of serving to make lives better and bringing the next level of goodness, crazy GOOD™, throughout all aspects of its operation.

Video Transcript

RACHELLE AKUFFO: Let's look at some alternative ways to actually invest in this space with Lauren Hein, Robo Global head of advisor relations, brought to you by Invesco QQQ. So great to have you on the show here. So for people who are wondering, perhaps, they want to invest in some of this new technology, talk about some of the holdings in this ETF and how investors can get in on this.

LAUREN HEIN: Yeah, so Robo Global, the company, built Robo, our robotics and automation ETF, almost a decade ago. So we're investing across the entire ecosystem of robotics and automation, so really looking at automation as a megatrend. About half the portfolio, actually about 60%, is in areas where we can apply these robotics technologies. And about 40% is the technology, the sensing and computing actuation, AI, and integration-- the technology underneath the robots.

So we believe that you should really own the whole ecosystem of automation because while automation is relentless, it's not perhaps moving sector by sector in lockstep. So sometimes you're catching really great growth, really great opportunities. Right now, logistics automation, you want to talk Amazon. Logistics automation is something we're also excited about. And you want to also own the companies in 3D printing that maybe are not so much seeing the fad like they were maybe five years ago, but are an integral part of the automation ecosystem.

SEANA SMITH: Lauren, there certainly are so many players in this space, even more companies jumping in, it seems, like on a daily basis when it comes to automation. How are you picking out the winner since it is such a broad spectrum?

LAUREN HEIN: Yeah, yeah, so we look at the 11 subsectors that we really think make up the automation ecosystem. And we look for market leaders in those sectors, for technology leaders in those sectors. So we want to really populate the entire spectrum with leaders. We want to talk about-- let's talk about warehouse automation. 20% of the warehouses in the United States are only using some amount of automation today.

So we look at a company that's going to be able to really penetrate that market and provide solutions there. We want to talk about logistics automation. We're going to talk about companies like-- Machine Vision is going to be a key part of that, so Cognex and Keyence from Japan and Samsara. Ultimately, we don't care where a company is located. We just care that they're leaders in some component of the automation megatrend.

DAVE BRIGGS: Pre-pandemic automation was viewed as really a threat to jobs not just here, but around the world. But how is the employment shortage in just about every field imaginable actually contributing to the growth of some of these companies?

LAUREN HEIN: Yeah, I think McKinsey said that there were-- 88% of the companies that they surveyed last year said that they're going to employ some sort of automation technology. The obvious places to think are going to be manufacturing and some sort of warehouse. I mean, gosh, Amazon's attrition rate last year was like 160%. So you've got to start thinking that robots can do some of these jobs.

Obviously, with wage inflation, automation is going to solve that problem to some extent, make the investment in robots, and then you've got some sort of cost control there, as opposed to the variability of labor. But there are-- robots are not going to replace people everywhere. Cobots is also a major industry, and cobots are going to work alongside people, just things that we can't do with just the machine.

RACHELLE AKUFFO: And Lauren, I want to ask you about supply chain challenges. Obviously, not just for things like the chips that go into this technology, but even the materials, some of these commodities that we see that are required that are needed for growth in some of these industries. What are you watching in that space? And how concerned are you that some of these supply chain issues still haven't been resolved yet?

LAUREN HEIN: So the supply chain issues are especially hairy for some of the companies in the manufacturing or capital goods side of the robo ETF companies like FANUC, Daifuku, Kardex even. Like, these companies are trying to meet the demand for robots and robotics, but they're just having issues getting not just semiconductors, but they're also having trouble getting component parts like sensors and other types of actuators.

It's just been an ongoing issue. They're not able to meet the demand for this-- for the orders that they have right now. So you're actually having sales growth continue to climb. But these companies in the robotics manufacturing space just not being able to meet their current orders.

So it's ongoing. You will see some reshoring, obviously, here in the US. We're really leaning into manufacturing our own chips and the semiconductor fabs that were estimating to build, I think, 10 over the next two years as part of the Chips Act that we passed this summer. So, yes, the supply chain is an ongoing concern. But it's going to take a few years to resolve.

Located in Joliet, Ill., and described as the "first-of-its-kind" for Walmart, the 1.1 million-square.-feet, high-tech facility is the first of four state-of-the-art fulfillment centers dedicated to e-commerce that Walmart plans to open during the next three years.

High-tech meets Walmart tradition as the retail giant takes delivering to their customers to the next level’. On Wednesday, Walmart officially opens its new, next-generation fulfillment center in Joliet. The first-of-its-kind facility spans nearly 1.1 million square feet and uses automation to pack and ship online orders more efficiently. Spanning nearly 1.1 M square feet the new high-tech facility will begin operations ahead of the holiday season, bringing next- or two-day shipping to customers across Illinois, Indiana and Wisconsin. The new state-of-the-art facility will fulfill Marketplace items shipped by Walmart Fulfillment Services (WFS), Walmart’s end-to-end fulfillment service for third-party eCommerce sellers. The southwest suburban facility has 300 million cubic feet of storage.

The next generation plan came as Walmart goes head-to-head with Amazon, meaning the idea to build fulfillment centers is right on time. Walmart warehouse workers used to walk 10 or miles a day to pick items off shelves and carry them back to a packaging area.

“As the first-of-its-kind for Walmart, our newly opened facility introduces an array of opportunities to our associates, including brand new tech-focused jobs. There’s never been a more exciting time to join Walmart Supply Chain,” said James Bright III, general manager, Fulfillment Center FC3040. “I look forward to seeing the positive impact this team of associates and the Joliet facility will have on not only the Northeast Illinois community and economy, but also for Walmart customers across the Midwest.”

The new system streamlines a formerly manual, 12-step fulfillment process into the following five steps:

• Unload: Sellers and suppliers send merchandise in cases to a fulfillment center. As the cases arrive, associates unload the trailers and place cases onto a conveyor belt where they’re routed to receiving.

• Receive: At receiving, an associate breaks the case apart and places the individual items into a tote. The tote is fed into a massive, automated storage system where a shuttle transports it to one of millions of designated locations. The storage system is designed to account for every square-inch, spanning from floor to ceiling in a custom-built structure designed to hold the inventory.

• Pick: When a customer places an online order, the system goes into action, retrieving their items and shuttling the needed totes to an associate at a picking station. According to Walmart, previously associates would have walked up to nine miles per day, picking items from multiple floors of shelving spread out over hundreds of thousands of square feet of space.

• Pack: Simultaneously, a custom box is created to fit the exact measurements of the order. In the pack area, Walmart estimates associates can assemble up to four orders at once and send packages to be shipped in less than 30 minutes after the customer clicks to order.

• Ship: The completed order is then automatically taped, labeled, and routed to its designated zone, where it’s then shipped to its final destination.

First-of-its-Kind Automation for Walmart

The new Joliet fulfillment center will be the first of four next-gen FCs, announced earlier this year, that will feature a new patent-pending process powered by the combination of people, robotics and machine learning. This process will set a new precedent in fulfillment speed by streamlining a manual twelve-step process to just five steps. Once completed, the four new state-of-the-art FCs for Walmart could provide 75 percent of the U.S. population with next- or two-day shipping.

“This new facility capitalizes on the way consumers are shopping today by ensuring products get to homes faster, all while providing good jobs to local families,” said State Rep. Larry Walsh Jr., “While this fulfillment center will have an impact across the Midwest, the impact felt locally will be greatest due to the commitment made to our local community and the jobs being created for workers here in our region.”

"This facility gives us the ability to reach the majority with two-day shipping, which speeds up your ability to get your items quickly, which is the ultimate the customer wants at all time," said Walmart Joliet Fulfillment Center General Manager James Bright. "Orders will come out of the automated storage and retrieval system where items are put into shipping boxes which are made to order, so there's less waste and customers aren't stuck with a big box for a small item.

"A lot of the manual labor has been reduced tremendously," Bright said. "I think it's a great opportunity."

“Customers continue to expect faster delivery times and we are excited to be able to meet those needs with these new high-tech facilities,” said Karisa Sprague, SVP Fulfillment Network Operations, Walmart U.S., “The addition of the Joliet next generation FC, paired with our 31 dedicated eCommerce fulfillment centers, will allow Walmart to fulfill online orders for Walmart.com and Walmart+ customers with greater shipping speed in the mid-west region. And, with the holidays around the corner, we’re excited to provide a more seamless experience for our customers.”

• Amazon's new pinch-grasping robot can handle and stow 1,000 items per hour, which is significantly faster than human workers

• The prototype uses cameras, algorithms and machine learning to mimic how human hands grasp items of varying sizes and shapes

• A video posted to the retail giant's science blog showed the machine moving 19 items of varying size and shape in one minute

• 'We’re able to identify a specific item in the scene and use machine learning to know how best to pick it up and to move it quickly and without damage'

In 2019, Amazon founder Jeff Bezos predicted that within a decade, robotic systems will be advanced enough to grasp items with the dexterity of a human hand. Three years later, Amazon looks to be making progress toward that goal.

A recent video published on the company’s science blog features a new “pinch-grasping” robot system that could one day do a lot of the work that humans in Amazon warehouses do today. Or, potentially, help workers do their jobs more easily.

The new 'pinch-grasping' robot system unveiled by Amazon shows the machine deftly grabbing and stowing a wide range of items - moving at a rate of 1,000 items per hour, which is far faster than a human worker could.

Although humans don't spend much time figuring out how to grasp a bottle from the back of the fridge that might fall and break open, teaching a robot to deal with cluttered spaces, locate a wide range of items and deftly move them is a challenge for the retail giant's robotics division.

In the video posted to Amazon's science blog, the robot prototype can be seen using its finger-like pinchers to move and stow 19 items - including small bags, a broom, a spice container and a small box - in 60 seconds.

'But we are starting to get some of the ability to reason and think about how to grasp. We’re starting to catch up. Where pinch-grasping is really interesting is taking something mechanically simple and making it highly functional.'

Amazon uses a combination of multiple cameras, motion algorithms and machine learning models to give the robots a three-dimensional understanding - so that they are able to correctly grasp different items without causing damage, dropping anything or bumping them into other items.

In preliminary tests, the pinch-grasping robot achieved a 10-fold reduction in damage on certain items, including books, without having to reduce its speed in comparison to robots that use suction cups.

'They not only showed they could grip a lot of objects, but they did it really fast — they got to 1,000 units per hour,' said Parness, who oversees the project.

The robot's ability to carefully and quickly move a wide variety of objects make it a suitable candidate for wider deployment in Amazon's fulfillment centers. The company has 110 active fulfillment centers in the U.S. and 185 globally.

Amazon founder Jeff Bezos in 2019 predicted that commercial robots able to grasp items as well as human hands would be available within ten years.

'What’s interesting about e-commerce, as opposed to manufacturing, is it’s much more dynamic,' Parness said. 'It’s a pen, and then it’s a teddy bear, and then it’s a light bulb, and then it’s a t-shirt, and then it’s a book.'

Warehouse automation isn't a new topic, as the company's own internal research earlier this year estimated that it could run out of workers to hire in the U.S. by 2024 if it did not make a series of major changes that included more automation.

In addition, the current push for unionization at two different fulfillment centers has led some labor activists to speculate that Amazon may speed up its automation efforts in response.

Ultimately, Amazon may need to develop a model that combines elements of the pinch-grasping technology and the suction - because the latter is more suited to flat items such as cards.

'As a person, you pick up a book differently than if you pick up a coin or a t-shirt,' Parness explained. 'We need robots to be intelligent about the items they’re manipulating. If I’m picking up a hammer to hammer a nail in, I want to grasp it in a certain way. But if I’m picking up a hammer to go put it in a box to ship it to you, I want to grasp it in a different way. That’s the future of item intelligence.'

'Not only are we able to build robust three-dimensional models of the scene, we’re able to identify a specific item in the scene and use machine learning to know how best to pick it up and to move it quickly and without damage,' Siddhartha Srinivasa, director of Amazon Robotics AI, said in a statement.

The topic of warehouse automation is more relevant than ever in the retail and e-commerce industries, especially for Amazon, which is the largest online retailer and the second-largest private sector employer in the US. Recode reported in June that research conducted inside Amazon predicted that the company could run out of workers to hire in the US by 2024 if it did not execute a series of sweeping changes, including increasing automation in its warehouses.

At the same time, the company is facing the prospect of US workers starting to unionize after the victory by the Amazon Labor Union in the historic Staten Island vote, and another upcoming union election in October in Upstate New York. Labor activists have long speculated that Amazon might ramp up automation efforts in response to unionization activity.

In a statement provided by an Amazon spokesman, the company’s director of Robotics AI, Siddhartha Srinivasa, said: “[W]e have an incredible opportunity to help advance the science of robotic manipulation in ways that meaningfully benefit our employees and our customers. Our investments in robotics and technology are helping make jobs in our facilities better, easier, and safer, as well as creating new career opportunities for our people.”

The robotic arm in question does not look as futuristic as you might imagine. The proof-of-concept machine uses an off-the-shelf metal pincher rather than some novel grasping device. But it can pick up a new item and deposit it on a metal chute every three seconds. At the rate it’s going in the video, Amazon says the robot could handle more than 1,000 items an hour, meaning it could pick and stow items at rates several times faster than a human worker could. From a box of crayons to a container of what looks like garlic powder to a whisk broom, each item is grasped and moved with no human direction. The robot utilizes multiple cameras to help it “see” the assortment of items in front of it, as well as machine learning to help it decide the best way to pick up a given item, and motion-planning algorithms to help the robot navigate the crowded scene without bumping or damaging any of the goods. Preliminary tests also found that the robot damages certain products at a much lower rate than other manipulation robots Amazon has tested.

The video and the robotic system in it were created late last year in a controlled lab test by Amazon technologists. This robot prototype can only move items weighing less than two pounds. In testing, the robot was asked to handle hundreds of different items in this weight group and successfully grasped and moved around 95 percent of them, according to Amazon spokesman Xavier Van Chau. On a larger scale, the two-pound weight restriction would still allow the robot to grasp a selection of items making up about half of Amazon’s total product assortment. But the company is working on grasping solutions that would be able to handle any and every type of item that could fit inside an Amazon box, perhaps by combining a pincher attachment with a popular suction method, and having the system trained to know which “hand” should be used for which item.

How long it will take for Amazon to create a single robot that can handle the vast majority of products is up for debate, but it’s a question of “when,” not “if.” And when the “when” becomes “now,” we’ll have an answer to one of the great unknowns of this era of automation: Will a new generation of warehouse robots that can grasp goods almost as well as human hands make work better or easier for the people doing these jobs? Or will the technological evolution eliminate the need for these workers and their jobs?

An Amazon spokesperson said the company is betting on the latter, based on the way it has utilized other types of robots in its warehouses up to now. In June, Amazon announced a prototype of a robotic system called Cardinal that lifts and sorts already-packaged orders and, the company claims, “reduces the risk of employee injuries by handling tasks that require lifting and turning of large or heavy packages or complicated packing in a confined space.” The company says it expects to introduce the system into an unspecified number of fulfillment centers in 2023. And last year, the company unveiled another robot arm that it calls Robin, which handles a similar task with lighter packages. Van Chau, the company spokesperson, declined to provide details on the deployment of either the Cardinal or Robin robots.

Amazon’s history in robotics dates back to when it bought a company called Kiva for $775 million. In the decade since, it has rolled out more than 500,000 roaming warehouse robots. During the same period, the company says it has hired more than a million workers and points to this fact to try to dispel the notion that warehouse advancements are leading to worker elimination.

“From the early days of the Kiva acquisition, our vision was never tied to a binary decision of people or technology,” the company said in a recent blog post. “Instead, it was about people and technology working safely and harmoniously together to deliver for our customers. That vision remains today.”

The Kiva robots did make some Amazon warehouse jobs easier. For those workers in picker or stower roles, robots now transport shelves to them at a stationary workstation, where they stand for 10 hours a day with padding beneath their feet. In Amazon’s pre-Kiva days, these workers would walk 10 to 20 miles a day, plucking merchandise from, or adding goods to, aisle after aisle of inventory shelves.

Kiva robots also brought downsides. Before the robots arrived, a picker might have had a goal to handle 100 items an hour; Amazon tripled those expectations when the robots, not the workers, did the traveling. And with the addition of robots, injury rates increased as workers were forced to move faster to keep up with higher quotas.

The tasks being completed by Amazon test robots like the “pinch-grasping” one in the new video potentially have more direct overlap with existing worker tasks. The robot, like an Amazon picker or stower, is retrieving a piece of merchandise from one location and moving it to another, as quickly as possible without damaging it. That said, while the robot prototype is picking items at a rate of more than 1,000 an hour — around triple the typical rate of human pickers in Amazon warehouses — it’s not an apples-to-apples comparison. Amazon pickers in warehouses with robots have to pull each item out of a cluttered shelving unit, and sometimes have to use a step stool to reach merchandise at the top. Similarly, Amazon stowers have to fit each piece of merchandise into an open space on the mobile shelving unit, versus the robot that is simply moving it from one open space to another. Van Chau, the Amazon spokesperson, said the prototype in the video was neither tested nor designed to pick items from shelves as workers do in the company’s current robotic warehouses.

Still, robotics experts are paying attention. Martin Ford, the author of multiple books about robotics including Rule of the Robots, said while it’s unclear how Amazon’s most recent robot prototype would perform in a high-volume warehouse, it still seems to show “remarkable progress.” With advancements like Amazon’s, as well as those of many well-funded startups building robotic systems to try to solve for challenge of grasping with the dexterity of humans, “it’s inevitable that the problem will be solved — perhaps sooner than many of us expect,” Ford told Recode.

“And once that happens,” Ford added, “there’s little doubt that Amazon warehouses, as well as many other environments, are going to become a lot less labor intensive.”

Amazon maintains that robots and people will continue to work together inside its warehouses. But robotics experts say that one day, the company may have a real option to depend on robots to do a lot of the work it currently depends on human employees to do.

It was clear to those attending labor management sessions during the CSCMP EDGE 2022 conference in Nashville, Tennessee, that offering cool technology is an essential element in attracting and retaining young workers. But gizmos and gadgets are not enough on their own, as was clear from a panel discussion September 20 that included human resources and staffing executives who work at the coal face of the current staffing shortage in warehousing and other logistics facilities. Flexibility is key.

“During COVID, we saw we had to get out of the traditional mindset,” said Nick Orefice, human resources manager for supply chain at Advance Auto Parts at the session entitled “How Flexible Labor is Changing Warehouse Operations and Solving Staffing Challenges." “The eight-hour day, 40-hour week model is no longer there. It’s gone.” Orefice related the company’s surprising experience after facing staffing shortfalls in its distribution facilities, and turning to a “gig” worker software application. “We thought it wouldn’t work, but within 20 minutes, we had filled all the slots. And people showed up!” he said. In fact, Orefice said, it turns out average rates of attendance and retention are actually higher with gig workers than for part-time and full-time workers.

Panelist Mike Bohnett, vice president of sales and partnerships at Instawork, which connects businesses with go-to hourly workers, noted that so-called gig work is the fastest growing segment in U.S. labor, and it’s far from being all about passenger or delivery drivers. A recent report by Instawork, “The State of the Flexible Workforce,” found that at least one in six adult Americans has already earned money from the “gig economy” via apps. Gig workers are typically in the 25-44 age range and are highly motivated by non-monetary factors, such as setting their own schedules, Bohnett said. They’re also more highly educated than hourly workers overall, which makes them super-valuable in today’s fast-moving warehouse environment.

“We’re familiar with the idea of a first, second and third shift,” said Bohnett. “Now we’re turning that model on its head by letting people choose their own schedule. Flexibility in the workforce is not going away. It’s where the trends are headed.”

“Post-COVID, people are aware they have options,” said Warren. “Life is more and more complex, and people want to explore what options they have.” In this new worldview, there’s no reason to restrict the earning power of a woman who wants to drop her kid off at school at a certain time and then go to work. Warren said Joshua Tree helps companies implement labor management tools that open up a whole new world of options. “So you still have to get this much work out the door to meet your customers’ needs — fine. But maybe instead of having 10 people working eight-hour shifts, you have 20 working four-hour shifts. Or you maybe have some workers outside the four walls. Or you pay high-performers for an eight-hour shift for stuff that’s done in six hours,” she said. “We’re getting away from the traditional mindset of this many people for this many hours.”

Flexibility is one thing; transparency and a culture of worker empowerment is another, said Orefice. Advance Auto Parts gets rated by its gig workers, in a comparable way that Uber drivers get scores from passengers. “So we have to be sure we’re building a good culture, because we’re getting graded, and a good grade helps us recruit,” he explained.

Warren agreed heartily. “I think performance and workflow and all those things are supposed to be a two-way conversation,” she said. “You want to encourage workers to come to a leader and say, ‘I have this obstacle that’s preventing me from doing my job well,’” she said. “You’re creating a culture of what it takes to be successful and getting ride of the ‘Us vs. Them’ mentality.”

Orefice said responding to what works best for workers can even influence operational decisions such as which day of the week to ship product out of a facility. “At the end of the day, I hate to say it, but we need everybody that comes in, and that makes us think outside the box,” he said. Companies such as Advance Auto Parts are flexing to make sure they’re welcoming to refugees, people with disabilities and “second-chance” workers with criminal records. Warren said it’s important to think creatively — for example, one of Joshua Tree’s clients in Chicago focuses on hiring landscapers to work in fulfillment centers during the holiday peak season, knowing that there’s not much landscaping work in December.

“Flexible work can be more than just a source of extra income or a way to fill holes in staffing,” concludes the Instawork report. “By offering another option for employment through the ups and downs of the economy, it can help to stabilize incomes and production levels. By helping workers to pick up new skills, it can create human capital. By making the matching process in the labor market more efficient, it can chip away at the most stubborn forms of unemployment.”

Symbotic’s end-to-end automation system, with robotic case pick capabilities, is designed to enable UNFI to transform its distribution centers to enhance capabilities and efficiency, improve order accuracy for its customers, increase storage capacity within its facilities, and facilitate planned future growth. The Symbotic System™ will be able to fulfill customer-specific orders, which is expected to create operating efficiencies at the customer store level while creating a safer environment for associates.

“We are excited to welcome UNFI as a customer and look forward to working with them to transform their distribution centers,” said Michael J. Loparco, Chief Executive Officer of Symbotic. “Additionally, we believe this agreement further validates the broad applicability of the Symbotic A.I.-powered robotics and software platform.”

About United Natural Foods

UNFI is North America’s premier grocery wholesaler delivering the widest variety of fresh, branded, and owned brand products to more than 30,000 locations throughout North America, including natural product superstores, independent retailers, conventional supermarket chains, ecommerce providers, and food service customers. UNFI also provides a broad range of value-added services and segmented marketing expertise, including proprietary technology, data, market insights, and shelf management to help customers and suppliers build their businesses and brands. As the largest full-service grocery partner in North America, UNFI is committed to building a food system that is better for all and is uniquely positioned to deliver great food, more choices, and fresh thinking to customers.

Ohio has recently proved an alluring target for biopharmas of all sizes, from gene therapy player Sarepta Therapeutics to biotech-CDMO hybrid Forge Biologics. Now, Big Pharma Amgen is getting in on the action, with plans to stand up its "most digitally advanced facility" just outside the state capital.

Amgen is dropping $365 million on an upcoming smart factory in New Albany, Ohio, where it will eventually employ 400. Set to feature the company’s “most advanced” assembly and final product packaging capabilities, the plant will tackle the last manufacturing steps for U.S.-bound injectables, according to a release from local development council The Columbus Region.

The build-out of the 270,000-square-foot plant is set to begin in the fall, Amgen said. The company’s investment will cover land and construction costs plus manufacturing equipment. Amgen, with an expected annual payroll of about $40 million, will be on the prowl for new technician, engineer, quality assurance and quality control hires, plus administrators and managers.

The company has already started recruiting certain full-time staffers, with plans to boost hiring efforts in 2022 as construction nears completion, Arleen Paulino, senior vice president of manufacturing at Amgen, said over email. The site is expected to come online in early 2024, she said.

The goal is to make the assembly and packaging site Amgen's "most digitally advanced facility," Paulino said. By leveraging the latest manufacturing technologies there, the company also hopes to get ahead of "anticipated growth in demand" for Amgen drugs, Esteban Santos, executive vice president of operations at Amgen, said in a statement.

The "smart facility," as Paulino put it, will rely on digital tech, including artificial intelligence and automation, across three areas: advanced industrial automation using robotics and equipment automation; digital quality for automated inspection, testing and real time release of manufactured batches; and data availability to monitor and manage process and operational performance.

The site will employ "highly automated" storage and retrieval systems, automated guided vehicles to ferry materials, and collaborative robots as just a few examples, Paulino said. The so-called "cobots" work alongside human employees, as opposed to industrial robots, which do work in place of those employees.

Amgen didn’t delve into specifics about the products it plans to package at the new plant, but the main focus will be parenteral drugs, Paulino said. The facility will assemble, label and package autoinjectors, syringes and vials for a plethora of Amgen meds, she said.

Amgen has also recently been recognized for its environmental, social and governance work—an increasingly valued metric of corporate social sustainability—and those efforts will be on full display at the New Albany plant. The company is building the facility to “exacting environmental standards” as part of its mission to achieve carbon neutrality by 2027.

It will also support Amgen’s role as a founding member of OneTen, a multi-industry coalition of major companies that aims to hire 1 million Black Americans into well-paying jobs over the next decade. OneTen specifically focuses on those without a four-year college degree, Amgen said.

Meanwhile, Amgen is linking up with The Ohio State University, which has pledged to co-develop an internship program, alongside “other experiential learning opportunities,” centered around the plant.

It’ll be in good company in the Columbus, Ohio, region, where a suite of biopharmas have set up shop over the past year. Rare disease specialist Sarepta is pumping more than $30 million into a so-called Gene Therapy Center of Excellence in Columbus, economic development agency JobsOhio reported last June. The company plans to hire 100 new employees to staff the 85,000-square-foot plant.

Meanwhile, self-styled gene therapy “development engine” Forge Biologics, which is headquartered in Columbus, recently raised $120 million to take its adeno-associated virus contract manufacturing services to the next level. Forge’s Columbus home base and factory, dubbed The Hearth, currently employs about 75. The company plans to increase its headcount there by roughly 150 over the next 18 months, Forge CEO Tim Miller, Ph.D., told Fierce Pharma in April.

In the U.S. alone, some 1.5 million workers are employed in the warehouse and storage sector. The UK’s transportation and storage sector employs 1.8 million, and millions more work in warehouses all around the world. While some prior work has explored the impact of automation on these workers, there is still limited understanding of how automated technologies are changing these employees’ daily lives. To get a better sense for workers’ perspectives, we built on Accenture’s recent research into warehouse automation with a series of in-depth video interviews with 34 warehouse workers and 33 front-line supervisors across the U.S., UK, France, Spain, and China (interviews were conducted in workers’ native languages, and then translated into English for analysis).

We had three questions for workers:

We had three questions for workers:

1. How do automation technologies help you do your current job?

2. How do you feel about working side by side with a robot? What do you like and dislike about it?

3. What safety challenges are you facing in the warehouse?

And two questions for supervisors:

1. How has automation impacted operations and your role in the warehouse?

2. What are some of the new challenges that have emerged since deploying automation?

We then conducted a sentiment analysis and leveraged standard data science techniques to extract key themes from the responses. We found that overall, sentiment was about 40% negative and 60% positive, and we further identified a number of recurring concerns and hopes: On the negative side, workers were worried about losing their jobs, having inadequate training resources, and dealing with downtime or errors caused by technology malfunctions. On the positive side, workers expressed optimism that automation would make their jobs safer, increase productivity, and improve the quality of their work.

Workers have some concerns related to automation…

1. Fear of job loss

In our analysis, 42% of the responses categorized by our models as “negative sentiment” were related to fears around job loss. Two respondents from China — Xin, a warehouse packer, and Chensi, a warehouse supervisor — used the exact same phrase to express their fears, saying: “this choice [to use robots] may cause us to face unemployment.” Heather, a warehouse clerk at a global logistics company based in the UK, wondered about her future, commenting: “I don’t mind working side by side to a robot, but I feel that sometimes my job is being pushed out to robots.”

Even for those who weren’t necessarily worried about their own jobs, many of the people we talked to expressed concern about others losing their livelihoods. As Sami, a French warehouse packer, explained: “It worries me for the following generations, because they will not need us anymore…Everything will be done by robots, because [a machine] does not break its back, it is all automatic, it does not complain, and it does not strike.” Similarly, UK-based supervisor Ramsay felt that “the negative thing is the fact that it removes jobs for people in this very difficult time.”

2. Inadequate training

The next most common concern, accounting for 35% of all the negative responses, was a fear that inadequate training resources would reduce workers’ ability to succeed in a new, digital workplace. Ricardo, a warehouse supervisor from Madrid, had mixed feelings about automation, explaining: “I think the more the warehouse is automated, the better we’ll all perform. Robots will greatly diminish our workloads, reduce risks, and increase productivity. But if we don’t know how to handle them, they’re hardly going to do any good.” Similarly, a supervisor at a network technologies company in China, Kexin, noted that the demographic makeup of his workforce posed a challenge when it came to learning to use new tools: “Our current sorting technicians are older people,” he noted. “It is a process of adjustment for them to learn to operate new smart equipment.”

Workers in non-supervisor roles expressed similar fears: Montserrat, a warehouse worker in Spain, shared that for him, “the biggest challenge is understanding how this whole computer thing works and how to properly handle the robots and use the program commands.” A packer for a U.S. sporting goods company expressed a similar sentiment, sharing: “I think I would feel a little uncomfortable at first working with robots just because it’s new…It would be a little nerve-wracking at first, [but] once I have the proper training on how to interact with them and safety measures like shutdowns and things like that, I’d feel more confident and comfortable.” Some workers also pointed out that while leaders might assume that most people have a certain level of familiarity with automated tools, that’s not necessarily the case. As Axelle, a worker in a French warehouse, explained, “We need to learn how to use these robots correctly, to maneuver them, because we don’t necessarily know anything more than how to drive a car.”

3. Unreliable technology

Finally, the remaining concerns expressed in our interviews were related to fears that if automated tools broke down, workers would have no way to fix the problem, and would thus be unable to get their work done effectively. Especially when training resources are limited, workers may feel helpless when things go wrong, unable to address or even diagnose the issue. For instance, Eva, a supervisor at a global automotive manufacturer in Spain, described how “while working with the automated robots, we face challenges when a part is jammed or when they can’t move. We learn about many codes only as the error happens.” As Connor, a supervisor at a large UK-based retail company succinctly put it, when the system goes down and work has to be done manually, it’s “an absolute pain.”

Similarly, Dave, a material handler for a construction equipment manufacturer in the UK, felt that automated technologies have “definitely assisted,” but when there are problems, “it generally ends up being a big breakdown,” significantly disrupting his workday. When automated tools malfunction, workers are often forced to either take on additional manual labor, or to waste time waiting around for a technical expert to resolve the issue.

…But there is also cause for optimism

1. Greater safety

The number one factor driving workers’ optimism around automation (mentioned in 42% of the positive responses) was its potential to improve safety. In many cases, safety referred to reducing wear-and-tear on the body: For example, Yanis, a forklift operator at a global logistics provider in France, told us, “I used to be on sick leave several times due to severe back pain. The automated forklift truck has improved the most important aspect of my physical health.”

In addition, automated tools designed to sanitize workspaces have become especially critical during the pandemic, preventing the spread of the coronavirus among workers whose jobs had to be done in person. Lanisha, a stocking associate at a retail chain in Michigan, stressed that her warehouse was safer because “with just the push of a button, the cleaning robots drive around cleaning the floors and wiping everything down the whole night.”

2. Increased speed and efficiency

While executives often tout the high-level efficiency gains of automation, we were encouraged to see that on-the ground workers and supervisors were similarly positive about the speed and efficiency made possible by implementing automated tools. Thirty-eight percent of the positive responses fell into this category, with workers expressing their enthusiasm about technologies that helped them do their jobs faster and more efficiently.

Steve, a warehouse worker with a multinational food manufacturer in the UK, commented that “robots have made the warehouse massively more efficient.” Alain, a material handler at a French grocery wholesaler, noted that “we’ve gained something like ten times in terms of productivity,” while Lilin, a packer at a casting equipment manufacturer in China, explained: “The robots easily lift several tons of cargo…[freeing up] people to do less strenuous tasks, like controlling the machines and inventory.” Supervisors were similarly excited about the potential gains in efficiency: For example, UK-based warehouse supervisor Ian commented that “automated software makes it easier for me to do my job, as it’s more efficient to use robots than to use humans [for some tasks].”

3. Higher-quality work

Finally, the remaining 20% of positive responses focused on how support from automated tools enabled workers to do their jobs better. One area in which we saw optimism that automation would improve the quality of work was in customer experience. A supervisor in a warehouse in China that had not yet invested in automation lamented that he received many customer complaints about “sorting errors and the shipment of expired foods.” He expressed a hope that his company would invest in automated equipment soon, to prevent such complaints in the future. Similarly, Aryona, a Florida-based warehouse operator at a multinational consumer electronics retailer, described how automation reduced mistakes in the checkout process: “A lot of times there can be human error in the systems,” she explained. “Having technologies that help to improve the quality is great.”

In addition, many workers felt that automated tools not only helped them do a better job on discrete tasks, but also freed up their time for more interesting work, helping them stay motivated and engaged. For example, a supervisor in France, Thierry, expressed the difference automation made for him: “[Now,] I only intervene if there is a technical problem. It makes my role more interesting and less repetitive.” For Andrew, a supervisor in the UK, automation meant he had “less supervision to carry out so [he could] focus on other tasks.” Similarly, French warehouse worker Fabien appreciated how “working with robots makes the job more interesting. It saves you time, because you have to go looking for information…everything is already integrated and digested by the robots.”

Takeaways for Companies

Clearly, the automation of warehouse operations has the potential to make a real, positive impact on workers — but it’s not without its downsides. Given the hopes and concerns our analyses revealed, we’ve identified a few strategies to help employers better support their workers while reaping the benefits of automation.

Emphasize growth opportunities

The number one fear expressed by the workers in our study was that automation might cost them their jobs. Of course, the flip side of that fear is the hope that automation could make workers’ jobs safer and more meaningful. Both to address this fear and emphasize its positive counterpart, employers must proactively expand growth opportunities (and make sure that workers have the tools and information they need to take advantage of those opportunities).

For example, some companies have launched training centers to help entry-level warehouse workers succeed in their current roles and provide paths for career growth. Importantly, these training programs aren’t just about making resources available — they’re about demonstrating that real growth is possible. That means not just encouraging employees to participate, but also ensuring that a substantial proportion of entry-level workers do in fact end up moving up the ranks into management positions, helping current workers envision how a similar trajectory could be within their reach.

Get the training right

Our interviews also highlighted workers’ concerns around getting the training they need to work safely and fix issues with automated tools when they arise. Unfortunately, many well-intentioned employers struggle to provide training that actually works, especially for workers who start their jobs with little or no technical expertise in operating the kinds of robotic systems that are common in automated warehouses.

To get workers and supervisors comfortable with automated technologies, training programs must go beyond simple instructional videos or classroom sessions, and instead offer hands-on practice and simulations on how to operate these machines, as well as how to reset them when they malfunction. For example, FedEx uses VR simulations and gamified training programs to train its thousands of warehouse employees, allowing them to practice difficult tasks before they even set foot on the loading docks. These programs are designed to improve both worker safety and confidence, and they have substantially reduced turnover among package handlers.

Keep investing in safety

The biggest advantage of automation that the workers in our study identified was its capacity to boost safety. But while these new tools can enable a safer workplace, that doesn’t mean that employers should stop investing in further improvements. Robotic assistants can save a good deal of wear-and-tear on the human body, but they don’t solve everything. In many cases, human workers are still expected to do a lot of lifting or other strenuous tasks, and it’s up to employers to provide as safe and healthy a workplace as possible.

One option is to pursue additional technological solutions. Some warehouses and manufacturing facilities have begun providing workers with exoskeletons for motion assistance, reducing the risk of physical injury or excessive fatigue. Newer robotic exoskeletons even use artificial intelligence to adjust to the individual wearing them, providing another level of support for workers. Companies have also begun using wearable sensors to capture workers’ movement data, which they then use to assess injury risk on an individual level and provide feedback and training to improve safety. Similar tools were adapted during the pandemic to support social distancing by alerting workers when sensors indicated that they were too close together.

But even without advanced technologies, there’s a lot employers can do to boost workers’ health and safety. Simpler strategies can be similarly impactful, such as allocating sufficient cleaning staff to the warehouse floor to ensure a consistently sanitary workspace, providing clear signage around dangerous machinery, or instituting systems that encourage leadership to work proactively with on-the-ground workers to identify and address safety concerns.

Now more than ever, warehouse work is the backbone of our global economy. It’s essential work — but it can be tough on workers, especially as the deployment of automated technologies brings new challenges and uncertainties. Our research highlighted how these technologies can make a major positive impact, enabling employers to offer a safer, more productive, and more meaningful work experience. At the same time, workers have serious concerns around how these new tools might harm their job security, as well as whether they’ll get the training they need to work effectively and safely alongside their robotic colleagues. As organizations look to the future, they must both address workers’ fears and build on their optimism by working to provide safe, productive workplaces and real opportunities for growth.

Summary:

Automated tools that help to lift, sort, and move goods around warehouses can substantially improve efficiency and quality. But how do the millions of workers employed in warehouses around the world feel about these changes? The authors conducted a series of interviews with on-the-ground workers and identified several common hopes and concerns. Based on these trends, they offer three strategies to help employers both address workers’ fears and build on their optimism: Emphasizing growth opportunities for entry-level workers, providing effective training to help workers learn to use automated tools, and investing in systems to ensure workers’ health and safety.

NIKE, Inc.’s mission of improved sustainability has recently developed B.I.L.L. (Bot Initiated Longevity Lab), a robot-augmented system designed to clean and repair some of the brand’s most popular sneakers.

Unveiled at NikeTown London, B.I.L.L. is free to customers, joining initiatives like Nike Recycling & Donation, Nike Refurbished and tutorial videos aimed at extending the life of footwear for a more circular future. At launch, the platform – which combines advanced robotics, old-school hand craft, water-based cleaning products and recycled polyester patches for its repair process – works with the Air Jordan 1, Nike Air Force 1, Space Hippie 01, and Nike Dunk (trim not specified by the brand, but presumably Low, Mid and High): B.I.L.L. processes Bruce Kilgore’s “presidential” design in about 45 minutes.

Here’s how it works, according to a Nike News press release: “After loading a shoe into the robot, a three-dimensional digital model of the shoe is created, pinpointing detailed areas of cleaning on the upper, the sidewalls, and the outsole. Shoppers can then select patches to repair areas of wear-and-tear on the upper of their shoe. Once B.I.L.L. has finished with the shoes […] Nike store athletes add new liners and laces made from recycled materials.”

Insights and feedback gained during NikeTown London’s pilot will be utilized to assess the opening of the Bot Initiated Longevity Lab at other brick-and-mortar locations across the globe. It’s unlikely Air Max offerings will be able to get their bubbles fixed through the program, but the Swoosh is continuously modifying its manufacturing in order to create product more compatible with its circular initiatives.

“The thing is, maintaining old product is deeply personal,” Noah Murphy-Reinhertz, Sustainability Lead, Nike NXT. “People will go to great lengths to care for their favorite shoes. Repairing a product is a way to extend our memory with a product. We see B.I.L.L. as a tool for being able to do that. Robots can do things that are tough to do by hand, but when we used robotics as part of a recycling technology, we still want the service to be personal.” NikeTown

London is located at 236 Oxford St, London W1C 1DE, United Kingdom.

Amazon.com Inc. appears to be fine-tuning its distribution strategy as it pauses its warehouse expansion across the U.S., consolidating operations in some areas while pulling back growth plans in secondary markets, according to logistics experts.

The e-commerce giant has canceled, closed and delayed facilities at each stage of its order fulfillment process, while continuing to move forward with large distribution centers that funnel goods into its home-delivery network since it announced earlier this year that it was pausing its ambitious U.S. logistics expansion. Amazon has shut down, called off or pushed back the openings of 66 delivery stations, fulfillment centers and other facilities as of this week, according to data from supply-chain consulting firm MWPVL International Inc.

Fourteen of the 15 buildings Amazon has closed have been delivery stations, the smaller facilities where the company prepares online orders for delivery to customers’ homes, said Marc Wulfraat, founder and president of MWPVL. Those sites have largely been in areas where the company had multiple facilities close to one another, he said, suggesting Amazon will consolidate the operations in fewer stations.

Ten of the planned 25 projects Amazon has canceled have been larger fulfillment centers slated for development in markets including Louisville, Ky., Greensboro, N.C., and Kansas City, Mo., according to MWPVL data.

“These have tended to be more capital-intensive projects,” Mr. Wulfraat said, “and so they decided to nix the project to preserve capital and to reduce operating expenses.”

An Amazon spokesperson said the company takes a variety of factors into account when deciding where to develop future sites and to maintain a presence.

“While we’re closing some of our older sites, we’re also enhancing some of our facilities and we continue to open new sites as well,” the spokesperson said.

Amazon has continued investing in its logistics strategy. The company on Friday said it has acquired D. Cloostermans–Huwaert NV, a Belgian company that designs technology to manage the flow of robots through warehouses. The acquisition is Amazon’s latest in a series of warehouse-automation investments since buying Kiva Systems Inc. for $775 million in 2012.

Amazon accelerated its logistics expansion during the pandemic as e-commerce demand boomed. The company added tens of millions of square feet of warehouse space, bought trucks and vans, and hired tens of thousands of workers to keep up with demand. Its warehouse footprint grew from 165 million square feet before the pandemic to 379 million square feet by May 2022, according to MWPVL.

Amazon Chief Executive Andy Jassy said recently that the company in 24 months had doubled the size of a fulfillment network that it had built up over 25 years.

E-commerce growth more recently has stalled as high inflation hits Americans’ pocketbooks and consumers return to in-person shopping.

The pullback in online sales demand and broader signs of an economic slowdown have many companies reassessing their logistics footprints, said Jason Tolliver, executive managing director of logistics and industrial for commercial real-estate services firm Cushman & Wakefield.

“The natural business reaction to that is to pause, because your margin for error in an environment of complexity and increasing costs shrinks, and the cost of a mistake rises,” Mr. Tolliver said.

Amazon is moving forward with plans for several new warehouses, including more of its sprawling distribution centers, where it transports goods in bulk to middle-mile and last-mile facilities.

“If there is a financial benefit to opening a new building, then Amazon will stay the course,” Mr. Wulfraat said.

Startups that make technology designed to predict industrial equipment failures before they happen are seeing a surge in demand, as strained supply chains prompt manufacturers to squeeze more efficiency out of production lines, startup founders and analysts say.

Anna Farberov, general manager of PepsiCo Labs, the technology venture arm of PepsiCo Inc., said that over the past year so-called predictive-maintenance systems at four Frito-Lay plants reduced unexpected breakdowns, interruptions and incremental costs for replacement parts, among other benefits.

Developed by New York-based startup Augury Inc., the technology has helped Frito-Lay add some 4,000 hours a year of manufacturing capacity—the equivalent of several million pounds of snacks coming off the production line and shipped to store shelves, Ms. Farberov said.

PepsiCo is now sending the technology to most of its U.S. Frito-Lay plants, and plans to roll it out in its Southern U.S. beverage plants and eventually to all its bottling facilities in North America, she said. “We had a very clear business target to achieve,” she said.

Other manufacturers appear to be following suit. The global market for predictive-maintenance technology, also called machine-health tech, is expected to reach $18.6 billion by 2027, growing at a compound annual growth rate of just over 26%, according to data analysis firm Research and Markets. When Covid-19 struck in 2020, closing factories and disrupting shipping routes, worldwide spending on predictive maintenance stood at roughly $4 billion, the firm said.

Augury expects to add up to 50 new industrial customers by the end of the year, said Saar Yoskovitz, the company’s co-founder and chief executive. In addition to Pepsi, current customers include Colgate-Palmolive Co. , DuPont de Nemours Inc. and Hershey Co. , among roughly one hundred beverage and food producers, pharmaceutical firms, consumer packaged goods makers and other large-scale manufacturers, the company says.

Launched in 2011, Augury makes wireless sensors that attach to factory equipment and pick up the sounds they emit. The data is transmitted to its cloud-based platform and analyzed by artificial-intelligence software trained to recognize more than 80,000 industrial machinery sounds at various life cycles of operations—from functioning smoothly to falling apart—and overlays these sounds to detect patterns. Augury’s system then relays its insights to the plant’s maintenance team in real time, enabling them to better focus equipment inspections and get a jump on maintenance needs.PepsiCo is now sending the technology to most of its U.S. Frito-Lay plants, and plans to roll it out in its Southern U.S. beverage plants and eventually to all its bottling facilities in North America, she said. “We had a very clear business target to achieve,” she said.

Other tech startups offering similar predictive-maintenance technology include C3.ai Inc., DataProphet and Senseye. Though the technology isn’t new, soaring demand—driven by added supply-chain disruptions in the wake of Russia’s invasion of Ukraine and ongoing Covid-related shutdowns in China—is making these and other startups increasingly valuable to manufacturers.

Senseye, a predictive-maintenance software developer based in the U.K., in June was acquired by Siemens AG.

In October, when Augury raised $180 million in a Series E funding round—which took its private-market valuation above $1 billion—its lead investor was oil-field giant Baker Hughes Co. Another was the corporate venture arm of Schneider Electric SE.

Under the terms of the deal, Baker Hughes took a seat on Augury’s board of directors. It also signed a multiyear commercial agreement, Augury said.

In May, Augury itself acquired Seebo, an AI-based process-intelligence startup, in a deal valued at more than $100 million.

Mr. Yoskovitz, Augury’s chief, said his long-term goal for the company isn’t to get acquired by a giant manufacturer or IT provider, but to go public “when the time comes.”

Large information-technology vendors are increasingly offering their own predictive-maintenance tools, ratcheting up competition in an already tight market.

“The value of startup vendors such as Augury has initially been the combination of hardware and software predictive-maintenance solutions, especially machine learning-driven,” said Emil Berthelsen, vice president and analyst at IT research and consulting firm Gartner Inc.

By using multiple data sources, such as historical and operational data, acoustic sensors and images, Mr. Berthelsen said, “the quality and levels of predictive-maintenance insights continues to improve.”

Warren Pruitt, vice president of global engineering at Colgate-Palmolive, said the company turned to predictive-maintenance tools in a bid to improve machine performance and reduce machine downtime. Previously, the company relied on preventive and calendar-based maintenance to manage equipment, he said.

Colgate-Palmolive has put Augury’s platform to work in all of its North America plants, as well as many in Europe, Latin America and Asia, he said.

“Our predictive-maintenance program also upskills our workforce, giving our employees the bandwidth to look at the big picture and consider how to employ new technologies and initiatives to continuously improve our operation,” Mr. Pruitt said.

Amazon.com Inc. sellers are bracing for a bleak holiday shopping season as inflation-bitten consumers curb their spending.

Many merchants, who sell more than half of the goods on Amazon’s web store, fear they’ll be forced to cut prices to move a mountain of unsold inventory. It’s an abrupt change from the previous two years when sellers scrambled to get enough products into Amazon warehouses to meet pandemic-fueled demand even as chronic shortages let them jack up prices.

This year US online sales will rise just 9.4% to $1 trillion, the first time growth has slipped into the single digits, according to Insider Intelligence, which in June lowered its earlier annual forecast. Spending on Amazon will hit $400 billion, up 9% and slower than the overall industry, the research firm says.

“Consumers don’t seem to be spending much on anything beyond basic necessities, so sellers have to offer discounts and coupons and aggressive marketing, which can be expensive,” said Lesley Hensell, a co-founder of Riverbend Consulting, which advises Amazon sellers. “The fourth quarter looks scary this year.”

The challenging holiday shopping season was Topic A this week at the Surge Summit, an e-commerce networking event hosted by Hensell’s firm that drew about 300 sellers to Tampa, Florida. During a session called “Navigating the Bear Market as a Seller,” dozens of merchants discussed the abrupt shift in consumer behavior and how to adjust their businesses accordingly.

Korion Morris, who ran the bear-market session, is the director of growth at Unybrands, which owns e-commerce companies in such categories as baby, fitness and personal care. He told attendees that Unybrands is trying to hold the line on prices by cutting logistical and other costs.

“Consumers are hurting right now,” Morris said during the event. “In the rare instances we do increase pricing, we’ll add a promotion to offset it.”

Amazon itself is being forced to adjust to the new new normal. The world’s largest e-commerce company was saddled with too many warehouses and workers when the pandemic boom ended. Amazon has since abandoned dozens of existing and planned facilities around the US, according to MWPVL International Inc., a closely watched research firm. Some of the closings are related to a modernization program, an Amazon spokesperson said last week, and the company continues to open facilities where customer demand requires extra capacity.

Responding to merchants’ concerns about a lackluster holiday shopping season, an Amazon spokesperson said sellers using the company’s logistics service typically pay less than other methods. Amazon has also expanded a program offering low shipping costs on inexpensive items to include products weighing up to three pounds; previously the limit was 12 ounces.

“Sellers are incredibly important to Amazon, and we work every day to provide them with powerful tools and services that help reduce their operational burdens, build their brands and connect them with customers so they can rapidly grow their businesses through busy shopping periods and beyond,” spokesperson Patrick Graham said in an emailed statement.

Meanwhile, merchants are making their own moves to cut shipping costs. Marlee Rabin of Montreal launched her organization brand Homie Collection on Amazon two years ago and her best seller was a $25 transparent plastic pantry bin. She’s preparing to launch a smaller kitchen organizer this year that she expects to sell for less than $10. Besides targeting cost-conscious shoppers, she says, the smaller, lighter bin will save her a bundle on Amazon storage and shipping fees.

“I’d love to charge premium prices,” she said. “But in this environment I think I’ll do a lot better at the lower price point.”

The effects are rippling from sellers to firms that support them, including small business lenders. Amazon merchants commonly borrow about $100,000 to buy inventory and pay for marketing campaigns during the holidays, paying the loans off with their proceeds. Seth Broman, chief revenue officer of Swiftline, which offers loans to online merchants, is turning down more loan applications this year. Rising costs and slower growth has simply made lending sellers money too risky, he said.

“A lot of customers are over-leveraged, and their sales are off,” Broman said.

Even the smallest merchants are feeling the pinch. Nancy Philips sells used books on Amazon that she snags at yard sales and library clearance sales. She’s slashing prices on about 100 books that have been lingering in Amazon warehouses for about a year before her storage fees go up. Amazon increases storage fees on products that don’t sell quickly to prevent its warehouses from getting cluttered.

“Books I’d sell for $20 I marked down to $10 or less,” she said. “Amazon fees are about $8, so I won’t make any money. I need to get rid of them, and people are buying less.”

Steven Pope, who has been selling gifts on Amazon for seven years, says he’s never been more nervous about a holiday season. Sales of his $50 “mom box” that includes a bath bomb, soaps and lotion, plunged more than 50% this Mother’s Day compared to 2021. He fears a similar drop heading into Christmas since shoppers are focused on necessities like food and gas and have less money for indulgences.

“The gift-giving industry has completely collapsed,” said Atlanta-based Pope, who is developing new snack products to compensate for slowing gift sales.

Pope, who also provides consulting services to more than 300 merchants, recently changed his marketing slogan to reflect leaner times. Before it was “We grow sales.” Now it’s “We deliver peace of mind.”

“It’s very difficult to navigate the climate right now,” he said. “This will be a make or break year for a lot of businesses.”

• Amazon said Friday it’s acquiring Cloostermans, a company that builds warehouse machinery and robotics.

• Cloostermans employees will join Amazon Robotics, Amazon’s division focused on automating aspects of its warehouse operations.

Amazon has acquired Cloostermans, a Belgian company that makes technology used in warehouses, the company announced Friday.

Amazon began working with Cloostermans in 2019, using its technology to help move and stack heavy palettes and goods, as well as package products together for delivery, the retail giant said.

Cloostermans will become part of Amazon Robotics, Amazon’s division focused on automating aspects of its warehouse operations. The unit was formed after Amazon acquired Kiva Systems, a manufacturer of warehouse robots, for $775 million a decade ago.

Amazon continues to launch new machines in warehouses. In June, the company unveiled a package ferrying machine called Proteus, which it referred to as its first fully autonomous mobile robot. It’s also deployed other robots that can help sort and move packages.

In a blog post, Ian Simpson, vice president of Global Robotics at Amazon, said the company is investing in robotics and other technology to make its warehouses safer for employees.

The prospect of warehouse robotics improving safety has been a topic of debate. An investigation by Reveal from the Center for Investigative Reporting found Amazon’s warehouses with robots have higher injury rates than facilities without automation.

Founded in 1884, Cloostermans began as a repair shop for textile companies and went on to build industrial machines. As a result of the acquisition, Cloostermans’ team of roughly 200 employees will join Amazon Robotics, Amazon said.

Copy of Amazon Press Release: September 9, 2022

Innovation is central to how we strive to be Earth’s Best Employer, and Amazon continues to invest in technology that helps make work at our operations safer, simpler, and more productive. As we continue building next-generation workplace technology, we are excited to have signed an agreement for Amazon to acquire Cloostermans.

Based in Belgium, Cloostermans designs and manufactures mechatronics solutions, advanced technology that is used in Amazon operations to help move and stack heavy palettes and totes or package products together for customer delivery. Amazon began working with Cloostermans in 2019, and by focusing Cloostermans’s deep experience in engineering, machinery, and robotics, we will more rapidly deploy solutions in our workplace that support employees in their roles and improve safety at work, and also help reduce packaging waste.

“Amazon’s investments in robotics and technology are supporting how we build a better and safer workplace for our employees and deliver for our customers,” said Ian Simpson, vice president of Global Robotics at Amazon. “As we continue to broaden and accelerate the robotics and technology we design, engineer and deploy across our operations, we look forward to welcoming Cloostermans to Amazon and are excited to see what we can build together.”

Cloostermans’s team of approximately 200 employees will be joining Amazon Global Robotics’ growing presence in Europe. Last year, Amazon launched the European Innovation Lab in Italy, which focuses on new ergonomic technologies. Expanding our design and manufacturing capabilities is just one of the many ways Amazon continues to invest in technologies within our operations. We recently announced a series of new robotic technologies, including Proteus, Amazon’s first fully autonomous mobile robot that uses advanced safety, perception, and navigation technology to maneuver around employees without being confined to restricted areas.

“We’re thrilled to be joining the Amazon family and extending the impact we can have at a global scale,” said Frederik Berckmoes-Joos, CEO of Cloostermans. “Amazon has raised the bar for how supply chain technologies can benefit employees and customers, and we’re looking forward to be part of the next chapter of this innovation.”

Since Amazon began introducing robotics into its facilities in 2012, we have deployed more than 520,000 robotic drive units worldwide while also creating over a million new jobs. Automation has led to new roles at our facilities, including jobs such as robotics and mechatronics maintenance technicians as well as flow control specialists. To support career development, we have introduced apprenticeship programs that offer our employees paid training and on-the-job learning that leads to certification, technical skills, and an opportunity for rewarding work.

France has taken steps to outlaw so-called dark stores - city-centre food depots used for instant home deliveries ordered over the internet.

Faced by growing protests from local people as well as city authorities, President Emmanuel Macron's government has decreed that the stores be classified as warehouses, rather than as shops - meaning that in Paris and other cities most will probably be forced to close.

Run by half a dozen competing companies such as Gorillas, Cajoo, Getir, Flink and Gopuff, "dark stores" have proliferated in France as elsewhere over the last two years after Covid confinement popularised internet food shopping.

Advertising in Paris urges householders to get their food delivered in less than 10 minutes - or "quicker than a double by Benzema", referring to the French football star. A campaign by Cajoo shows "Alex" doing his shopping by smartphone while sitting on the lavatory.

But residents of buildings where "dark stores" have replaced pre-existing grocery shops are angry about noise from early morning lorries and the disruption caused by squads of deliverers on electric bicycles and scooters.

City officials - who spent millions to safeguard the high street against out-of-town shopping centres - are worried that the new threat from "quick commerce" will drain life from public spaces and hasten the trend to an "atomised" society of solitary consumers.

"We can't sleep any more," said Samira, who has launched a petition against a "dark store" in her building in the 17th arrondissement of Paris.

"There is constant scooter noise, and the drivers hang outside till one in the morning, smoking weed and urinating on the street," she added.

Typically "dark stores" - of which there are about 80 in Paris - present a blank front to the street, with just the name of the company on a frosted window. But inside are shelves of commonly bought goods, which are stacked into bags and handed to waiting couriers.

The public has no access, and there is no possibility of buying the goods inside except by ordering over the internet.

Paris City Hall has tried for months to control the spread - but with limited success. Officials complain of legal loopholes which the operators have been able to exploit, and of fines too meagre to have an impact.

But after the capital joined forces with other cities like Lyon, Nice and Montpellier, their combined pressure this week convinced the government to clarify town planning laws and make it easier for municipalities to shut down "dark stores".

"Once this decree is finalised, there will be no ambiguity. Dark stores will be officially designated as warehouses, not as shops, which means local mayors will have powers to act if they choose," said Small Businesses Minister Olivia Grégoire after a meeting with city officials from across France.

"This is not just a question of noise and traffic disruption. It's a question of society," said Camille Augey, a deputy mayor of Lyon.

"We need to ask ourselves what we want. Does every need have to be immediately satisfied regardless of external consequences? Do we really need that packet of pasta or bottle of shampoo at 11 o'clock at night? Can it really not wait until the morning?"

"We managed perfectly well before quick commerce, didn't we?" she added.

None of the "dark store" operators contacted would give an interview. In a statement Gorillas said that it brought "dynamism to town centres - creating jobs but also new outlets for local producers".

It said it would need time to study the government's new decree before reacting.

The separate phenomenon of "dark kitchens" - diner-less restaurants where meals are prepared for delivery - will also be affected by the new government policy, though it remains unclear exactly how.

Back in May 2018, Kroger unveiled an exclusive U.S. partnership with U.K.-based online grocery specialist Ocado Group. The aggressive plan called for the companies to identify sites for about 20 automated customer fulfillment centers (CFCs) in the United States over the next three years. These high-tech Kroger CFCs would use Ocado’s vertical integration, machine learning and robotics to fill e-grocery delivery orders, providing the supermarket giant with the capacity, speed and efficiency to serve a market base stretching across more than 2,700 stores in 35 states and the District of Columbia plus vast online properties.

Many industry analysts called the Ocado alliance a big win for Kroger. Not only would it would turn up the competitive heat on rivals and blaze a path to profitability in online grocery, but it also would give Kroger potentially national scale in grocery e-commerce — including states and markets where it doesn’t operate brick-and-mortar stores.

However, other analysts saw the Ocado deal as a risky bet for Kroger. They described the CFC model as capital- and labor-intensive and said the big centers — scaling to well over 300,000 square feet — would take too long to open, be situated too far from customers (adding costs for transportation and supporting facilities) and possibly cannibalize sales from stores. Such large-scale operations, they noted, also would require dense markets to achieve ROI and profitability, at a time when online penetration in the U.S. grocery market stood at low single digits.

Fast forward to August 2022. Kroger has announced 17 CFCs overall — ranging from 135,000 to 375,000 square feet — and six are now open. To support the regional CFCs and enlarge their service area, the Cincinnati-based company also has announced 12 Ocado-automated “spoke” facilities of 40,000 to 80,000 square feet, with seven now live. One operational CFC and three spokes have brought Kroger into one new state, and upcoming facilities stand to extend its geographic reach into two more states and one new region.

Meanwhile, the COVID-19 pandemic has hoisted online grocery sales. The market rose from 2.7% and 3.4% of total U.S. grocery sales in 2018 and 2019 to 8.1% and 9.5% in 2020 and 2021, according to the Mercatus/Incisiv “eGrocery Transformed” report. That percentage is expected to hit 11.1% in 2022 and 13.5% in 2023, climbing to 20.5% by 2026.

The U.S. also now has a lot more online grocery shoppers. In 2019, 33.8% of the population were digital grocery buyers, eMarketer reported. But since the onset of COVID, that share jumped to 47.8% in 2020, 49.7% in 2021 and 51.3% in 2022, with a forecast to reach 52.4% in 2023 and 53.3% in 2024.

Against that backdrop, Kroger stands strongly positioned as a leader in fresh foods, own brands, consumer data and analytics, and omnichannel shopping — the company’s “competitive moats” of “Fresh, Our Brands, Personalization and Seamless.”

For its vision and embrace of innovation in executing its “Leading with Fresh and Accelerating with Digital” strategy, The Kroger Co. has been named as the 2022 Retailer of the Year by Supermarket News.

“In every decision we make, we do what we think is right for customers and right for our associates as we look 10 years into the future,” Kroger Chairman and CEO Rodney McMullen told SN in an interview.

“From everything that we could see, the customer really wants and needs a retailer that’s able to serve them with physical stores, pickup and delivery. And what we find is that customers bounce back and forth between those channels, depending on what’s going on in their household. When you look at the long-term trend, we fundamentally believed that would become increasingly important,” McMullen said. “And then you look at, how do you do that efficiently? We’ve always told our investors, job one is to make sure we take care of the customer, but as they move to online, that customer is not as profitable. So job two is to figure out how to serve that customer profitably. When you look at the overall ecosystem, that’s really what led us to Ocado.”

Ocado network takes shape

Kroger opened its first Ocado CFC, a 375,000-square-foot automated warehouse, or “shed,” in April 2021 in Monroe, Ohio. That was followed by 375,000-square-foot CFCs in Groveland, Fla., in June 2021 and in Forest Park, Ga., this past February and a 340,000-square-foot CFC in Pleasant Prairie, Wis., in June. Most recently, CFCs of 135,000 and 350,000 square feet went operational in Romulus, Mich., and Dallas, respectively.

The Ocado CFCs use automation and artificial intelligence to service online grocery orders, with on-site associates supporting delivery operations and helping to process, package and load orders.

In the Monroe CFC, for example, more than 1,000 bots containing totes with products and ready customer orders dart across huge 3D grids — known as “The Hive” — managed by air-traffic control systems. When order delivery times near, the bots retrieve the products from The Hive and bring them to pick stations, where items are sorted for delivery. Algorithms control the pick-and-sort process to ensure that products are packed intelligently, with fragile items on top and bags evenly weighted. Next, packed orders are loaded into a temperature-controlled Kroger Delivery van that can hold up to 20 orders. Machine-learning algorithms weigh factors such as road conditions and fuel efficiency to optimize delivery routes.

Shoppers place their orders via Kroger.com or the Kroger mobile app. Each Ocado CFC covers a delivery radius of up to 90 miles. Depending on its size, a CFC can equal the sales of about 20 stores, according to Kroger. At full capacity, annual sales per module — the Monroe CFC has seven modules — are projected at $80 million to $100 million.

“Ocado is incredibly efficient. The thing that I’ve always been impressed with, since signing our original agreement with Ocado, is not so much what they were then but what they will become,” McMullen explained. “We had studied Ocado on and off over the years, and the thing that always impressed us was that they just kept getting better and better. And they continue to aggressively invest in R&D. That R&D is focused on two things: how to improve the customer experience and how to improve the efficiency of the operation. Since we’ve developed a deeper partnership with them, they’ve really improved the consistency and the experience for the customer. That’s why we identified Ocado, why we partnered with them and why we’re pleased with the continued progress that we’re making.”

Upcoming Ocado CFCs, Kroger reported, include locations in Frederick, Md.; Phoenix; Charlotte, N.C.; Aurora, Colo.; the Cleveland region; the Pacific Northwest; and the Northeast. The retailer, too, has announced plans for two CFCs in Southern California and two more in Florida.

The Kroger Delivery network also includes Ocado-powered spoke facilities that serve as last-mile, cross-dock sites to help the CFC “hubs” process online grocery and fresh food orders and extend their service radius, up to 200 miles. Spokes are now live in Miami, Tampa and Jacksonville, Fla.; Lockbourne, Ohio; Indianapolis; Louisville, Ky.; and San Antonio. Other spokes are slated to open in Oklahoma City; Austin, Texas;Birmingham, Ala.; Nashville, Tenn.; and Maywood, Ill.

“It’s one of those things where you continue to learn, and each one gets a little bit easier to operate than the first one,” said McMullen. “The thing that I focus on every single week is our Net Promoter Scores from the customer, our repeat purchase rate and how customers engage with us, both in physical stores and pickup and delivery. In all those things, we will continue to make progress. I’m really proud of all the hard work everyone has done and really pleased with where we are.”

Reaching into new markets

The opening of the Groveland CFC and its three supporting spokes enabled Kroger, for all practical purposes, to enter a new state: Florida. Previously, the company only had a Harris Teeter supermarket in the Jacksonville area.

Delivery to South Florida launched in June, following the inception of service to the greater Orlando, Tampa and Jacksonville areas. Last October, Kroger said it plans to build two small CFCs in South Florida that will join its live e-grocery operations in Central Florida. The new sites are slated to include a “Zoom” micro-fulfillment center that will enable Kroger Delivery in as soon as 30 minutes from a selection of 10,000 fresh food items and essentials, plus a larger facility offering same-day and next-day service from an assortment of 35,000 items, according to Kroger.

“It’s fascinating. In Florida, over half of the customers knew that Kroger sold groceries. Now the thing we have to help customers in Florida understand is they can buy them from us not just at a physical store,” McMullen noted. “The other thing that the [Ocado] sheds will allow us to do is test different things. In Dallas, we’re actually testing serving restaurants in that market, right through our shed [CFC]. And then there’s leveraging Our Brands. One of the things I’ve really been pleased with is the fact that Our Brands’ share of market in Florida is actually a little bit better than in our historical core markets. That just shows the strength and the quality of Our Brands.”

The 50,000-square-foot spoke in Oklahoma City, due to go into operation later this year, will support the Dallas CFC and bring Kroger into Oklahoma, its 36th state. Likewise, the Cleveland region CFC will serve areas in northeastern Ohio and Pennsylvania, with the latter representing the grocer’s 37th state. In October 2021, Kroger announced plans to build a CFC in the Northeast — where it has no physical stores — but has yet to provide details about the facility and its opening time frame.

“Long term, one of our visions is to serve America, because we think everybody deserves fresh, affordable food,” said McMullen. “It allows us to go into new markets with something different than what is already there and do it in a way that’s efficient. And you can scale off of it over time. So that’s one more way of taking care of customers and supporting communities.”

Cultivating a seamless ecosystem

The Ocado network will underpin the e-commerce portion of what Kroger envisions as a “seamless” ecosystem, with customers able to easily move between channels — brick-and-mortar stores and digital, and among in-store shopping, pickup and delivery — and get the same high-quality experience.

Currently, The Kroger Co. operates 2,723 supermarkets and multi-department stores under more than 20 banners, including Kroger, Ralphs, Dillons, Smith’s, King Soopers, Fry’s, QFC, City Market, Owen’s, Jay C, Pay Less, Baker’s, Gerbes, Harris Teeter, Pick N’ Save, Metro Market, Mariano’s, Fred Meyer, Food 4 Less and Foods Co. More than 2,250 stores have pharmacies, and over 1,600 have fuel centers. Eighty-two percent of Kroger’s customers within five miles of one of its stores, with most living within two miles.

On the digital side, as of the fiscal 2021 year-end, 2,257 stores provided online grocery pickup, and over 2,500 stores offered delivery. Including click-and-collect and delivery via Kroger Delivery, third-party partners such as Instacart and Kroger’s Ship direct-to-home service, the company covered 98% of households in its trade area with e-commerce services.

“When customers engage with us, we think it’s really important. We call it ‘zero compromise.’ Customers should never have to compromise an experience, and that’s everything from how easy is it, fair and reasonable prices, using our data to personalize the experience and making sure the product is incredibly fresh,” explained McMullen. “When you look at our [Ocado] sheds, that’s part of the seamless system, and it facilitates that overall connection with the customer in all those dimensions. It also makes it incredibly easy to be consistent with the experience for the customer. One of the things I think is important relative to some of our competitors is that the consistency of our seamless [digital] experiences are the same consistency that you would have when you go into the stores every day.”

Digital represents a more than $10 billion annual business for Kroger. About 18.5 million households engaged online with the retailer in 2021, and in the fiscal 2022 first quarter digitally engaged households grew by another half-million. Kroger also made further enhancements to its seamless experience.

“Our seamless ecosystem continues to deliver fresh products to our customers, anytime, anywhere, and with zero compromise,” McMullen told analysts in a conference call on Q1 results. “During the first quarter, more customers returned to in-store shopping and, as a result, we made strides to enhance that experience while introducing new tools that help our associates better serve customers. In pickup, we unveiled new technology that improved wait times 20% and expanded capacity based on customer needs. In delivery, we continue to introduce key initiatives that expand our reach and shorten delivery times. We strive to provide more customers access to high-quality affordable food, regardless of whether they have a physical store in their community.”

In March, during a 2022 business update event with investors, Kroger reiterated its goal from 2021 to double its digital sales and passthrough profitability rate by the end of 2023, driven by its seamless experience and ecosystem.

“We’re continuing to make progress,” McMullen told SN. “COVID accelerated the growth of seamless and digital business by three or four years, and that stayed with us. On the end of the last earnings call [Q1], I mentioned that our seamless business had turned positive in terms of sales growth. It’s also important to note that almost all of the customers that used to shop digital and got comfortable coming back to stores are coming back to stores at Kroger. So it just shows you the ability for people to move back and forth. And we have continued to see household growth in terms of people engaging with us digitally.”

In July, Kroger rolled out its eight-month-old Boost by Kroger online benefits program nationwide. Boost comes two membership tiers, at $59 or $99 annually. All members get free delivery for online orders of $35 or more and double fuel points (up to $1 off per gallon of gasoline) for each dollar spent on groceries and general merchandise. The $59 annual membership provides delivery within 24 hours, while the $99-per-year option offers delivery in as soon as two hours. Those signing up for either Boost membership tier get a one-time welcome kit valued at over $100. Kroger said the kit offsets the first-year cost of membership and estimated that Boost can save customers more than $1,000 per year on fuel and grocery delivery.

The subscription program initially was piloted in Kroger’s Cincinnati-Dayton, Columbus, Atlanta and Central divisions. “Delivery [sales] increased significantly compared to non-Boost divisions, and delivery retention improved approximately 600 basis points,” McMullen said in the Q1 analyst call.

Leading with fresh, serving up Our Brands

Fresh foods also are major catalyst for customer engagement across Kroger’s seamless ecosystem. In Kroger’s March business update, Stuart Aitken, chief merchant and marketing officer, noted that fresh is the No. 1 determinant of store choice, as 70% of customers base their choice of shopping venue on fresh products, and 92% of Kroger’s shoppers buy fresh products.

Since 2019, the retailer has seen 15.6% sales growth in fresh departments, and in Q1 2022, identical sales grew 5.2% in fresh. Helping to drive that gain was the acceleration of Kroger’s End-to-End Fresh Produce initiative.

“When you look at fresh, the majority of our customers decide where to shop based on the fresh experience, and it’s something that Kroger has always started with and had a strength versus competitors,” McMullen said in the interview. “And it’s an opportunity for us to even get better because there are plenty of opportunities to improve. At the end of the last quarter, we announced that we had 355 new stores certified on End-to-End Fresh Produce. Our expectation is that, over time, you’ll hear us continuing to add share as that accelerates.

“The other thing is we’re in a unique position when you think about food as medicine,” he added. “We have the ability — given our produce departments, physical stores and expertise in health and wellness — to really merge those two. And we’re starting to work with outside partners to better understand that.”

Through the End-to-End program, Kroger leverages data, science and partner collaboration to fine-tune produce distribution, cut the time from farm to table and ensure supply-chain stakeholders are working together to reduce the age of the product, minimize dwell time in the distribution network and maintain the cold chain. In stores, the retailer is bolstering vendor accountability by updating technology that provides real-time data to suppliers to deliver more days of freshness.

“The produce departments in our initial rollout are performing better than similar stores that haven’t implemented the in-store portion of our end-to-end process, and we have plans for continued rollout in 2022,” Aitken reported in the update event. “And produce is just the beginning of our end-to-end initiative. We see similar opportunities across the store in meat and seafood and, of course, in dairy.”

Kroger’s Our Brands private-label lineup is another big draw for customers. An approximately $28 billion annual business, which would make Kroger the ninth-largest U.S. CPG company, the portfolio encompasses nearly 20 brands and offers 14,000 items. Four labels are billion-dollar brands, including Simple Truth, Private Selection, Home Chef and Kroger — the latter being the largest by far with sales of $15 billion and Simple Truth the nation’s largest natural/organic brand. Meal kit brand Home Chef joined the billion-dollar club in 2021.

More than 660 new Our Brands items were added in fiscal 2021, followed by another 239 in the 2022 first quarter. Identical sales of Our Brands in Q1 rose 6.3%, eclipsing growth for national brands, according to Kroger.

“If you look at last quarter, the growth of Our Brands outpaced the overall growth of the company,” McMullen said. “The Our Brands team is made up of Kroger people and external people from the CPG world who are very knowledgeable of innovation in brand products. It’s really the best of all those together. And every year, we’re introducing new products. Last year, I think we introduced [over 600], and I know this year we’re on pace to exceed that. Part of that is, how do you keep it fresh? How do you keep it interesting for the customer? And you know, they don’t have to compromise because of the great value for the money and incredible quality.”

Catering to the customer

Kroger noted that its more than 20 years of investment in data science has enabled the company to leverage the information across its physical and virtual properties and brands to create personalized experiences and value for our customers. Overall, Kroger serves more than 60 million households annually, and 96% of customer transactions are tied to Kroger loyalty program.

“Data is only important when you use it in a way that’s helpful for the customer. What we try to do is to make sure that every customer has a unique experience with us, and that’s what’s important to them and their household. So we’ll use our data, right now obviously with inflation, to try to help people stretch their budget. We also make sure we thank customers for shopping with us. So we offer them something we know is important to them or their household,” said McMullen. “You may notice, every year, we announce what we see as food trends. Well, those food trends are coming out of what we’re seeing with our data. And it’s how we also allocate resources in introducing new products, for Our Brands as well.”

Chief Information Officer Yael Cosset said at the business update event that Kroger’s expanded loyalty and personalization platform enables the retailer to “provide value that matters to each customer,” with more than 2trillion relevant recommendations and 50% of items added to the basket due to personalized search. Omnichannel customers are the most exposed to personalization, he said, and exhibit 98% retention and spend two to four times what an average customer spends.

Data and technology are “key to our mission to elevate the customer experience and grow sales,” according to Mary Ellen Adcock, senior vice president of operations for Kroger. During the update event, she said that in 2021 Kroger introduced a new fresh production, automated forecasting and ordering application using artificial intelligence. Real-time analytics also are available to coach associates to help them make better and faster decisions, based on customer data and operational data.

“What’s so exciting about technology is that you continue to figure out how to make things even better,” McMullen said in the interview. “That’s the thing that’s so important. Tomorrow, we’ll give customers a better experience than they had yesterday. We always will focus on making sure that every single day we serve the customer a little bit better.”

Mitsubishi Heavy Industries (MHI) on Thursday started selling driverless forklifts for warehouse operators grappling with rising e-commerce demand coupled with chronic labor shortages, a move by the Japanese machinery maker to shift from manufacturing into services.

The unmanned system comprises a forklift for pickup and loading, autonomous mobile robots for moving around cargo, and a robotic arm to sort them out. The forklift uses laser beams to measure its position within the warehouse, and sensors to place its fork in an exact position under the pallet.

Japanese aerospace company Mitsubishi Heavy Industries started selling driverless forklifts for warehouse operators grappling with rising e-commerce demand coupled with chronic labor shortages.

The unmanned system comprises a forklift for pickup and loading, autonomous mobile robots for moving around pieces of cargo, and a robotic arm to sort them out. The forklift uses laser beams to measure its position within the warehouse, and sensors to place its fork in an exact position under the pallet.

In two to three years, the company aims to develop an even more sophisticated forklift that can navigate around obstacles on its own, pick up randomly placed cargo, and load and unload cargo on and off a truck, says Atsushi Matsuo, senior manager at MHI's logistics system division.

"We aim for sales of hundreds of millions of dollars by 2030," he said during a media demonstration in Yokohama on Wednesday. The company is targeting drinks and frozen food makers as well as other businesses whose products are stocked in large, heavy loads.

The demonstration was held in a former turbine factory that has been converted into a business incubation facility.

The Japanese conglomerate is a leading producer of forklifts, with a 34% share of the Japanese market last year. Globally, it ranked fourth, with 10% of the market, according to the company. Its attempt to develop an unmanned warehouse is part of an effort to move up the value chain as it faces growing competition from Chinese and South Korean rivals.

"We want to be a provider of solutions rather than discrete products," Matsuo said. The company hopes to add more sophisticated features like obstacle avoidance simply by upgrading software, he said.

The unmanned system is a relatively late move by MHI to join the shift away from traditional manufacturing. Other manufacturers such as automakers are already well on their way to developing self-driving vehicles. Heavy machinery makers like MHI have been cautious about getting into self-driving technology because it requires a heavy investment that might not be justified in relatively small markets such as forklifts. But the rapid growth of e-commerce and growing labor shortages have made such investment unavoidable.

The company's rival and the world's largest forklift maker, Toyota Industries, is also racing to develop a self-driving forklift.

Komatsu, a Japanese maker of dump trucks and excavators, has been selling self-driving dump trucks since 2008 that can safely pass each other on the road in settings such as huge mineral mines. Komatsu says the offering is in response to greater demand for self-driving trucks. In mining operations, far more trucks are required than excavators, hence a greater need for unmanned trucks. Automating excavation has also proved more difficult because the excavator needs to know where to dig and by how much. Komatsu is currently developing a system in which unmanned trucks and excavators work together autonomously.

Investors in Mitsubishi Heavy Industries have been calling for more stable revenue after the company posted significant losses on large projects, such as developing passenger jets and cruise ships. The shift to the solutions business is one way to address these concerns. MHI is also developing autonomous solutions for urban transit systems, defense equipment and cargo handling operations for container ships.

"Our goal is to create a fully automated warehouse," Matsuo said.

1. The facility will help the retailer process an additional 1 million units per day over the holidays.

2. The 850,000-square-foot facility is Gap’s seventh distribution center in North America and its first in Texas.

3. The company is explored the use of AI to more efficiently manage returns.

4. Gap sees online sales representing 50 percent of its volume in three years.

Gap Inc. opened a new distribution center, last week, to support rapidly growing online e-commerce sales and to help the retailer handle peak season demand.

The specialty apparel retailer opened its newest Customer Experience Center in Longview, Texas. The 850,000-sq.-ft. distribution center, initially announced in February 2021, is outfitted with some the latest robotics systems and automation technology.

Gap plans to hire 500 full-time workers in Longview by the end of 2023. The payroll is slated to grow to more than 1,000 full-time roles in the city over the next five years.

The site brings major processing power to Gap’s network, with initial capacity for 1 million units per day during the peak season. At its height, the retailer’s network will now be able to process more than 4 million units per day.

The Longview facility is equipped with several forms of automation, such as an automated storage and retrieval system, robotic sorting and automated returns unit handling. The technology is part of a larger automation push by the retailer, including the current piloting of autonomous offloading and new “goods-to-person” robotics capabilities.

The company has also explored the use of AI to more efficiently manage returns.

The new center will supplement Gap’s six existing distribution centers in North America, including those in Fresno, Calif.; Phoenix; Groveport, Ohio; Gallatin, Texas; Fishkill, N.Y; and Brampton, Ontario.

Earlier in summer 2022, the company also expanded operations at its customer experience center in Fishkill, N.Y., adding automated receiving, multi-level pick modules, enhanced returns processing capabilities, additional residual shuttles, and new automated storage retrieval systems.

Gap says that it processes 1 billion units annually with a logistics workforce of over 9,000 associates that scales with seasonal demand. The retailer also claims an order accuracy rate of 99.8% and 99% on time ready to ship performance.

By opening this center, Gap is building on other efforts to boost its presence in the supply chain space in the past year.

These include the acquisition of Context-Based 4 Casting Ltd. (CB4), a New York- and Tel Aviv-based retail artificial intelligence and machine learning platform. The start-up provides technology that is intended to increase sales and improve customer experience through predictive analytics and demand sensing.

The specialty apparel retailer also focused a $100 million-plus investment in its fulfillment centers in Phoenix, and Gallatin, Tenn. on increasing speed, flexibility and efficiency. The expansions at the company’s 1.4-million-sq.-ft. facility in Gallatin and its 400,000-sq.-ft. facility in Phoenix now enables online order fulfillment for more of its brands.

More recently, Gap introduced a new offering called GPS Platform Services by Gap Inc. The hosted service provides supply chain solutions that Gap says meet the needs of direct-to-consumer and business-to-business companies across the supply chain.

According to Gap, the platform offers logistics & fulfillment capacity and scale to retailers looking to grow their brand and expand their operations. Specific advertised logistics and fulfillment capabilities include automated e-commerce fulfillment and returns processing at Gap fulfillment centers.

Gap Inc. offers clothing, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republc, and Athleta brands.

Gap Launches 3PL Distribution Platform >

A Look at 50 Years in Denim and Khaki - From one street corner in San Francisco to every mall in America >

About Gap Inc.

Gap Inc., a collection of purpose-led lifestyle brands, is the largest American specialty apparel company offering clothing, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, and Athleta brands. The company uses omni-channel capabilities to bridge the digital world and physical stores to further enhance its shopping experience. Gap Inc. is guided by its purpose, Inclusive, by Design, and takes pride in creating products and experiences its customers love while doing right by its employees, communities, and planet. Gap Inc. products are available for purchase worldwide through company-operated stores, franchise stores, and e-commerce sites. Fiscal year 2021 net sales were $16.7 billion.

There definitely have been easier years than 2022 for trying to start a business. Compared to larger firms, smaller companies have a harder time absorbing shocks like inflation changes, supply chain disruptions, and changing demographics in the workplace. We see evidence that investors are starting to prefer to see proof of profits, rather than growth, an anathema to the startup founders of only a few years ago. At the same time, founders who embrace technological innovation have an immense opportunity.

Through our work with companies of all sizes across industries around the world, we see that the convergence of these trends explains the increased focus on “intelligent automation” as organizations embark on digital transformation journeys. By applying artificial intelligence (AI) to IT operations (AIOps), robotic process automation (RPA), decision management, and business automation, companies can reduce costs and do more with less. Intelligent automation also helps to combat the global skills shortage by allowing employees to work on more engaging, value-adding tasks, as well as helps companies deliver exceptional customer experiences.

Nine out of 10 employees who have used automation-based tools have improved their work-life balance. In short, automating processes makes companies healthier — with the critical caveat that they are applied thoughtfully, keep an eye on the user and employee experience, and provide a deliberate assessment of how the automation of a certain process impacts the organization as a whole.

With this background as context, the role of the chief automation officer (CAO) becomes an important investment in a company’s digital transformation. Not only is the role of the CAO rapidly emerging, but it is also growing in importance due to the positive impact automation is having on businesses across industries. The CAO will be responsible for implementing business process and IT operations decisions across the enterprise to determine when and what type of automation strategy is best suited for each business imperative while working with a wide range of leaders across all business pillars.

As part of a collaborative process, the CIO identifies areas for automation and modernization, the chief data officer (CDO) collects data insights from automating workflows, the chief AI officer (CAIO) implements advanced AI methods and algorithms in automation processes, and the COO align on change management.

With the right automation processes and team in place, CAOs can measure success on the following indicators:

1. Every industry vertical and use case can benefit from AI and automation

AI-powered automation enables organizations to apply intelligence across their business, bridging gaps in workflows between business and IT. For example, IBM uses this approach of actionable intelligence to help organizations automate IT operations and business processes to lower costs and improve user experiences.

The CAO can use AI and automation to understand relationships and correlations, derive deep insights, and establish baseline KPIs. Without AI, data discovery associated with automation is mostly limited to structured processes and structured data. With AI, the discovery process is no longer blocked by a lack of structure. By utilizing AI, businesses can move from discovery to decision-making more naturally and collaboratively, increase employee engagement and productivity, and foster a more collaborative relationship between AI and employees.

There is no industry vertical where AI-powered automation’s relevance is not applicable today. Take manufacturing, for example. Automation supported by visualization algorithms can help detect defects in manufactured components on the assembly. In electronics, automation can be used to detect the sounds of break-ins or automatic control of electrical appliances, in financial services to automate payments or customer behavior data, and in retail to transform the customer’s shopping experience.

2. To combat the growing skills gap, a deeper focus on higher value work is needed

As baby boomers are leaving the market, approximately 2.4 million fewer workers are entering every year. The pandemic has also impacted many companies’ ability to recruit and overall values around work-life balance, impacting the skills available in the workforce.

In fact, according to IBM’s recent Global AI Adoption Index 2022, the data shows steady AI adoption as organizations look to address skills shortages and automate processes. For example, by automating tasks for skilled workers so they can be more productive, or by using AI-assisted learning or employee engagement. Almost one-in-four companies are adopting AI because of labor or skills shortages, and 30% of global IT professionals say employees at their organization are already saving time with new AI and automation software abd tools.

3. IT operations and core business processes are ripe for transformation

As I mentioned, AI and automation can transform IT and business processes to help improve efficiencies, save costs and enable people — employees — to focus on higher-value work.

Two of the most important areas of IT operations in the enterprise are issue avoidance and issue resolution because of the massive impact they have on cost, productivity, and brand reputation. The rapid digital expansion among enterprises has led to an immediate uptick in demand from IT leaders to embrace AIops tools to increase workflow productivity and ensure proactive, continuous application performance. With AIops, IT systems and applications are more reliable, and complex work environments can be managed more proactively, potentially saving hundreds of thousands of dollars. This can enable IT staff to focus on high-value work instead of laborious, time-consuming tasks, and identify potential issues before they become major problems.

In addition to applying AI and automation to help improve IT operations, business automation is also well-suited for streamlining processes across just about every area of an organization. A few examples include sending out marketing emails to a client distribution list on a pre-defined schedule, automating job application processing, interview scheduling, employment offers, onboarding, payroll management, and benefits administration in human resources or automating repetitive tasks like qualifying leads, assigning prospects, and automating invoices in sales and accounting.

As organizations of all sizes continue to digitize and modernize their workflows, the CAO can help guide how AI and automation are used to modernize legacy IT systems and streamline business processes, so employees can focus on projects that are truly impactful.

The CAO is important because their experience is versatile. Not only can they use AI to power automation across many industry verticals and use cases to address the growing gap in skilled workers, but they can also work hand-in-hand with the CIO, the CDO, the CAIO and the COO to transform core business functions that impact the bottom line.

When the Green Bay Packers walked onto the practice field this week, they were greeted by an unusual new teammate: a robot.

In videos on Twitter, a 6-foot tall white robotic machine simulates a punter, kicking balls at a rapid pace to players downfield. The robot, which holds six balls in a revolving cartridge, could also imitate a quarterback’s style including the speed, arc and timing of a throw.

The Seeker is a robotic quarterback, kicker and punter rolled into one. It’s a modern day version of a piece of football equipment, called a JUGS machine, that’s been used to simulate throws and kicks to football players for decades. The Seeker, company officials say however, is a more accurate thrower and runs software to let players practice more advanced gameplay scenarios.

The robot, created by Dallas-based Monarc Sport, is starting to gain adoption. Top college football programs, such as Louisiana State University, the University of Oklahoma and the University of Iowa, all count the Seeker as part of their training strategy. The Green Bay Packers are the first team in the National Football League to try the technology.

The Seeker’s software allows players to customize how they practice with it. Athletes can catch balls from close to the machine to improve hand-eye coordination. They can also program the robot to throw a ball to a spot on the field, or simulate more-lifelike conditions by over or underthrowing a ball. Players wear a pager-like tag which allows the robot to track their location on the field, and throw a ball accurately within inches.

“It gives so much opportunity for our guys to get reps without the need of having a quarterback there,” said Ben Hansen, the director of football administration at Iowa, where the technology was first tested. “That’s a huge plus.”

Since the 1970s, football teams have relied on the JUGS machine to avoid wearing out quarterbacks and kickers. It fired off footballs through two high-speed rotating discs and allowed players to run routes or practice catching by themselves, operating with basic machinery and not utilizing software.

Over the decades, the machine — named after its creator, JUGS Sports — became commonplace on the football field. But it’s been criticized by football staff for poor performance.

Matt LaFleur, the head coach of the Green Bay Packers, spent a few minutes in early August criticizing the JUGS machine for not simulating punts well. “It was awful,” he said in a news conference. “You couldn’t get the ball to turn over. It was damn near impossible to catch.”

J.R. Reichenbach, a national account manager at JUGS Sports, said the company contacted the Packers after seeing the clip to ask if they could help alleviate the issue. “We were there for them,” he said. “They didn’t need anything, everything’s fine.”

Igor Karlicic and Bhargav Maganti, co-founders of Monarc Sport, started working on the Seeker in 2015 as engineering students at Northwestern University looking for a way that wide receivers could train on their own. They created a prototype and worked with Iowa to refine the concept.

The Seeker robot has two rotating discs, similar to a JUGS machine, that rotate quickly and help launch a ball. The robot can carry six balls at a time in cartridges, similar to a revolving gun chamber. Each robot costs roughly $40,000 to $50,000 per year for the hardware, software and servicing, Karlicic said.

“Small advantages matter a lot,” Karlicic said of the training options the robot offers. “All of this makes a huge impact on game day.”

Hansen, of Iowa, said in an interview that his team started using the Seeker in 2018. One of the most helpful parts of the technology, he said, is being able to program it to throw passes that simulate game day conditions. Unlike the JUGS machine, he said, which doesn’t have software to pass in random patterns, the Seeker can purposefully throw passes that aren’t perfect.

He’s the chief executive officer of GXO Logistics Inc., which operates about 900 warehouses, mostly in the US and Europe for customers including Nike Inc. and Nestle SA. The Greenwich, Connecticut-based company, which cobbles together different types of robots tailored to a client’s needs, signed up a record $475 million of new business in the second quarter and has a pipeline of automated logistics projects that extend into 2024.

Even though GXO is one of the most advanced warehouse operators, the trend of adopting automation is only getting started. About a third of GXO’s warehouses are automated, double the percentage of about five years ago. GXO expects to have 60% to 70% of its warehouses operating mostly with machines in the next five years, he said. The warehousing industry as a whole is only about 5% automated, he said in a phone interview.

That will change, and it’s a transformation that is picking up speed. In the US, orders for industrial robots rose to a record 40,000 last year from 31,000 in 2020 and 30,000 in 2019. If anything, the US lags behind on robot adoption. In the latest worldwide data from the International Federation of Robotics, Asia’s installations of 266,000 robots in 2020 topped those in the Americas by more than sixfold. For robot density, which measures the number of these machines for every 10,000 workers, the US is seventh, trailing manufacturing powerhouses such as South Korea, Japan and Germany.

The pandemic and the lingering labor shortage that came with it will accelerate this adoption of automation, which should be viewed as beneficial for the economy, for companies and even for workers. It bolsters productivity, which allows salaries to rise without adding to inflation.

This latest wave of US warehouse and factory automation is unique because it comes at a time of near full employment, which helps allay some of the fears that the robots are coming to take everyone’s job. This rapid rise of robot demand hasn’t put thousands of workers on the street. Manufacturing employment increased by 271,000 in the first six months of this year, and the unemployment rate has dropped to 3.5%, matching the pre-pandemic level in 2019 that was the lowest since the late 1960s.

There will still be warehouse jobs for people for a long time to come. In some of GXO’s operations, such as performing sub-assembly work for Boeing Co., the volume isn’t large enough to justify the automation. Workers will always be needed to tend to the machines and do the tasks that involve solving problems. And although the end-of-arm tools for robots have advanced rapidly, nothing comes close to the dexterity of the human hand — and won’t for decades.

Still, that doesn’t mean there won’t be some labor force disruption. About 6.2 million people work as hand laborers and material movers, the US Bureau of Labor Statistics category that most closely matches warehouse work. They make just less than $15 an hour, and even with automation jobs in the industry are expected to increase 7% from 2020 to 2030, which is as fast as average, the bureau says.

Companies were forced to think during the pandemic about which work can be done remotely and which must be done in person, McKinsey & Co. said in a study last year. Automation will accelerate for the US food service and customer service sectors and cause those jobs to decline by 4.3 million, the report said.

Jobs, though, will expand for health-care providers, technicians and managers, the study notes. That will require people to raise their skill levels for these new positions as the lower-wage work is eliminated. “More than half of displaced low-wage workers may need to shift to occupations in higher wage brackets and requiring different skills to remain employed,’’ the study said.

On the warehouse floor, some of the most tedious jobs, such as packing items in a box or walking miles each day to fetch goods off a shelf, can be performed by an array of different robots. Companies gain efficiencies from automation and often can reduce the size of their warehouse operations because goods are processed and moved through more quickly. And with robots, warehouses are becoming safer as ailments from lifting and repetitive motion are reduced, Wilson said. GXO has a better track record for retaining workers at the automated facilities compared with those that aren’t.

Frontline employees’ attitudes toward robots shifted as well during the pandemic, especially in warehouses and factories where labor shortages were acute and workers were being asked to pull extra shifts to keep up despite the risks of catching Covid-19. During the pandemic, the machines weren’t replacing humans so much as coming to the rescue. That’s because the machines are the most cost effective for mind-numbingly repetitive tasks or jobs where heavy lifting can wear out someone’s back in a hurry. That’s the low-hanging fruit for automation. Technology has also enabled companies to insert robots safely alongside humans, who are increasingly viewing them more as assistants than something menacingly dangerous and isolated behind a cage, as most robots were more than a decade ago.

This current robotics revolution couldn’t have happened earlier because the technology wasn’t ready. Just in the last decade, the industry began to make robots that stop their action when approached by a worker, thereby liberating many of these machines from their cages that keep humans away from the powerful steel arms that move at deadly speeds. Those large robots isolated from humans are still the case in heavy manufacturing such as auto factories, where big robots can easily whirl around a half-made vehicle.A little more than five years ago, autonomous mobile robots arrived on the scene in a big way and revolutionized warehouses. Now, trays and bins are brought to people instead of the other way around. With cameras that allow machines to “see’’ and end-of-arm tools that can now grab almost any item, robots are able to pick and pack specific items. Machine-learning software helps them improve on these abilities and share that knowledge instantly with other robots with just a software update.

Throughout history, machines have eased the physical burdens of labor and have increased the worker productivity that allows wages to rise without sparking inflation. It’s a bit counterintuitive, but these machines have also paved the way for increased overall employment, although automation certainly can directly eliminate specific jobs. Think of the steam shovel that replaced dozens of workers with hand tools. Hoover Dam wouldn’t have been possible to build with just shovels and picks for digging and wheelbarrows for pouring concrete. That said, it’s crucial that workers participate in the productivity gains through higher wages and that displaced ones are given new opportunities. The robot revolution is coming, though, and industry will be better for it.

Sonepar in Switzerland has taken efficient logistics to the next level by investing in a unique robotic picking system. The Switzerland division will make them logistics pioneers within the global Sonepar group. Starting in 2023, a Robotics Pick and Pack solution will be implemented to process small-parts orders in a completely and fully automated manner and raise the performance and profitability of Sonepar’ s goods-to-person (GTP) system to a whole new level.

As a leading electrical wholesaler, Sonepar Suisse AG offers customers from trade, commerce, and industry a huge selection of high-quality electrical items and materials for their daily needs. Sonepar sells more than 220,000 products through its own ‘web-shop’, with the promise of delivering orders within 24 hours.

In 2020, Sonepar’ s new Central Distribution Center was put into operation in the Swiss city of Wallisellen. After a two-year construction phase, this facility became the home to Switzerland's first high-bay warehouse. A high-performance Automated Storage and Retrieval Systems (ASRS) was integrated during construction.

As the first division of the globally operating group, Sonepar Switzerland has now invested in its first fully robotic order picking system. Order fulfillment has thus been optimized for current tasks and the company has prepared itself for future market requirements in the best possible way. Within Automated Storage and Retrieval Systems (ASRS), small parts are stored in approximately 55,000 plastic bins. Battery-powered robots are presenting the storage bins at the ASRS picking stations on an order-by-order basis. Until now, order picking at these workstations has been performed manually by operators at Sonepar.

"Investments into our Supply Chain are always a benefit for our customers. With automated and digital processes, we increase our quality while saving time when processing orders, which enables us to offer an even better service to our customers", says Benjamin Ertl, Head of Supply Chain at Sonepar Suisse AG. "Our Central Distribution Center is already an undeniable success story in terms of sustainability and automation. We consider the Robotic Piece-Picking system the ideal overall solution for current and future requirements. The robotic-piece-picking project is under execution, going live in Q1.2023. After almost five years of planning and intensive discussions around robotic order picking, a dream is coming true for us."

Fully automated, precise picking with 3D vision

The overall solution, which is being integrated into the existing processes at Sonepar in Switzerland, includes a Piece-Picking Robot that will serve two Automated Storage and Retrieval Systems (ASRS) workstations simultaneously by picking items fully automatically from an ASRS bins and placing them into order cartons. Using 3D vision cameras and intelligent software algorithms, the pick and place robot replicates the precision and synchronization of a human's eye-hand coordination. As a result, the robot is able to handle items of various shapes and sizes without master data or teach-in processes. The "auto-learning" function ensures that new articles can be handled efficiently. Furthermore, it enables continuous optimization of operations.

Another integral part of the overall integrated solution is a compact packaging machine which will take care of erecting, providing, sealing, and labeling the order cartons, before transporting them to the shipping area via the existing material flow. The state-of-the-art picking solution will achieve a performance of more than 300 picks per hour.

Designed for 24/7 operation

Fully robotic piece-picking cells can be easily integrated within any brand of Automated Storage and Retrieval Systems (ASRS), enabling previously unimaginable performances. They operate 24/7 when needed. This can become a critical component in an era when customers place orders around the clock from all over the world. The advanced features of the pick and place robots enable them to handle a diverse and constantly changing product range. They work with various Automated Storage and Retrieval Systems (ASRS) processes, including pick-to-tote, pick-to-belt, pick-to-pallet, consolidation, and replenishment, and they integrate with various warehouse systems, sortation systems and packaging machines. The innovative technology consisting of 3D cameras, flexible mechanical grippers and intelligent software algorithms enables precise detection, localization, gripping and placement of unknown items arranged in any order, even in segmented containers.

All business processes and material flows are fully transparent. Robotic applications enable 100% digitized workflows and significantly improve the quality and reliability of logistics processes.

About Sonepar:

Sonepar is an independent family-owned company with global market leadership in B-to-B distribution of electrical products, solutions, and related services. Through a dense network of 100 brands spanning 40 countries, the Group has an ambitious transformation agenda to become the first global B-to-B electrical distributor to provide a fully digitalized and synchronized omnichannel experience to all customers.

Sonepar is number one globally in sales of energy-efficient products & a leading pioneer of the energy transition. Check out our interactive Sustainability Map to explore 80+ key actions from across the globe: https://t.co/wpOwmAMDvF#PoweredByDifference #SustainableSonepar pic.twitter.com/wXqtWaUlYc

— Sonepar USA (@Sonepar_USA) August 9, 2022

Sonepar CEO Philippe Delpech discusses in his article the digital group-wide transformation unlocking unprecedented investment in Sonepar’s supply chain and the key to navigating this new ecosystem. https://t.co/hUPvzMomUV#Sonepar #Supplychain #Omnichannel #PoweredbyDifference

— Sonepar Canada (@soneparcanada) August 11, 2022

]]>The three true robotic startup outcomesWarehouse AutomationThu, 18 Aug 2022 21:27:38 +0000https://www.warehouseautomation.ca/news-notes-1/2022/8/18/digi-key-opens-400m-distribution-center-in-thief-river-falls5a31c205d55b41e997de43b6:5a31db250d9297f79916ac9e:62fea303093c586659fda235The new facility allows Digi-Key to pick, pack and ship nearly three times the previous daily average of 27,000 packages to customers in more than 180 countries around the world.

Digi-Key Electronics, which offers the world's largest selection of electronic components and automation products in stock for immediate shipment, celebrated the ribbon cutting of its Product Distribution Center expansion (PDCe) today, expanding the company's headquarters' footprint by 2.2 million square feet for a combined total of more than 3 million square feet.

Digi-Key celebrated the opening event with an official cutting of tape from a Digi-Reel and ceremonial first package handoffs to each of the company's four carrier partners: DHL, FedEx, UPS and USPS. Remarks were given by Digi-Key President Dave Doherty, Minnesota Department of Employment and Economic Development (DEED) Commissioner Steve Grove, Thief River Falls Mayor Brian Holmer and several other Digi-Key executives, as well as video messages from U.S. Senator Amy Klobuchar and Minnesota Governor Tim Walz.

"This is a significant milestone for all Digi-Key employees and our community," said Dave Doherty, president of Digi-Key. "Our new product distribution center expansion will help us continue to deliver excellence to our customers for many years to come. As exciting as this expansion is for us, our hope is that our customers truly don't notice a difference – the transition for them should be seamless, and if anything, result in an even better customer service experience than they are already accustomed to. For us, it's deeper roots in Thief River Falls and a commitment to continue investing in this community and the state of Minnesota."

On August, 17, Digi-Key unveiled its new $400 million, 2.2 million ft2 distribution center to invited partners, customers and media members. Coupled with its existing facilities in Thief River Falls, Minnesota.

The PDCe building was designed by Minnesota-based Widseth, and McShane Construction served as general contractor on the project. KNAPP, a leader in warehouse logistics and automation, partnered with Digi-Key on the internal automation and operational equipment.

"The state of Minnesota is thrilled to celebrate Digi-Key's growth milestone today," said Steve Grove, commissioner of Minnesota DEED. "Growth at this level is a win for the employees of Digi-Key, it's a win for the Thief River Falls community and it's a win for the state of Minnesota. The opening of this facility is made possible by local and state economic support which will contribute an additional $500 million in economic output, as well as the addition of more than 1,000 new jobs."

The opening of the facility comes at a time of record growth for the company – Digi-Key wrapped up 2021 growing faster than ever before with a 65% growth rate, and bookings in 2022 are up more than 25% over last year. This year has also been one of the largest years for supplier additions for the company with 250 suppliers already added for the year. Since construction began in 2018, Digi-Key has added 1,500 suppliers and 1.5 million part numbers to their inventory.

The new facility is nearly fully automated, the only task that is truly done by hand is the actual picking of parts. Among the racks of components, carts are wire-guided so that the only thing a cart driver will have to worry about is where to stop. The wire-guided system will save more than 10% of time and is significantly safer.

The product distribution center expansion features two primary conveyor systems to provide redundancy in the case of a breakdown and provide opportunities for future growth. Scalability and growth were top of mind in the plans and design of the new building, and the majority of the fourth floor is currently open for the time being. There are over 27 miles of automated conveyor belt in the new facility, and an average order will travel more than 3,200 feet inside the building.

The building features six backup diesel engines and pumps along with a water tank built for fire suppression. It also has its own storm sewer and run-off ponds so as not to contribute to any flooding or storage concerns in the community.

The state-of-the-art facility features multiple common work areas and break rooms with oversized windows for optimal natural sunlight, as well as the Two Rivers Café that features a range of food options from ready-to-eat salads and wraps to burgers and paninis cooked to order. Local vendor, Las Ranitas, serves authentic Mexican options from the café a couple days per week as well. Digi-Key is recognized by the state of Minnesota as a Breastfeeding Friendly Workplace and has 16 private Mother's Rooms throughout the PDCe for employees returning to work after parental leave. The building also has a spacious Quiet Room for employees to take their breaks, relax and recharge.

Outside of the new building there is a new Community Garden where employees can adopt a plot for the summer and plant seasonal flowers, fruits and vegetables. In the Skybridge connecting the original PDC to the PDCe building there is a "Digi-Walk" mapped out from end to end, offering a great place for employees to get in some extra steps during their breaks.

Sustainability was also considered during the planning and construction of the facility. The roof has a white membrane to reflect the sun's heat, sensor-activated LED lights to minimize electricity usage, and a specially designed conveying system which maximizes energy usage as well as efficiency.

To learn more about Digi-Key, visit the Digi-Key website.

About Digi-Key ElectronicsDigi-Key Electronics, headquartered in Thief River Falls, Minn., USA, is recognized as both the leader and continuous innovator in the high service distribution of electronic components and automation products worldwide. As the original pioneer in this space, Digi-Key provides more than 13.4 million components from over 2,300 quality name-brand manufacturers with an industry-leading breadth and depth of product in stock and available for immediate shipment. Beyond the products that drive technology innovation, Digi-Key also supports design engineers and procurement professionals with a wealth of digital solutions and tools to make their jobs more efficient.

Digi-Key Electronics was busting at the seams when it began planning a 2.2 million-square-foot, $400 million expansion in 2017.

Now, as the Thief River Falls company on Wednesday showed off the new space, one of the 10 largest warehouses in the country, it is growing at a pace that will outgrow the current addition in the next decade.

"Today is clearly a celebration," said Dave Doherty, Digi-Key's president, at a celebration lunch. "But this book is far from over."

In 2016, Digi-Key had annual sales of $1.86 billion and 3,200 employees. Annual revenue last year was $4.7 billion, and the company now has about 5,200 workers, 3,600 of whom work in Thief River Falls in the northwest corner of the state.

Digi-Key is a distributor of electronic components and automation products offering more than 13.4 million products to more than 857,000 customers each year in 180 countries.

"What's unique for us is we deliver lots of small shipments everywhere," Doherty said in an interview before the celebration for dignitaries and the community. "This model is about having inventory and having high service levels to get out the door."

Doherty refers to Digi-Key as a "broken pack" distributor. That means it takes any size order, including small custom jobs that many suppliers cannot handle.

The company began 50 years ago as a mail order catalog business. Thief River Falls remains Digi-Key's largest location, with additional support and distribution facilities in Fargo and a dozen other cities across the world.

The new building — which is the size of 22 football fields — will allow Digi-Key to not only ship more products but also offer more services to their customers and suppliers. The new building has automation built in as well, eliminating the long walks workers had before to fulfill orders.

Steve Grove, commissioner of the Minnesota Department of Employment and Economic Development, attended the grand opening as part of his "Summer of Jobs" tour and later held a panel discussion on the area's economy at Digi-Key's next-door neighbor, Textron's Arctic Cat facility.

"It's a unique regional economy that I don't think a lot of Minnesotans know about, " Grove said in an interview before events on Wednesday.

One big impediment to the Thief River Falls companies — and others in northwest Minnesota including Marvin in Warroad, Polaris in Roseau, and Altoz and Central Boiler in Greenbush — is promotion. People might not know about the job opportunities.

The effort to sell Minnesota more broadly, similar to efforts in South Dakota, Nebraska and Wisconsin, is critical, Grove told the audience Wednesday.

"We advocated last legislative session to get DEED's first-ever marketing budget for talent, attraction and promoting our state to business," Grove said. "We're just not in that game."

Thief River Falls expansion

22 football fields: Size of new Digi-Key warehouse

4: Number of stories

27: Miles of automated conveyor inside the building

$400 million: Cost to build complex

$40 million: State of Minnesota grant for job creation

640: New jobs added since construction started

1,700: New parking spots added

Food retailers have, so far, been slow to mechanize their online operations, but rising costs for workers and products could spark renewed interest in technology that does that, industry experts said.

When the sudden onset of the pandemic forced food retailers to confront a deluge of demand for online grocery services, mechanized systems that could supercharge stores’ ability to pick and fill orders seemed like an obvious solution.

More than two years later, however, automated micro-fulfillment centers (MFCs) remain a rarity in the grocery space, with retailers still heavily reliant on human workers to manually gather products for digital customers. Meanwhile, retailers have adopted systems that help those employees assemble orders more efficiently, posing a challenge to MFC vendors as they look to demonstrate why their equipment is worth the substantial amounts of money needed to install and maintain it, according to retail and supply chain industry experts.

In addition, retailers have recently been focusing on core issues like managing inflation and keeping their shelves stocked in the face of supply chain constraints, taking their attention away from technologies that might not be central to those efforts. At the same time, while online grocery sales remain elevated compared with pre-pandemic levels, shopper interest in e-commerce is not increasing at the explosive rate it was earlier in the public health crisis.

“They’ve invested in their in-store operations and their in-store picking … and so what they’ve done is raise the threshold or barrier that the micro-fulfillment center needs to jump to demonstrate its ROI,” said Barry Clogan, chief product officer of Wynshop, which provides e-commerce platforms to retailers.

A largely untapped market for micro-fulfillment technology

In an illustration of how slowly MFC technology is showing up in the grocery industry, Takeoff Technologies, which is working on MFC projects with retailers including Albertsons and Wakefern Food, has so far installed just 22 systems, said Mitchell Freeman, the company’s chief financial officer and chief strategy officer. Takeoff has about 100 more MFCs in the development pipeline, even though the company believes there is a potential global market for least 15,000 MFCs, Freeman added.

“We know that we’re only in the early innings of this industry,” Freeman said. “There’s a lot of hard work and a lot of energy that still needs to be spent on building the right portfolio solutions.”

Freeman said MFCs have the potential to help grocers reduce costs for shoppers without losing money on e-commerce.

“The desire to buy online has not changed. What has changed over the last six months is [shoppers’] demand for a much more competitive price when they do buy online, and we’re seeing commentary in our commercial conversations that suggests that the grocers are seeing this, and that they need micro-fulfillment now more than ever,” Freeman said.

A key factor for MFC vendors is that food retailers have historically been slow to integrate technology into their operations — a dynamic that remains in place today even though e-commerce represents a much larger share of the grocery market than it did before the pandemic, said Tom Furphy, a former Amazon Fresh and Wegmans executive who is now CEO and managing director of Seattle-based venture capital firm Consumer Equity Partners. Furphy is also CEO of Replenium, a supplier of automated replenishment technology.

Even as the grocery industry has found ways to manage e-commerce demand manually, retailers have yet to find ways to turn their online grocery operations into consistently profitable ventures, Furphy pointed out. That could drive demand for MFCs down the road, particularly if retailers continue to find it hard to turn a profit on e-commerce despite launching innovations like membership programs to pass on some of their fulfillment costs to grocery shoppers, he said.

‘The payback is not obvious’

A central question retailers need to address is how long it will take them to make back the cost of putting in an MFC — a figure that is directly related to the number of orders they process in a given period of time, said Marc Wulfraat, founder and president of MWPVL International, a supply chain consultancy based in Montreal.

A typical MFC can pick between 350 and 500 items per hour and takes from 7 to 10 seconds to gather each product, according to figures from MWPVL. By contrast, human workers in a store generally take about 75 seconds to pick a single item, Wulfraat said, noting that multiple items of the same kind, such as two cartons of eggs, are counted as one unit.

MFCs start providing a financial return after handling about one million orders, but getting to that point can take years, given that grocers venturing into automation typically start at about 5,000 orders per week, or 250,000 per year, Wulfraat said. By comparison, the sprawling robotic fulfillment centers Kroger is rolling out across the United States in partnership with U.K.-based automation company Ocado can handle 250,000 orders in a single week, according to MWPVL.

“If you’re the owner of a grocery business and you’re considering automation in the micro-fulfillment context, the payback is not obvious.” Wulfraat said. “It’s not as though it says, ‘Hey, in a year and a half, you’ll be done and the cash is going to start flowing in.’”

Wulfraat said retailers he works with are taking a cautious approach to determine whether investing in micro-fulfillment technology is worthwhile, in part because they are waiting to see how the various solutions on the market develop. “They’re very interested in the technology [but] they want to understand who’s making what moves, what vendor solutions seem to be pulling together in the horse race. So they’re not quite ready to push the button and take a chance,” he said.

Rising labor costs and hiring challenges stemming from the tight job market, however, are shining a spotlight on technology that can accomplish tasks without human involvement, potentially changing the calculus for retailers unsure about whether to invest in MFCs, according to Wulfraat.

In addition, the number of working-age people will decline as the population ages during the coming years, Wulfraat added. In a reflection of the connection between automation and demographics, the companies that build the systems at the heart of MFCs are centered in Europe and Asia, where the average person is older than in the U.S., Wulfraat said.

“Finding someone to go and pick ... orders in your store isn’t as easy as it used to be,” said Wulfraat. “There has to be a way to do it better, because this isn’t going away.”

Looking for a balance of cost and utility

Factors like geography, customer preferences and promised fulfillment speeds all play a role in determining how and if automation could benefit a retailer’s e-commerce operations, Wulfraat said. In a reflection of this, he noted that even as Kroger focuses on large-scale facilities as the foundation of its automated fulfillment network, the grocer is using micro-fulfillment technology to serve the Miami area.

Wulfraat said he thinks mid-size automated e-commerce fulfillment systems designed to serve an entire metropolitan area, like the facility The Giant Company debuted last year in Philadelphia using technology from AutoStore, could turn out to be a “sweet spot” by offering retailers an optimal balance of cost and utility.

“Not only is this a way to handle online orders for existing customers, it’s a way to grow sales,” Wulfraat said. “So to my mind this is the poster child of what MFC will likely become.”

Instacart has partnered with MFC vendor Fabric to offer a solution for grocers that see a need for MFC technology but don’t want to invest the resources or time to develop automated fulfillment facilities on their own. But the companies have yet to announce a customer for their service more than a year after agreeing to work together.

In an emailed statement in response to questions about the Fabric tie-up, an Instacart spokesperson said the company works “to help retailers devise and implement new fulfillment models” through Carrot Warehouses, a suite of services for grocers it rolled out earlier this year, but did provide details about the partnership.

“As part of Carrot Warehouses, we work with retailers to build a model that’s tailored to their specific needs. Some will choose to leverage automation – and Fabric is one example of a technology provider that they can leverage,” the spokesperson said.

The spokesperson added that Instacart offers “faster, more accurate delivery” using what the company refers to as “nano-fulfillment” centers, but did not identify the source of the technology Instacart uses to provide that service.

Wullfraat said he thinks Instacart is likely to see interest in automated fulfillment services from retailers in large markets where order volume puts pressure on its in-store picking model.

“If it’s not a problem, why would I want to pay that extra fee for the automation? [But] if I’ve got 40 to 50 people in my store at the same time picking online orders and my extra customer sales are dropping because of it, I’m not going to be too happy” and might be inclined to look at automation, said Wulfraat.

Shoppers would rather wait longer for their grocery delivery than pay more for faster service, especially in light of inflation’s impact on household budgets.

That’s a principal conclusion of new shopper behavior research from Mercatus, a Toronto-based grocery e-commerce specialist, and Brick Meets Click, a Barrington, Ill.-based strategic advisory firm, which found that many consumers simply avoid grocery delivery services because of higher costs and because they’d rather select their own produce. Specifically, customers are turned off by additional service-related costs, not the prices paid for products online.

One in five U.S. households used an online grocery delivery service during the prior month, according to the study, released Wednesday by Mercatus. Among the households that chose not to use delivery, the top two reasons were tied at 62% each between “I do not want to pay for the extra charges, fees and tips” and “I like to select my own fruits and vegetables.”

The oldest customer group, those over age 60, was significantly more concerned with picking their own produce versus younger shoppers (75% vs. 53%), while the desire to avoid paying the service-related costs was the same across all age groups. Only one in seven households (14%) cited “the products are more expensive online than in the store” as a reason for not using a delivery service.

“If you are a grocery delivery customer — especially one using a third-party marketplace — it’s understandable that you may want to find ways to pay less given inflation’s impact on purchasing power,” explained Mark Fairhurst, vice president of marketing at Mercatus. “These incremental costs, including delivery fees, shopper service charges, fuel surcharges and even a very modest tip, are some of the last things customers view during the checkout stage, and they can add $20 or more to the bill.”

So given the choice, customers are much more likely to select a time slot later the same day, or even the next day, if that meant they could pay a lower delivery fee, Mercatus found.

When presented with a fixed fee of $9.95 for a large order (greater than $100), over 30% of customers selected to receive their order within 30 to 60 minutes, more than 40% selected to receive it within one to three hours, and fewer than 10% opted for the next day or later. However, when offered a variable fee that scaled down as the delivery time was extended, the share of shoppers that selected delivery within the 30- to 60-minute and one- to three-hour windows declined by more than half, while over 40% of customers selected to receive the order next day or longer.

“These findings reinforce the idea that customers are more sensitive to the added service costs that they can plainly see,” commented David Bishop, partner at Brick Meets Click, which focuses on how digital technology impacts food sales and marketing. “This makes sense, because accurately perceiving differences in product pricing online versus in-store, even with known value items, requires more effort on the customer’s part.”

Today, most customers only need to choose when they’d like to receive their order, as the delivery fee at that point is usually fixed. But the Mercatus/Brick Meets Click research found grocers should consider a variable fee approach based on when a customer would like to receive the order.

“Grocery customers don’t want to pay more than they must, and the explicit fees that come with online delivery are a big speed bump,” noted Sylvain Perrier, president and CEO of Mercatus. “Other aspects of this research reinforce that grocery customers shop regional grocers for different reasons than big-box mass retailers like Target or Walmart. Being more convenient is the main reason customers prefer grocery over a mass retailer, followed by the quality of the products they want to buy.”

The Mercatus omnichannel shopper behavior research was conducted by Brick Meets Click via an online survey on June 30 and July 1 with 1,847 U.S. adults. The current research, the first of a three-part series, also explored other areas of importance for regional grocers, including where households primarily shopped, how the customer demographics varied by retailer type and reasons for selecting a primary grocery store.

Even the simplest human tasks are unbelievably complex. The way we perceive and interact with the world requires a lifetime of accumulated experience and context. For example, if a person tells you, “I am running out of time,” you don’t immediately worry they are jogging on a street where the space-time continuum ceases to exist. You understand that they’re probably coming up against a deadline. And if they hurriedly walk toward a closed door, you don’t brace for a collision, because you trust this person can open the door, whether by turning a knob or pulling a handle.

A robot doesn’t innately have that understanding. And that’s the inherent challenge of programming helpful robots that can interact with humans. We know it as “Moravec's paradox” — the idea that in robotics, it’s the easiest things that are the most difficult to program a robot to do. This is because we’ve had all of human evolution to master our basic motor skills, but relatively speaking, humans have only just learned algebra.

In other words, there’s a genius to human beings — from understanding idioms to manipulating our physical environments — where it seems like we just “get it.” The same can’t be said for robots.

Today, robots by and large exist in industrial environments, and are painstakingly coded for narrow tasks. This makes it impossible for them to adapt to the unpredictability of the real world. That’s why Google Research and Everyday Robots are working together to combine the best of language models with robot learning.

Called PaLM-SayCan, this joint research uses PaLM — or Pathways Language Model — in a robot learning model running on an Everyday Robots helper robot. This effort is the first implementation that uses a large-scale language model to plan for a real robot. It not only makes it possible for people to communicate with helper robots via text or speech, but also improves the robot’s overall performance and ability to execute more complex and abstract tasks by tapping into the world knowledge encoded in the language model.

Using language to improve robots

PaLM-SayCan enables the robot to understand the way we communicate, facilitating more natural interaction. Language is a reflection of the human mind’s ability to assemble tasks, put them in context and even reason through problems. Language models also contain enormous amounts of information about the world, and it turns out that can be pretty helpful to the robot. PaLM can help the robotic system process more complex, open-ended prompts and respond to them in ways that are reasonable and sensible.

PaLM-SayCan shows that a robot’s performance can be improved simply by enhancing the underlying language model. When the system was integrated with PaLM, compared to a less powerful baseline model, we saw a 14% improvement in the planning success rate, or the ability to map a viable approach to a task. We also saw a 13% improvement on the execution success rate, or ability to successfully carry out a task. This is half the number of planning mistakes made by the baseline method. The biggest improvement, at 26%, is in planning long horizon tasks, or those in which eight or more steps are involved. Here’s an example: “I left out a soda, an apple and water. Can you throw them away and then bring me a sponge to wipe the table?” Pretty demanding, if you ask me.

Making sense of the world through language

With PaLM, we’re seeing new capabilities emerge in the language domain such as reasoning via chain of thought prompting. This allows us to see and improve how the model interprets the task. For example, if you show the model a handful of examples with the thought process behind how to respond to a query, it learns to reason through those prompts. This is similar to how we learn by showing our work on our algebra homework.

So if you ask PaLM-SayCan, “Bring me a snack and something to wash it down with,” it uses chain of thought prompting to recognize that a bag of chips may be a good snack, and that “wash it down” means bring a drink. Then PaLM-SayCan can respond with a series of steps to accomplish this. While we’re early in our research, this is promising for a future where robots can handle complex requests.

Grounding language through experience

Complexity exists in both language and the environments around us. That’s why grounding artificial intelligence in the real world is a critical part of what we do in Google Research. A language model may suggest something that appears reasonable and helpful, but may not be safe or realistic in a given setting. Robots, on the other hand, have been trained to know what is possible given the environment. By fusing language and robotic knowledge, we’re able to improve the overall performance of a robotic system.

Here’s how this works in PaLM-SayCan: PaLM suggests possible approaches to the task based on language understanding, and the robot models do the same based on the feasible skill set. The combined system then cross-references the two to help identify more helpful and achievable approaches for the robot.

For example, if you ask the language model, “I spilled my drink, can you help?,” it may suggest you try using a vacuum. This seems like a perfectly reasonable way to clean up a mess, but generally, it’s probably not a good idea to use a vacuum on a liquid spill. And if the robot can’t pick up a vacuum or operate it, it’s not a particularly helpful way to approach the task. Together, the two may instead be able to realize “bring a sponge” is both possible and more helpful.

Experimenting responsibly

We take a responsible approach to this research and follow Google’s AI’s Principles in the development of our robots. Safety is our number-one priority and especially important for a learning robot: It may act clumsily while exploring, but it should always be safe. We follow all the tried and true principles of robot safety, including risk assessments, physical controls, safety protocols and emergency stops. We also always implement multiple levels of safety such as force limitations and algorithmic protections to mitigate risky scenarios. PaLM-SayCan is constrained to commands that are safe for a robot to perform and was also developed to be highly interpretable, so we can clearly examine and learn from every decision the system makes.

Making sense of our worlds

Whether it’s moving about busy offices — or understanding common sayings — we still have many mechanical and intelligence challenges to solve in robotics. So, for now, these robots are just getting better at grabbing snacks for Googlers in our micro-kitchens.

But as we continue to uncover ways for robots to interact with our ever-changing world, we’ve found that language and robotics show enormous potential for the helpful, human-centered robots of tomorrow.

Butted up to the edge of downtown Vancouver, there is little room for the second-biggest marine terminal at Canada’s largest port to expand. Yet DP World is boosting Centerm’s capacity by 66 percent despite increasing its footprint just 15 percent.

The modernization of the Centerm terminal shows how North American operators of land-constrained facilities can invest in new equipment, including two new quay cranes, and tap artificial intelligence (AI) to keep cargo moving faster to, in effect, create more functional capacity. When the expansion is complete in November, Centerm will have an annual capacity of 1.5 million TEU on just 81 acres, Maksim Mihic, CEO and general manager at DP World Canada, told JOC.com previously. DP World didn’t disclose the cost of the project.

The approach makes even more sense considering the last more than two years of port congestion. Clogged marine terminals often reduce how many daily turns — container pick-up, drop-offs, or both — drayage drivers can make. That hurt not only drayage providers’ consignees and shipper customers, but can encourage drivers to leave the market, reducing harbor trucking capacity. DP World’s Vancouver project also shows how terminal operators can gain functional capacity on a limited footprint without having to make massive investment in semi- or fully automated berth operations, a sore point — if not a flashpoint — for some longshore unions.

While relocating some older buildings helped free up space, it is the major rethinking of truck gates that freed up more terminal capacity. Centerm used to have 13 in-gates, four out-gates, and approximately 75 staging areas. Now, the facility has just four in-gates, two out-gates, and no staging areas.

That’s made possible by a fully automated process that clears truckers for security and gives drivers instructions for pick-up and drop-off — all in a single in-gate transaction. The “Optimal Character Recognition” (OCR) technology, which scans camera-collected images and then analyzes them via AI, has slashed the processing time from an average of 4.5 minutes to 45 seconds. Of the three Vancouver container terminals, Centerm has consistently outperformed the others in keeping the time in and out of facilities under an hour. In the first week of August, for example, 88 percent of drivers got out in and out of Centerm in under an hour, according to Vancouver Fraser Port Authority’s online port performance tracker.

Before the new truck gates came, truckers had to pick up the phone to communicate their appointment to check if they could retrieve a container sooner. The new process, built around truck visits rather than terminal appointments, allows truckers to complete up to six transactions — either pick-ups or drop-offs — without any intervention or assistance from a checker. If there are any security or commercial exceptions flagged by OCR, truckers are sent to a separate line where issues are addressed manually. In the future, truckers will be able to manage exceptions via a mobile app on their cell phones. Unsurprisingly, there hasn’t been any pushback from truckers over the new gates.

“Any technology that will increase their performance and their turnaround time they will accept,” Maksim said.

The modernization project also speeds up how Centerm can get railed containers in and out of the terminal. The terminal's rail footage has been expanded from 8,000 feet to 15,000 feet. That coupled with the replacement of rubber-tire gantry cranes (RTG) with five semi-automated rail-mounted gantry cranes (RMGs) allows the terminal to build longer unit trains, and in faster time, because it delivers containers from the yard straight to the rail track.

Just on the other side of that rail track lies hip breweries and cafés. When space is tight like that, only speeding up freight flow will create significant capacity.

Amazon Australia has launched free live virtual tours of its fulfilment centres in Sydney, Melbourne and Brisbane to give people a sneak peek behind the scenes of staff work collaboratively with advanced robotic technology at the site to see how their online shopping cart gets to their doorstep.

Customers will be able to take free live virtual tours of the sites four days a week, and see how the contents of their online shopping cart make it from the warehouse to their door, as well as get “up close and personal” with Amazon’s fulfilment technology. Virtual guides will introduce some of the people who pick, pack, and ship orders throughout Australia and customers will be able to see the vast quantities of products stored at the fulfilment centers, ready to ship.

Each fulfilment centre tour is live, Amazon confirmed with Gizmodo Australia, despite it being virtual, and those watching along will hear testimonials from workers. There is an option for a live Q&A while you’re attending the tour, too.

According to Mindy Espidio-Garcia, the newly appointed director of operations at Amazon Australia, the tours provide Australian customers with an opportunity to learn how their orders are fulfilled and meet some of the team who make that happen. Prior to moving to Sydney, Espidio-Garcia spent eight years in fulfilment centres in the U.S..

“At Amazon, our promise is all about providing great value and fast delivery for our customers. In order to do that, we’ve hired talented employees from right across the country, and invested in the systems and technology to support them. With online shopping now a part of everyday life, this is the perfect opportunity for customers to join us for an hour to see what happens after they place their order,” she said.

The free tours will last one hour, and Australians can reserve them online via the Amazon website.

In April, Amazon Australia opened the doors to its Sydney Robotic Fulfilment Centre, Australia’s first and largest robotics warehouse, spanning 200,000sqm across four levels.

Tesla Megapack now available for utility-scale energy storage https://t.co/MQMgMkFfNm

— Elon Musk (@elonmusk) July 29, 2019

On August 9, the City of Austin officially approved the project, which has no set capacity as of yet but is listed at 53.27 acres in size. Tesla’s planned capacity for the BESS project, which will utilize the company’s commercial battery known as Megapack, will likely be revealed in the site plan when it is finalized by the automaker. The City of Austin currently has the site plan listed as “Pending.”

Megapacks are utilized in many large-scale applications across the world and are capable of storing 3 MWh of energy — enough to power an average of 3,600 homes for one hour.

Tesla has been building Gigafactory Texas for several years, and production and deliveries began in April of this year. Building the Model Y initially, Tesla plans to bring a number of its future projects to the plant for manufacturing, the most notable being the Cybertruck. Musk confirmed once again last week that the Cybertruck would begin production at Gigafactory Texas next year.

Gigafactory Texas is a considerably large plant, and when it’s churning out vehicles at full capacity in a few years, Tesla will likely build between 500,000 and 1 million vehicles at the plant. Unpredictability in terms of weather and climate in Texas may be the main reason for Tesla’s strategy to build a massive BESS project at the plant. Texas gets incredibly hot during the Summer but also has harsh winters. Last year, Tesla faced this first-hand during the early construction phases of the factory. Frigid temperatures moved through the region and caused widespread outages.

Tesla’s BESS project at Gigafactory Texas will help avoid these unpredictable situations. Vehicle production stoppages can cause months of turmoil even if lines are inactive for a few hours, so Tesla is obviously taking steps to avoid this at all costs.

However, Tesla needed to go through the normal regulatory processes, which were officially completed last week. Austin approved the project on August 9.

Tesla has plans to expand the factory in other capacities as well. In July, Tesla filed to build on a 68.11-acre plot of land, which would be held for “industrial use facilities with associated improvements.”

Tesla’s approved permit for the Gigafactory Texas BESS is available below:

Introducing Megapack: Utility-Scale Energy Storage >

Oxbotica is an autonomous vehicle software company that was founded out of Oxford University back in 2014.

Our mission is to transform the way we move people and goods by enabling all vehicles to do more. Our full-stack, end-to-end autonomy software is both vehicle- and platform- agnostic, making it applicable across a multitude of industries both on- and off-road. We’re working to build an eco-system that supports the adoption of autonomous vehicles, building partnerships to accelerate the deployment of autonomy for real-world application.

Our technology enables machines to robustly navigate, understand and act in any environment, without dependence on any external infrastructure – even GPS. Building further, we have created the software ecosystem needed to develop, deploy and operate autonomy solutions, including simulation, data management, calibration, fleet management and our robust machine learning infrastructure.

This approach makes our technology exceptionally flexible and uniquely positioned to provide autonomy solutions for remarkably varied vehicle platforms and domains, both on- and off-road.

We call this Universal Autonomy.

Founded in 1992, the robotics company Boston Dynamics can look back on a long history of research and development. However, artificial intelligence has only played a minor role in this. Instead, the company has focused on frictionless robot mechanics combined with hand-programmed capabilities.

More AI for Spot, Atlas and Co.

But that’s changing: cognitive advances in artificial intelligence, such as machine vision, are creating new opportunities in robot control as well. Recently, Boston Dynamics has increasingly switched from manually programmed motion sequences to automated ones and is using more computer vision, for example for its Stretch warehouse robot.

Parkour is the perfect sandbox for the Atlas team at Boston Dynamics to experiment with new behaviors. In this video our humanoid robots demonstrate their whole-body athletics, maintaining its balance through a variety of rapidly changing, high-energy activities. Through jumps, balance beams, and vaults, we demonstrate how we push Atlas to its limits to discover the next generation of mobility, perception, and athletic intelligence.

AI for robotics will be further advanced at the newly established AI Institute: Boston Dynamics says the research will focus on cognitive AI, AI for sports or robot motion, organic hardware design, and ethics and policy. Each of these disciplines contributes to advanced robots, the institute’s announcement says.

Initially, Boston Dynamics and parent company Hyundai are investing $400 million to build the institute, which will develop its own technologies and collaborate with research units at other companies and universities.

Stretch is a box-stacking, pallet-moving robot from the company that created the world's most famous robotic dog, Spot.

Robots should become more like humans

The institute’s goal is to develop a new generation of robots that are “far better than anything that exists today.” Robots must become “smarter, more agile and dexterous, and generally easier to use” and “more like people”, the company says.

Once that goal is achieved, it says, robots and other types of intelligent systems could further improve productivity, take over dangerous jobs for humans, care for people with disabilities, or help people overall “live better lives.”

With the AI Institute, Boston Dynamics could try to put research projects and profitable products on their own feet: For more than two decades, the company was primarily a research and development company. It didn’t launch open robot sales until the summer of 2020 with its Spot dog robot. It also introduced Stretch, a logistics robot designed to help in the warehouse at DHL, for example.

On the other hand, there is the visionary humanoid robot Atlas (see our history of robotics), which has no immediate practical use yet (and may never have), but which will advance robotics overall as a research project.

Boston Dynamics is likely to focus more on commercial, productive robots, also considering the economic requirements of its listed parent company Hyundai, while the Boston Dynamics AI Institute is pushing ahead with complex basic research into robotics.

This theory is supported by a personnel decision: Al Rizzi, who has more than 25 years of experience in robotics development – including 17 years as a senior scientist at Boston Dynamics – will become chief technology officer of the AI Institute.

• Instacart has launched a new feature, known as OrderUp!, that lets customers order items from two retailers but only pay one delivery fee, the e-commerce company announced on Friday.

• After placing a grocery order from one retailer, customers will have a limited time to shop from an additional retailer without incurring a second delivery charge.

• The feature comes at a time when third-party e-commerce providers are refining and rolling out new abilities for customers, workers and grocers.

Instacart, the market leader in the third-party grocery e-commerce space, has been fighting to keep its dominance among grocers and relevance among shoppers as companies like Uber and DoorDash ramp up their grocery game.

Instacart’s OrderUp! feature is similar to DoorDash’s DoubleDash, which DoorDash introduced last year as a way to let shoppers add items from another merchant to their original order for no additional delivery fee or order minimum. Both companies’ features allow customers to get more items with fewer fees.

The recommendations OrderUp! provides can include alcohol, beauty, pets, electronics, office supplies and other types of products.

In the announcement, Instacart noted that customers may not always be available to find all of the items they need from one retailer, which is where OrderUp! steps in. Customers must meet a $10 minimum in order to buy items from an additional retailer with OrderUp!, Instacart told TechCrunch.

The tools from Instacart and DoorDash mimic in-person shopping where customers will make multiple stops in one trip to buy the items they need.

DoorDash’s DoubleDash feature has proven popular among customers. Half of DoubleDash users order from merchants they haven’t ordered from before, Fortune noted in February. “More customers place a bundled order now than ever before,” Helena Seo, head of design for DoorDash, told Fortune, calling the feature “a huge success.”

Another competitor, Uber, recently rolled out a series of changes to its Uber Eats app to make grocery shopping for both customers and gig workers more convenient. Last year, Uber launched its own tool on Uber Eats with convenience stores, like Wawa and 7-Eleven, that is similar to DoubleDash, Fortune noted. Insider said at the time it was announced that the add-on feature bundles food and grocery orders under one delivery fee.

DoorDash’s aggressive push into the grocery space continued Monday when it announced a deal with Grocery Outlet Holding. DoorDash will provide delivery service through its DashPass service.

Based in Emeryville, California, Grocery Outlet (NASDAQ: GO) provides grocery items to 420 independently operated stores in California, Washington, Oregon, Pennsylvania, Idaho, Nevada, New Jersey and Maryland. The company serves 1.5 million shoppers each week.

“Our partnership with DoorDash will help save shoppers time and money,” said Grocery Outlet CEO Eric Lindberg. “In addition to bringing more of our great products direct to consumers, our DoorDash partnership will help Grocery Outlet reach more customers with great prices during a time where every penny counts.”

Grocery Outlet said 398 locations will be part of the program.

DashPass is DoorDash’s (NYSE: DASH) membership program. For $9.99 a month, DoorDash waives delivery fees on eligible orders of $35 or more. These include orders from restaurants, grocery and convenience stores.

“DoorDash is committed to providing customers with all the selection they crave at affordable prices in a way that’s convenient for them and their families,” said Shanna Prevé, vice president of business development at DoorDash. “As consumers face rising prices, we’re thrilled to partner with Grocery Outlet to provide consumers across the country with a new way to purchase more affordable groceries while maximizing their budgets. With this partnership, consumers can find and enjoy even more affordable grocery selection on our marketplace.”

The partnership with Grocery Outlet is the latest in a series of moves as DoorDash tries to gain market share in the grocery delivery space. In early August, the company announced a deal with Associated Wholesale Grocers (AWG) to provide on-demand grocery delivery services to independent food retailers. Customers at participating stores can order groceries through the DoorDash app.

AWG boasts over 1,000 member companies with more than 3,400 locations in 31 states.

DoorDash also recently signed deals with Schnuck Markets, which operates 112 stores in four Midwestern states, and Food City for delivery from 117 of its 138 stores. In February, DoorDash launched an express grocery delivery service with Albertsons Cos. (NYSE: ACI). That program enables delivery of more than 6,000 items such as produce, dairy, eggs, snacks, frozen foods and packaged goods in under 30 minutes at participating Albertsons Cos. locations. These include Safeway, Vons, ACME Markets, Jewel-Osco and Tom Thumb in more than 20 cities.

Still, DoorDash maintains a low penetration rate in an online grocery market that is expected to reach $2.1 trillion by 2030. Data from Bricks Meets Clicks found July online grocery sales in the U.S. increased 17% on a year-over-year (y/y) basis to $7.8 billion. Delivery expanded 5% y/y and held 34.2% of the online grocery delivery market.

“Based on third-party data, we estimate our business currently addresses global markets with more than 300 million households and 750 million people, total restaurant spend of over $1 trillion and total grocery and convenience spend of over $2.5 trillion,” DoorDash said in a shareholder letter accompanying the earnings. “Based on those estimates, we believe the Wolt and DoorDash Marketplaces currently represent just 5% of restaurant spend in these markets and well under 1% of convenience, grocery and non-food spend.”

The company said it believes it has a “large opportunity for growth” in the space.

Story by Brian Straight @ freighwaves.com

The most disconcerting thing about Masayoshi Son at the announcement of SoftBank’s quarterly results was not the record-breaking $23bn loss, the promise of ferocious cost-cutting or even, two days later, the historic selldown of the company’s stake in Alibaba.

It was how much he looks and sounds like the 65-year-old chief executive of a Japanese company: a conservative cash-hoarder in full protective mode, wary of the future and wearily trimming dreams to reflect the here and now.

Over the years, with rocket-fuel panache and confidence, Son the transformational dealmaker and Vision Fund founder has done everything to avoid this perception. When set against almost every other large Japanese company, he has been more aggressive in his bets, more creative in his use of debt and more committed to selling investors on the idea that his Big Picture is the biggest and most picturesque in the market.

Son, uniquely for Japan, had the knack of turning vision into an asset class. The question he will have to answer — on behalf of vision-peddlers around the world — is whether that particular alchemy survives a prolonged tech rout, higher interest rates, inflation and disruption or only ever works in a bull market flooded with cheap cash. These are very early days, but the signs are not good.

Son’s presentations, with all their deliberately anti-tradition aplomb, have complemented his efforts to stand apart from the rest of corporate Japan. Any company can stick stratospheric sales projections on a Power Point slide: Son’s is the only one that can, to a sage nod from analysts, throw in a telepathic dog or an artist’s impression of how we will cuddle one another in the distant future.

But last week’s presentations were all mud and no stars. In front of the media, he adopted the agreed choreography of Japanese CEOs in a bind: chastened acknowledgment of previous hubris and a prominent show of battening down the financial hatches.

To analysts and investors, the message of risk aversion was even stronger. Repeatedly, Son answered questions by referring to SoftBank’s “defensive mode” and its emphasis on piling up and retaining cash. Parts of the company’s vast debt will naturally mature, he noted, and be paid down during this phase. Overprotectiveness, he said in a striking break with the image he has fought so hard to sell, is an accusation worth wearing to ensure survival. If, as some suspect, this is all rather more of an act than a true change of character, it is an impressive bit of misdirection.

“It’s definitely heavy rain,” concluded Son, every bit the dispirited unicorn-hunter. “How deeply will the rain damage our asset value? We don’t know. Therefore, we cannot take too much risk.”

Defence. Survival. Cash. Indefinite risk aversion. The problem with these words, when spoken by a Japanese CEO, is not their necessity in the face of clear and present danger. Although he provided reassurances that his vision remained unchanged, Son knows better than anyone the direness of the situation his mighty Vision Fund technology portfolios are now in, and how extensively global events and markets could continue to annihilate fortunes. He highlighted China, where SoftBank still sees big opportunity but has been forced by a variety of factors to turn particularly cautious.

The problem, as great swaths of corporate Japan have spent decades demonstrating to the fundamental cost of innovation, entrepreneurialism and the broader economy, is that defensiveness and cash-hoarding can become unshakeably addictive in the longer term. For many, the collapse of the 1980s bubble was the crisis that started the habit; for others it was the financial crises of 1997 or 2008. The current “correction” could well join the list of traumas that cause Japanese companies permanent loss of risk appetite.

The alarming thing, therefore, is the spectacle of Son both deploying the language of “ordinary” Japanese CEOs and entering their drear philosophical domain — however justified it is for SoftBank right now or how temporary it ultimately proves. Son told analysts that he can “convert into offence mode very quickly”. Japan needs that to be true.

SoftBank to Take 40% Stake in Norway’s AutoStore >

The stakes here are much higher than SoftBank’s survival. Japan clearly does not need every CEO to nurture and sell visions like Son. But it definitely needs a decent crop of those that do. Japan will become less likely to generate such a crop the longer Son is seen cowering. The next months will be critical: a tug of war between Son’s natural addiction to risk and Japan’s addiction to its avoidance. For the moment, Son has made himself look predictable; history, though, suggests that is exactly when he is most unpredictable.

Self-made billionaire Masayoshi Son’s long-termism helped grow an empire far beyond Japan

Amazon sells millions of products; each of its 175 warehouses ship tens of thousands of them each day; and those warehouses look like live-action games of Chutes and Ladders—whizzing with a meticulously coordinated system of conveyor belts, slides, and machines that do everything from attach labels to boxes to check weight for quality control.

In the process of building this elaborate system, Amazon has completely redefined warehouse efficiency and customer convenience. Through its Prime membership, it has promised 150 million customers free two-day shipping on more than 100 million products. Amazon brought in $75.5B in sales revenue in the first quarter of 2020. “That was the major innovation,” says Daniel Theobald, who cofounded a warehouse robotics company called Vecna in 1998 and counts major retailers and logistics companies as clients. “As soon as people realized, you can order something and get it tomorrow, that turned the industry upside down.”

The core of this disruptive efficiency, though, is not Amazon’s automated shelf-moving warehouse robots, which is the innovation that gets the most attention. And it isn’t, on its surface, something that you would associate with a well-oiled machine. It’s not even a breakthrough technology. In fact, some version of it was already in place when Alperson worked in Amazon’s early warehouses.

What makes Amazon’s warehouses work is the way they organize inventory: with complete randomness.

How ecommerce made randomness efficient

At a traditionally organized warehouse, when a shipment of, say, toothpaste arrives, an employee looks up where the toothpaste shelf is located, and then moves the box to that shelf.

When a box of toothpaste arrives at an Amazon warehouse, though, the process works differently. An employee removes each individual tube and stows it wherever he finds open space. Placement is completely random. Items aren’t organized by where they’re being shipped; they aren’t—aside from very big items—organized by size; and they aren’t organized by the type of customer who is likely to order them. A shipment of 50 tubes of toothpaste may ultimately be distributed to and stored in 50 different places.

On a visit to an Amazon warehouse in New Jersey last year, I saw a box of Irish breakfast tea, next to a board game called “Quick Cups,” next to a Hamilton Beach Juicer.

This random system has been in place since early on in Amazon’s 24-year history, and to a casual observer, the result appears chaotic. The reason it makes sense to group these random products together has everything to do with technology: the speed and frequency with which customers order online, and the tools that Amazon has developed to keep track of every item in its vast warehouses.

First, random storage makes finding the toothpaste faster in an era of on-demand efficiency. If there were a dedicated “toothpaste shelf” and someone ordered toothpaste, a “picker”—how Amazon refers to employees who gather items—would need to travel there, whether he were 10 feet or 100 yards away from that location. But if the warehouse stores toothpaste in 50 different locations, there’s a much better chance that there’s a tube close to some picker. There’s also a greater chance that the second item the customer ordered is also nearby.

“With the millions of items that we ship, every opportunity to improve a process by a second is relevant,” Alperson says.

Randomness is also preferable when it comes to managing the wide range of items customers now order online—most practically by saving space. Amazon warehouses carry a huge variety of items that can be ordered at any moment, but they do not carry a huge number of each item. “They may only have one box of Cheerios,” says Tom Galluzzo, the founder of Iam Robotics, which makes warehouse robots. “If you were to have a space for every product, you would need a gigantic warehouse.” Amazon’s largest warehouse is already 1 million square feet, which is about 17 NFL football fields in size. Reserving empty space on the “toothpaste shelf” while waiting for the next shipment of toothpaste would mean its warehouses would need to be even bigger. It’s more efficient to use any free shelf space available.

That Amazon and other ecommerce companies sell directly to customers (as opposed to retailers) is also a factor in making randomly stowing items efficient. They ship a single tube of toothpaste to a customer, not a box of 50 tubes to a store, so there’s no reason to keep all 50 tubes together in the warehouse. They’ll be unbundled before they’re shipped out, in any case.

Amazon didn’t invent this strategy, but the company has employed it at a scale that has never been seen before.

The company’s inventory management system, which it built itself, makes this random storage philosophy possible. At Amazon’s warehouses today, before a worker places something on a shelf, she uses a handheld computer to scan a barcode on both the product and the shelf. This allows the computer to keep track of where every item is located.

Adding robots to random

In 2012, Amazon acquired the company that makes its robots, called Kiva Systems, for $775 million, and since 2014 it has deployed more than 100,000 of the machines in 25 of its 149 warehouses worldwide. Though these robots are often hailed as the key to Amazon’s efficiency, they wouldn’t work as well without Amazon’s simple system of random storage.

Inventory at warehouses with robots is stored using the same strategy as in Amazon’s non-robotized warehouses. The difference is that Amazon workers in robot-equipped warehouses don’t need to bring items to the shelves for stocking—the robots bring the shelves to them. Rather than humanoid robots, they’re small box-like machines that pick up shelves and move them along a grid, shuffling other shelves within the grid to make way for whichever shelf the computer system says contains available space. As with non-robotized warehouses, the workers then scan the item, place it on one of the shelves—wherever there is free space—and scan the shelf so the computer knows where the item is located.

Kiva’s robots have taken Amazon’s random organization strategy and made it even faster. Deutsche Bank estimated in 2016 that the “click to ship” cycle—the time it takes to pick a product from the stacks, pack it, and ship it—was around 60 to 75 minutes when employees manually handled the process. With the aid of robots, the same job could be done in 15 minutes. Warehouses equipped with Kiva robots can also hold 50% more inventory than those without them.

Theobald, whose own warehouse robotics solution works with both the traditional and random strategies, says that when he started working in the industry 20 years ago, about 20% of warehouses used the random strategy. Now, he says it’s around 50%. Random stow makes sense when there’s limited space, or when the timing or quantity of inventory is unpredictable.

Twenty years ago, about 20% of warehouses used the random strategy. Now, it’s around 50%.

“Retail is fickle, especially when you are shipping to individual customers like you and me (rather than, say, stores),” says John Bartholdi, a professor of industrial and systems engineering at Georgia Tech. “Both Amazon and Walmart have huge populations of product and move lots of it, a few pieces at a time. There is huge product churn as they reconfigure their offerings constantly. It is impossible to plan and manage space in such a dynamic environment.” With products offered in stores changing quickly, it makes even less sense to save dedicated space for one product or another.

After Amazon moved the bar for immediate gratification by offering free two-day delivery to Prime customers, many retailers have meanwhile adjusted partly by spreading a product not only throughout a warehouse, but throughout different warehouse locations, so it has a better chance of being closer to the customers who order it, and thus less expensive to ship quickly. Many companies aim to reduce labor costs by automating more of their warehouses so they can spend more on faster shipping.

Amazon has also focused on improving its delivery process over the “last mile,” from warehouse to doorstep. The company is building its own cargo airline and has been experimenting with drones around the world, both efforts that have attracted the attention of tech enthusiasts. But while the key to a speedy delivery is making it as streamlined as possible, it all starts at the warehouse, where Amazon’s strategy rests on a simple decision to leave stuff wherever there’s space.

If you live in a city where Amazon offers their Prime Now service, you can have tens of thousands of items delivered to your door in an hour. Howe...

While the plant will help transform the company for the future, its name pays respect to the past.

Believed to be the first Black letter carrier in Canada, Albert Jackson faced significant racial barriers in his workplace. He was initially barred from working as a letter carrier, before winning the right to do the job he was hired for.

Tour of the Albert Jackson Processing Centre

Check out our video tour of the facility

Members of the Jackson family attended the inauguration event in front of the new building, located in northern Scarborough.

The $470 million state-of-the-art facility will help Canada Post meet the rapidly changing needs of Canadians and businesses across the country – and handle the continued growth in online shopping for years to come.

Facts at-a-glance:

• The building is 585,000 square feet – roughly the size of six CFL football fields.

• It will be able to sort more than 60,000 packages per hour – 50 per cent more than Canada Post’s Gateway facility in Mississauga, currently the company’s largest parcel plant.

• The facility will be able to process more than one million packages a day at full capacity.

• It will be Canada Post’s first zero-carbon building and the largest industrial project in Canada with the Zero Carbon Building Standard designation.

• The facility is an important part of Canada Post’s plan to increase parcel capacity by more than 50 per cent across its network over the next seven years, to manage demand beyond 2030.

• The facility is under construction and is expected to be operational in early 2023.

The story of Albert Jackson

The naming of the Albert Jackson Processing Centre is intended to honour, share and preserve Jackson’s legacy, and serve as a reminder of the importance of equality and respect in the workplace.

Canada Post previously paid tribute to Jackson in 2019, when he was commemorated on a stamp. You can discover more about Jackson and view the stamp by visiting the article that was released at that time.
Watch the video to learn about Albert Jackson’s story:

The company’s plant in Caseyville, Illinois will expand by 170,000 square feet. Tyson officials say the expansion could lead to anywhere from 200-500 new jobs. It’s also expected to bring new production lines and increase the level of automation at the plant.

“We’re thrilled to celebrate the expansion of our Caseyville prepared foods plant, creating new job opportunities for those in the community and keeping workplace ease and efficiency in mind for our current team members,” said Noelle O’Mara, Group President of Prepared Foods for Tyson Foods. “With automated warehousing and robotics at the heart of the project, we’re looking forward to its full completion.”

The Caseyville facility currently has 293 employees. Tyson Foods had recently raised their total compensation, including boosting hourly wages to at least $21 an hour.

1/2: It was a great morning in St. Clair County, IL as @TysonFoods broke ground on the $180 million expansion of their Caseyville facility. The 170,000 s.f. expansion will add 250 new jobs to the existing workforce of nearly 300. pic.twitter.com/s4tQD83xHR

— Mark Kern (@ChairmanKern) August 3, 2022

The meat company has been on a tear of plant expansions and hiring this past year. In Tyson’s May earnings call, CEO Donnie King said it planned to launch about 10 projects to expand capacity for the third quarter, representing 25 million pounds of volume for prepared foods alone.

Most recently, Tyson announced a $90 million project to increase capacity at its chicken processing plant in Forest, Mississippi. The expansion, which includes adding automation, would create more than 320 jobs.

Our manufacturing industry is booming and @TysonFoods’ expansion in Illinois is a prime example.

Thanks to our EDGE credit program, Tyson is:

✅ Investing $180 million in the community
✅ Creating over 250 new jobs pic.twitter.com/ygsrktflFf

— Governor JB Pritzker (@GovPritzker) August 3, 2022

Within prepared foods, Tyson has been especially active in launching new products around snacking and breakfast. Last September, it entered the kids snacking segment with the launch of Hillshire Farm Snacked. The addition joins other snack options in its portfolio including Any’tizers chicken appetizers.

And for Jimmy Dean, Tyson has added plant-based options, as well as a snack offer for breakfast: Breakfast Nuggets, breaded pieces of seasoned meats, eggs and cheese.

Illinois Gov. J.B. Pritzker joined the company Wednesday to celebrate the upcoming expansion.

“I am thrilled to celebrate the expansion of Tyson Foods’ Caseyville facility thanks to our EDGE credit program,” said Pritzker. “Tyson’s decision to expand in Illinois speaks to our strengths in manufacturing, our world-class infrastructure, and our abundant and highly talented workforce.”

Tyson’s Caseyville plant is a larger producer of Hillshire Farm® and Jimmy Dean® products. The company has a significant economic impact on Illinois. outputting nearly $1 billion in Illinois alone. Tyson has more than 4,000 current full-time staff members in Illinois and nearly 300 staff members in Caseyville.

Ten years ago, global e-commerce sales amounted to just over 5% of total retail sales. Today, that number is closer to 20%. Most projections have e-commerce exceeding 30% by the end of the decade. Covid contributed to driving that number up at record rates, though it has receded in recent months, with shoppers clamouring to get back to the malls to regain some sense of normalcy.

Whether or not the increase in automation spend encounters further spikes, the compound annual growth rate (CAGR) of the warehouse automation industry as a whole is expected to exceed 10% over the next 8 years.

The warehouse robotics industry is growing even faster than that. According to Acumen Research, the size of the global warehouse automation market was approximately $20 billion in 2021 and it is expected to rise to over $60 billion by 2030. ResearchAndMarkets predicts that the combined growth of the automated guided vehicle (AGV) and automated mobile robot (AMR) markets will grow by over 30% annually, to $18 billion by 2027. Given the skyrocketing growth, the most significant challenges facing many warehouse automation vendors will be to attract and train sufficient numbers of skilled resources to implement the projects that they win.

So, what does all this have to do with e-commerce? E-commerce is not a market unto itself, rather a submarket that is associated with most major verticals. It has become a particularly significant channel for consumer spending across general merchandising, grocery, apparel, and health/pharma, leading to a surge in demand in the parcel industry as well.

Through the shift, consumers have become king. They want what they want, when they want it, and if they aren’t able to get it on their terms from one retailer, they will search for another retailer who can perform better. Gone are the days where manufacturers and retailers wield the balance of the power and influence.

Many manufacturers and distributors that invested heavily in automation in the 2000’s and 2010’s, now realize that their efforts were insufficient. They focused primarily on the efficient fulfillment of goods to retail stores, typically involving large quantity orders packaged in cases and shipped on pallets. They prioritized the automation of case picking and pallet building, rather than item (eaches) picking and case (or envelope) packing. Today, many distribution centers must figure out how to support retail and consumer orders in tandem, which adds significant complexity to their automation efforts.

The primary options that manufacturers and distributors face today as they strive to maximize their e-commerce business opportunities are the following:

•Outsource their e-commerce orders to Amazon, for both sales and fulfillment.

•Sell directly, but partner with a third party logistics (3PL) provider to manage fulfillment.

•Rely on individual retail stores to process their e-commerce orders.

•Invest more heavily in automation to optimize their sales through e-commerce channels.

Outsourcing to Amazon has its advantages and disadvantages, but given the costs, many manufacturers and retailers don’t see it as a long-term solution due to a rise in their e-commerce business as a percentage of total sales. The 3PL market will continue to grow on the back of e-commerce, and those 3PL providers that make the required investment in next generation automaton solutions are likely to thrive.

Many retailers, with grocery stores leading the way, are expected to invest in micro-fulfillment at increasing rates, converting the back-half of their stores into highly automated, standardized micro-warehouses. With increasing numbers of online orders, it only makes sense to utilize the full volume of a portion of their stores to rapidly retrieve products from any height. It follows that a smaller percentage of floor space will be used for in-person shopping. The last option is to make the required investment to optimize picking and packing of the small quantity orders that are associated with e-commerce, and to build the required relationships with parcel companies to guarantee rapid delivery.

Fortunately, new, innovative technologies from a host of well-funded robotics providers have created a multitude of choices, and just in the nick of time. Labor shortages have become a major challenge for many warehouse operators and there is no indication that these shortages will subside any time soon. To meet the demands of customers, an increasing number of manufacturers and retailers are piloting solutions with autonomous and articulated arm picking robots. They are minimizing their reliance on workers to perform repetitive, mundane tasks, and training an increasing number of them to perform more interesting, complex jobs.

While some companies, Shopify being a recent example, grossly over-estimated the Covid driven acceleration of e-commerce, the longer-term trend has not changed. Robotic technologies and services are getting better, and faster, every day. The time is now for manufacturers, distributors and retailers to devise a long-term e-commerce strategy that works for them.

There is no one size fits all approach, but it is a mistake for sellers not to acknowledge that the way consumers are buying is shifting. Those that don’t, are likely to become the companies we remember with fondness from days gone by, just as we remember Sears and Blockbuster today.

Pete Devenyi is an experienced technology executive with a focus on warehouse automation. He is the author of the highly acclaimed technology career book, Decoding Your STEM Career, published by Business Expert Press. For over thirty years, he led a career in technology, both globally and in Canada. Until June 2020, he was senior vice president of global products and solutions at Dematic. He continues to consult actively in the field. For more information about Pete, visit him here. petedevenyi.com.

The 1 million-square-foot facility in Arkansas will be serviced by DG Private Fleet, Dollar General’s in-house freight division that launched in 2016 and currently utilizes 950 tractors and drivers. The distribution center will also be a “dual facility,” meaning it will service the traditional Dollar General merchandise as well as the DG Fresh supply chain network.

The Northwest Arkansas Democrat Gazette reported that Dollar General bought the 152-acre site, which is located along U.S. Highway 70 and near an Amazon fulfillment center, from Tulip Farms Inc. for $2.4 million. The development team for the project was not released or reported.

Dollar General currently employs more than 4,300 Arkansas residents, having opened its first store in the state in 1975 and now operating approximately 500 stores. Management hiring at the industrial facility is expected to begin in spring 2023, with warehouse team member recruitment currently scheduled to begin in fall 2023.

Performance Team – A Maersk Company has announced plans for a new Toronto distribution center designed to serve the growth of Canada’s import and export cargoes via ocean, rail, air and road.

The Performance Team Toronto building will be a new state-of-the-art facility located on Airport Road in the Toronto metro-area – strategically-located as the ideal balance of distance to port, airport, and close proximity to the Canadian Rail Intermodal complex. The 568,000 square foot, 97 dock door facility will open in November 2022 and be operated by Performance Team – A Maersk Company.

End-to-end supply chain solutions will be created by Maersk’s multi-gateway Ocean services calling the Port of Prince Rupert, Vancouver, Seattle, Montreal, Halifax and Mobile (Alabama, U.S.) that can be integrated with rail service, air freight and Maersk Customs Services for customs clearance and cross border expertise.

8.6 million people live within 50 miles of the Performance Team Toronto facility, representing the highest population density in Canada. Nearly 15 million people are within 250 miles, creating Canada’s largest customer and consumer demand market.

As the largest logistics center in Canada, Toronto has superb access to seven major highways that provide access to locations across Canada and U.S. border crossings. The market is directly served and focused as a hub by both the Canadian National and Canadian Pacific railways with Intermodal railyards. In addition, the Toronto Pearson International Airport processes over 45% of Canada’s air cargo, serving 175 international destinations and most Canadian E-Commerce consumers due to the strategic geographic location. The airport also serves as the center for the region’s rail and highway network, ensuring scaled supply chains to ship to the region’s retailers who are expanding in this market.

The Performance Team Toronto building will be a new state-of-the-art facility located on Airport Road in the Toronto metro-area – strategically-located as the ideal balance of distance to port, airport, and close proximity to the Canadian Rail Intermodal complex.  The 568,000 square foot, 97 dock door facility will open in November 2022 and be operated by Performance Team - A Maersk Company.

The new Toronto facility will complement Performance Team’s existing Pacific Transload Express center in Vancouver that opened in September 2021 to make Asia/Pacific Northwest (PNW) supply chains more resilient, flexible and cost-effective. The ability to transload international containers into domestic 53-foot trailers for inland rail destination to Toronto and the U.S. Midwest enables customers to achieve overall cost savings (per cubic meter) for domestic distribution, while reducing storage costs related to port demurrage and detention of international containers.  Supply chains flowing through the facility comprise fast-moving consumer goods (FMCG) in the retail and lifestyle segment that need agile response capabilities to consumer demand fluctuations. FMCG represents 80-90% of the volumes and auto parts are 10-20% into the Midwest.

BALYO, a technological leader in the design and development of innovative robotic solutions for material handling trucks, announces the successful installation and hand over of world’s tallest autonomous VNAs at Singapore Storage and Warehouse (SSW), located in Singapore.

With a lift height of 16.8m (55’ 1”), this is the first site in the world that is operating autonomously at such height using VNA robots. This innovation is further testimony to BALYO’s technological prowess and capabilities.

Since its beginning in 1987, Singapore Storage & Warehouse has been the preferred logistics service provider to its wide base of customers and stakeholders in Singapore. The company has an established track record of helping customers successfully manage their inventory and logistics operations under normal business conditions and stepping up to support business partners during exceptional times, including emergencies.

With the company striving for innovation, SSW wanted to convert manually operated VNA in their Singapore site to autonomous robots. The main challenge in this site was height, not throughput. A 16m+ pick/drop of pallets autonomously was previously unheard of. Linde Material Handling Singapore, along with BALYO, implemented its new "Very Narrow Aisle (VNA)" autonomous model with full reliability and safety.

Thanks to BALYO’s innovative approach to safety, standard OEM forklift controls, and smart perception of pallets, reaching new heights is now possible. After a few weeks of tests in 2021 and a commissioning lead-time of 2 months, BALYO successfully ramped up and handed over four autonomous VNAs to SSW. These robots handle pallets up to 750kg at a maximum pick and drop height of 16.8m.

This capability is unique in the world today. Warehouse and Supply Chain Managers around the globe can now consider autonomous VNA at heights that were earlier not possible. This opens a new applicative segment to BALYO, its partners, and clients which were until now constrained to manual operations or less flexible fully automated warehouses (ASRS).

With the space constraints and the tight labor market, as in Singapore, UK, and Japan, there are significant warehouses operating at such heights. Managers can now engage the conversion to autonomy thanks to this technological milestone.

Ong Swee Keong, CEO of SSW, commented: "We are very happy to be partnering with BALYO & Linde for this automation project. The productivity gains have been impressive, and I am glad that the dedication and hard work put in by everyone in SSW, Linde, BALYO and our partners for this project has paid off. As SSW continues to transform and grow, we look forward to achieving even more business success with our reliable partners".

Pascal Rialland, CEO and Chairman of BALYO, commented: "This project shows the tremendous superiority of Linde-BALYO’s technology on the high-bay storage and VNA applications. Singapore has been the perfect hub to launch applications at extreme heights due to space scarcity and customer engagement toward robotics. We will pursue our commitment to engage further with Linde and their teams to expand this success at further SSW sites and other warehouses around the globe".

Duluth Trading Company, a casual wear, workwear, and accessory retailer for men and women, will build a new distribution and fulfillment facility in Adairsville.

“We are excited to welcome an iconic brand in Duluth Trading Company to the Peach State,” said Governor Brian Kemp. “We are confident this new facility will begin a prosperous relationship with the people of Bartow County as Duluth expands to meet the distribution needs of our modern economy. Georgia’s prime location and robust infrastructure allows companies to distribute products to 80 percent of the U.S. market in less than two days of drive time or two hours by plane.”

Duluth Trading’s new facility will be located at the Ashley Capital building at 400 International Parkway in Adairsville. the facility will be a first-of-its-kind automated distribution and fulfillment center for the retailer. It serves as a major investment against Duluth Trading’s Big Dam Blueprint, the retailer’s plan focused on digital growth and expansion, to better serve customers and its nationwide footprint of brick-and-mortar stores. Duluth Trading, home of best-selling Fire Hose Pants®, No-Yank® Tanks and Buck Naked™ Underwear, is based in Wisconsin and prides itself as a problem-solution workwear destination. Known for its humorous marketing and best-in-class customer service, Duluth Trading offers its products to brand fans and new customers alike exclusively on their website or in their 65 retail stores, including one in Kennesaw, Georgia.

“We are thrilled to open Duluth Trading’s first-ever automated fulfillment center in Adairsville, Georgia,” said Sam Sato, President and CEO, Duluth Trading. “With an expanded fulfillment network and state-of-the-art robotics, this new facility positions us to better serve our customers nationwide all while adding hundreds of new jobs to the Bartow County community.”

Flexible enough to support their strategic business and growth plans for the next decade, the facility design maintains Duluth Trading’s famous customer service. This omnichannel facility supports a seamless experience across Duluth Trading’s retail, wholesale and ecommerce channels in the region. Leveraging the robotic ASRS, the facility is capable of processing and shipping an impressive 160,000 units per day.ba

“We know that Duluth Trading had excellent options, which makes this announcement even more meaningful for Adairsville-Bartow County. There are many aspects of our region that make businesses successful, particularly our talented citizens and transportation corridors,” said Adairsville Mayor Kenneth Carson. “Adding to that, the caliber of Duluth’s innovations in technology and strategy, along with their excellent reputation, surely will quicken their success. We look forward to a great partnership.”

Project Manager Mellissa Takeuchi represented the Georgia Department of Economic Development’s (GDEcD) Global Commerce team on this project in partnership with the Cartersville-Bartow County Department of Economic Development, Metro Atlanta Chamber of Commerce, Georgia Power, and Georgia Quick Start.“This announcement is great news for metro Atlanta, and we welcome Duluth Trading Company’s investment in Bartow County,” said Metro Atlanta Chamber President and CEO Katie Kirkpatrick. “Metro Atlanta’s expertise in logistics coupled with an infrastructure designed to reach major population centers creates undoubted access for Duluth Trading Company to grow. Additionally, Atlanta’s strength as a technology hub will be a great asset to Duluth Trading Company as they implement the latest supply chain technology solutions.”

“Duluth Trading is a unique, recognizable national brand, and we are excited they have chosen Georgia for their first distribution center of its kind for the company,” said GDEcD Commissioner Pat Wilson. “Georgia’s logistics industry created the third most jobs last fiscal year. Our logistics advantage is further supplemented by the Georgia Center of Innovation, which works to foster growth in key industries using research-driven strategies and a wide network of public and private partners. Congratulations to our partners in Bartow County and metro Atlanta for bringing new jobs and opportunities to their communities.”

Duluth Trading will be hiring for a variety of positions, including full-time, part-time, and seasonal fulfillment center warehouse associates. Interested individuals should apply

Tokyo-based startup Telexistence this week announced it will deploy NVIDIA AI-powered robots to restock shelves at hundreds of FamilyMart convenience stores in Japan.

There are 56,000 convenience stores in Japan — the third-highest density worldwide. Around 16,000 of them are run by FamilyMart. Telexistence aims to save time for these stores by offloading repetitive tasks like refilling shelves of beverages to a robot, allowing retail staff to tackle more complex tasks like interacting with customers.

It’s just one example of what can be done by Telexistence’s robots, which run on the NVIDIA Jetson edge AI and robotics platform. The company is also developing AI-based systems for warehouse logistics with robots that sort and pick packages.

“We want to deploy robots to industries that support humans’ everyday life,” said Jin Tomioka, CEO of Telexistence. “The first space we’re tackling this is through convenience stores — a huge network that supports daily life, especially in Japan, but is facing a labor shortage.”

The company, founded in 2017, next plans to expand to convenience stores in the U.S., which is also plagued with a labor shortage in the retail industry — and where more than half of consumers say they visit one of the country’s 150,000 convenience stores at least once a month.

Video from Telexistence compares how a human stocking clerk repeatedly loads shelves with drink bottles one by one. The video says the TX SCARA robot scans to see where bottles need to be replenished based on demand and past sales. A single store can replenish 1,000 bottles in a day.

Telexistence Robots Stock Up at FamilyMart

Telexistence will begin deploying its restocking robots, called TX SCARA, to 300 FamilyMart stores in August — and aims to bring the autonomous machines to additional FamilyMart locations, as well as other major convenience store chains, in the coming years.

“Staff members spend a lot of time in the back room of the store, restocking shelves, instead of out with customers,” said Tomioka. “Robotics-as-a-service can allow staff to spend more time with customers.”

TX SCARA runs on a track and includes multiple cameras to scan each shelf, using AI to identify drinks that are running low and plan a path to restock them. The AI system can successfully restock beverages automatically more than 98% of the time.

In the rare cases that the robot misjudges the placement of the beverage or a drink topples over, there’s no need for the retail staff to drop their task to get the robot back up and running. Instead, Telexistence has remote operators on standby, who can quickly address the situation by taking manual control through a VR system that uses NVIDIA GPUs for video streaming.

Telexistence estimates that a busy convenience store needs to restock more than 1,000 beverages a day. TX SCARA’s cloud system maintains a database of product sales based on the name, date, time and number of items stocked by the robots during operation. This allows the AI to prioritize which items to restock first based on past sales data.

Achieving Edge AI With NVIDIA Jetson

TX SCARA has multiple AI models under the hood. An object-detection model identifies the types of drinks in a store to determine which one belongs on which shelf. It’s combined with another model that helps detect the movement of the robot’s arm, so it can pick up a drink and accurately place it on the shelf between other products. A third is for anomaly detection: recognizing if a drink has fallen over or off the shelf. One more detects which drinks are running low in each display area.

The Telexistence team used custom pre-trained neural networks as their base models, adding synthetic and annotated real-world data to fine-tune the neural networks for their application. Using a simulation environment to create more than 80,000 synthetic images helped the team augment their dataset so the robot could learn to detect drinks in any color, texture or lighting environment.

For AI model training, the team relied on an NVIDIA DGX Station. The robot itself uses two NVIDIA Jetson embedded modules: the NVIDIA Jetson AGX Xavier for AI processing at the edge, and the NVIDIA Jetson TX2 module to transmit video streaming data.

On the software side, the team uses the NVIDIA JetPack SDK for edge AI and the NVIDIA TensorRT SDK for high-performance inference.

“Without TensorRT, our models wouldn’t run fast enough to detect objects in the store efficiently,” said Pavel Savkin, chief robotics automation officer at Telexistence.

Telexistence further optimized its AI models using half-precision (FP16) instead of single-precision floating-point format (FP32).

• Telexistence plans to deploy AI-powered robots to restock shelves at 300 FamilyMart stores in Japan, according to a blog posted Wednesday by Nvidia.

• The robots run on Nvidia’s Jetson edge AI and robotics platform.

• Telexistence is a startup founded in 2017 and based in Tokyo. After it tackles the Japanese market, Telexistence plans to take on convenience stores in the U.S.

• “We want to deploy robots to industry that support humans’ everyday life,” CEO Jin Tomioka told Nvidia. “The first space we’re tackling this is through convenience stores—a huge network that supports daily life, especially in Japan, but is facing a labor shortage.”

• Labor shortages are everywhere in retail globally, apparently. In the U.S. there are 150,000 convenience stores while Japan has 56,000 such stores.  About 16,000 there are run by FamilyMart. Telexistence is also developing AI for warehouse logistics with robots sorting and picking packages.

• In the Japanese convenience store example, Telexistence said it will install the TX SCARA robot in 300 FamilyMart stores in late August. A video from Telexistence compares how a human stocking clerk repeatedly loads shelves with drink bottles one by one.  The video says the TX SCARA robot scans to see where bottles need to be replenished based on demand and past sales. A single store can replenish 1,000 bottles in a day.

• The robot moves in a narrow aisle with its robotic arm moving up and down and then in and out of each shelf. It grabs bottles and cans one by one with a simple robotic pincer.

• If the robot encounters miscalculations or other problems, it connects to a remote operator via the internet to take control. The video depicts a remote operator using a VR system with a headset and hand-operated controller to take control of the robot’s maneuver as needed.

• Ahead of schedule, the $403 million Urban Outfitters distribution center, which plans to bring 2,000 jobs to Wyandotte County, will be completed in the fall.

• The developer, Dallas-based Hillwood Development Co., and general contractor, New Jersey-based Blue Rock Construction, began construction on the 880,254-square-foot building in the fall of 2020 on 65 acres Kansas Speedway owns around 118th Street and State Avenue in Kansas City, Kansas.

• Construction on the distribution center, which is a large portion of the project, will be completed in October, said Mindy Rocha, owner of KCK-based CJ Industries, a subcontractor under Blue Rock. The Philadelphia-based fashion and lifestyle retailer will begin operations in the warehouse by June 2023.

• The facility is slated to become the "heart" of Urban Outfitters' nationwide network, which Rocha, who grew up in the area and operates her business in Wyandotte County, said is huge for Kansas City, Kansas.

• Building will feature a new fulfillment center that will feature smart picking robots and automated conveyors.

• Urban Outfitters will implement a new robotic picking system at a new fulfillment center. This automated design builds upon a pilot program Urban Outfitters is running in the U.K. using the ‘Rovolution’ smart picking robot, which picks orders automatically and ensures the next phase of picking is being addressed.

• The new system incorporates two ‘Rovolution’ workstations, along with 46 ‘PickCenter’ One workstations. Leveraging the automation, Urban Outfitters can use the horsepower or “engine” to pick orders discreetly. Urban Outfitters will incorporate the same workstations and software as it is using in the U.K. pilot.

• At goods receiving, cartons are emptied into totes and transported to a storage warehouse, which is used to feed the shuttle system. Totes are then transported to 46 goods-to-person workstations, where items are picked into target totes. The different areas are connected by an energy-efficient KingDrive conveyor system. The warehouse control system interfaces with a Manhattan Associates warehouse management system.

• Regardless of channel (brick-and-mortar or digital), the operational processes remain the same and operational training for associates and maintenance support is simplified globally.

• Faced with an unprecedented surge in online orders and significant workforce disruption caused by the COVID-19 pandemic, an increasing number of retailers have been relying more on robots to perform picking processes.

• Specialty apparel retailers Gap Inc. and American Eagle Outfitters have both been scaling their picking and packing operations for online orders with the Sort smart robotic solution from Kindred. Sort piece-picking robots utilize AutoGrasp, a robotics intelligence platform that identifies and singulates items to pick and place into an automated putwall.

• “The new facility will be highly automated, incorporate robotics and provides the capacity necessary to support our fast-growing business. Our design is a modular solution we believe is simple, flexible and adaptable to the future needs of our customers” said Melinda McClure, executive director of North American Logistics, Urban Outfitters.

• Philadelphia-based Urban Outfitters operates a portfolio of global consumer brands comprised of Anthropologie, BHLDN, Free People, Terrain, Urban Outfitters, Nuuly, and a food and beverage division.

• The state has agreed to pay Urban Outfitters $5 million through its Job Creation Fund Program, Unified Government of Wyandotte County/Kansas City, Kansas, documents show.

The Massachusetts-based company, which has seen explosive growth in the wake of its mRNA COVID-19 vaccine, announced last year that it would build a Canadian facility along with other production expansion projects that include plans to build a $500 million plant in Africa.

The exact site of the Canadian mRNA vaccine facility, which is forecast to produce about 30 million doses a year and employ between 200 and 300 people when completed in 2024, hasn’t been determined, but Radio-Canada reported it will be in the greater Montreal region.

"You have to understand that these are decisions not for six months, one or two years, but it is a decision for 20, 30 or 40 years," Stéphane Bancel, Moderna’s chief excecutive, told the broadcaster. "It's really important that we do it in a place where we have the right level of talent, who will become employees of Moderna.”

Prime Minister Justin Trudeau and Quebec Premier François Legault are expected to attend the Friday announcement.

Moderna and the Canadian government signed a memorandum of understanding last August to build a “state-of-the-art messenger RNA” vaccine manufacturing facility.

Although details, including the expected cost of the project, have yet to be disclosed, the company said at the time the purpose was to provide Canada “direct access to rapid pandemic response capabilities," with its COVID vaccine.

In a postpandemic mode, the company said it will use the new facility to provide Canadians with a portfolio of vaccines against other respiratory diseases such as seasonal influenza and respiratory syncytial virus, pending regulatory approvals.

“The Ontario Cannabis Store’s distribution centre is in the process of returning to operational status,” said David Lobo, the OCS’s president and CEO, in a statement posted to the distributor’s website Wednesday afternoon.

“A small number of deliveries from the distribution centre will be made later today, beginning with the delivery of the orders that were impacted at the time of shut down.”

The OCS will work "around the clock: to transition back to standard service levels and begin with deliveries of orders that were impacted at the time of shut down, he added.

Orders will be processed in the sequence they were placed on the OCS ordering platform and his organization will provide further information this evening about what retailers can expect during the recovery period.

The government-backed OCS sells cannabis to consumers online through OCS.ca, but is also the province's lone pot wholesaler, so Ontario's 1,333 licensed marijuana stores have no choice but to buy products they sell from the OCS.

Since the OCS revealed the Aug. 5 attack on the parent company of its third-party distribution centre, Domain Logistics, on Monday, several Ontario pot shops have said their supplies are dwindling and they worried they could run out of product and consumers would turn to the illicit market, if the delivery halt stretched on.

The OCS has said there was no indication its systems were targeted or its customers’ information was compromised during the attack. Domain Logistics has not responded to requests for comment.

Asked whether licensed cannabis producers will be compensated or the OCS will withhold payment from, fine or sue Domain Logistics, OCS spokesperson Daffyd Roderick said Wednesday in an email, “Our focus is entirely on recovery at the moment.”

An OCS letter to retailers obtained by The Canadian Press said “as a goodwill gesture,” the OCS will waive retailer delivery fees until Sept. 30 as well as the $500 processing fee for an emergency order — one per store — between Sept. 1 and March 31, 2023.

Licensed cannabis producer Hexo won’t be seeking compensation from the OCS because of the cyberattack, but CEO Charlie Bowman called the impacts of the situation “frustrating.”

Several of Hexo’s new product launches have been delayed by two to three weeks because of the attack.

“We've already launched in other provinces and what happens when there's a delay is you lose that new buzz,” Bowman said.

“You lose that customer experience because that customer then migrates to another brand.”

Bowman has also heard from retailers who are facing issues restocking products because of the attack and has noticed pot shops in neighbouring provinces not far from the Ontario borders are seeing a spike in traffic as a result of the breach.

“We'll pick up some business in some areas, and we'll lose some business, but what we have to do is hope that customer experience from our brand is so strong, that they'll come back to us when we're able to be back on the shelf,” he said.

“But I have no malice. There's nothing the OCS could have done to prevent something like this… so you work with them to make sure it's minimalized and everybody makes sure that it doesn't happen to them next time.”

This report by The Canadian Press was first published Aug. 10, 2022.

Tara Deschamps, The Canadian Press

1. Digital fluency

First and foremost, workers need to possess a basic level of digital fluency in order to successfully implement digital transformation. Depending on the industry, digital fluency can range from a basic knowledge of Microsoft Suite to an understanding of cloud computing.

This necessity of this skill is company-wide; Harvard Business School Professor Tsedel Neeley points out that digital fluency adheres to a basic tenet of linguistics. "I often reference the 30% rule; borrowed from the study of languages, when applied to digital fluency, it dictates that the entire company needs to be, at least, at a 30% fluency baseline in order to move in a new digital direction effectively."

Of course, the necessity of digital fluency only increases at executive levels. The impetus lies with company leaders to possess and encourage digital fluency. Leaders who are digitally literate will be better equipped to address the gap between executives and employees – be it regarding perception of digital changes or simply the reality of data architecture caliber – which so often contributes to the failure of digital transformation.

2. Data analytics

Often, companies fall prey to an abundance of data, and struggle to analyse and draw conclusions from data sets. Data analysis expertise – encompassing data visualization and cleaning, as well as technical skills such as MATLAB, Python and R – are of paramount importance to process data and use it in a way that's both permissible and productive.

The utility of data analytic skills in today's economy is easy to track: The U.S. Bureau of Labor Statistics has predicted heavy growth, projecting that the data science field will grow about 28% through 2026 – far above average. This growth is bolstered by past data: A report by Fortune reveals a global job market value of $231.43 billion for data analytics, marking a whopping 10.6% increase from 2020's figures.

3. Digital marketing

There's no point in streamlining company processes and creating an improved product via digital transformation if the ultimate product is unable to effectively reach its consumer base. Marketing skills are essential in engaging your customer base and ensuring a product's financial success. Today, marketing is dominantly digital – so expertise in areas such as search engine optimization, email campaigns and social media will allow companies to successfully garner and utilize customer feedback, promote their product and, most importantly, take customers on the digital transformation journey with them. After all, following a digital transformation, users also need to be educated on how best to reap the benefits of the new product.

Worldwide, companies are well aware of the importance of marketing in the digital age. According to emarketer.com, digital marketing spending, especially within advertising, rose 17% to $333 billion globally in 2021.

4. Cybersecurity

An oft-neglected component of digital transformation is cybersecurity. According to research and marketing firm ThoughtLab, the average number of cyberattacks rose by 15.1% in 2021, as compared to 2022. The implications are sobering: Blockchain analysis firm Chainalysis reports that victims of ransomware spent almost $700 million paying off their attackers in 2020.

As the digital transformation process accelerates, companies should cover potential risk areas by hiring those with cybersecurity skills. The potential in this investment is reflected in the discrepancy between cybersecurity supply and demand. Cybersecurity Ventures, a research firm covering the global cyber economy, predicts there will be 3.5 million unfilled cybersecurity jobs by mid-decade, and the U.S. Bureau of Labor Statistics projected a 33% increase in the need for security analysts by 2030.

5. Leadership

It has been noted multiple times that the largest barrier to digital transformation is company culture. Company culture can heavily impact employees' perception of change, and an unresponsive culture can result in the expenditure of millions of dollars to achieve a transformation that will be circumvented.

Company culture can be extremely difficult to change; however, the efficacy of a cultural revamp will largely be determined by company leaders. In order to create change as significant as the shift required for digital transformation, company leaders need to possess a multitude of 'soft' skills, such as expertise in communication, influence, empathy and strategic thinking. A good leader will be able to capitalize upon core company values to promote digital transformation.

Remember, digital transformation is a process that is extensive, expensive and all-encompassing – so, it will require strong leadership presence and investment to implement.

Introducing INDUCT: the AI-Powered Robotic Induction Workcell for Parcel, Post, and E-Commerce Fulfillment

San Francisco-based robotics and AI outfit Kindred – which is owned by UK grocery retailer Ocado – has recently created INDUCT, a high-speed,

AI-powered robotic work cell that accurately picks, maneuvers and places items onto a moving belt, bomb bay or tilt sorter. As the company’s CEO, Marin Tchakarov, explains, the platform combines AI-powered machine vision, grasping and manipulation algorithms to handle parcels of varying size, fragility and materials. “We were able to quickly solve the engineering challenge of automating induction – a more difficult process than picking and sorting due to the unstructured and unpredictable dynamics of handling parcels,” he says.

Starting with a ‘cluttered avalanche’ of parcels, Tchakarov says the INDUCT in-feed system separates items from a chute onto a series of belts, dividing and unstacking pieces into two organized streams. Two synchronized robotic arms then pick up each item at the precise speed and grip required for its shape and weight, and place it on a free space on the moving sorter. Numerous INDUCT work cells can also be used collaboratively along the same fulfillment line and further units can be added to support peak periods.

“The work cell has been in a trial at a global package fulfillment, logistics and delivery company for the last nine months,” adds Tchakarov. “The system has been in use along a parcel fulfillment line, handling parcels of up to 4kg [9 lb] and moving them from an incoming chute onto a moving tilt sorter.”

Built on Kindred’s proprietary CORE/AutoGrasp™ artificial intelligence platform, the INDUCT robotic system is a high-speed workcell that identifies items and determines how to handle them, a process known as induction. It accurately picks, maneuvers, and places items onto a moving belt, bomb bay, or tilt sorter. The platform combines AI-powered machine vision, grasping, and manipulation algorithms to handle parcels of varying size, fragility, and materials.

Starting with a cluttered avalanche of parcels, the INDUCT in-feed system separates items from a chute onto a series of belts, dividing and unstacking pieces into two organized streams. Using Adaptive Motion Control, two synchronized robotic arms pick up each item at the precise speed and grip required for its shape and weight and place it on a free space on the moving sorter. Built-in scanners capture barcodes as items move down the sorter, regardless of orientation.

Grasp & Maneuver Various Items

• Up to 4 kilograms (8 pounds)

• Variety of shapes, surface textures and materials

• Both rigid packaging and loose plastic polybags

Supercharged Induction Speeds

• 1600-2000+ picks per hour (PPH)

• 99.5% uptime with remote human-in-the-loop piloting support

Compact Workcell Design

• Fits within the confines of most induction workstations

• Footprint of 2.7 meters by 1.4 meters (8 feet 10 inches by 4 feet 6 inches)

This week Package Fulfillment, Logistics & Delivery Expo highlighted Kindred INDUCT as one of the most innovative technologies recently brought to market. Kindred CEO, Marin Tchakarov, explains: “The workcell has been in trial at a global package fulfillment, logistics and delivery company for the last nine months. The system has been in use along a parcel fulfillment line, handling parcels of up to 9 pounds and moving them from an incoming chute onto a moving tilt sorter.”

Among the business topics that have dominated the press over the past two years, supply chain difficulties and labor shortages have certainly been at the top. But the two are not mutually exclusive.

Organizations across all industries are having a hard time finding employees to keep their supply chains operating as efficiently and smoothly as possible; goals that have been made more difficult due to the COVID-19 lockdown hangover, continuing lockdowns in China and the war in Ukraine, among other challenges.

This labor deficiency has been building for some time — since even before the pandemic — and it is not expected to moderate anytime soon. In a recent survey that Protiviti conducted with the Oxford Global Centre on Healthcare and Urbanization at Kellogg College, in which we queried global executives about the future of work, 83% said that retention and turnover would remain a top concern over the next decade.

Consequently, companies are increasingly considering adopting automation to fill in the gaps to improve global supply chain operations. It should not be surprising, therefore, that 85% of global executives in the Protiviti-Oxford survey said that artificial intelligence (AI) and other emerging technologies would radically transform their businesses over the next 10 years.

Warming to automation

Over the past decade, the industry has become well acquainted with the potential benefits derived from implementing automation technologies, including greater efficiency, reduced costs and greater profits, and enhanced safety, to name a few. But many organizations have been reluctant to pursue the solutions because of widely held perceptions that the technologies would replace workers. To take the automation route would erode employee trust, the thinking went.

But in many cases, the pandemic lockdowns and restrictions forced organizations to adopt automation to keep producing and shipping goods to customers. Now that the genie is out of the bottle, more firms are beginning to investigate and implement technology solutions, particularly manufacturers, many of whom are considering returning production from foreign shores to the U.S. or locations nearby.

For companies taking actions toward automation — and for those still hesitant to broach the subject — here are three considerations to keep in mind during the journey.

Building Trust

While employees may bristle at automation initially, operators of machinery who perform rote and low-skill tasks often end up embracing technology because it allows them to learn new skills. If an organization gives someone the ability to work with virtual reality tools on the plant floor, or the capacity to program machines versus simply turning knobs to operate the machines, for example, that person is likely going to have a greater sense of satisfaction and responsibility.

When determining where to implement automation, organizations frequently focus on where technology can maximize supply chain efficiency, cost savings and labor availability in any particular facility. Alternatively, they may want to use automation to plug talent gaps.

Adopting automation can help onshoring or nearshoring efforts, which are being pursued to mitigate the risk of supply chain disruptions occurring on the other side of the world or during a 60-day boat ride while remaining cost-competitive with other markets. Companies undertaking this strategy may want to target processes integral to the production and distribution of their most premium merchandise or those that are the most challenging from the perspective of hands-on labor.

Change Management

Companies recognize that employee retention is just as important as recruiting — and, in fact, that it is easier to keep workers than hire new ones. That puts the onus on organizations adopting automation to implement change management programs and other initiatives that feature robust communication channels with employees to mitigate the risk of disengagement and attrition.

The central message that organizations must convey is that automation does not equate to workforce reduction; rather, the goal is to adopt new technologies that can help supply chains flow during good times and bad times alike. To avoid distrust, companies must make clear their intent to upskill employees and to move them into more meaningful roles.

This approach can help convince people to stay versus looking for greener grass. Additionally, initiating listening strategies, encouraging employees to share job security concerns or even the desire to change employers, and emphasizing a culture that values its workers can help create loyalty, especially in small rural areas that lack the population to support emerging manufacturing hubs. In many cases, first-line managers who tend to have strong relationships with people on the floor can play a pivotal role in these efforts.

Enhancing Resiliency

Over the past three decades, organizations developed supply chains to be efficient and cost-effective, putting little emphasis on resiliency or flexibility. But business interruptions over the past two years have forced organizations to adjust their focus. Rather than viewing supply chains as cost centers, executives are now beginning to apply a revenue assurance model to the operations.

This approach includes looking at previously ignored costs associated with business continuity management, logistics changes, delays, unhappy customers and other risks. The model also tabulates the value that can be generated by a redesigned and more resilient supply chain that incorporates automation. Companies interested in bringing back production to the U.S., for example, may be looking at higher wage costs, but with automation, employees here will not be doing the same low-skill tasks being performed in other markets. Therefore, the cost discussion shifts from one focused solely on labor to one that considers total costs and risks.

Plan for Success

Labor shortages are plaguing all industries, but along with two years of unprecedented economic disruptions, they are hitting supply chains particularly hard. Automation can help organizations solve some of the challenges associated with tight labor markets. But companies that choose that route — and that want to maximize their chances for successful results — need to reassure existing employees that they will be the recipients of more meaningful work and not pink slips, incorporate the technology in a manner that optimizes the supply chain, and take an expanded view of supply chains to better assess cost, risk and value while enhancing flexibility and resiliency.

County supervisors approved plans for a multistory, 650,000-square-foot building on a 105-acre tract on state Route 623, about a quarter-mile north of Interstate 64.

Gov. Glenn Youngkin said state economic development officials are working on the deal — code-named “Project Rocky” — but that some final details are still to be worked out. He declined to say who the end-user would be.

“It’s a significant economic development project,” said Jo Ann Hunter, Goochland deputy county administrator. She also would not say who the end-user of the building will be.

The building would have 55 loading docks for trucks and parking spaces for more than 400 truck trailers.

It would operate two shifts a day, with about 660 people on each shift, according to a traffic study commissioned by the applicant for a rezoning and land use permit, the Panattoni commercial real estate development company.

Most of the truck traffic would come between 8 p.m. and 4 a.m., the traffic study said.

The Goochland facility would be smaller than Amazon’s fulfillment center in Chesterfield County, which is more than twice the size, with about 1.2 million square feet, and employs 2,200 people, a number that can rise by an additional 1,000 during the holiday shopping season.

Panattoni is building the first robotic fulfillment center for Amazon in the Czech Republic and has developed a 600,000-square-foot fulfillment center for Amazon in Henderson, Nev.

County records say the Goochland fulfillment center would not be the sort of facility that dispatches small trucks to make door-to-door deliveries, but that traffic would be limited to large trucks bringing in shipments to be sorted, which would then move out to other facilities.

Residents living near the site have been telling county officials and board members that the truck traffic and fulfillment center employees’ vehicles would make travel along already congested state Route 623 (Ashland Road) even worse.

“Ashland Road already has significant heavy truck traffic servicing the landfill and the three quarry operations accessed off Ashland Road with both tractor trailers and heavy dump trucks,” county resident Paul Anderson said in a letter to the supervisors.

He said the road already carries the worst state rating for congestion during rush hours and that the county building department has said it is concerned that heavy traffic on the road could slow the fire and rescue response to emergencies.

It’s not just the congestion that worries county resident Stephen Levet, who lives about a mile and a half from the site.

“Have you ever been behind a tractor-trailer at a stoplight and the driver puts it in gear and moves forward and a big cloud of soot comes out?” he said.

Such soot is linked to lung disease and heart ailments. On top of that, the 1,851 tractor-trailers and 6,676 employee vehicles coming and going from the fulfillment center every day would generate 608 metric tons of carbon dioxide a week — roughly what would come by burning nearly 673,000 pounds of coal, he said.

He said supervisors, who voted 5-0 for the project, brushed off the health concerns he, two doctors, a nurse and a teacher presented.

To ease traffic jams, meanwhile, the county wants to push ahead with a “diverging diamond interchange” for the Rockville exit off I-64, similar to the one that carries U.S. 15 over I-64 at the Zion Crossroads exit.

These use traffic lights to direct cars and trucks on roads crossing a superhighway to drive on the left hand lane, and traffic engineers say they move more traffic than traditional cloverleaf interchanges can while taking up less space.

Via his YouTube channel Friday Adventure Club, a Seattle-based Amazon delivery driver posted his first impressions of the new Rivian EDV and praised its advantages over its ICE-powered counterparts. The driver loved the added storage capacity, the digital dash and center display, and the van’s keyless operation.

The video starts with the driver describing the different versions of the Rivian EDV that Amazon will be using; the EDV 500, the EDV 700, and the EDV 900. The 500 is the smallest of the vans (~20 feet long), while the 900 (~27 feet long) is the largest. From the graphic posted on the screen, the driver shows that the 500 and 700 will have the longest range, 150 miles max each, while the 900 will only be capable of 120 miles max. The vehicle he was able to explore is the 700, the ~23-foot van.

The EDV offers many advantages over the previous gas-powered Ford Transit vans. The Rivian EDV is quieter, helps prevent air pollution, and operates cheaply due to the electric drivetrain. These benefits apply to the driver, the communities they deliver to, and Amazon simultaneously.

More delivery driver-specific upgrades the driver talks about include the more extensive rear storage with two sets of shelves, the digital dash and center screen that sync with the mobile delivery tablet; giving the driver a constant stream of directions, and the van’s key fob that latches to the driver’s vest; making the experience simpler and more streamlined.
The video was not all praise as the driver notes that, due to the lower ground clearance, multiple drivers have already bottomed out the vehicle going over speed bumps, and one such driver damaged the battery, forcing the van to be towed.

The driver was excited about the apparent upgrades over the previous gas vans. And some of the revelations are quite surprising; the lack of a 360 camera in the gas vans, the surprising lack of storage compared to the electric van, and the synced center screen seem like obvious upgrades.

With Ford’s sales report from July stating that Ford controls “over 95% of the electric van market”, Rivian faces a competent opponent in the E-Transit.

UK bookseller Waterstones has suffered weeks of disruption to its business operations following an upgrade of its warehouse management system, according to reports on social media.

Employees took to Twitter over the weekend to complain of ongoing stock shortages, which some attributed to Waterstones’ recent migration to a new warehouse management system from US vendor Blue Yonder.

Update: Waterstones has confirmed that the Blue Yonder migration created a backlog in stock deliveries, which it is now working through. But it added that some stock availability issues may reflect its own stock management choices, which cannot be attributed to the migration.

Frustrated customers read riot act to bookshops >

In response to a tweet by book marketing consultant Sam Missingham, a number of Waterstones booksellers reported that they have encountered stock shortages in stores for six weeks.

“I feel like we’ve [been] lied to the whole time,” said one user. “The delays have been extended and extended.” Another said they have removed six display tables and three bays of shelves from their store to compensate for the lack of stock.

Another Twitter user said the stock issues resulted from an ongoing warehouse management software migration. “Our systems for deliveries and order processing were super outdated. They were upgrading them and something has gone wrong, so orders are not matching up properly on the system and as a result we haven’t been able to get any books whether they’re stock or for customers.”

Right, lots of answers to what's going on @waterstones in replies.

Summary: They have been implementing a new warehouse system called BlueYonder, said it would take two weeks. Tested after that and it worked for one day. (1/?) https://t.co/KMBt3SCSak

— Sam Missingham (@samatlounge) August 7, 2022

In a statement to Tech Monitor, Waterstones confirmed that it upgraded its stock management software to Blue Yonder last month. “This is now operational, with stock flowing to our bookshops and customers alike,” the company said. “Over the implementation period, however, a backlog of orders was created which we are now processing as quickly and efficiently as we can.

“Our expectation is to have the backlog of stock deliveries into shops caught up over the quiet August period, with August new releases now being processed without delay,” it explained. “Indeed, by September we anticipate beginning to benefit from the much more sophisticated platform now at our disposal.”

The company added that the stock availability issues may also reflect its own purchasing decisions. “Unfortunately, no amount of sophisticated new warehouse systems changes the fact that as booksellers we choose what to buy, sometimes being a little too reticent, sometimes too enthusiastic,” it said. “We can’t blame Blue Yonder for this.”

From Ford to Musk

A long-standing staple of economic thinking is the benefits of economies of scale. Put simply, this refers to the idea that when you scale up production, the cost of each unit of production comes down. In laymen’s terms, bigger is better.

Despite its association with innovation and ‘breaking things’, Tesla has not strayed too far from Ford’s original method. The company’s approach retains the production line, it simply relies on much higher levels of automation, with robots working around the clock.

As for the mantra that bigger is better, Tesla’s celebrated gigafactory in the Nevada desert is clear evidence that Musk subscribes to this maxim. It is expected that, once completed, Tesla Giga Nevada, or Gigafactory 1, will have the largest footprint in the world.

A new arrival?

However, for many manufacturers, greater automation is offering the benefits of operating with a smaller footprint. This is especially so for those embracing the microfactory concept. At its heart, this approach dispenses with the traditional production line, using automation to underpin a modular approach on a much smaller footprint.

British EV start up Arrival has quickly emerged as the standard bearer for the microfactory. Like Tesla, the company is an innovative EV maker whose production processes involve high levels of automation. However, whereas Tesla is building ever larger production facilities, for Arrival the answer is manufacturing on a smaller footprint, with multiple microfactories deployed closer to the markets the company will serve.

An Arrival microfactory can be built in a standard 200,000 sq ft warehouse. It can be up and running in a matter of months, and in contrast to the extortionate capital costs of gigafactories, it costs a mere £38 million. For Arrival CEO Mike Abelson, this will be key to the company’s success and will mean greater flexibility in reacting to market changes. With such a vast reduction in capital costs and the ability to deploy rapidly, those adopting the microfactory approach will not need to plan ahead years in advance.

Automation without cabinets

It’s interesting that automation is paving the path for both gigafactories and microfactories, given the two concepts are polar opposites. At Beckhoff UK, we’re happy to cheer on both approaches, given the obvious benefits to mankind of increasing manufacturing efficiency.

However, even if you own a large facility, we’ve been working on solutions that allow manufacturers to take advantage of automation without having to sacrifice excessive space in their existing facility. Our automation without cabinets technology is intended to make automation on a smaller footprint possible.

Traditionally, new machines required control cabinets to house cabling and control systems, increasing the overall footprint of the machine. By reducing the cabling commitments via our automation without cabinets, we can deliver products and solutions that are inherently more mobile and suitable for relocation in comparison to cabinet-reliant counterparts. Other benefits include reduced shipping costs and installation times, as well as higher output per square meter of production space.

Will automation lead to the largest building in the world, or will it lead to a factory in a box? So far, it looks like the answer will be both. The beauty of automation is its power to unlock different paths to more efficient and sustainable approaches to manufacturing. At Beckhoff UK, our solutions are designed to support this goal, whether your factories are micro or giga, we believe automation should be as simple as possible.

DHL CEO Scott Surredin sits down with Yahoo Finance Live to talk about the state of the supply chain, progress made in hiring and automation, and inventory in warehouses and ports.

Video Transcript

- Well, the supply chain could be facing new concerns as retail warehouses fill up with excess product and consumer demand falls. We have Scott Sureddin-- he's DHL's supply chain CEO-- here with us. And, Scott, let's just first talk about what's going on in the supply chain landscape because we are still seeing some congestion. We do have trade tensions. There are labor talks with workers at some of the nation's biggest ports that still have yet to be resolved. What's your assessment just of the current environment?

SCOTT SUREDDIN: Well, it's definitely stable. I mean, besides those things right there, we are actually moving volume very, very well. But I will say inventory levels are really building. So we're kind of seeing pre-pandemic levels of inventory build so it'll be interesting during the peak season, especially with customers that are-- I would say consumer packaging goods and fashion, apparel e-comm, how they get their inventory out, how they're going to discount, how they're gonna do promotional strategies.

I will tell you our plan is being the largest supply chain company in the world by 2x, in North America by 2x. We will add 12,000 associates just in the fourth quarter to handle the volume and to move volume out. And that's about what we added last year. We also added about 1,500 collaborative robots last year along with 12,000 people. And we'll add about 2,000 collaborative robots this year along with the 12,000 seasonal associates to handle the volume.

- In terms of the flow of goods globally, how close are we to pre-pandemic levels?

SCOTT SUREDDIN: We're very close. Especially in certain categories. When you talk about the automotive, there's still a chip issue there. But we are talking about with inflation and everything going on, people are getting back to the basics and buying consumer packaged goods, buying e-commerce items that are needed. So a lot of volume is going in those sectors or those industries.

- And, Scott, what about some of these retail inventories that were sort of stuck in this bottleneck and then suddenly came into play? We're seeing this buildup of them in US warehouses. How is that affecting business?

SCOTT SUREDDIN: I mean, well, our revenue [INAUDIBLE] because of that, once again, being the largest. And we have 497 operating sites in North America and 151 million square feet. I'm investing over $400 million this year into 5 million more square feet. Plus, we will lease buildings too. But it comes back to my point earlier around we're working with our customers now and what their strategy is to unload the inventory during the peak season holiday season and what their promotion strategy is going to be because, to your point, the inventory is here now. It has built up. And now it needs to get out to the end users.

- Scott, what about the demand side of the equation, right, because there are some fears-- although the economy remains very strong. That was evident in the latest jobs report. But there are some fears that we could see a significant slowdown or just a slowdown in general over the next couple of months heading into that holiday season. Are you starting to see any evidence of that just yet?

SCOTT SUREDDIN: Everyone's talking about the demand headwinds. And I'm not seeing it yet. I mean, just to give you an example, we have 45,000 associates in North America. That's 10 and 1/2% up from where it was December of 2021. So we're still adding people, shipping volume. I'm with you. I think there will be movement in certain categories because of inflationary pressures. But we've not seen any major slowdown at this point with our growth in the supply chain industry.

- The massive backlogs at LA and Long Beach ports have now been cleared. But there is still concern about dockworkers continuing to work without a new contract. How big a concern is that? And if they were to strike, how debilitating would it be?

SCOTT SUREDDIN: It would hurt the entire North America. It would hurt the world economy. I mean, it would be bad. So the good thing is they did agree on the health care piece of that. But, yes, there is-- even though we said we've cleared a lot of backlog, we've built up our inventory, there's still backlog. There's still a lot of inventory sitting in warehouses in the ports, sitting on rail yards trying to get moved.

So we've not cleared it all. But it's better than what it was. And, yes, we need to make sure that not only their contract gets done, but also we do more automation in areas like that because automation will help us in the future of handling the volume. Today, you can't get enough employees to move the volumes. You need some sort of automation to help offset with the labor.

- And to that point, Scott, what sort of investments are you making in innovation? Obviously, this direct to consumer model isn't going anywhere. A lot of people still-- that's how they're going to be purchasing their goods in the future. What does that mean for the investments that you're making there?

SCOTT SUREDDIN: So as I mentioned, we have 2,000 collaborative robots just in our warehouses. We're doing autonomous forklifts. So we have a big accelerated digitalization agenda. A lot of that's around, first, robotics. And the second piece is around data and how are you using data to be more efficient and making sure that we're looking at the right things.

So we are making big investments in that. I can't give you an exact number. I don't know exactly off the top of my head. But it's several hundred millions we do make investments in robotics and automation. And it's really getting better. It's really going to help us out in the future. DHL is one of the biggest leaders in putting in automated solutions in our warehouses.

- All right, Scott. Appreciat it. Good stuff. Thank you, sir.

Amazon has been working on building a drone delivery service since 2013. Our goal? Building fully electric drones that deliver packages under 5 pounds to customers in less than an hour.

Later this year, customers living in Lockeford, California and College Station, Texas will be among the first to receive Prime Air drone deliveries.

This is an inside look at one of Amazon’s flight-testing facilities, located in Oregon. Here, a dedicated team of experts in safety, aerospace, science, robotics, software, hardware, testing, and manufacturing come together to build a safe and scalable system.

Most people have heard of at least one rapid grocery delivery firm. By the end of 2020, these companies had taken the grocery sector by storm, pulling in over $1.1 billion in revenue.

These fledgling players, which include Getir, Gorillas, Zapp and Jiffy, saw the gaping hole that had been left by pandemic restrictions on bricks-and-mortar retail.

They set up shop in a series of ‘dark stores’, small warehouse spaces which serve as delivery hubs for app orders and are closed off to the public.

The model was hugely successful to begin with, providing consumers with fast alternatives to masking up and heading to their closest grocery store or battling with others to claim a delivery slot at one of the country’s largest supermarkets.

Many of these including Tesco and Sainsbury’s struggled to fulfil the vast number of orders that were being submitted in time, prompting consumers to look towards the small number of quick-commerce startups that were starting to take a foothold in the sector.

By the end of 2021, rapid delivery annual revenue had reached $4.7 billion and the main players had been established. However, the traditional grocery sector expanded their logistics networks to claim back gains it had lost to the q-commerce sector. After the industry stabilised and shoppers returned to their usual grocers, the q-commerce players started to fight each other for smaller shares of the market.

This has turned out to be a disaster for some of the less-well funded startups, including Weezy, which was bought out by market leader Getir in November 2021. A number of others have collapsed in on themselves after struggling to turn a profit in a hotly contested market.

Ex-Jiffy head of delivery operations and q-commerce expert Quaid Combstock revealed to Charged why he believes the quick-commerce sector will not and shouldn’t exist within the next 12 months in its current iteration.

“I think that the market’s very well aware that it’s not financially stable anymore. I think people are well aware that you can’t just keep throwing money at something to try and make the proposition work,” he said.

“The biggest concept of last year was that [q-commerce startups] were trying to create a cultural shift and cultural revolution in making consumers more aware that on-demand delivery was a thing.

“If you can get your groceries in 10-15 minutes, imagine what you could buy from Amazon and other ecommerce providers in that time. I think the long term goal of q-commerce wasn’t to be limited to grocery providers, but rather to the wider ecommerce proposition.”

Combstock pointed out that the industry has taken the concept of ultra-fast delivery and made it possible, however the longevity of the sector just does not exist.

“We all know that the concept works. It’s been proven, everyone’s aware of it. The downside, I think, is that it’s not financially stable.”

He compared the concept of q-commerce to the Concorde and said that “you could get to New York substantially quicker on the Concorde than you can do today. So we’ve proven you can get to New York a lot quicker, but the reality is, it’s just not cost efficient to do. So eventually, it burns out and stops. And I think that’s what’s happening here in q-commerce.”

“You can move things very, very quickly. And if you’re willing to pay for that it’s doable. However, the reality is the average consumer is not willing to pay the money to get the items in 10 to 20 minutes. And even if they are willing and have got the money to spend, I think a lot of them don’t recognise the need to get in 10 to 20 minutes versus the traditional 40 to 60 minute you would get with Deliveroo.”

On the financials, Combstock said: “If you think about what the average rider cost in London is, £12 to £16, and then you think, okay, it’s going to take you 15 minutes to get to a customer’s location and 15 minutes to get back, that’s half an hour.”

“So a rider gets paid £12 an hour, the rider labour alone is £6. And that’s before you add on the cost of purchase the items, the warehousing, stock, lack of utilisation, marketing, tech, any of those other stuff, which overheads probably account for additional 30%.”

He explained why the model works for takeaway delivery firms like Just Eat and Deliveroo, but not for q-commerce startups such as Jiffy or Gorillas.

“Theoretically, this works for takeaway companies like Deliveroo, largely because they charge the restaurants and 30% margin. And that’s where they make their money.”

“But you have to think that grocery goods have got such small margins, like milk is a loss leader as well lots of things like cereal, bread, etc.

“You’re talking about being a loss leader, you’re talking about making up to between one to 5% in profit, but you’re talking marginal amounts of money. So you’re not getting that 30% back like you would in the takeaway industry.

“So if you’re not charging the customer enough to cover the ride the delivery costs, ultimately, there’s no way that you can ever claim that money back.”

Combstock explained how funding in the industry has been drastically pulled back when compared to the early stages of the pandemic.

“You’ll probably find that q-commerce players today are receiving 30% less orders than they did this time last year. The reality is a lot of this was induced through marketing campaigns funded by VCs, which they’re not doing anymore. So people aren’t spending the money anymore.”

“In short I think that q-commerce can still be a thing, but it’ll just require so much change that what we know of providers today, they won’t be able to reflect that.”

In May, Jiffy announced it will stop all consumer-facing operations this week, as it made a “major strategic pivot” to become a dedicated rapid delivery software company, providing solutions for brands to offer sub-15 minute delivery of their products or services via their own direct-to-consumer website, however using Jiffy’s ordering system and fulfilment network.

The company said at the time of the announcement that click & collect operations from its network of dark stores would continue “for the coming week or so,” with deliveries ceasing even sooner.

Combstock told Charged he was less than impressed with the company’s “strategic pivot”.

“You got to ask yourself, what market gap are they filling? The reality is Jiffy has not been around a long enough to spend enough time on the tech development to make it an efficient product that people want to buy,” he pointed out.

“Jiffy is only just over a year old, you’ve got other companies out there who are two, three, four, five years old with the same tech.

“I’m not aware of any one in the industry looking for a product like this”.

As the grocery delivery industry slims down, the remaining startups are finding inventive ways of staying relevant. For example, Gorillas has launched both a record label and opened up one of its dark stores in Hampstead to serve coffee.

Combstock laughed at the announcements, referring to them as nothing more than marketing ploys.

“I’ve had this question quite a few times, ‘what do you think of companies who are opening up dark stores to up customers?’ and I think the simple answer is it is quite laughable. It’s even borderline idiotic, because it’s not new,” he explained.

“You can get up and you can go to a shop and you can walk in right now. It was there last year. It was 100 years ago. It was like 500 years ago, shops you can walk in. It’s nothing more than someone who’s rebranded something that has been around for centuries.”

“The moment a customer walks in a dark store is no longer a dark store. It’s as simple as that. You can rephrase it all you like but it’s laughable because it’s not then a dark store, which negates the entire thing.”

On the q-commerce industry as a whole, Combstock believes it does not have the longevity nor stability to last on its own.

“I think the biggest thing here is I don’t think grocery key commerce deserves to be an industry in its own right, which they’re trying to become or they were trying to be in the last year. So in my mind, there’s no logical opening up a Gorilla’s app and buying groceries, it makes a lot more sense to go to your Uber Eats, Deliveroo or Just Eat where you can get food takeaway and groceries and it’s all under one proposition.”

When asked about which companies he expected to still be operating in a year’s time, Combstock didn’t place much faith in the current market leaders.

“I think none of the key commerce players that you and I know today. I think the service that is going to overtake them will be Deliveroo Hop. And I think that’s because they can share infrastructure with other clients.”

“So they’re already worked from the likes of JD Sports, so they can then outsourced that warehouse space to those other companies and make money on those are charging £15 a delivery. That is a cost efficient delivery cost or an on demand service, not two, three quid. £15 that’s effective.”

Mankind's new best friend is coming to the U.S. Space Force.

The Space Force has conducted a demonstration using dog-like quadruped unmanned ground vehicles (Q-UGVs) for security patrols and other repetitive tasks. The demonstration used at least two Vision 60 Q-UGVs, or "robot dogs," built by Ghost Robotics and took place at Cape Canaveral Space Force Station on July 27 and 28.

According to a statement(opens in new tab) from the Department of Defense, Space Launch Delta 45 will use the robot dogs for "damage assessments and patrol to save significant man hours." The unit is responsible for all space launch operations from Kennedy Space Center and Cape Canaveral.

Images from the demonstration show personnel operating the robots with a hand controller inside a hangar. The Ghost Robotics Vision 60 Q-UGVs can be equipped with a wide variety of optical and acoustic sensors, enabling them to serve as automated "eyes and ears" around sensitive installations such as a Space Force base. The robots can be operated either autonomously or by a human controller and can even respond to voice commands.

The dog-like robots can also serve as miniaturized communications nodes, carrying antennas to quickly extend networks beyond existing infrastructure or in locations where no such infrastructure exists.

The robots have been previously tested by the U.S. Air Force for perimeter defense tasks and as part of a large test of the service's Advanced Battle Management System (ABMS) data-sharing network. In that 2020 test, robot dogs at Nellis Air Force Base in Nevada "provided real-time strike targeting data to USAF operators" in Florida using Starlink satellite links, then-CEO of Ghost Robotics Jiren Parikh told The War Zone(opens in new tab).

The Ghost Robotics Q-UGVs are designed to withstand water and weather, and were recently demonstrated with a tail-like payload enabling them to travel underwater(opens in new tab).

Aside from their military applications, the robot dogs are also being eyed for uses in emergency management, public safety and industrial inspection.

What is an AGV?

An Automated Guided Vehicle, or AGV, is an industrial vehicle that can be pre-programmed to transport goods in a warehouse or manufacturing environment.

Features of an AGV:

• Navigation: Traditionally guided by magnetic strips or wires installed on or under a warehouse floor

• Deployment: Requires installation of navigation guides, and sometimes requiring substantial facility renovation

• Operational Flexibility: Altering AGV operating patterns requires repeating the entire deployment process

• Responsiveness: Limited flexibility to adapt to changing environment or changing workflow

What is an AMR?

An Autonomous Mobile Robot, or AMR, is a vehicle that uses on-board sensors and processors to autonomously move materials without the need for physical guides or markers. It learns its environment, remembers its location, and dynamically plans its own path from one waypoint (a location or destination within the environment) to another.

Features of an AMR:

• Navigation: Using technology such as LiDAR sensors & Simultaneous Localization and Mapping (SLAM), an AMR will determine the best route between waypoints

• Deployment: This can vary, but great AMRs can be unboxed and put to work in less than 15 minutes

• Operational Flexibility: An AMR will dynamically plan the shortest path based on current conditions and requirements, if the work changes from one day to the next, the AMR’s route will change with it

• Responsiveness: AMRs will automatically sense and avoid obstacles and blocked paths to find the best route to its next waypoint

• Tortoise initially pitched its remote-controlled robots as an ultrafast-delivery solution.

• It's now using its robots as mobile vending machines at conferences and stadiums.

• Walmart is testing the "15-second commerce" at a store near its headquarters.

The tech startup Tortoise initially pitched its remote-controlled robots as an ultrafast delivery solution to companies like Instacart. But with the collapse of several ultrafast-grocery players, Tortoise has shifted its focus and is using its "floating" robotic warehouses as mobile vending machines.

Tortoise's first large-scale national retailer partnership is with Walmart. In late July, the retailer began using a Tortoise robot to sell beef jerky and Kinder chocolate eggs to shoppers waiting for curbside-pickup orders in the parking lot.

The Tortoise robots work like automated vending machines that can drive to a shopper's vehicle. Once shoppers tap and pay with a credit card, the lid opens so they can grab their item. Dmitry Shevelenko, Tortoise's cofounder and president, said retailers like Walmart were hoping to recapture sales of nonessential grocery items that consumers toss in their baskets when they shop in store.

"They're bleeding revenue because you make fewer impulse buys when you're buying online," Shevelenko, a former Facebook and Uber executive, said.

Walmart said it's piloting the Tortoise robot at "store 100" near its Bentonville, Arkansas, headquarters "to see if customers enjoy a mobile vending experience."

"We are only focused on this particular use case at this time," a company spokesperson told Insider.

Walmart, which recently cut its profit outlook for fiscal year 2023 amid excess inventory and inflation issues, has been dabbling with automation and robotics for a couple of years to boost its e-commerce business.

It has invested heavily in self-driving cars and is testing drone delivery from six US stores in Arkansas and North Carolina. It plans to have more than 30 drone-delivery sites in five additional states — Virginia, Arizona, Florida, Texas, and Utah — by the end of the year.

Tortoise is betting on '15-second commerce'

Tortoise, headquartered in Mountain View, California, has raised $8 million from investors, including Rosecliff Ventures and Food Retail Ventures.

Walmart is Tortoise's largest retail partner to trial the mobile vending robots. The company is also working with some of the country's most prominent food-service vendors: Sodexo, Compass Group, and Aramark.

The companies are deploying Tortoise's robots at sporting venues and conferences, giving attendees a fast and frictionless way to buy snacks and beverages.

"We have 40 robots operating on a weekly basis throughout the country," Shevelenko told Insider.

At the Comic-Con International convention held last month in San Diego, a Tortoise robot was hawking burritos for $13.50 and Gatorade for $5. Each robot has two temperature-controlled compartments, allowing Tortoise to sell hot and cold items. Tortoise takes a 10% cut of sales.

"Our north star is 15-second commerce," he said. "You get what you want and go."

The company, founded in 2019, was previously focused on last-mile delivery. The tech will debut with 18 retail partners, like Colorado grocer Choice Market and Los Angeles-based chocolatier Lady Chocolatt, all going live within the next quarter, Tortoise president and co-founder Dmitry Shevelenko told Retail Brew.

The vending machines address retailers’ “existential need for growth”—which has been difficult to fulfill lately due to labor shortages—by offering new sales channels, Shevelenko said.

The mobile stores aren’t selling staples like SunChips and Diet Coke, but rather retailers’ premium SKUs like a $35 pastry box, or even a $300 pair of headphones, Shevelenko said. And from any which place: parked in front of stores, down the block, or at the local park.

Tortoise manages the machines through a “remote store clerk” that monitors any “unpredictable” behavior.

There’s a Bluetooth locking mechanism, plus branded wrapping to display the products inside and customizable audio to guide shoppers through checkout.

Tortoise started testing the tech at the end of last year (which only took one modification to its delivery setup—adding an NFC reader to enable contactless payment) after noticing consumers often assumed they could buy something from its robots fulfilling deliveries, Shevelenko said.

The mobile stores garnered 25x a typical vending machine’s hourly earnings, per Tortoise, with Asian-American bakery Bake Sum generating $100/hour in sales by placing it outside the shop for three hours after closing and bringing it to local parks.

The company doesn’t charge for the software or hardware, but keeps 10% of gross sales, Shevelenko noted, so it can be beneficial particularly for small businesses.

“[Small merchants] need incremental sales,” he said. “This is a marketing engine; it attracts that foot traffic and monetizes it better for them. So we certainly see this as being something that enables local businesses to thrive and hire more employees.”—EC

Tesla has disclosed that it is lobbying the Ontario government for a potential new factory in Canada. The new lobbying effort comes after several hints from Tesla CEO Elon Musk in regards to building a Gigafactory in the country.

In June, Electrek obtained a recording of a companywide meeting held by Musk, during which he confirmed that Tesla is looking at sites in North America and the CEO hinted to Canada.

Musk did it again at Tesla’s annual shareholders meeting last week.

Now Electric Autonomy Canada reports a new lobbying disclosure from Tesla in Ontario revealing that the company is engaging with the government to reform permitting and for possible incentives regarding an “advanced manufacturing facility.”

In Canada, companies have to disclose all their lobbying efforts with the government.

Tesla wrote in the filing filed last month:

Engage with the government and its agencies to identify opportunities for industrial and/or advanced manufacturing facility permitting reforms with the intent to increase the competitiveness of Ontario and its ability to attract capital investment through establishing approvals timeframes that are competitive with high-growth manufacturing locations in North America, while also working with government to identify or align incentives programs that could further increase the attractiveness of Ontario for industrial and/or advanced manufacturing investment.

Tesla has made it clear that a quick permitting experience to get approval to build is now the biggest incentive a region can give it to convince the company to choose them for a new factory. The automaker doesn’t want to repeat the experience of building Gigafactory Berlin in Germany, which was stuck in a bureaucratic nightmare for the better part of a year.

Tesla is looking for something closer to the experience it had in Austin for Gigafactory Texas, which was built in a record time.

Electrek’s Take

If Tesla has set its eyes on Canada for its next factory, and it looks like it did, I think the company is likely looking to make Quebec and Ontario compete for the factory; both provinces have fairly large populations, and they both have a history of automotive production.

They have both been investing heavily into electric vehicles. Quebec has had a lead in EV adoption, but Ontario has attracted more investments for production.

Like Tesla is hinting in the lobbying disclosure, I think it’s going to come down to how smooth they can make the permitting experience, and I think that’s going to be a challenge for both provinces.

Then earlier this spring, Raschke learned her rent was increasing by $617 per month. Delivery was one of the first things she cut from her budget. Now, the 75-year-old walks four blocks to the grocery several times a week. She only uses delivery on rare occasions, like a recent heat wave.

“To do it every week is not sustainable,” she said.

Raschke isn’t alone. U.S. demand for grocery delivery is cooling as prices for food and other necessities rise. Some are shifting to pickup — a less expensive alternative where shoppers pull up curbside or go into the store to collect their already-bagged groceries — while others say they’re comfortable doing the shopping themselves.

Grocery delivery saw tremendous growth during the first year of the pandemic. In August 2019 — a typical pre-pandemic month — Americans spent $500 million on grocery delivery. By June 2020, it had ballooned to a $3.4 billion business, according to Brick Meets Click, a market research company.

Companies rushed to fill that demand. DoorDash and Uber Eats began offering grocery delivery. Kroger — the nation’s largest grocer — opened automated warehouses to fulfill delivery orders. Amazon opened a handful of Amazon Fresh groceries, which provide free delivery to Prime members. Hyper-fast grocery delivery companies like Jokr and Buyk expanded into U.S. cities.

But as the pandemic eased, demand softened. In June 2022, Americans spent $2.5 billion on grocery delivery — down 26% from 2020. For comparison, they spent $3.4 billion on grocery pickup, which saw demand drop 10.5% from its pandemic highs.

That’s causing some turmoil in the industry. Buyk filed for bankruptcy in March; Jokr pulled out of the U.S. in June. Instacart — the U.S. market leader in grocery delivery — slashed its own valuation by 40% to $24 billion in March ahead of a potential IPO. Kroger said its digital sales — which include pickup and delivery — dropped 6% in the first quarter of this year.

Some think delivery demand could drop further. Chase Design, a consulting firm, says its surveys show the number of U.S. shoppers who plan to use grocery delivery “all the time” has fallen by half since 2021.

Cost is the biggest reason. Peter Cloutier, the growth and commercial strategy lead at Chase Design, said it’s difficult to get groceries to a customer’s door for less than a $10 premium, which covers labor and transportation. Often, that cost is higher.

Consider a basket of eight staples from Target, including a gallon of milk, a dozen eggs and a pound of ground beef. In store, the order would ring up at $35.12. Target offers curbside pickup for free. Delivery costs $9.99, not including a tip.

DoorDash also offers delivery from Target, but it charges more for each item on its website. The cart rings up at $39.90 from DoorDash, which then adds $12.18 in taxes and delivery fees. If the consumer adds a $10 tip, that totals $62.08.

Both DoorDash and Target offer free delivery through subscriptions, but those come with a monthly or yearly fee.

The premiums are tough to swallow on top of skyrocketing food prices. In June, U.S. grocery food prices were up 12.2% over the last 12 months, the largest increase since April 1979, according to government data.

Cynthia Carrasco White, an attorney for a nonprofit in Los Angeles, got accustomed to grocery delivery during the pandemic. She still prefers it, since her youngest child isn’t fully vaccinated and it saves time.

But earlier this summer, as gas prices approached $7 and a box of strawberries neared $9, she got serious about cutting costs.

White now toggles between Instacart, Uber Eats, Walmart and others, using whichever has the best offers and coupons. She will sometimes spend two hours filling a delivery cart and then wait to see if more promotions are posted before she finishes her order. And she has cut back on the amount she tips drivers.

“The economy has definitely taken the wind out of our sails,” she said. “It’s just this endless pressure.”

Retailers are responding by varying delivery prices by time of day. On a recent morning, Walmart offered to deliver a $35 order within two hours for $17.95; that dropped to $7.95 if the order could be delivered between 3 p.m. and 4 p.m.

But cost isn’t the only reason some consumers are moving away from delivery. Cloutier says many customers are wary of the quality of items selected by workers.

“There’s a trust gap between what the shopper wants to get and what the retailer fulfills,” Cloutier said.

Delivery companies are trying to improve that. Last month, Uber Eats announced upgrades to its online grocery offering, including the ability for consumers to see the products as workers scan them.

But even that may not entice some shoppers.

Diane Kovacs, a college lecturer in Brunswick, Ohio, has been using curbside pickup for nearly a decade. It saves her money, she says, because she doesn’t get sucked into impulse buys inside the grocery.

She got her groceries delivered briefly during the pandemic and she didn’t mind paying $10 or $15 a week for the service. But she still prefers pickup. She likes driving her dogs to the store and chatting with the employees.

“I think that people are not using delivery because they want to get the heck out of the house,” she said.

True demand for grocery delivery is tough to calculate. Usage can swing wildly when COVID cases rise or companies offer discounts, said David Bishop, a partner at Brick Meets Click.

But he sees some patterns emerging. Households with young children and people with mobility issues are sticking with delivery. People over 60 have generally gone back to shopping in person.

Bishop says delivery saw five years of growth in the first three months of the pandemic, and demand is probably still elevated. Eventually, he expects delivery sales to settle into more regular growth of about 10% per year. But delivery won’t go away, he said.

“I don’t see it moving all the way back to pre-COVID levels. That can has been opened up,” he said.

Incisiv and Wynshop recently launched Grocery Doppio, a free and independent source of grocery insights, and its first report is titled “State of Digital Grocery Performance Card.” The report also found that while 13.7% of all grocery orders in the first half of 2022 were digital, those sales decreased 13% from the first quarter of the year to the second.

Digital basket sizes have also decreased as inflation has risen, with the average price of an item in a digital basket increasing 15% in second quarter relative to first quarter. Digital baskets had an average of three fewer items in second quarter versus first quarter, and 83% of grocery executives expect pricing pressure to continue until 2023.

“The explosion of digital shopping during COVID forced grocery executives to execute digital strategies faster than they normally would have, often at the expense of profitability and operational effectiveness,” said Gaurav Pant, chief insights officer at West New York, N.J.-based Incisiv. “While digital has been a growth driver for the industry, we are seeing growth decelerate and most grocers are losing money on their digital orders.”

Across channels, e-commerce grocery orders placed through a third-party service represented 28.4% of all digital sales, while those placed through a grocer’s website represented 64.5% and grocer apps accounted for 7.1% of sales. In addition to the $11 billion lost because of unavailable or unsubstituted items, $0.16 is the average margin loss on a digital order during the second quarter of 2022.

“Staggering stats like $11 billion lost in digital sales in just six months motivate us to get information out to grocers even faster so they can avoid missing out on sales,” said Neil Moses, CEO of Miami-based Wynshop. “We look forward to using Grocery Doppio as a tool to help the entire digital grocery industry move forward.”

Grocery Doppio will also include statistics on financial performance, digital adoption, profitability and market share of leading grocers, as well as digital benchmarks and exclusive shopper and grocery insights.

Conagra Brands, Inc. plans to deliver $1 billion in cost savings over the next three years as it renovates and updates its supply chain. Dubbed “fuel for growth,” the initiative will encompass production, logistics, margin management and new capabilities.

“By implementing a fuel for growth program, we will accelerate productivity over the next three years,” said Alexandre O. Eboli, chief supply chain officer, during the company’s July 27 investor day presentation. “From a historical average of 2% to 3%, we expect to accelerate productivity to achieve 4% of cost of goods sold by fiscal year ‘25.”

Conagra’s supply chain encompasses 42 plants and 25 distribution centers with 15,000 employees that produce more than 5,000 products and account for 80% of the company’s volume. External partners make up the rest of the volume.

Five components will support the program, including optimization, productivity, agility, people and a focus on sustainability. Perhaps the most significant impact will be felt in logistics, said Mr. Eboli.

“Today, we have 25 distribution centers supporting our business,” he said. “We will reduce our distribution centers by 50%, while at the same time, leverage best-in-class logistics operators to provide automation that will allow facilities to run 24/7, service our customers and optimize our costs.”

Mr. Eboli used a distribution center in Atlanta as an example, noting that the site now combines a Conagra and former Pinnacle operation in the Southeast.

“This is a 24/7 fully automated distribution center operating with 50% fewer people than a traditional warehouse,” he said. “Only in this location we are expecting to deliver $3 million in savings in warehousing cost per year.

“Over the next three years, the consolidation of the network across both frozen and ambient networks across the country is expected to deliver $200 million total savings in logistics, with optimization not only of warehousing costs but also transportation costs by optimizing the number of miles we travel.”

To improve productivity, the company is enhancing its data and analytics capabilities. With the new tools, cross-functional teams will be able to better identify opportunities to reduce cost in materials, manufacturing and logistics.

At a baking plant in Indianapolis, the cross-functional team approach shows the benefits, Mr. Eboli said.

“This team is composed of resources across R&D, manufacturing, logistics, finance and procurement,” he said. “With every product design assessment, we begin by benchmarking our products against our competition, trading for alternatives for ingredients and packaging, while keeping the key attributes that our consumers love about our products. In this example, not only are we able to improve our material costs; we are also able to reduce repetitive manual labor, ultimately reducing our COGS by 250 bps.”

Digitization of systems has helped Conagra Brands tap into the benefits of computer analysis.

“We have built a data lake to take advantage of the vast amount of information being collected across these specialized applications,” Mr. Eboli said. “At the top layer, we have the intelligence and orchestration layers where we apply machine learning and artificial intelligence to drive insights and agility.

“The tools that we are now using provide us with greater visibility and allow us to make data-driven decisions on long-term capacity plans. … We expect these tools and capabilities to deliver an increase in revenue through improved service, decreased operating costs in our plants and distribution centers while reducing overall working capital.”

Using the tools has allowed Conagra’s Slim Jim meat snack business to identify and unlock 40% capacity over the past four years, according to the company.

“… and we will unlock another 20% over the next 12 months,” Mr. Eboli said. “With Slim Jim being the largest meat stick brand, our long-range demand forecast continues to be strong. We leverage our planning tool to define forward-looking capacity requirements across our network. And right now, we are evaluating future investments to support growth beyond 2025.”

The company also is in the process of digitally connecting its manufacturing operations. Called the “connected shop floor” the program will feature four pillars.

“The first pillar of the program is connected line,” Mr. Eboli said. “We will be connecting all equipment on production lines to the web, providing a constant flow of data to our teams. The second pillar is connected worker, providing an electronic way for the team to collect data on a mobile device.

“The third pillar is yield management, which allows the teams to attract material efficiency, supplier quality and adherence to the standards required to produce consistent and repeatable products minimizing waste. And lastly, we are investing in dashboards and alerts so that our frontline teams and site leadership can take timely actions on high-priority events.”

The initiative is expected to deliver $300 million in manufacturing savings over the next three years, according to Conagra Brands.

“Our disciplined approach will accelerate capital spending over the next three years to between 4% and 5% of net sales compared to a baseline of 3.5% to 4%,” Mr. Eboli said. “We then expect this to moderate back to our prior capital allocation plans pre fiscal year '23. These investments will be deployed two-thirds to growth and productivity and one-third to foundational elements like quality, safety and infrastructure.”

GXO Logistics Inc.’s focus on automation and returns has been a boon for nabbing new customers.

The Greenwich, Conn.-based company said it now counts Dolce & Gabbana, Lacoste, JD Sports, Spanx, Restoration Hardware and L’Oreal among the more recent fashion and beauty customers that have hired the contract logistics firm to help manage their supply chains and warehousing.

The momentum behind GXO, which had a recent market cap of $6.1 billion, led the company to up its guidance for the year when it reported its second-quarter results this week. GXO said it now expects organic revenue growth in the range of 12 percent to 16 percent, up from 11 percent to 15 percent. The company is also forecasting adjusted earnings before interest, taxes, depreciation and amortization in the range of $715 million to $750 million, compared with previous guidance of $707 million to $742 million.

“Across global markets and industries, continuing supply chain complexities, elevated inventory levels and high inflation are making seamless logistics management mission-critical for more and more companies,” CEO Malcolm Wilson told analysts this week. “This all plays to the strengths of GXO [and] is no doubt helping to drive our significant organic growth and market share gains. On the one hand, we have seen some return to brick-and-mortar by the consumer. On the other hand, large companies are still continuing to expand their online product offering.”

On the acquisition of Leeds-based Clipper Logistics, Wilson said “we need to digest that,” when asked about future deals being struck. However, the CEO noted the trend in industry consolidation in saying GXO would look at opportunities that would allow it to expand into new verticals.

“No doubt we will look again in the M&A market. North America, I have to say, is probably our favorite market. Lots of opportunities,” Wilson said.

Clipper is expected to help bolster the company’s e-commerce efforts once it has fully transitioned into the GXO system.

“E-commerce is growing rapidly for GXO as more big, global brands continue to put more of their products online to catch up with consumer behavior. E-commerce generates higher product returns and managing these returns is a problem for most customers,” GXO chief commercial officer Bill Fraine said this week during the company’s second-quarter earnings call.

Fraine said 96 percent of GXO customers are able to resell returned product. That compares to, industry-wide, about 25 percent of returns remaining unsold.

Fraine went on to say 40 percent of GXO’s new customer contracts include reverse logistics and said there is “significant growth opportunity here for GXO.”

The CCO used the example of a large sports customer GXO began working with about four years ago to paint the picture of how the logistics firm has made the returns process more productive for getting in-season merchandise back into availability for purchase.

Software helps the company identify which of the trucks returning to a warehouse contains product that needs to get back into the system queue for sale. Merchandise is then processed by level of priority based on that information.

Clipper Logistics adds more software that’s expected to bolster GXO’s reverse logistics offering to customers, with Wilson saying that will eventually be rolled out across all of GXO’s European business and not just the U.K.

Technology and automation provides the backbone to GXO’s services and the company continues to open automated warehouse and distribution centers.

About 60 percent of the new business in the second quarter was for what the company said are highly automated sites as more apparel, retailers and other businesses focus on software to help with inventory management and trimming costs.

About that same percent of contracts GXO is bidding for have a tech component, according to the company.

Companies have become particularly keen on warehouse automation to help solve labor concerns of the past couple years, Fraine pointed out, adding it also helps make the existing workers in a facility “more sticky” as technology helps make work easier.

With availability of everything from real estate to parts and other components, Wilson said GXO’s ability to obtain the necessary robots or other technology for its facilities is not a concern for the company given its size in the market.

Said Wilson: “That scale gives us huge buying power when it comes to equipment, like automation, not to mention real estate.”

]]>With warehouse space in short supply, retailers need to rethink their inventory strategiesWarehouse AutomationFri, 05 Aug 2022 18:39:41 +0000https://www.warehouseautomation.ca/news-notes-1/2022/8/5/conagra-brands-to-automate-all-dcs-after-major-update-to-its-supply-chain-wtgg2-s4brb-32xmy-fd5w85a31c205d55b41e997de43b6:5a31db250d9297f79916ac9e:62ed63b382994105a3333e67Conagra Brands renovating and updating its supply chain

Conagra Brands, Inc. plans to deliver $1 billion in cost savings over the next three years as it renovates and updates its supply chain. Dubbed “fuel for growth,” the initiative will encompass production, logistics, margin management and new capabilities.

“By implementing a fuel for growth program, we will accelerate productivity over the next three years,” said Alexandre O. Eboli, chief supply chain officer, during the company’s July 27 investor day presentation. “From a historical average of 2% to 3%, we expect to accelerate productivity to achieve 4% of cost of goods sold by fiscal year ‘25.”

Conagra’s supply chain encompasses 42 plants and 25 distribution centers with 15,000 employees that produce more than 5,000 products and account for 80% of the company’s volume. External partners make up the rest of the volume.

Five components will support the program, including optimization, productivity, agility, people and a focus on sustainability. Perhaps the most significant impact will be felt in logistics, said Mr. Eboli.

“Today, we have 25 distribution centers supporting our business,” he said. “We will reduce our distribution centers by 50%, while at the same time, leverage best-in-class logistics operators to provide automation that will allow facilities to run 24/7, service our customers and optimize our costs.”

Mr. Eboli used a distribution center in Atlanta as an example, noting that the site now combines a Conagra and former Pinnacle operation in the Southeast.

“This is a 24/7 fully automated distribution center operating with 50% fewer people than a traditional warehouse,” he said. “Only in this location we are expecting to deliver $3 million in savings in warehousing cost per year.

“Over the next three years, the consolidation of the network across both frozen and ambient networks across the country is expected to deliver $200 million total savings in logistics, with optimization not only of warehousing costs but also transportation costs by optimizing the number of miles we travel.”

To improve productivity, the company is enhancing its data and analytics capabilities. With the new tools, cross-functional teams will be able to better identify opportunities to reduce cost in materials, manufacturing and logistics.

At a baking plant in Indianapolis, the cross-functional team approach shows the benefits, Mr. Eboli said.

“This team is composed of resources across R&D, manufacturing, logistics, finance and procurement,” he said. “With every product design assessment, we begin by benchmarking our products against our competition, trading for alternatives for ingredients and packaging, while keeping the key attributes that our consumers love about our products. In this example, not only are we able to improve our material costs; we are also able to reduce repetitive manual labor, ultimately reducing our COGS by 250 bps.”

Digitization of systems has helped Conagra Brands tap into the benefits of computer analysis.

“We have built a data lake to take advantage of the vast amount of information being collected across these specialized applications,” Mr. Eboli said. “At the top layer, we have the intelligence and orchestration layers where we apply machine learning and artificial intelligence to drive insights and agility.

“The tools that we are now using provide us with greater visibility and allow us to make data-driven decisions on long-term capacity plans. … We expect these tools and capabilities to deliver an increase in revenue through improved service, decreased operating costs in our plants and distribution centers while reducing overall working capital.”

Using the tools has allowed Conagra’s Slim Jim meat snack business to identify and unlock 40% capacity over the past four years, according to the company.

“… and we will unlock another 20% over the next 12 months,” Mr. Eboli said. “With Slim Jim being the largest meat stick brand, our long-range demand forecast continues to be strong. We leverage our planning tool to define forward-looking capacity requirements across our network. And right now, we are evaluating future investments to support growth beyond 2025.”

The company also is in the process of digitally connecting its manufacturing operations. Called the “connected shop floor” the program will feature four pillars.

“The first pillar of the program is connected line,” Mr. Eboli said. “We will be connecting all equipment on production lines to the web, providing a constant flow of data to our teams. The second pillar is connected worker, providing an electronic way for the team to collect data on a mobile device.

“The third pillar is yield management, which allows the teams to attract material efficiency, supplier quality and adherence to the standards required to produce consistent and repeatable products minimizing waste. And lastly, we are investing in dashboards and alerts so that our frontline teams and site leadership can take timely actions on high-priority events.”

The initiative is expected to deliver $300 million in manufacturing savings over the next three years, according to Conagra Brands.

“Our disciplined approach will accelerate capital spending over the next three years to between 4% and 5% of net sales compared to a baseline of 3.5% to 4%,” Mr. Eboli said. “We then expect this to moderate back to our prior capital allocation plans pre fiscal year '23. These investments will be deployed two-thirds to growth and productivity and one-third to foundational elements like quality, safety and infrastructure.”

GXO Logistics Inc. marked its one-year anniversary Aug. 2 by releasing its second-quarter earnings report.

The Greenwich, Conn.-based global contract logistics company also celebrated by ringing the opening bell on the New York Stock Exchange. The company was able to do the same thing a year prior when it launched.

“It’s been a super exciting and quite frantic couple of days, but nonetheless we are really enthused,” Chief Strategy Officer Neil Shelton told Transport Topics. “We’re delivering on financials, delivering on growth, and we’ve got a great springboard as we head into 2023.”

Wilson and some other executives were unable to attend the first bell ringing on the exchange because the coronavirus made travel complicated. He was on hand, though, to ring the bell marking the first anniversary.

“It was an absolute pleasure to be at the New York Stock Exchange,” Shelton said. “What a place. I was absolutely blown away. You felt like you were really being graced with being able to visit and see an American institution that the whole world knows about. It was really enjoyable and a massive honor to be there.”

XPO decided to turn its contract logistics business into a stand-alone company so it could better take advantage of tailwinds related to e-commerce, automation and outsourcing. The latest earnings report showed the company was able to do just that. The e-commerce, omnichannel retail and consumer technology vertical represented the strongest revenue stream as it increased 19.5% year-over-year to $1.19 billion from $999 million.

GXO noted in its earnings report that net income was $52 million, or 44 cents a diluted share, for the three months ending June 30. That compared with $14 million, 10 cents a share, during the year-ago period when the company’s operations were part of XPO Logistics. Total revenue increased by 15% to $2.16 billion from $1.88 billion.

Wall Street analysts polled by Zacks Consensus Estimate expected EPS of 63 cents and quarterly revenue of $2.11 billion.

“One year ago today, we became GXO, creating a pure-play logistics leader with a mission to accelerate growth, advance our technological leadership, maintain a robust capital structure and drive value for our stakeholders,” CEO Malcolm Wilson said in a statement. “I’m proud to say that we’ve delivered on our promises.”

“E-commerce and omnichannel outpaced the group rate of growth through the second quarter, and it’ll continue to outpace the group rate of growth given the wins that we’re picking up, the pipeline we’ve got, and the fact that our customers continue to want to deliver, not only a best-in-class consumer experience, but to do so very efficiently,” Shelton said. “You need high levels of automation; you need a lot of technology in order to be able to do that. And they’re depending on us across more and more of their footprint to help deliver that.”

The food and beverage vertical followed, with revenue increasing 7.7% to $336 million from $312 million. Industrial and manufacturing came next with revenue increasing 7.2% to $269 million from $251 million. Consumer packaged goods revenue rose 21.7% to $224 million from $184 million.

“I think the past 12 months has really been quite fast-paced,” Shelton said, “both in terms of our financial and operational growth but also the recognition that we’ve managed to achieve and the branding we’ve achieved in the marketplace already in quite a short period of time.

“It’s been some fantastic milestones achieved, but also at the same time delivering for all of our stakeholders, which we’re really quite proud of. We can’t rest on our laurels. We’re going to continue to deliver on that.”

GXO in its first year opened about 90 new sites, added about 15 million square feet of new warehouse space, won hundreds of new contracts from customers, accelerated automation and grew its head count by about 15,000. The Clipper Logistics acquisition also was seen as a milestone by company leaders when it closed May 24.

Cowen and Co. said the quarterly results came in above expectations as new business wins continue to spur growth despite looming uncertainty in Europe. The investment bank and financial services company also pointed out that 40% of Q2 new business wins were attributable to reverse logistics and that returns are a margin-rich subsegment of the e-commerce business.

“GXO continued to capitalize on trends in e-commerce and product returns [reverse logistics],” Cowen analyst Jason Seidl wrote in a report. “60% of 2Q new business wins were captured by highly automated sites as customer demand for tech-enabled solutions continues to grow. Going forward, the percentage of new contracts with a tech component is expected to remain very high, which is beneficial to margins due to the low variable cost structure of these service offerings.”

]]>2022 Plant of the Year: Bell & EvansWarehouse AutomationThu, 04 Aug 2022 14:20:14 +0000https://www.courierpostonline.com/story/news/local/2022/08/01/nj-warehouse-and-distribution-boom-finding-staff-in-new-ways-places/65384176007/5a31c205d55b41e997de43b6:5a31db250d9297f79916ac9e:62ebd492cc258b74b67c9695From flex schedules to much better benefits packages, warehouse and distribution companies and their labor recruiting agents have gotten creative to recruit workers and then, crucially, to keep them from getting lured away.

Recruiters start searching locally, which helps builds local connections, but they are willing to stretch. Because for the right compensation, they say, prospective workers will endure some travel.

One option? Calling refugee settlement agencies.

Lynne Cravero is a regional operations director for ACCU Staffing Services, a longtime industrial labor recruiter in the tri-state area. Some staffing problems caused by the COVID-19 pandemic and onerous pandemic health policies have improved but conditions still are not close to normal, she says.

“We’ve tapped into a lot of agencies that provide refugee workers,” Cravero said. “For example, people have come over from Afghanistan recently. That’s a whole other work force that’s legal to work in the United States. They are provided everything they need to go to work.

“We just try to connect with all different kinds of groups, communities, clubs, churches,” she said. “We’ll do anything to recruit and find people.”

New Jersey, in particular, has exploded with warehouse and distribution centers. Amazon, in the space of five years, has become the largest private employer in the state with about 49,000 people on its payroll.

E-commerce, or online buying, is the phenomenon primarily driving the proliferation of warehouses and distribution centers. Food storage, dry and refrigerated, is another busy sector. And while e-commerce has calmed somewhat, as people return to shopping at stores, online buying is expected to see further growth.

Amazon handles recruiting internally. It, too, will not overlook unconventional sources for workers.

“We have a brand new, state-of-the-art fulfillment center in Wilmington, Delaware,” spokesman Vince Kelly said. “It’s got, like, over 3,000 full-time employees. When they were looking for that, they partnered with every community organization imaginable.”

Commerce Drive is one area that Logan Township has set aside for warehouses and distribution centers.

Amazon opened a sorting facility there in October 2021, which is its second here. About half of it is being used as construction continues, with another section expected to be ready in August. About 1,000 workers are employed between the two sites.

Amazon also has a fulfillment center and a delivery station in Logan.

Kelly said Amazon finds there is no hard-and-fast profile for those who come looking for a job. One departure from traditional hiring requirements is there is no demand to have a high school graduation certificate.

“Obviously, they’ll be a group of people that don’t know what they want to do,” Kelly said. “But we have a ton of people that, because of the flexibility in scheduling, when they rejoin the workforce they come here. Because they’re looking for just to earn a little extra pocket change. So, it’s not really like one we can say, ‘85 percent of our workforce is between 18 and 30.’”

Kelly said a new hire will make $18 per hour, which also is nationally the average at the company.

“New Jersey is basically in line with that average, because it’s a higher cost of living,” he said. “Most employees will start, day one, having access to comprehensive health benefits."

Cravero said a lot of people that ACCU interviews are referrals by friends and family. “We do a lot of social media advertising, as well,” she said.

“I think each area is a little different,” Cravero said. “I wouldn’t say it’s a super-young workforce. You have to remember, a lot of the positions we have are entry level. Packers and that type of things. So, (we cannot) … zero in one demographic of people. We really do have everyone.”

There is one group every recruiter would like to tap but whose members would rather do almost anything else than shifts in warehouses, according to Cravero.

“We don’t see college students that want to do these kinds of jobs anymore,” Cravero said. “We don’t see young people that want to do these kinds of jobs. That’s not who’s applying. Not, like, high school grads looking for a first job.

“No, no, no, no,” she said. “They don’t want to work that hard. Because they can go work for the same amount of money at McDonald’s.”

Kelly said Amazon does make efforts to attract high school graduates, visiting schools to talk about the company. “Our workforce staffing team was at one that was hosted by the Philadelphia school district a couple months back at a high school,” he said.

In today’s conditions, Cravero says, a $1 an hour pay hike is more than enough for workers to switch jobs. And often workers don’t need to travel very far to do so, she says.

“It’s so true,” Cravero says. “It’s so crazy.”

Cravero says many otherwise suitable candidates just will not work for minimum wage in a heavy manual work climate.

“And if they do?” she says. “It doesn’t last long. Because they can go down the street. Like I said, they’ll chase 50 cents to make more money. And especially now, because things are so outrageously expensive ... they have to chase the dollar.”

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]]>New rules, fierce competition to find warehouse workforcesWarehouse AutomationThu, 04 Aug 2022 02:50:33 +0000https://corporate.walmart.com/newsroom/2022/06/03/a-new-era-of-fulfillment-introducing-walmarts-next-generation-fulfillment-centers5a31c205d55b41e997de43b6:5a31db250d9297f79916ac9e:62eb33f09c7e6374707a4d81

A New Era of Fulfillment: Introducing Walmart’s Next Generation Fulfillment Centers

Link to full story, images, videos at walmart.newsroom.com >

Next-Generation Fulfillment Centers - Features

Walmart is rolling out four new next generation fulfillment centers featuring the powerful combination of people, robotics and machine learning to set a new precedent on our speed of fulfillment and opportunities for our associates.

Accessibility

• Four new FC’s alone will provide 75% of the U.S. with next- and two-day shipping on millions of items, including Marketplace items shipped by Walmart Fulfillment Services. Combined with traditional fulfillment centers Walmart will reach 95% of the U.S. population with next- and two-day shipping.

Speed

• Patent-pending fulfillment system transforms a manual, 12-step process down to just 5 steps resulting in a 2x increase in storage capacity than a traditional fulfillment center and 2x increase in the number of customer orders fulfilled in a day.

Comfort

• Automated system provides increased comfort for Walmart associates – removing the need to walk up to 9 miles per day picking items from multiple floors of shelving spread out over hundreds of thousands of square feet of space.

Opportunity

• These four new Next Generation Fulfillment Centers will collectively create more than 4,000 new supply chain jobs such as control technicians, quality audit analysts and flow managers.

Joliet, IL | 3501 Brandon Rd

• Opening Summer 2022

• 1,100,000+ square-foot facility

• Plans to hire 1,000+ new supply chain associates

• Providing customers across Illinois, Indiana and Wisconsin with access to next- and two-day shipping on millions of items

McCordsville, IN | 5259 W 500 N

• Opening Spring 2023

• 2,200,000+ square-foot facility

• Plans to hire 1,000+ new supply chain associates

• Providing customers across Indiana, Illinois, Kentucky and Ohio with access to next-and two-day shipping on millions of items

Lancaster, TX | 2500 Beltline Rd

• Opening Fall 2023

• 1,500,000+ square-foot facility

• Plans to hire 1,000+ new supply chain associates

• Providing customers across the majority of Texas and Oklahoma with access to next- and two-day shipping on millions of items

Greencastle, PA | 1915 Ebberts Spring Court

• Opening 2024

• 1,500,000+ square-foot facility

• Plans to hire 1,000+ new supply chain associates

• Providing customers across Pennsylvania, Maryland, Delaware and New Jersey with access to next- and two-day shipping on millions of items

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]]>Presenting Walmart’s Next Generation Fulfillment CentersWarehouse AutomationTue, 02 Aug 2022 21:32:44 +0000https://www.warehouseautomation.ca/news-notes-1/2022/8/2/41-million-square-foot-warehouse-in-ontario-will-be-amazons-biggest-ever-cljmr5a31c205d55b41e997de43b6:5a31db250d9297f79916ac9e:62e997e5f98234034e86c543A new distribution and automation center rising from a south Ontario feedlot will have more space than Disney’s California Adventure theme park.

At almost 4.1 million square feet, the five-story, 97-foot-tall behemoth now taking shape in southwestern Ontario will have more space than any other Amazon warehouse not just in America, but in the world.

“That’s the biggest (Amazon warehouse) we see in our database,” said Marc Wulfraat, president of Canadian-based logistics consulting firm MWPVL International, which tracks the Seattle retailer’s distribution network.

San Francisco-based logistics giant Prologis Inc. is building the warehouse for Amazon, which already has at least 17.9 million square feet of warehouse space in Southern California.

Amazon signed a lease for the building last summer, and construction began soon after. A Prologis spokesperson said construction should be done by the end of the year, clearing the way for a new distribution and automation center to begin operations.

At that size, the new 4,055,890-square-foot structure — sitting atop a former cattle feedlot — will be almost as big as two 73-story Wilshire Grand Hotels, the region’s tallest skyscraper in downtown Los Angeles.

Amazon’s new warehouse floor space, measuring some 93 acres, would hold all of Disney’s California Adventure theme park — with 21 acres to spare.

Amazon has confirmed the massive Ontario warehouse was part of its network.

“The footprint is over 800K square feet and the total square footage is over 4 mil (sic) making it one of our largest buildings,” an Amazon representative said in an email.

But the future of the building and some of Amazon’s other Southern California distribution centers may be in doubt. An e-commerce boom that exploded during the pandemic slowed over the past year as people resumed shopping in stores, leaving Amazon with a $3.8 billion loss at the start of 2022, its first quarterly loss in seven years.

The setback prompted the online retail giant to curtail a two-year warehouse-acquisition binge.

Bloomberg News and The Wall Street Journal reported recently that Amazon now wants to shed 10 million to 30 million square feet from its warehouse network, either by subleasing some of its space or by terminating leases — possibly including leases with Prologis.

Bloomberg reported the company has excess capacity in Southern California, as well as New York, New Jersey and Atlanta.

Chief Executive Andy Jassy said in Amazon’s first-quarter earnings report that it took the company 25 years to amass 193 million square feet of warehouse space but just two years to double its global network to 387 million square feet, 370 million of that in North America.

“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” Jassy said in the company’s April filing with the Securities and Exchange Commission. But, Jassy added, “we’re no longer chasing physical or staffing capacity.”

One real estate analyst speculated that Amazon will sublease space elsewhere in Southern California before it puts the new Ontario warehouse on the chopping block.

“I’m not sure they’d be able to find another single user for space of that size,” said Joshua Ohl, senior market analyst for real estate data firm CoStar Group. “From what I’ve heard, Amazon has been placing more of its older facilities on the sublease market that have less automation, fewer (high-level loading docks) and lower clear heights.”

Wulfraat said that as Amazon increasingly expands its use of robotics, it needs more space to store the “pods” that hold merchandise.

“The more items you have, the more pods you need,” he said.

In a press release last August, Amazon said a new fulfillment center in Ontario would employ 1,500 people who will work alongside its robots as they pick, pack and ship smaller-sized items to customers.

If the facility is anything like a new, five-story warehouse just outside Wilmington, Del., robots could outnumber humans 10 to one, according to a recent Philadelphia Inquirer story.

At the Delaware warehouse, workers unload trucks and stow the contents in 8-foot-tall stacks of square yellow bins. Once in the bins, goods are ready for retrieval by robots, the Inquirer story said. Robotic vehicles are guided by optical and motion sensors, selecting and carrying Amazon merchandise from storage bins to delivery.

Amazon’s next-biggest warehouse after the Ontario building will be a 3.87 million-square-foot facility under construction in Loveland, Colo., said Wulfratt, the MWPVL president. The company has eight other buildings in operation or under construction with at least 3.8 million square feet.

The company’s biggest Southern California warehouse is a 3.4 million-square-foot building in south San Diego County, followed by the 2.56 million-square-foot facility in Beaumont, he said.

Amazon’s new Ontario warehouse is the first to rise out of a massive conversion of nearly 600 acres of agricultural land north of Chino Airport. Two recently approved developments will add 13.8 million square feet of industrial and commercial space to the region.

Last year, Ontario approved the 376-acre Merrill Commerce Center, which includes the new Amazon building. Prologis plans to build 7 million square feet of big-box industrial on the site, plus a 1.4 million-square-foot business park.

In March, the city approved the South Ontario Logistics Center, where developers intend to build 5.3 million square feet of warehouse space.

The Logistics Center plan received vocal opposition from residents fearing increased traffic and pollution and opposed to the conversion of more farmland into warehouses. A lawsuit and a petition drive have been launched to reverse the city’s approval of the development.

Yet, more warehouses already are in the pipeline for the Inland Empire, which is home to 583 million square feet of warehouse and logistics buildings, according to CoStar. More than 30 million more square feet of big-box industrial are under construction.

With an industrial vacancy rate of just 1%, the Inland Empire leads the nation with 60% year-over-year rent growth for big-box facilities, commercial brokerage CBRE reported in early May.

“Big-box development is spreading eastward through the San Gorgonio Pass and into the Coachella Valley along Interstate 10,” the report said.

As part of the expansion of this relationship, Berkshire Grey and FedEx have entered into an agreement for new development activities that will provide broader AI robotic automation capabilities to help improve the safety and efficiency of FedEx package handling operations globally. The two companies also expect to execute a master system purchase agreement in 2022, which will streamline and expedite the procurement process for Berkshire Grey solutions across all FedEx operating companies globally.

Additionally, Berkshire Grey has granted FedEx a warrant to purchase common stock which vests incrementally, subject to certain terms including the ordering of and payment for Berkshire Grey AI-enabled robotic automation goods and services at any time prior to December 31, 2025, with full vesting of all 25 million shares subject to the warrant upon the ordering of or payment for at least $200 million of such goods and services. Details on the terms of the warrant agreement are available in the Form 8-K filed today by Berkshire Grey.

“Our growing relationship with Berkshire Grey for robotic automation is a direct response to the growth of e-commerce, which has accelerated the demand for reliable automated solutions throughout all stages of the supply chain,” said Rebecca Yeung, Corporate VP of Operations Science and Advanced Technology, FedEx. “FedEx believes that continued innovation and automation will improve efficiency, productivity and safety for its team members as they continue to keep the global supply chain moving.”

As previously announced, FedEx Ground and Berkshire Grey are already working together to deploy Berkshire Grey’s Robotic Product Sortation and Identification (RPSi) systems to robotically sort small packages that arrive daily and require distribution. In addition to the recent installations at eight sortation facilities, including Queens, NY, Las Vegas, Nev., and Columbus, Ohio, FedEx Ground plans to have RPSi systems in place at select additional facilities in the network over the next 12 months.

The new product development agreement is an expansion of this collaboration and offers new opportunities for the two companies to work together to further increase efficiencies across the FedEx enterprise using AI-enabled robotic automation.

“Berkshire Grey and FedEx are strategically aligned. These new agreements reflect our mutual commitment to innovations in robotic automation that can remove barriers within the supply chain, ease the physical burden on employees and streamline operations,” said Tom Wagner, CEO of Berkshire Grey. “We look forward to working together on this new program and to advancing other automation programs with FedEx moving forward.”

Amazon Chief Security Officer Stephen Schmidt, AWS Vice President and Chief Information Security Officer CJ Moses, Vice President of AWS Platform Kurt Kufeld, and MongoDB Chief Information Security Officer Lena Smart take the stage to discuss the latest innovations in cloud security from AWS and how to foster a culture of security in your business.

Why is it so hard for companies to adopt multi-layered security practices? They still have on-prem baggage, explain IDC analysts

In their keynote at AWS re:Inforce 2022, AWS’ Steven Schmidt, chief information security officer, and Kurt Kufeld, platform vice president, repeated a theme that was heard at the RSA conference earlier this year: Enterprise-level companies have to up their multifactor authentication game.

AWS deals with “quadrillions of events every month,” according to Schmidt. A quadrillion has 15 zeros, making it a number beyond the comprehension of most of us. Cloud competitor Microsoft reports that there are 50 million password attacks on its Azure Active Directory daily. Yet while implementing MFA can reduce infiltration through phishing attacks 99.9%, only a small percentage of admins implement authentication services with their single-sign-on procedures.

Why?

“Because it introduces friction, and all of a sudden people can’t get their jobs done,” said Jay Bretzmann (pictured, right), research director for cybersecurity and industry analyst at International Data Corp. “And the whole point of a network is letting people on to get that data they want to get to.”

Bretzmann and Philip Bues (pictured, left), research manager for cloud security at IDC, spoke with theCUBE industry analysts John Furrier and Dave Vellante at AWS re:Inforce, during an exclusive broadcast on theCUBE, SiliconANGLE Media’s livestreaming studio. The discussion covered trends in identity management security and cloud data security. (* Disclosure below.)

Enterprise security has to deal with on-premises baggage

Despite the prevalence of the word “seamless” in cybersecurity product pitches, the day-to-day reality of security is anything but simple. Identity verification started back with mainframes, and many companies are still dealing with the baggage of security designed for on-prem active directories, according to Bretzmann. So while it may be easy for born-in-the-cloud companies to implement universal identify verification in the cloud, it’s a different situation for traditional enterprise.

“If you ask different suppliers ‘What percent of your base that does SSO also does MFA?’ one of the biggest suppliers out there, Microsoft, will tell you it’s under 25%. That’s pretty shocking,” Bretzmann stated.

Not so long ago, MFA was accomplished via a one-time code sent through Short Message Service. But this method is no longer recommended because it is relatively easy to compromise, according to the United States National Institute of Standards and Technology’s “Digital Identity Guidelines.”

SMS is susceptible to man-in-the-middle attacks because it is built on the Signaling System 7 telephony protocol, according to Bretzmann. Developed in 1975, SS-7 “predates anything. There’s no certification either side,” he said.

In addition, Subscriber Identity/Identification Module, or SIM card hacking has also become common, allowing attackers to reroute SMS messages and compromise accounts.

Best practices for modern MFA

Modern best practices for MFA include push notifications sent to secured mobile devices that can’t be accessed without first unlocking the device. One big player in the market is Cisco Duo, which has wide adoption because many companies already use Cisco’s network services, according to Bretzmann.

“Push can be a red ‘X’ and a green check mark to your phone. It can be a QR code somewhere; it can be an email push as well,” he said. “So that is the next easiest thing to adopt after SMS.”

Another development in dynamic identification is the adoption of public key infrastructure). This system enables encrypted and signed data, and identity is authenticated via digital certificate. This makes sense due to the prevalence of personal smart devices, according to Bretzmann.

“You can have an agent on that smart device generate your private key and then push out a public key. So the private key never leaves your device,” he explained.

Trends in cloud security

The big question for data security in the cloud is how to secure complex multicloud environments when trained security personnel are hard to find. The answer seems to be through open-source, automated solutions.

“Open source continues to proliferate around the automated reasoning, [and] I think that makes sense,” Bues said. “You want to provide guide rails, you want to provide roadmaps, and you want to have sort of that guidance.”

Another trend is that companies are combating cybercrime by sharing intelligence: “Some of the recent directives from the [US] Executive Branch make it easier for private companies to share data and intelligence, which I think strengthens the cyber community overall,” Bues added.

However, sharing data can be a security risk: When the keynote speakers said “encrypt everything,” they were speaking only about data at rest, Furrier pointed out. “What about data in flight?” he asked.

The trend toward consolidation and integration in cloud security continues, according to Bues.

“In the runtime detection, [it] makes perfect sense to have both the agent and agentless so that you’re covering any of the gaps that might exist,” he stated.

Here’s the complete video interview, part of SiliconANGLE’s and theCUBE’s coverage of the AWS

Scientists and engineers are developing a new generation of simulation tools accurate enough to develop and test robots virtually.

Read the full story with videos on Amazon Science >

Building and fine-tuning robotic systems takes lots of time. This is especially true for robots designed to interact within and manipulate an ever-changing array of objects in Amazon facilities. Developing robotic systems in a virtual environment can accelerate this process, but it’s harder than it looks.

Engineers have been accelerating new-product design using digital models and virtual simulations for decades. But these existing tools don’t meet Amazon’s need to develop and scale its fleet of complex robots.

To understand why, consider video games. Modern video games simulate worlds that look visually realistic at interactive rates.

“Take a race car game, for example. Everything looks physically plausible, but the forces behind the movements aren’t necessarily accurate,” says Andrew Marchese, an Amazon Robotics principal applied scientist who specializes in robotic manipulation. “They approximate some of the torques and forces that push and pull an object in the real world. So, a car’s acceleration may look realistic, even though the car’s engine is not big enough to generate the force needed to jump across the missing section of a bridge.”

Many industrial simulations also rely on approximations. Amazon, for example, uses visual simulators to plan its facilities and approximate how robots will move and interact safely with associates.

“To develop complex robotic manipulation systems, we need both visual realism and accurate physics,” says Marchese. “There aren’t many simulators that can do both. Moreover, where we can, we need to preserve and exploit structure in the governing equations — this helps us analyze and control the robotic systems we build.”

The more complex the system, the more likely those small gaps between virtual and physical devices turn into chasms. Developers in the field call it the sim2real gap.

“This is why it is commonplace in robotics to write and test code against physical systems,” Marchese says. “But this approach is not scalable for the variety of types and configurations of robots Amazon is developing. Doing things this way, there is just not enough time or hardware for everyone on a project team to keep testing a system until they get it right.

“Our ambition is to develop robots in simulation first,” Marchese adds. “We want to write software against virtual robots, test it in realistic simulations, verify safety on a real robot, and deploy. And our team is making real progress in doing this.”

Modeling the underlying physics

To achieve this vision, Amazon must not only create models of complex robots but also the objects they will interact with regularly.

A robotic arm, for example, might include a pneumatic gripper with multiple suction cups on the end. A model of that arm must evaluate the flow of air through the gripper’s tubes and valves, the contact forces of the rubber cups on a package, how the deformation of the cups during contact changes airflow, and what happens if only some cups make contact.

In addition, it must also simulate how the robot’s vision system identifies individual items in a pile of mixed packages, and how its arm calculates the approach angle and force needed to lift it. It is a lot to do in a single simulation environment, especially in high-fidelity.

“The complexity of Amazon’s facilities makes this an even greater challenge,” says Clay Flannigan, Amazon Robotics senior manager, advanced robotics.

“Simulating robots is hard because robots interact with the world and the world is complex,” Flannigan explains. “There are many simulators that understand the movement of rigid robots in free space. But we stock essentially millions of items, and we want our robots to be able to interact with millions of different items in our inventory. This is an enormously difficult robotics challenge.”

Consider, for example, the range of packages a robotic arm might encounter. They include rigid boxes that hold a single, immobile object encased in cardboard or foam. That box is straightforward to model. Other boxes look the same on the outside but contain products that may shift their weight when lifted. Harder still are bubble-wrap mailers that deform and shift their center of gravity when lifted.

Given the number of packages Amazon handles every day, creating one-off models based on empirical tests isn’t feasible. Instead, Flannigan says, the company wants to model the underlying physics of these interactions.

An accurate first principles model requires highly detailed physics. In addition to airflow, a pneumatic gripper must also model contact forces, inertia, friction, and aerodynamics. While the physics are well understood, their application to individual components must be verified to ensure the models are accurate.

Building and verifying such models is a massive undertaking. Fortunately, though, MIT researchers have been working on a toolkit to model robotic components for years. It is called Drake.

Building a platform

Drake — the brainchild of Russ Tedrake, director of MIT’s Center for Robotics and vice-president of the Toyota Research Institute — is an open-source toolbox for modeling and optimizing robots and their control system.

The open-source part is critical to Amazon. Many modeling tools provide little or no insight into how their solvers produce their simulations. Drake, on the other hand, reveals its governing equations. “This lets us poke at the underlying physics and modify how they are applied,” Flannigan says. “If there is a bug, we can find it and fix it.”

Drake brings together several desirable elements for online simulation. The first is a robust multibody dynamics engine optimized for simulating robotic devices. The second is a systems framework that lets Amazon scientists write custom models and compose these into complex systems that represent actual robots. “At first the framework can seem a bit formal, but it is actually key to reusing and integrating components within large models,” Marchese said. The third is what he calls a “buffet of well-tested solvers” that resolve numerical optimizations at the core of Amazon’s models, sometimes as often as every time step of the simulation.

Another key feature is its robust contact solver. It calculates the forces that occur when rigid-body items interact with one another in a simulation.

“Figuring out those forces is a really difficult problem,” Marchese says. “If you don’t have a good contact solver, you might use the wrong force to grip an object, and drop it.”

Drake’s powerful features make it a critical platform for Amazon’s virtual robot development plans. In fact, Drake is now a strategic project for Amazon. This enables Amazon developers to work more closely with and make code contributions to Drake. In addition, last year, Amazon and MIT launched a Science Hub, a collaboration focused on areas of mutual interest, including robotics.

Changing robot development

While there will always be a sim2real gap, Amazon scientists and engineers are working to narrow the gap. One way they do that is by leveraging real data to validate the fidelity of the simulator.

“We are always comparing the model with the hardware,” Flannigan says. “If we get first principles right, the error in model converges over time. There is always some uncertainty in our model, but once we quantify this, it is relatively easy to apply it again in similar applications.”

The bigger challenge remains in deformable objects — things that bend, flap, twist, and sag. The Amazon and Drake teams are both making progress on handling soft bodies with large deformations, like stuffed animals or squishy pet toys.

That is a challenge Vanessa Metcalf, an Amazon Robotics software development manager, is addressing. “Right now, we don’t have a practical way to empirically understand how a robot will pick up millions of different deformable items.

“Finding a model in simulation that we can apply to a broad category of products is a massive challenge, and we’re looking for ways to address it. For example, are there objects that have deformable parts but also rigid parts that are easier to model? We’re looking at what we can do first and build on that.”

Despite the challenges, Amazon simulations are already yielding results. One of the Amazon Robotics program teams came up with a new robotic manipulation concept they thought might improve fulfillment. They were able to use the simulator developed by Metcalf’s team to quickly validate the idea.

“It took about a month to test the concept in simulation,” Metcalf says. “It turned out to be a great idea that’s being implemented now. If we had to wait for the hardware to do the concept validation, it would have taken three times as long. That’s just one of many examples of how simulation can be incredibly impactful.”

As Amazon continues to chip away at simulation challenges, it is continuously improving its modeling infrastructure. And with good reason.

Our dream is that all of our robotics research and development starts in simulation. When someone has an idea, their first reaction would not be to order parts, but to use the simulator.

Vanessa Metcalf

Solving these challenges and achieving high-fidelity simulation would enable scientists and engineers to test new ideas and novel configurations as quickly as they could type their thoughts on a keyboard. They could generate conditions that rarely occur in prototype physical experiments, but that happen regularly within an organization that has robots that help deliver millions of packages a day. Teams could collaborate on different parts of a project simultaneously. No one would have to wait their turn for someone to reconfigure a robot prototype to test a new idea.

“Our dream is that all of our robotics research and development starts in simulation,” Metcalf says. “When someone has an idea, their first reaction would not be to order parts, but to use the simulator. They could develop an entire robotic workcell in a virtual environment, with a final safety check occurring on hardware.”

This reality is on the horizon, suggest Metcalf, Marchese and Flannigan. Although physics-based simulation has open challenges, Amazon is making real progress and the tools are accelerating the way Amazon develops new robots. Ultimately, this will result in more smiles from Amazon customers, and ever improving safety in its facilities

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]]>Amazon is developing a new generation of simulation tools to test robotsWarehouse AutomationTue, 02 Aug 2022 15:18:34 +0000https://www.warehouseautomation.ca/news-notes-1/2022/8/1/why-rapid-delivery-grocery-startups-couldnt-hack-the-us5a31c205d55b41e997de43b6:5a31db250d9297f79916ac9e:62e8ca6129e3110241569c31Rapid-delivery startups that thrived in Europe are getting demolished in the US. Here's what they got wrong about Americans, according to analysts and insiders.

• Rapid-grocery-delivery startups in Europe like Gorillas and Getir tried to break into the US market.

• Promising groceries in less than 15 minutes, these startups grew quickly in big US cities.

• But several have ended operations. Analysts say they didn't understand the American shopper.

Days before launching his ultrafast-delivery business in New York City last year, Kağan Sümer, the CEO of Gorillas, based in Berlin, vowed to break US shoppers' habit of Costco-style bulk buying.

"Gorillas can give you the bulk purchases," he told Insider in May 2021, "but you will not need it, because we're giving you things when you need it."

But some habits are hard to break.

Ultrafast-delivery businesses are collapsing as fast as they built up. Fridge No More, Buyk, Jokr, and 1520 have shuttered or withdrawn from the US, while Getir, Gopuff, and Gorillas have cut staff. Gorillas scrambled in late July for $250 million in funding at a reduced valuation.

Many of their founders built their rapid-delivery businesses abroad and tried to replicate the model in the US. But the companies "did not fully appreciate nor understand" the differences between US and European consumers, said Gary Hawkins, a retail analyst who leads the Center for Advancing Retail & Technology.

Phil Lempert, a grocery analyst, said the so-called ultrafasts would never stick in the US. "It is an unrealistic business model that was impossible to reach for success," Lempert said.

Insider interviewed four analysts and insiders about the industry. Here's what they said went wrong.

The distinctly American love of bulk buying

By the end of 2021, express-delivery startups like Gorillas, Jokr, Fridge No More, Buyk, Getir, Food Rocket, and Gopuff had spread throughout New York, Chicago, Boston, and San Francisco. They hoped to seduce city dwellers with doorstep delivery of groceries in 15 minutes or less.

Since 2021, $10.9 billion in venture capital has been invested in last-mile-delivery startups globally, according to PitchBook.

Several ultrafast players had learned the business outside the US. Gorillas, for instance, perfected its model on the streets of Berlin, while Buyk's founders had run an ultrafast-delivery service called Samokat in Russia.

But analysts told Insider this may have led to blind spots when it came to the American consumer.

Shoppers in Europe tend to buy fresh groceries every few days. In the US, people with larger homes often buy goods in quantities that could last a week or more, Hawkins said. And persistent inflation has made bulk buying even more attractive.

"The economics of bulk buying are hard to ignore, and those habits are hard to change, especially as the economy has tightened up," Hawkins said.

Huge discounts and high burn rates made profits unattainable

To gain customers, ultrafasts burned cash.

A source told Insider in May that Getir was burning upwards of $60 million a month. And an insider told TechCrunch that month that Gorillas' monthly global burn rate was between $50 million and $75 million.

Robert Mollins, a Gordon Haskett analyst, wrote in a research note in February that ultrafasts' discounts of $20 to $25 for first-time customers were "very unsustainable."

Customers also weren't ordering enough. YipitData suggests the average order for Getir, Gorillas, Gopuff, and Jokr was $21 to $32 in May. That was about one-fourth the size of the average Instacart basket in April.

Surveys from Brick Meets Click suggest that sales of groceries ordered online in the US dropped by 18% from March to May. And Labor Department data indicates inflation has driven up grocery prices by 12.2% over the past year.

These pressures squeezed ultrafasts. The business model, Lempert said, "was doomed from the start."

Range plot graphic here.

Even experienced ultrafasts have struggled in the US

The ultrafast-delivery company that was perhaps best positioned to succeed in the US was Getir, founded in Turkey in 2015. It was an experienced player with $2 billion in funding and operations in eight European countries.

In an interview with Insider in February, its CEO, Nazim Salur, said Getir had battle-tested the model. "We know what we're doing," he said.

But Getir's expansion in Europe leaned heavily on acquisitions. The company acquired Blok, a delivery service in Spain and Italy, for an undisclosed amount in July 2021. In November, it bought Weezy, based in the UK, adding another European market to its roster.

By contrast, when Getir arrived in the US in November, it chose to build from the ground up — something it hadn't done outside of Turkey, a former corporate employee told Insider.

It hired hundreds of employees and planned to open thousands of US stores in 2022, but it reversed course in May and laid off 14% of its global workforce, or about 4,480 people, TechCrunch reported. Former employees said that at the time of the layoffs, the company was still unprofitable.

It has also struggled with its operations in the US. Employees said that some scooter- and bicycle-riding couriers had gotten into accidents on city streets and that snow in Chicago made scooters impossible to ride. Two former employees said the company hadn't reported their income to state tax authorities. Getir is now the focus of an investigation by the New York State Department of Labor.

The US "was the ninth country that Getir opened," one former employee said. "They had ample opportunity and resources to put together a design frame that could support what they were doing."

A Getir bike driver in New York City

A Getir bike driver in New York City Alexi Rosenfeld / Getty Images

An American ultrafast founded on late-night snacks

Analysts said one ultrafast-delivery service, Gopuff, seems to have a better understanding of the American market than its rivals — but it's still struggling.

Gopuff got its start in Philadelphia in 2013 selling snacks and smoking supplies to college students, a group of consumers already accustomed to getting food deliveries quickly and at odd hours.

Almost 10 years later, it operates in about 1,000 US locations and sells a range of groceries, snacks, booze, and prepared foods.

Mollins predicted in May that Gopuff would emerge as the quick-delivery leader in the US. Since then, Gopuff has cut 10% of its workforce, in its second round of layoffs this year.

Even Gopuff has yet to break even, suggesting that speed isn't everything.

"Grocery retailers and delivery companies understand that consumers don't necessarily want 15-minute delivery," he said. "Instead, what consumers want are options for receiving groceries when they want.

"There isn't a market for rapid grocery delivery," he said of the US.

Automation is changing the way our world works, and it’s probably already a part of your daily life.

Even the ways you watch TV and shop are likely influenced by automation, from artificial intelligence-powered suggestions on what series to begin next, and algorithms that conveniently present you with ads for your favorite brand of sneakers.

As making purchases online becomes even more seamless, distribution centers and retail warehouses – the infrastructure taking goods off the shelf and to your customers’ doorsteps as quickly as possible – are also using automation technologies, such as robots and other machines, to increase throughput and help alleviate workers from injury-prone jobs.

Are you ready to automate? Futurum Research interviewed industry leaders and executives to examine the challenges of automating retail warehouse and distribution centers and the approaches they recommend to implementing automation in your business.

Below are the highlights of the report

1. Focus on automation as a way to augment and secure – not replace – human workers

Consider how automation solutions can allow more opportunities to leverage human skillsets. The value of implementing automation technology is how you can upskill workers and maximize their abilities to solve creative and challenging issues. For example, delegating repetitive, injury-prone tasks to robots designed to take on those movements can alleviate workers from that role.

2. Anticipate a decade ahead

How do you know what automation technologies are right for your business distribution? One executive of an autonomous mobile robot (AMR) provider said in Futurum Research’s study that anticipating your peak throughput (about three to four times your normal throughput) requirements a decade from now is critical as you adopt automation solutions.

3. Adopt a data-centric approach

Industrial-grade software can help on your journey to implement automation technologies and measure success. With predictive data, you can get ahead of maintenance or downtime, exposing hidden inefficiencies in your systems and creating a system of record so all teams work with the same data.

4. Integrate management systems

As you prepare to implement automation technologies into your infrastructure, ensure warehouse operations data and records are part of your enterprise’s larger strategy. Integrating data and records across warehouse, supply chain, distribution and other business systems will give you a unified look at your entire enterprise – from the first supplier to the last customer.

5. Challenge assumptions

Focus less on automating existing tasks or processes. Instead, think of the tasks that you envision being automated today, what opportunities that will bring, and what processes or tasks you may want to automate in the future.

NVIDIA #AI and simulation solutions are delivering better-than-ever efficiency and intelligence to the supply chain, ensuring retailers never miss a beat in meeting customers’ expectations.

The PV power system on these warehouses generate close to 2,400 tons of coal per year. Installed on unused spaces such as the warehouse roof, the solar power system enables Cainiao to produce its own electricity to support warehouse operations while contributing towards the State Grid, China’s electric utility corporation, for broader usage. This safeguards the energy supply for the warehouses, and helps to reduce the cost of energy consumption, save energy, and reduce carbon emissions.

In the warehouse in Xiasha, the electrical output is then used to power energy-efficient operation systems. For example, the energy-saving lighting system measures the amount of light within the warehouse via sensors in real-time to automatically adjust the number of lights to switch on. Energy-saving conveyor belts will also be able to automatically start or stop the motor based on the real-time parcel volume.

"The successful launch of Cainiao’s first warehouse zone with a photovoltaic power generation system is just the beginning of sustainable measures that we have planned. We aim to build an eco-friendly global logistics network for our merchants and brands across the globe to reduce carbon footprints together,” shared Sun Beibei, General Manager, Global Supply Chain, Import Business, Cainiao.

By 2023, Cainiao and its partner ecosystem is expected to install rooftop PV generation systems on Cainiao’s bonded warehouses that spans a total of 500,000 square meters. While striving to reduce carbon emissions along other aspects of the logistics value chain including storage, computing, packaging and delivery, Cainiao aims to establish an industry benchmark on green logistics through the utilization of renewable energy and amplification of recycling capabilities.

]]>RFID’s renaissance in retailWarehouse AutomationSun, 31 Jul 2022 22:59:06 +0000https://www.warehouseautomation.ca/news-notes-1/2022/7/31/a-look-inside-rivians-electric-delivery-vehicle-for-amazon-last-mile-delivery5a31c205d55b41e997de43b6:5a31db250d9297f79916ac9e:62e70851daf3695c44ccb782Sr. Dir. of Commercial Vehicle Product Line John Woodmore of Rivian discusses the new electric delivery vehicle (EDV) purpose built for Amazon.]]>A Look Inside Rivian's Electric Delivery Vehicle for Amazon Last Mile DeliveryWarehouse AutomationSun, 31 Jul 2022 18:58:52 +0000https://chainstoreage.com/survey-consumers-have-metaverse-expectations5a31c205d55b41e997de43b6:5a31db250d9297f79916ac9e:62e6d0958b3184307a8bc14ePermalink

]]>Survey: Consumers have metaverse expectationsWarehouse AutomationSun, 31 Jul 2022 16:57:54 +0000https://aeon.co/essays/downtime-is-not-an-option-meet-the-stewards-of-the-cloud5a31c205d55b41e997de43b6:5a31db250d9297f79916ac9e:62e6b48c2f07337554f9ea00

The ‘cloud’ is not an intangible monolith. It’s a messy, swelling tangle of data centres, fibre optic cables, cellular towers and networked devices that spans the globe. From the tropical megalopolis of Singapore to the remote Atacama Desert, or the glacial extremes of Antarctica, the material infrastructure of the cloud is becoming ubiquitous and expanding as more users come online and the digital divide closes. Much has been written about the ecological impact of the cloud’s ongoing expansion: its titanic electricity requirements, the staggering water footprint required to cool its equipment, the metric tonnes of electronic waste it proliferates, and the noise pollution emitted by the diesel generators, churning servers and cooling systems required to keep data centres – the heart of the cloud – operational 24 hours a day, seven days a week, 365 days a year.

But less has been written about those who work inside the machinery of the cloud. Though often forgotten, this community of technicians, engineers and executives is integral to the functioning of our increasingly digitised society. They are the caretakers of the digital, the wardens of our data, and the unsung heroes working tirelessly to sustain an ever-expanding array of digital objects, including our emails, cat videos, maps, non-fungible tokens, metaverse avatars, digital twins and more. The idea of digital caretakers might conjure science fiction images of empty, towering warehouses stacked with racks of automated machines. But these workers are very much flesh and blood. The silicon milieu they’re part of is as human as it is mechanical. From their vantage, the cloud is not merely an infrastructure they maintain, but a way of life, an identity, a culture of stewardship – replete with its own norms, rituals and language.

For the past six years, I have observed, shadowed and interviewed data centre professionals in the United States and Iceland as an anthropologist. During the course of my ethnographic fieldwork, I witnessed and performed many of the tasks that cloud workers engage in on a daily basis: I dined, trained, travelled and bonded with the crews that I had the privilege of joining as an eager intern, guest and social scientist. Along the way, I learned what it meant to be a steward of the cloud. I also learned that the cloud is no monolith, and that the cultures emerging among its workers are far from uniform. Data centres – as workplaces and sites of culture – vary considerably from continent to continent, node to node, or business model to business model. How they operate depends greatly on where they’re located.

Every site has its constraints, which are political (regulatory considerations), economic (total cost of operation, tax-breaks, business model), environmental (climate conditions, risk of natural disasters) and geographic (proximity to power, network, and other natural resources like water). Some companies lease server space or data to other companies, operating shared centres known as ‘colocations’ or ‘colos’. Other companies or entities, such as governments, choose to build their own data centres instead of renting out space in a colocation.

Data centres also differ based on their technological sophistication: there is a tiering system that ranks centres according to their resources, scale of operation, and level of redundancies (fail-safes) that influence their ability to provide uninterrupted service or ‘uptime’. Only about one-third of the world’s data centres resemble the oft-circulated images of Google’s idyllic facilities, glittering with colourful pipes and smiling technicians who get around their workplaces on scooters. The remaining two-thirds of data centres are far less impressive. Some are found in mouldy basements, others in the shells of decaying office buildings or abandoned military installations. Many companies still use outdated, energy-inefficient designs or do not have the resources to invest in cooling or power-optimisation solutions. As such, the workers in these facilities must rely more readily on their experiences and finely tuned instincts to keep their patches of the cloud ‘up’, however imperfectly. They do not see themselves as automatons, as mere cogs in a perfectly optimised machine, but rather as hunters, firefighters or even priests, who must make, find or invent ways to meet the impossible demand of an unremitting cloud.

While not an exhaustive account of an incredibly diverse, global industry, in what follows, I draw on interview transcripts and field notes to recreate my experiences and encounters with cloud workers (to protect their anonymity and the companies they work for, pseudonyms have been used throughout this essay). These are their stories.

August 2015. A data centre in the greater Boston metro area, Massachusetts. It is three in the morning when the alarm starts to blare. Tom’s pale face is flushed. His mane of grey-brown hair is awry from constantly running his fingers through it. I follow him as he navigates a windowless labyrinth of blinking server racks to the site of a thermal anomaly: a chrome rack of high-density ‘blade’ servers. It is warmer here than in other parts of the facility and, as computational heat envelops me, the goosebumps on my skin slightly recede. Tom is silent while his hand hovers over the server’s metallic grill-plate, where air is being suctioned up by tiny ‘muffin’ fans inside the computer to cool its hot innards. The fans are roaring.

‘You hear that?’ Tom says. ‘They’re starving.’ He gestures to the toolbox, and I hand him the proper tool for the job: a handheld metal apparatus with plunger-shaped suction cups attached to its base. He uses the tool to plunge the floor tile beneath the whining server, then lifts and removes it carefully to expose an underfloor plenum below. A burst of cool air rushes up from the cavity, displacing the earlier warmth that I had been grateful for. Data centres are not designed for human comfort. ‘Another hotspot?’ I ask. ‘Unfortunately,’ Tom nods, teeth clenched.

Like a pressurised can, the computer room air conditioner (CRAC) units pump cold air into the plenum – cold that escapes in a controlled way through tiny perforations in floor tiles that help manage the volume of air released into the server aisle. While some data centre managers use sophisticated computer models to map the airflow and thermal profiles of their facilities (computational fluid dynamics models, or CFDs), many rely on their bodily senses to make judgment calls about how much cooling is needed.

‘Hotspots are elusive critters,’ Tom says, ‘no matter what the CFDs say, they always appear somewhere, and it’s our job to put them down.’

‘Or else the data centre overheats?’

‘Yeah, and if that happens, it’s downtime.’

At that point, ‘downtime’ was a word I was already familiar with, referring to a service interruption, a state of unavailability or rupture wherein the client (potentially you) cannot access their data, stream their music, or play their game. But for Tom, ‘downtime’ was charged with foreboding – a word that meant failure, not only in a technological sense, but a personal sense. He was entrusted with the data centre’s wellbeing, and that meant preventing interruptions of any sort.

I tell Tom I had read that downtime can cost a company thousands of dollars per minute.

Hotspot hunters like Tom are still snuffing out fickle thermal pests, still listening for their distinct signature

‘Even more for some companies,’ Tom says, ‘so we have to be vigilant. We have computer models and sensors and instruments. But some of this stuff you just get a feel for. I mean, you can feel when it’s hot, can’t you? And you can hear it, too, the fans rev up.’

I listen to the ambient din of fans roaring and cannot discern the sound of overheating he is describing. My untrained ear cannot differentiate that noise from the rest of the mechanical thrumming around me. But Tom can. Conditioned by countless hours in these mechanical halls, he hears the individual parts in a symphony of beeps, tones and pulses coming from air conditioners, power distribution units, servers, smoke detectors, fire prevention systems, ungrounded cables, and heat. In this world of computational chill, heat is nuisance, an invisible enemy and index of harm, what the symbolic anthropologist Mary Douglas might have called ‘matter out of place’. Listening for heat is a skill Tom has honed, and one that he wields to ensure that the computational river of the digital continues to flow, unimpeded.

‘It gets easier the more time you spend here,’ Tom goes on. ‘There is so much going on in this place. But one of our main concerns is temperature. And the problem with temperature is that air is always on the move.’

‘So how do you measure it?’ I ask.

‘We tend to prioritise measuring temperatures rather than airflows,’ Tom said, ‘because in the end air is a fluid, which is hard to track. Imagine that this place is like an ocean. Currents of warm and cool water cycle through. We do what we can to make it work for us, but, like the ocean, air is something we can’t fully control because it’s like liquid, it seeps through the cracks!’

I nod and stare off into the glittering corridor of server racks, trying to visualise these invisible tides of air. How far could the oceanic comparison go? How else were data centres like seas?

‘Don’t worry,’ Tom says, grinning. ‘There aren’t any sharks in here, the only predator you have to worry about are the hotspots. With time and training,’ Tom says, ‘you’ll be able to find them like the rest of us.’

I recall my time sifting through animated airflow and thermal models, watching gradients of red and blue cycling in perpetual ingress and egress. A thermodynamic surf of hot and cold.

A great deal has changed since 2015, when Tom and I hunted hotspots in a raised-floor data centre, a design now largely out of fashion in the industry. By 2018, Nature was reporting that about a third of data centres were ‘hyperscale’, run primarily by the tech industry giants Alphabet, Amazon, Microsoft and Facebook. Hyperscale facilities are state-of-the-art with ultra-efficient designs and cooling systems, many of which now claim to be carbon neutral or nearing carbon neutrality (via carbon offsetting). These mostly automated facilities patrolled by technicians on scooters, and with robotic dogs, are a far cry from Tom’s world of whack-a-mole hotspot hunting. During the course of my research, I heard data centres like Tom’s derided by some as ‘ghetto colos’ – where ‘ghetto’ is used in a pejorative sense to do with race, poverty and rundown neighbourhoods. But rather than a thing of the past, these facilities represent at least a quarter of data centres in operation today. Thermal management remains a challenge for many of these data centres. Hotspot hunters like Tom are still snuffing out fickle thermal pests, still listening for their distinct signature in the symphony of fans.

Before I worked with Tom, back when I first started studying the cloud, I was worried that conversations with workers would be thick with an inaccessible argot of data centre techno-speak. However, I quickly learned that the complexity of the systems – and the embodied and sensory dimensions of workers’ everyday experiences – required workers like Tom to resort to metaphor in their explanations to neophytes like me. Patches of excess heat became a cunning species of sentient pest (or predator). The elusive, hard-to-apprehend medium of air, which was so crucial to mitigating thermal anomalies, was described as a sea awash with convective tides and unruly surfs. For Tom, the work of a data centre manager was not so different to that of a mariner. However, those I spent time with in Iceland drew an altogether different analogue.

June 2016. A data centre in the Reykjanes peninsula, Iceland. Nestled in the mossy lava fields is a facility that its managers hope will usher in a new era of sustainable data storage. I arrive early so that I can navigate the gauntlet of biometric scanners and credential verification checkpoints (‘mantraps’) before my meeting. This is the way into the pearlescent halls of a data centre ‘of the future’, as Baldur calls it. With its sophisticated liquid cooling system, geothermal power outfit and empyrean aesthetic, this is the closest I have come to the cloud of the popular imagination. After touring the facility with a technician, I am escorted upstairs to meet Baldur. Through a window in his office, I glimpse the marbled mossy landscape of the Reykjanes peninsula, the jagged outlines of mountains and the azure sea looming beyond.

‘Do you like it here in Iceland?’ Baldur asks.

‘It is a beautiful country,’ I say. ‘And your facility is equally beautiful.’

‘I am glad to hear it,’ Baldur begins, ‘our hope is that Iceland will become a haven for data centres. And with our natural resources, our abundant geothermal power, we can provide the world with sustainable computation.’

I say that I’ve heard a lot about the natural resources but, as an anthropologist, I am curious about the human resources. ‘What is it about the culture of Icelanders that makes data centres a good fit for the economy here?’

Baldur smiles, pouring me a glass of water from a pitcher. ‘Perhaps we are too focused on the natural resources.’

He points out the window to the Arctic landscape before us. ‘The truth is, we are just a rock in the middle of the North Atlantic Ocean. We struggle to convince our clients and investors that Iceland is more than just a path to cheap power and sustainable operations. Many do not realise that we are as civilised as they are. We do have modern amenities.’

Baldur saw his job as preventing ‘fires’ from ever occurring, or snuffing them out before they spread

‘In your brochure, you mention how Icelandic culture is uniquely hospitable to the tech industry, can you tell me what you mean by that?’ I ask.

‘There are certain factors, yes, that make Icelanders special,’ he says. ‘Something in our Norse DNA makes us hardy.’

Baldur turns to face me: ‘I am an executive here, but you’ll often see me down there, checking on cables, helping to decommission assets. Because, for us, it is in our nature to want to do a little bit of everything. We are self-reliant. Job descriptions don’t mean much here, because we all work hard to accomplish what needs doing. The Icelander is in the format of a firefighter. And that, that is very good for this kind of work.’

The reference to firefighting came as something of a surprise to me. However, the more I mulled it over, the more appropriate it seemed. During my research, I had combed through countless brochures advertising rack space or vendor technology solutions for ‘mission-critical’ data storage, pitched in the language of emergency. Like Tom, Baldur saw his job as preventing ‘fires’ from ever occurring, or snuffing them out before they spread. In this way, both Tom and Baldur saw themselves as heroic, but also resourceful and quick to respond, unhampered by inflexible protocol or narrow parameters like ‘scope of work’.

Baldur pointed to a brochure I had in my hand, promoting the data centre. ‘I think sometimes when we have to collaborate with multinationals, this mentality can be something of a barrier, because we don’t know how to delegate or compartmentalise our work. But this can also be a strength. And we hope one day, this industry we are building will grow and grow, so that our young people will have a future beyond tourism.’

With its year-round cool temperatures and abundant renewable energy in the form of hydroelectric and geothermal power, industry observers in the early 2010s predicted that Iceland might soon become a data centre haven. Article after article heralded the coming of a Nordic green cloud, positing that sustainability could be achieved by harnessing the planet’s northern pole as a cooling engine, siting data centres in the Arctic to mitigate the rising carbon toll of centres elsewhere. Using a technique called ‘free cooling’ (cycling ambient air instead of refrigerating it), proponents of the cloud’s Arctic migration argued that data centres could be run with minimal ecological footprint. Today, this dream of an Icelandic data haven is ongoing, but remains hampered by connectivity issues, due to fibre optic cable capabilities and signal delays of microfractions of a second, which occur as a result of distance.

But in terms of culture, what distinguishes this instance of the cloud from others, as Baldur suggested, is the eagerness of Icelanders to learn how to do every task in the facility – the spirit of the firefighter – as opposed to the highly compartmentalised structure of facilities in the US. For Baldur, running a data centre is not merely a job, it is about laying the foundation for his community to build a future, a parallel I find in a tropical Caribbean island, 6,000 kilometres away.

October 2020. A data centre in the San Juan metropolitan area, Puerto Rico. The air is warm and rich with the smell of fritters and the nearby ocean as I enter a plain, white building. I ascend two flights of stairs, sanitise my shoes, hands and feet, and doublecheck that my N-95 masks fits tight to my face before entering this data centre in the tropics. Ricardo is waiting for me, eager to resume tutoring me on the subtleties of managing his facility. We start our day tidying up disorderly cables but, while we work, I struggle to hear what he’s saying against the cacophonic din of server fans, air conditioners and beeping power distribution units. We converse in Spanglish technobabble using gestures to bridge technical, linguistic and auditory barriers. As we chat, I learn how to properly thread and ‘seed’ ethernet cables – how to connect them from one port to another without disrupting client services.

‘Even though demand is way up during the pandemic,’ Ricardo tells me in Spanish, ‘we are up for the challenge, no major service interruptions, no cooling failures.’

‘That’s really impressive,’ I reply, ‘I can see why they’re now calling you guys essential workers.’

Ricardo nods, then hands me a bundle of elastics to retie the cables: ‘I think we have always been essential workers.’

‘During Maria,’ Ricardo says, referring to the Category 5 hurricane that hit the Caribbean in 2017, ‘we were part of the relief and recovery effort.’

‘You mean the hurricane didn’t cause you any downtime?’ I ask, recalling the storm-proofing measures, like concrete walls and bulletproof glass, that Ricardo had shown me in a previous visit.

‘Even though most of the island lost power, we had generators, and we never lost network connectivity. In the early days after the hurricane, people from all over the island came to us, and we let them in, so that they could charge their phones or use our network signal to try to locate their families. Government officials came here to set up in the call centre to coordinate supply drops and rescue operations.’

‘Our data centre was like a congregation, and we were like the priests’

I recounted my extended family’s experience in the mountainous community of nearby Guaynabo, a suburb of San Juan, and the challenges they faced keeping their kin on the US mainland updated amid the chaos of the storm.

‘For about a month,’ Ricardo began, ‘my family and I stayed here in the data centre. It was the safest place to be, and our boss let us, because it was a crisis, you know?’

That’s how I learned that a data centre could become a sanctuary. The machinery of the cloud, built to withstands disasters of all kinds, provided shelter to local communities from the hellish spiral of Maria.

‘They called her the mother of God,’ he says to me, referring to the hurricane’s biblical moniker, gripping my shoulder as tears welled in his eyes, ‘and let me tell you, I have never seen anything like it in all my life. But this community, my colleagues, we came together to help in whatever way we could.’

‘Like the churches,’ I say, thinking of the integral role that religious institutions played in connecting displaced people with supplies and medical care in the aftermath. ‘Yes,’ Ricardo chuckled. ‘Our data centre was like a congregation, and we were like the priests.’

In Puerto Rico (formerly Borikén), a Caribbean island and unincorporated US territory, data centre operators like Ricardo must contend with the hazards of tropical weather and the connectivity challenges of being on an island. For technicians, the data centre is more than just a privately owned company and service provider. It is also, under the right conditions, public infrastructure not unlike a church. As a sanctuary for many in the tumultuous aftermath of one of the worst natural disasters in US history, the data centre invested in the welfare, security and prosperity of its community. For Ricardo, the data centre was also a home for him and his family.

It is hard to imagine another US context where such a public appropriation of private infrastructure would be permissible, given the extensive security measures and privacy requirements codified in client contracts. In the context of Puerto Rico, such rigid adherence to protocol was not possible. The crisis of Hurricane Maria revealed the ways that the family-oriented and community-minded culture in Puerto Rico also shaped the culture of cloud operators.

July 2021. A data centre in the Phoenix metropolitan area, Arizona. Responding to a high-priority support ticket, Martin, a senior technician, leads a junior technician and me outdoors, to an open-air lot fenced with concrete walls and networks of pipes cross-hatching the asphalt. Sunlight scorches my skin as we exit the air-conditioned building. Jacob, the junior technician, is especially attentive to my orientation as a new member of the team and points out a series of what look like shipping containers around us, arranged in rows.

‘These are modular data centres,’ he says, squinting in the harsh sunlight, ‘think of them as little self-sustaining boxes of IT equipment.’

At 47 degrees Celsius, the Arizona heat is punishing. I nod, following Martin as he enters one of those modular data centres. Pipes run in cross-cutting channels along the asphalt, abutting the modular structures. Inside, I find a strange, claustrophobic world of servers on either side of me, stacked on metallic racks. Behind them are foamy sheets that resemble honeycomb, oozing with moisture and a mélange of desert sediments. ‘It’s fucking disgusting, isn’t it?’ Martin says, before inspecting the asset tags on the server destined for decommissioning. ‘It looks like sludge,’ I say, trying to understand the mechanism before me. ‘Adiabatic cooling,’ Martin explains. ‘An evaporative method. Just like the sweat on your brow. We use less electricity this way, the water evaporates on that filter media, and carries the heat with it. It’s perfect for this climate.’

I study the lattice of the filter media, which upon closer inspection resembles some kind of packaging foam pocked with wasp’s nests. Water cools these desert data centres instead of air, reducing electricity costs for air conditioning in such high-temperature conditions. While such practices curb some of the carbon emissions associated with data centres, it seems oxymoronic to use millions of gallons of water daily to cool servers in the midst of a historic drought.

Data centre discourse is rife with masculine bravado and sexual innuendo

‘This one, right?’ Jacob, the junior tech, asks, wiping sweat from his long, blond hair as he unfastens the screws holding the server in place.

‘That’s the one,’ Martin answers, unfastening the screws on the opposite side.

‘All right,’ Jacob says, and starts to tug on the server, which seems to be stuck in the rack. I wonder if the chloride ooze has become an adhesive.

‘Use the heel of your hand,’ Martin instructs, ‘it’s not a titty. You gotta grab it like you mean it, really man-handle that thing.’

Jacob curses, and I watch as he ‘man-handles’ the server until it is loose enough, and together we lift the hefty asset onto a specialised cart for decommissioning.

‘Not too shabby, Jakey,’ Martin says, firmly smacking his shoulder. ‘Don’t worry, we’ll make a man out of you in no time.’

Data centre discourse is rife with masculine bravado and sexual innuendo. One of the first things I noticed when I embarked on my investigation of the cloud’s workforce was the scarcity of individuals who don’t identify as men. From data centre to data centre, misogynistic and homophobic language was as ambient as the whir of fans in server racks. Historians of information technology tell us that computing professions were not always so dominated by men. In fact, women were once at the forefront of programming in the US and the UK, before being relegated to clerical positions, while men were elevated via a process called ‘professionalisation’, where technical skills were codified in specific ways to standardise expertise and sideline (or better manage) undesirables.

According to an industry survey, data centres are particularly hostile workplaces for women, who make up less than 10 per cent of data centre workers. While the factors behind this disparity are the subject of ongoing research, ethnographic accounts help to illuminate the qualitative factors and textures of everyday life in data centres that push women out and keep men at the centre. In the US ‘wild west’, modular data centres parked like trailers on backlots operate as a foundry for manhood. As data centres guzzle water to keep cool (even while water resources dwindle to record lows), men work to keep their microclouds afloat. Through their labour, they prove and assert their masculine identity, policing their neophytes to do the same.

In Boston, a man hunts for heat with his ears. In Iceland, a man puts out fires so that the youth of his community may have a chance at something besides bus tours. Amid the storm of the century, a man in Puerto Rico opens the doors of his fortress to the public, granting sanctuary like a pastor in a parish. In the Arizona desert, a man teaches his young pupil how to lift a server and, by extension, how to be a man. From the tropics to the Arctic, the cloud thrums. Heat blooms in the wake of computation. And it is men, not refrigeration alone, that can purge it, so that data can flow, and digital capitalism can proceed, uninterrupted.

As these tales from data centre workplaces reveal, there is more to cloud stewardship than the racking and stacking of servers, disentangling cables, swapping out floor tiles, or decommissioning old servers. Data centres are multisensory locales, where heat can be heard. They are the building blocks used to assemble dreams of communal prosperity for Icelandic youth and Puerto Rican families. They are workshops for a technical brand of masculinity. They are all these things and more but, most importantly, they are not staffed by automatons or sedentary button-pushers on spinning chairs.

On the contrary, these stories from within illustrate the ways that the cloud is as anthropogenic as it is technological, as emotional as it is logical, as physical as it is virtual, and as embodied as it is ethereal. Those behind the great digital machine, the unseen caretakers of our online worlds, are as flawed and human as the rest of us. And yet, they are also heroes of a pragmatic sort: they’re the reason why everything digital works. Next time you open your browser, or check your email, or stream music, think of them and their stories. They are the people on the other side of the cloud.

Permalink

]]>The people of the cloudWarehouse AutomationSun, 31 Jul 2022 16:27:27 +0000https://www.seattletimes.com/business/inside-amazons-kent-warehouse-after-prime-day/5a31c205d55b41e997de43b6:5a31db250d9297f79916ac9e:62e6ac983dae2462eeb72f45Permalink

]]>Inside Amazon’s Kent warehouse after Prime DayWarehouse AutomationSat, 30 Jul 2022 20:06:24 +0000https://www.warehouseautomation.ca/news-notes-1/2022/7/30/how-well-does-your-company-use-analytics-rabz9-7eycb5a31c205d55b41e997de43b6:5a31db250d9297f79916ac9e:62e58f37b42a230e848964cbEvery company is trying to capitalize on the promise of data and analytics. While a few leading firms like Amazon and Alibaba seem to have cracked the code, most are still finding their way and many remain unsure even where to start. A 2021 study by NewVantage found only 39% of executives believe their organizations manage data as an asset, and even fewer (24%) view their companies as being data-driven. Likewise VentureBeat found, in their 2021 survey, that just 13% of executives believe their organizations are delivering on their data strategy. These underwhelming findings are consistent with earlier studies by McKinsey, Deloitte, and BCG that revealed a large majority of senior leaders are not satisfied with the outcomes delivered through analytics.

What separates leaders from these lagging companies, and how can firms struggling with the analytics mandate catch up with — and even surpass — their competitors? To find out, we surveyed more than 300 senior executives across B2B industries about data-driven decision-making in their organizations and their performance on seven dimensions of analytics capability:

• Culture: The degree of consensus on the value of data and analytics as a strategic asset

• Leadership commitment: The extent to which senior leaders “walk the talk” when it comes to data and analytics

• Operations and structure: The level of development of structures and policies that support access to data for those who need it

• Skills and competencies: The ability to hire the right people and provide adequate training and support for them

• Analytics-strategy alignment: How effectively analytics complements both short- and long-term strategy

• Proactive market orientation: The degree to which data and analytics allow the organization to keep pace with and anticipate evolving customer needs

• Employee empowerment: The extent to which people throughout the organization are encouraged to pursue creative data capture and analytical methodologies

Based on these findings, we identified three tiers of companies: data and analytics laggards, strivers, and leaders. We then created a tool — available below — that helps leaders identify where their firm falls on this spectrum and the organizational characteristics and capabilities they may need to develop to further advance on their analytics journey.

The results can reveal a company’s analytics strengths or weaknesses, help it prioritize investments and allocate resources, provide benchmarks for gauging progress, and ultimately help it become more data driven and competitive. It can also help create a common language and mindset across the organization which will help create alignment and traction across the organization — and reveal differing perceptions of the firm’s capabilities. Further, it can help illuminate the views of those on the front lines or otherwise outside of the leadership circle whose customer-facing responsibilities will play a vital role in the transformation effort’s progress and success.

Assess your capabilities

Not every organization begins its journey from the same place. Some companies’ capabilities are well developed while others are rudimentary. Regardless, each company needs to answer three questions as it works to enhance its capabilities: What is our current level of proficiency? In what areas do we need to improve? And what do we need to do to optimize our data and analytics performance?

To assess your company’s data and analytics proficiency, assemble a set of core employees and other internal stakeholders representing a range of management levels and business functions. Be sure to engage a diverse sample of staff who will lead and manage teams in the transformation effort (e.g., executives in IT, marketing, and even HR), as well as front-line employees who will be affected by its implementation, such as those in sales, marketing, and customer service. Think of this exercise as a small group workshop with representation that will provide leadership with insights from informed discussion among participants leading to an “enterprise-wide reality check” of the company’s current capabilities.

Have each workshop participant individually answer the diagnostic-tool questions below using the one (strongly disagree) to five (strongly agree) scale for each item. Next, aggregate and average respondents’ scores on each of the seven analytics capabilities dimensions (culture, leadership commitment, and so on). This will provide a single, overall score on each dimension, revealing broad areas where the company may be performing well, or not.

If the findings reveal areas of notable weakness, leaders may want to focus first on these to create a stable analytics foundation. In other cases, the priority may be to continue building and enhance areas where the tool reveals moderate levels of performance. Conversely, high scores can reveal areas where continued (even modest) investments can help ensure no decline in performance in those areas essential to maintain business success. Top performing companies also can double down on strengths that already confer competitive advantage to put them even further ahead of the analytics strivers and laggards.

While looking at the scores for individual questions can help leaders know where to focus, it can also be valuable to periodically calculate a single, broader company metric by averaging all scores on the seven analytics dimensions. This aggregate measure can allow leadership to track the company’s overall progress over time or compare progress across subsidiaries.

Gauge employees’ consensus

If a company is to move ahead on its analytics journey it must also strive to build consensus among key players and work out where differences in perceptions of capabilities may exist. As the workshop participants represent different functions, levels of management, and lines of business, their individual scores can expose hidden areas of disagreement. If representatives from, say, IT and marketing, or the C-suite and HR) have dramatically different perspectives on the firm’s data and analytics capabilities, it’s worth investigating and addressing it. This can be done with further informal workshop discussions that focus specifically on areas of disagreement to surface a more accurate picture and strategies for shoring up any revealed weakness. Such revealed differences may potentially signal a red flag on firm performance such as sales or profit.

Gaining consensus among employees also enables an additional benefit — an aligned mindset and use of common language among workshop participants. Ultimately, this shared perspective will be socialized across the organization as insights and action steps from the workshop are disseminated through the ranks. For example, when diverging perspectives emerge in the workshops, understanding why there is disagreement — for instance, one function is aware of capabilities or initiatives that another isn’t — can help leadership design targeted communications that inform and align employee perceptions organization-wide. In other cases, gaps in perceptions among workshop members may accurately reveal fundamental shortcomings in analytics capabilities that require long-term cultural interventions or the need to immediately hire for critical skills that are lacking.

Firms that complete our diagnostic typically find that they have a mix of strengths and weaknesses. Depending on their industry sector and competitive content, company leaders should focus their attention on those dimensions that are essential to providing superior and sustainable business performance and address key areas where they are performing least well. For lagging companies, this will mean fixing fundamental areas of weakness; for leading companies it will mean optimizing performance on dimensions where they still have room to grow. Drawing on our analysis of leading companies, we created the playbook below that leadership can use to improve the company’s performance on each dimension.

To enhance culture:

• Integrate data analytics and insights into daily workflows

• Communicate to the entire workforce how effective use of data is a competitive business advantage, not a byproduct of doing business

• Help employees become comfortable with making decisions based on data rather than instinct or experience

• Emphasize the importance and value of “data citizenship” to all employees and stakeholders

To strengthen leadership commitment:

• Demonstrate that senior leaders take ownership of analytics and are committed to making it central to the company’s success

• Demystify the topic of data and analytics through “use cases” that are visible and relatable throughout the organization

• Highlight key investments in analytics technology and human capital

• Underscore the value of analytics as an asset by linking data-driven decision-making to compensation, rewards, and recognition

To optimize operations and structure:

• Stress the importance of “harmonizing systems use” across departments and levels when it comes to data and analytics

• Create performance management incentives to encourage cross-functional collaboration and partnerships in the use of data and analytics

• Democratize data access across departments without losing sight of privacy, security, and compliance considerations

• Demonstrate how front-line and other non-technical employees can have easier access to data

To hone skills and competencies:

• Train employees who are in non-analytics roles to embrace data and analytics as a new way of conducting business

• Help employees in analytics roles to translate technical language into business language

• Create and nurture career paths that enable non-technical employees to embrace data and leverage its value

• Recruit talent with proven skills in analytics

To increase strategy and analytics alignment:

• Demonstrate how the organization’s business strategy is supported by its data strategy (“best practices use cases” can be powerful here)

• Ensure that analytics strategy complements, rather than substitutes for, the overall business strategy

• Use insights and knowledge from analytics to drive and guide the overall business strategy

• Prevent analytics strategy from overtaking business strategy (i.e., don’t lose sight of analytics as a means to an end)

To increase proactive market orientation:

• Use analytics to predict future customer preferences that may not be obvious now

• Use analytics to accelerate innovation, even if it means making your own products and services obsolete

• Use analytics to create breakthrough innovations that offer novel solutions for customers

• Apply analytics proactively to sense and drive the market

To enhance employee empowerment:

• Help employees learn about the use and benefits of analytics to achieve business goals

• Help them feel empowered by showing them how analytics fit it into their daily activities

• Ensure that employees do not feel trapped (or held hostage) by a constant stream of data

• Remove bureaucratic obstacles that interfere with data capture or executing an analytics strategy

Every company is somewhere along an open-ended journey to achieve data and analytics superiority. While there is no final destination — there will always be more to do — there is a roadmap for efficiently and strategically progressing on the journey. By using our diagnostic tool, companies can create a unique profile of their data and analytics capabilities; and, with our playbook, they can then address areas of weaknesses and enhance their strengths, driving an ongoing data and analytics transformation that can deliver real sustained competitive advantage.

]]>Humanoid diving robot explores shipwrecks on the bottom of the oceanBenjamin AngelFri, 29 Jul 2022 19:52:02 +0000https://www.warehouseautomation.ca/news-notes-1/2022/7/29/five-killer-features-of-collaborative-mobile-robots5a31c205d55b41e997de43b6:5a31db250d9297f79916ac9e:62e4389dcc2bf646eb5a37cdIn response to global supply chain challenges and workforce shortages, as well as a profound change in the way people buy goods due to the COVID-19 pandemic, companies are increasingly relying on robots to do the work needed to meet customer demand. This means that more workers will be placed in the pathways of more robots more often. But what robots are best suited for working alongside human workers? Common robots currently found in warehouses such as automatic guided vehicles (AGVs) and automated mobile robots (AMRs) have proven to be useful, but they come with limitations. A better solution is collaborative mobile robots (CMRs).

Robots are found in workplaces from the warehouse floor to the hospital hallway. But as workers are being asked to share space with these robots, they are also placing more demands on the technology. Workers don’t want machines that will only perform simple tasks and are more of a nuisance than a help: they want to work with the robots, not around them.

Bears and Goats

While useful for specific tasks, AGVs and AMRs have some significant challenges to overcome.

AGVs have specific functions and perform their tasks along strictly prescribed and preset routes, usually laid out along wires or magnets embedded in the floor. It’s as if they follow imaginary train tracks that they cannot deviate from. They have simple sensors that enable them to avoid hitting obstacles in their path, but they aren’t sophisticated enough to navigate around them—they just stop and wait for the obstacle to be removed.

In his keynote at the 2022 Digital Factory conference, robotics expert Rodney Brooks described AGVs as bears—you want to make sure a fence or a cage is between you and the robot or you run the risk of getting injured. There is very little, if any, human-robot interaction.

AMRs are more sophisticated. Early models were essentially collaborative robot (cobot) arms mounted on wheels, but they’ve grown in complexity. These robots are a simple, efficient and cost-efficient way to automate the way materials are handled and transported within a facility such as a warehouse—basically replacing the need for a human worker to load and push a cart around the facility.

AMRs use sensors and software to scan and interpret their environment, which enables the robots to navigate efficiently, working their way around stationary and moving obstacles. They can work well with operators on specific tasks such as picking and sorting objects. But because they are expected to inhabit the same space as human workers, they must meet high responsiveness and safety protocols.

Brooks likens these robots to goats: they do their own thing and pay little attention to the humans in the room. An AMR likely won’t hurt a human, but the human is nothing more than a point-in-cloud obstacle, or an object in their LiDAR, that is to be avoided or worked around.

Where AGVs and AMRs really come up short is in their interactions with humans. They function either in entirely separate workspaces to prevent them from injuring workers or are limited to specific jobs where any teamwork with humans is constrained to specialized movements and operations.

As a result, the humans and robots largely work separately from each other. Even AMRs, which do share workspaces with humans, can frustrate workers if they get in the way, becoming more of a hindrance than a help.

Human workers need to feel comfortable around robots and confident that they will perform their work effectively and safely. When robots ignore social cues that humans take for granted, it’s not only a matter of discomfort but also productivity. If a robot is constantly slowing down or stopping to negotiate an obstacle, it can introduce snags into the human’s workflow.

Collaborative Mobile Robots: An Evolution of Human-Robot Interaction

The next big challenge in humans and robots sharing the workspace is for them to be able to actually work together. This will, of course, require a far more sophisticated and intuitive robot that is able to read human body language, identify and respond to social cues and anticipate what their human coworkers will do next.

That’s what the CMR is intended to be: a mobile robot that can read human body language to identify what workers around it are doing and respond appropriately. These products often deploy technologies such as LiDAR sensors, 3D depth cameras, and other sensors, and use artificial intelligence (AI) to get a clear view of the space around them and map out for themselves the best and most efficient way to carry out their tasks—while taking cues from humans about how to behave.

“The analogy here is a service dog,” said Brooks, whose company Robust.AI is developing its own CMR as well as a software platform to support it. “It obeys you; you can modify its behavior and it’s there to help you.” Rather than treat human workers as obstacles to be overcome, the CMR treats them like collaborators … or dance partners.

In his keynote presentation, Brooks cited an example of a robot encountering two people who are facing each other and socially distancing. The software his company has developed enables the robot to interpret that the humans are interacting with each other, so instead of taking the direct route between them (and disrupting their conversation), it moves around them. Had the two people been facing away from each other, the robot would have taken the straight path between them.

Five Killer Features of Collaborative Mobile Robots

CMRs have five distinct advantages for companies aiming to bring automation into their facilities.

Intelligence

Thanks to deep learning and AI, CMRs generate and process information to perform tasks efficiently with little or no need for a human operator to tell them what to do. These machines can also self-manage and make decisions on the fly. As a result, the robots can execute repetitive or hazardous tasks and adapt their movements to the humans around them in real time.

Connectivity

An increase in processing power needed for intelligent automation also means that CMRs can use machine-to-machine communication to interact with humans through multiple and integrated interfaces such as touchscreens and sensors. In contrast, many AMRs do not have this level of functionality or interactivity.

Flexibility

CMRs are also quite adaptable, adjusting the way they work depending on changes to their work environment. For example, a CMR could adapt as the layout, organization and needs of a warehouse change in response to fluctuating market demands.

Improved Safety

Intelligent CMRs that can handle and process massive datasets in real time are better able to predict human actions and perform high-precision movements in response to humans—making these robots safer for people to work alongside. These machines also have highly responsive and reliable failsafe mechanisms.

Easy Deployment

Should a business want to introduce AMRs in its facilities, it will need to bring in a team of professionals to set up, configure and control the robots. In contrast, CMR deployment can be done by anyone without the need for technical training. Rodney found success in this approach with iRobot, another one of his companies that produces the Roomba floor cleaner. The Roomba doesn’t need a systems integrator to install it in a home—the resident who purchased the robot can merely plug it in and press a button to put it to work.

The future of robotics is clearly heading toward collaboration—a world in which humans and robots work side by side rather than on opposing sides of an invisible bear cage or with the disregard of a grass-gnawing goat. Soon, perhaps the animal we’ll associate most with robots will be the stalwart dog, man’s best friend—for now.

That’s not how things are playing out. As pandemic restrictions have lifted, many people are going back to their old shopping habits: trying on clothes, testing mattresses and browsing shelves.

Canadians spent about $3.5-billion on e-commerce orders in May, down 23 per cent (or around $1-billion) from a year earlier, when parts of the country still had lockdown restrictions. Online orders accounted for 4.9 per cent of total retail sales – stronger than before COVID-19, but a deceleration from recent months.

It’s a similar story in the United States. Americans bought 14.3 per cent of retail goods through e-commerce channels in the first quarter. That’s not much different from the trend of prepandemic growth. Put another way, people are buying more things online, but the pandemic hasn’t expedited that behaviour.

Shopify Inc. chief executive officer Tobias Lutke pointed to this shift in a memo to staff on Tuesday, in which he announced that roughly 10 per cent of employees were being laid off.

“We bet that the channel mix – the share of dollars that travel through e-commerce rather than physical retail – would permanently leap ahead by 5 or even 10 years,” he said. “It’s now clear that bet didn’t pay off.”

E-commerce is “still growing steadily,” Mr. Lutke said, “but it wasn’t a meaningful five-year leap ahead.”

Erik Johnson, an economist at Bank of Montreal, cautioned against drawing a hard distinction between e-commerce and brick-and-mortar retail. As an example, he pointed to shoppers that use a retailer’s website to check if a product is in stock, then head to the store to see the item – and perhaps buy it – in person.

“There’s a lot more complementarity between them,” he said.

The retail sector is facing headwinds as consumers cope with sky-high inflation, rising interest rates and slower economic growth, all of which is forcing some households to cut back on their spending.

“Recession fears are certainly weighing on the retail space,” Mr. Johnson said.

]]>‘Dark stores’ offer anything you need in 30 minutes. But there’s a human costWarehouse AutomationFri, 29 Jul 2022 17:15:24 +0000https://www.warehouseautomation.ca/news-notes-1/2022/7/28/amazons-plans-for-massive-warehouses-go-forward-amid-logistics-review-7pty8-l7hde-eczer5a31c205d55b41e997de43b6:5a31db250d9297f79916ac9e:62e415a6dfa4a01cd7a075aeThe e-commerce giant has some of its biggest distribution centers in the works while it pauses some projects and reconsiders its aggressive expansion

The east and west sides of the proposed new warehouse and distribution center for Amazon in the Town of Niagara.-Town of Niagara Planning Board

A shovel-ready field at the intersection of Packard and Lockport roads in the Town of Niagara is to be the location of an Amazon distribution center.

This site plan for the Amazon warehouse in the Town of Niagara was submitted as "Project Fifi" to the Niagara County Planning Board in March 2022.

Amazon. com Inc. is making room for big new warehouse projects even as the e-commerce giant reins in its aggressive logistics expansion.

The e-commerce giant recently won local approval to build a five-story, 3.1 million-square-foot distribution center in western New York, and has even bigger sites in the works in Southern California and Colorado as it bolsters a network aimed at getting more goods faster to more Americans.

The projects signal that the sprawling warehouses that anchor Amazon’s U.S. logistics network still have a place in the company’s strategy following its announcement in May that it was slowing the build-out of its logistics network and planned to sublease some existing space following its slowest quarterly revenue growth in about two decades.

“These facilities, because the capital investment is so high, are long-term bets,” said Gregg Healy, executive vice president and head of the industrial services group in North America at real-estate services provider Savills PLC. “Considering they had kind of an all-in strategy just to get coverage before in these markets, this new iteration for strategy indicates that they are refining it, and certain core markets, they want to make sure they have the right footprint.”

The approval of a $550 million warehouse last week by a planning board in the Town of Niagara, N.Y., makes the site one of the first new Amazon distribution projects to move forward since the company said it was rethinking its logistics network.

The facility will be what Amazon calls a sortable fulfillment center, considered a “first mile” facility, where goods are transported in bulk to middle-mile and last-mile locations for final deliveries to customers. Employees at those warehouses work alongside robots to pick, pack and shop customer orders for items like books, toys and housewares.

The company is also pressing ahead with a 4.1 million-square-foot, five-story facility under construction in Ontario, Calif., and a 3.9 million-square-foot, five-story project in Loveland, Colo. Both of those would be among the company’s largest warehouses ever.

Amazon accelerated its aggressive logistics expansion during the pandemic, adding tens of millions of square feet of warehouse space, buying up trucks and vans and hiring tens of thousands of workers to keep up with increased demand from homebound consumers. The company’s warehouse space jumped from 165 million square feet prepandemic to 379 million square feet by May 2022, according to data from MWPVL International Inc., a Canadian supply-chain consulting firm.

E-commerce growth has more recently stalled as Americans have returned to in-person shopping, and the highest inflation in decades has pushed suppliers to raise prices and weighed on consumer markets.

Amazon has canceled some warehouse projects and delayed others, but experts say the big projects moving forward suggest the pause in logistics expansion is targeted at specific types of facilities and that the broader efforts to build up capabilities are still under way.

“This is not a year where they’re slamming on the brakes by any stretch of the imagination,” said Marc Wulfraat, founder and president of MWPVL International.

An Amazon spokesperson said the company weighs various factors when deciding where to add warehouses.

“It’s common for us to explore multiple locations simultaneously and make adjustments based on our operational needs,” the spokesperson said in a statement.

Amazon so far this year has canceled, closed, listed for sublease or put on hold more than 25 delivery stations and fulfillment centers across the U.S. and has delayed opening 15 more, according to MWPVL data.

At the same time, Amazon is expected to open some 250 more facilities in 2022, according to MWPVL.

Those facilities would add to Amazon’s logistics network at each stage of the order fulfillment process as the company works to get packages onto customers’ doorsteps.

Some are massive, hulking distribution centers, where goods are stored and then transported in bulk to interim stations. Others are smaller sites closer to population centers where orders are sorted by destination and moved onto trucks, The company has also been building smaller delivery stations closer to 100,000 square feet or less near population centers and focused on the last-mile stage of getting packages to residences.

Atlanta-based real-estate firm JB2 Partners LLC is developing the warehouse in the Town of Niagara, a community of some 8,000 residents north of Buffalo and near the U.S.-Canada border. The site is currently farmland, next to the Niagara Falls International Airport and the Niagara Falls Air Reserve Station.

Amazon plans to employ about 1,000 people at the warehouse. The ground floor will hold material handling and sorting equipment, according to documents filed with the Town of Niagara Building Department, while the upper four floors will have a limited number of employees and will use a large automated storage system with shelves moved by low-profile robots, the filings said, with about 1,500 robots in use per floor.

Such multistory warehouses are relatively rare in the U.S., and most are in relatively densely populated areas to take advantage of limited space where land is expensive, said Mehtab Randhawa, global lead of industrial research for real-estate investment services firm JLL.

MWPVL expects Amazon to open 21 big, multistory fulfillment centers totaling some 62.3 million square feet this year, although some of those could be pushed back under the company’s logistics review.

“It’s nothing to sneeze at,” Mr. Wulfraat said. “These guys are still on an incredible build-out.”

]]>Automation next in PetShop.co.uk's purrfect tech strategy to fuel e-commerce growthWarehouse AutomationThu, 28 Jul 2022 18:58:18 +0000https://www.warehouseautomation.ca/news-notes-1/2022/7/28/5-vendor-sales-negotiation-tactics-and-how-to-counter-them-96ejd-jedtw5a31c205d55b41e997de43b6:5a31db250d9297f79916ac9e:62e2dc4403a2bd4d8ef9daf3Far too many IT executives are ill-prepared for the sophistication of messaging and tactics vendors bring to the negotiation table. Here’s what you should know and how you can push back.

As companies undertake digital transformation initiatives in partnership with enterprise software providers, they must understand the sales strategies vendors use to establish leverage — and the countermeasures necessary to level the playing field.

Unfortunately, many line-of-business executives run headlong into executive-level relationship discussions without understanding the level of sophistication and thought that a software vendor and their sales team put into orchestrating their messaging and the downstream sales and negotiation process. Although vendors’ efforts in these areas may result in a mutually beneficial partnership, they are not necessarily constructed with the intent of doing so.

As such, organizations proceeding into executive-level meetings with their software counterparts would be well advised to understand the following vendor messaging, sales, and negotiation tactics and the counter messaging that customer executives can use to help their negotiation team achieve a more mutually beneficial agreement.

Vendor tactic No. 1: Relationship leverage

Software executives approach CEOs with an intention of demonstrating their prior and future commitment, their understanding of their client’s challenges, and how they are positioned to support their client’s objectives. Some approach the conversation with empathy and understanding while others will start with demonstrating the strength of their organization and their ability to solve the problems of the day, running right up to edge of arrogance.

Regardless of their personality or approach, the software executive will strive to establish a point of connection and rapport with their executive counterpart as they set a baseline of expectations and lay the foundation for future interactions. Software vendors will be purposeful in keeping the conversation strategic and forward thinking while avoiding historical matters that do not serve their future interests. As they do so, they will make every effort to steer clear of the more difficult relationship matters such as product performance, failed or challenged implementations, and unfavorable commercial agreement structures.

No matter how cordial or challenging an exchange may be, the software vendor executive will strive to accomplish these primary objectives:

• Establish a point of connection

• Set high-level expectations

• Set an engagement in motion

• Establish a future point of interaction

Countermeasure: Leverage your history

As software vendors position themselves for the next opportunity, it’s critical that your executive team demonstrates a firm grasp of the history of the relationship. Context is important in discussing the future and the nature of the relationship in terms of past benefits and challenges for both parties.

Unfortunately, many industry executives come to the table with a software vendor ill prepared to position examples of investments they’ve made in the software vendor relationship, such as implementation investments, product development investments, client and prospect references, speaking engagements, press releases, and financial commitments made at the end of a quarter to meet vendor financial objectives. In addition, it’s appropriate for the vendor to be reminded of past challenges. These reminders, if positioned appropriately, can serve as an effective warning not to repeat the sins of the past as the foundation for the future is being agreed on.

Vendor tactic No. 2: Product leverage

The vendor will naturally start to position their vision, product roadmap, and view of how your organization could (or should) fit into their vision. Executives should look for subtle messages or overt statements that indicate a divergence between the path of their company and the vendor’s future vision. These are intentional. Especially in situations where the software vendor has been unable to convince the organization to upgrade to its latest-generation platform.

The software executive will likely mention that their investments are headed to the new platform and set expectations that investments in legacy platforms are not a priority. They will also suggest that achievement of your vision is dependent on adoption of the latest-generation platform. If challenged, the software vendor will indicate that their commitment to your organization is unwavering and that they will continue to support the existing legacy platform. But the message is clear: They will support your current platform, but the capabilities you seek to address the challenges you have will be provided in the next-generation solution.

The messaging and leverage established via the product vision will also be dovetailed with the commercial leverage tactics noted below.

Countermeasure: Know the value of their solution

Very few organizations are dealing with greenfield vendor relationships. The reality is that many organizations already have relationships with the top-tier enterprise software providers. Herein lies the opportunity to present back to the software vendor a perspective on the value of their solution and services. Articulation of the value obtained, value lost, or in some cases the business disruption resulting from a failed or challenging implementation can serve as a valuable tactic.

Also, many organizations are struggling with commercial agreements that have locked them into products and license schemes that have resulted in significant underutilization of solutions and lost value associated with maintenance fees and recurring subscription cost. Lastly, as software vendors sell or compel organizations to upgrade, it is important to position the business case for the upgrade (or in some cases lack thereof) as a means of increasing relationship and negotiation leverage.

Vendor tactic No. 3: Industry leverage

Within the context of the discussion, the software vendor will indicate how they identify with the challenges of your organization and the industry as a whole. They will evidence their understanding with an articulation of how they are supporting other organizations to address these issues via their product and service offerings and how they are supporting them through their journey. This discussion may go so far as the vendor executive outlining the strategic co-innovation initiatives they are undertaking within your industry and the strategic commitments and mutual investments your competitors are making.

While the vendor’s achievements should be viewed positively, there is an intentional underlying message that your organization is behind relative to your industry and competitors. This messaging will naturally dovetail into the software vendor’s vision to increase your urgency to move to the next-generation platform.

Know that the software vendor will be extremely well briefed and in tune with commitments your organization is making at a strategic level to address opportunities and challenges, leveraging not only their sales team, but their internal and consulting partner relationships to hone their messaging and apply subtle pressure as necessary. Ultimately, this messaging is designed to demonstrate their level of influence beyond your organization, further legitimize their vision, and create uncertainty and doubt with respect to a strategy that deviates from their roadmap.

Countermeasure: Know your value to the vendor

Many organizations do not realize the true value they bring to the software vendor. This value can come in many shapes and sizes. For example, adoption of a new product doesn’t necessarily have to start at the Fortune 50 level. Many software vendors will target organizations with very strong brands that are nimble in nature and capable of quickly adopting the new technology that they bring to market. This client is far more valuable in certain cases than a Fortune 50 organization that is most likely to be slow in their adoption.

Conversely, a large organization that has the scale and investment power to support a vendor and bring a new product to market via a joint development initiative or is adopting a complete set of solutions that represent a competitive displacement opportunity at scale is significant.

In addition, an organization with a strong executive leadership team, a strong project management team, and a strategy to deliver on the program is of significant value as it presents a higher likelihood of becoming a showcase customer and potential market maker to the vendor. It’s incumbent on the customer to understand and articulate its value to the vendor as a means of balancing the relationship discussion.

Vendor tactic No. 4: Project leverage

The software vendor will leverage its sales organization, professional services engagements, and third-party consulting relationships to develop a sales strategy that contemplates the timing of your transformation. They will seek to understand timing for development of a business case, product roadmap, product evaluation and selection process, timing for presentation of business cases to executive leadership, planned approval of your board of directors, and planned commencement of the program. They will orchestrate their engagement and negotiation around these major events, speeding up and slowing down their engagement based on their read of their leverage position at different phases.

Like the negotiation tactics of consulting providers, software vendors will fully understand when the project needs to be kicked off and the timing for when licenses are required to enable the program to keep momentum. They will understand how to leverage the project timeline against the common tactic of driving a software vendor up against their quarter end as a means of creating a mutual interest to complete the agreement.

They also recognize that executives are stretched very thin at this point in the process as they are presenting to leadership, mobilizing the program, negotiating with consulting firms and other technology providers. As such, they will leverage negotiation fatigue and a desire to start the program to wear the client’s negotiation team down. Lastly, to the degree possible, they will leverage executive relationships to establish top-down pressure to get the deal done so all parties can focus on project mobilization and commence execution of the program.

Countermeasure: Know when the timing is right

There are very distinct times during a sourcing event that present opportunities for executives to establish leverage with a vendor. Unfortunately, many organizations view the commercial negotiation process as something that occurs toward the end of an evaluation and selection process. In a sole source environment where a competitive selection process is not being undertaken, the commercial negotiation is viewed as something that occurs after board approval or when the project is approved for commencement.

The reality is that organizations that delay establishment of the relationship principles (such as transparency, predictability, accountability, flexibility), haven’t positioned the corresponding commercial structures that align to such principles, and fail to involve an executive in the early stages of a program will obtain suboptimal results as the pressure to start a program will become the focus over achieving a best-in-class commercial structure. The vendor community knows this all too well and will use it to their advantage.

Vendor tactic No. 5: Commercial leverage

In combination with a strategic sales strategy, software vendors will rely on business practices to compel organizations to adopt new products and to maximize current and future revenue opportunities. Software vendors have learned a lot over the years, including the weaknesses associated with perpetual software license models, the strength of subscription-based licensing models, and the advantages of selling bundled solutions versus selling individual products with a corresponding value proposition and price point. They have also limited product price protections for additional products and renewal subscriptions as well as limited commercial terms and conditions in a manner that provides an opportunity for additional sales engagement based on changing business events.

Certain software providers have on occasion leveraged ambiguous license agreements to drive opportunistic audits. They also discontinue certain products that prevent organizations from expanding their footprint of a legacy environment, essentially compelling them to move to the new platform to resolve audits or expand their business. All these measures are tactics and backstops that the software vendor can and will leverage to drive desired outcomes at a time and place of their choosing.

Countermeasure: Know their business practices

Software vendors make it a point of knowing everything about your business and your priorities in advance of any executive exchange. It’s incumbent on customers to invest in understanding the priorities and motives of their vendors.

Part of this understanding must also include a detailed perspective on the past, present, and future product packaging, service offerings, pricing, and commercial contract structures of the vendor. It is essential for executives to understand the art of the possible when it comes to structuring the agreement with their vendor executive counterparts.

The reality is that software vendor executives are some of the best negotiators in the world and they have a particular advantage because of the unique nature of the technology industry. Any executive going head-to-head with a software executive without an advanced understanding of their pricing methodologies and business practices in commercial structures is at a distinct disadvantage. It is incumbent on enterprise executives to achieve these insights and counsel well in advance of initiating commercial discussions with the vendor.

The bottom line

Far too many organizations truly do not understand the sophistication of the executive messaging, sales tactics, and strategies of the vendor community. They also do not set their executives up for success at the early stages of engagement via a well-thought-out relationship, sourcing, and negotiation strategy. Companies that seek to understand these tactics and strategies and prepare themselves to execute with the same degree of thought and sophistication will set their vendor relationships up for mutual long-term success.

A newly automated distribution center in Oklahoma City will be fully operational by Monday, Jasco CEO Jason Trice and Gov. Kevin Stitt announced Wednesday.

The company spent $40 million renovating the distribution center to a state-of-the-art automated system, which is expected to expand the location’s capacity to hold up to 70% more inventory, Trice said.

“We’ve grown organically over the last 47 years to become a leading supplier of electronics, lighting products, lighting controls, and small home electrical solutions,” said Trice.

Jasco’s products have numerous applications spanning from things like mobile electronics to military hardware, according to the governor’s office. Some of Jasco’s larger customers include Walmart, Target, and Amazon. The company also partners with companies like Energizer, Disney and Marvel, said Trice.

He said the automation system would allow Jasco to consolidate other locations and create more jobs in Oklahoma.

“We’re paying third parties to store and ship our products in six different locations in three additional states so being able to expand the capacity of this facility allows us to bring that here and we will need additional people here in Oklahoma in order to handle all of that inventory and those logistics,” Trice said.

The CEO said the company is committed to not letting go of any employees as a result of automation; adding the system will provide additional bandwidth and make employees’ jobs safer.

“Instead of our team members pulling orders walking up and down the aisles logging millions of miles cumulatively every year, the state-of-the-art robots are bringing the goods to the individuals, which means they’re walking less, they’re bending less, they’re stretching less, they’re less exposed to the forklifts and other heavy equipment that’s operating in this facility,” said Trice.

Stitt touted the state’s business incentives, which he said allowed Oklahoma to compete very well with other states.

“I’m so proud of Oklahoma’s business-friendly attitude, our business-friendly policies that lead to great companies like this to continue to expand,” said Stitt. “They’re going to be able to consolidate some of their offices around the country right here to Oklahoma City. It’s going to create efficiency for them but also for Oklahoma it’s going to create more taxpayers and more citizens in the great state of Oklahoma.”

“The first time I saw these bouncing vegetables I was super excited because it meant we were close to launching finally in the U.S. our integration — and now I can’t stand them,” Oskar Hjertonsson, former CEO and co-founder of Cornershop, said during a press conference last week.

He continued: “We hit the ground quickly and really wanted to make it as fast as possible — maybe not as great as possible.”

Uber has conceded that its U.S. launch of grocery delivery on Uber Eats with Cornershop two years ago had a rough start and is now aiming to course-correct by adding new features on Eats for customers, workers and retailers.

A spokesperson echoed Hjertonsson’s comments in an email to Grocery Dive, noting the experience has been “frustrating” to a lot of shoppers. “That’s why we’ve reinvented the Uber Eats grocery app experience to make it more convenient and more seamlessly connected to the app experience consumers have come to expect from Eats,” the spokesperson noted.

The updates come at a pivotal time for Uber, which has seen its stock fall nearly 50% so far this year. In announcing its fourth quarter results in February, the company highlighted its worldwide expansions for grocery and convenience services through Eats, including partnering with West Coast grocery warehouse chain Smart + Final and launching its dark grocery store called Uber Eats Market in Japan.

While the press conference last week left the future of grocery services on Uber’s main app unclear, Khosrowshahi has said the two apps allow for separate optimization of ride-sharing and delivery services while encouraging cross-platform usage.

But the company’s slow start in grocery delivery could cost it dearly as competing firms Instacart and DoorDash roll out new services, including rapid delivery, and deepen their relationships with grocers. Uber has some key U.S. partnerships, including with Albertsons, Grocery Outlet and Costco, though Hjertonsson declined to offer specifics on how many grocers the company works with and how many cities its grocery delivery service operates.

“[The bouncing vegetables] were a really frustrating experience and it kind of talks about how much better the product that we’re launching today,” Hjertonsson said.

Looking to stand out

Will Uber’s updates keep it competitive? Some of the newly announced Eats features are similar to ones already used by competitors.

For example, Uber Eats’ new offerings that let customers schedule orders when a grocery store is closed and allow Uber delivery workers to shop customers’ orders resemble capabilities both offered by Instacart and DoorDash.

“A lot of it is really table stakes and must-haves but built with a kind of Uber flavor,” Hjertonsson said about the latest developments.

Meanwhile, grocery pickup — a service Instacart rolled out nationwide in late 2018 — is under consideration for Uber Eats, Therese Lim, Uber’s senior director of new verticals and grocery product, said during the press conference.

Among the new features, Uber will also allow Uber workers to pick orders in addition to delivering them. Previously, “dedicated Cornershop shoppers” had been fulfilling Uber Eats grocery orders, but that is changing this summer with those couriers who had been shopping orders through Cornershop now getting onboarded to Uber’s app to get grocery orders from Uber Eats, the company spokesperson wrote in the email. Meanwhile, existing Uber couriers can gain the ability to shop grocery orders.

One of the other major changes Uber is making is to switch from the WebView experience that’s been in place in the U.S. since early 2020 to a native one, the Uber spokesperson noted. That change allows users to leverage existing Uber Eats features for grocery shopping such as multiple carts and order tracking.

Uber is also focusing on adding more selection, improving substitutions, ramping up marketing and increasing customer acquisition, Hjertonsson said.

Grocers can add more of their SKUs to the platform and use real-time inventory management and improved product catalogs. Lim noted that grocers will also be able to add more product information, such as nutritional content, weight, alcohol by volume, caffeine content and more.

To improve frustrations with substitutions, customers will receive more granular replacement options. If an item the customer originally wanted is not available, the new features allow customers to choose if they want a refund, want the personal shopper to select a replacement or want to share alternatives or preferences.

Uber is leveraging machine learning to help make replacement choices more attuned to customers’ preferences, Lim said, adding that machine learning allows Uber to recommend substitutions based on what other users have selected that are close to the product a customer initially wanted.

The company is also providing workers shopping the orders with support if they encounter a problem with picking a substitution, Lim said.

“The burden is on us to make sure that we are building a product that consumers will love,” Lim said.

And while Uber is rolling out the order-ahead ability for stores that are closed, speed still matters for its grocery delivery. The fastest delivery time is typically 30 minutes, Hjertonsson said.

“We are primarily and first and foremost an on-demand company and we think speed matters,” he said.

Uber is aware that some consumers may perceive Uber Eats as more of a restaurant-delivery company and extension of Uber than a place to order groceries. With these latest updates, the company is hoping to change that perception.

“There are still users that are unaware of the fact that we offer groceries. … On the other end of the spectrum, there are millions of customers that get their groceries on Uber every week around the world,” Hjertonsson said.

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]]>Uber is looking to change its ‘frustrating’ US grocery experienceWarehouse AutomationWed, 27 Jul 2022 21:21:00 +0000https://www.warehouseautomation.ca/news-notes-1/2022/7/27/dollar-general-set-to-build-three-new-state-of-the-art-automated-dcs-jf4ky5a31c205d55b41e997de43b6:5a31db250d9297f79916ac9e:62e1ab64bdeb6a09c13cb05fThe company is set to build three new ‘state-of-the-art’ distribution centers in North Little Rock, Ark.; Aurora, Colo. and Salem, Ore.

Dollar General is in expansion mode. The company is set to build three new distribution centers in North Little Rock, Ark.; Aurora, Colo. and Salem, Ore.

Collectively, the facilities are estimated to create up to 1,100 total career opportunities at full capacity and represent an approximately $480 million combined investment.

Each state-of-the-art, approximately one million square-foot facility also will support the company’s growing DG Private Fleet presence.

“We look forward to breaking ground on these new projects, which will help us not only better serve our customers and communities, but also combine efficiencies of our DG Fresh and traditional supply chains,” said Tony Zuazo, Dollar General’s executive vice president of global supply chain. “We are fortunate to have created constructive relationships with Arkansas Governor Asa Hutchinson, Colorado Governor Jared Polis and Oregon Governor Kate Brown and their teams who understand the positive economic and labor benefits DG can bring when we invest in their local communities.”

At full capacity, Aurora and Salem facilities are each expected to create approximately 400 new jobs, and North Little Rock is expected to create 300. Career opportunities at each facility will be available online here.

The North Little Rock and Salem distribution centers are expected to add to the company’s growing number of dual facilities, which combines the capabilities of ambient and DG Fresh supply chain networks, and the Aurora facility will provide traditional functionalities. The company’s first ground-up dual distribution facility is currently under construction in Blair, Neb., and facilities in Ardmore, Okla. and Zanesville, Ohio currently operate with dual efficiencies having recently added DG Fresh capabilities to support supply chain efficiencies.

The North Little Rock dual distribution center facility represents almost a $140 million investment in Pulaski County, and construction is currently slated to begin by fall 2022 with a late 2023 planned completion date. Management hiring is expected to begin in spring 2023 with warehouse team member recruitment currently scheduled to begin in fall 2023. Dollar General currently employs more than 4,300 Arkansas residents, having opened its first store in the state in 1975.

“With more than 18,000 stores across the U.S. and 500 stores in Arkansas, Dollar General supplies millions with easy access to affordable, everyday necessities,” Arkansas Governor Asa Hutchinson said. “Dollar General’s choice of North Little Rock as the site for a new distribution center is more testimony to the strength of the relationships we have built nationally and our reputation as a business-friendly state.”

Dollar General plans to invest approximately $172 million in the Arapahoe County facility. The company opened its first Colorado store 16 years ago in 2002 in Poinsett County and currently employs approximately 600 individuals in the state. Construction on the project is currently scheduled to begin in late summer 2022, with a late 2023 completion date. Management hiring is expected to begin in late spring 2023 with warehouse hiring to begin in fall 2023.

“Colorado continues to thrive and attract new business growth as our economy gets even stronger, so we are delighted that 400 new jobs are coming to Aurora through this expansion to help keep food and other everyday items on shelves and in stock for Coloradans,” said Colorado Governor Jared Polis.

Located in Marion County, the Dollar General Salem dual distribution center represents an approximate $168 million investment in the Pacific Northwest. Dollar General currently employs approximately 750 individuals in Oregon through more than 80 stores. The company currently expects to close on the Salem distribution center property in August 2022 and begin construction by fall 2022.

The planned new distribution facilities also enable the continued growth of DG Private Fleet, bringing new jobs to the communities in which Dollar General operates, and the ability to efficiently deliver goods to customers. The company currently plans for the DG Private Fleet to represent 40% of its drivers by the end of fiscal year 2022. Since its inception in 2016, DG Private Fleet has grown to approximately 950 tractors and drivers and 25 private fleet sites.

Dollar General said it is proud to provide career advancement opportunities for workers within its DG Private Fleet, providing on-the-job training to any DG employee interested in earning their Class A Commercial Driver’s License. Additional information on DG’s Private Fleet program and employees’ training program is available here.

Further more, Dollar General said that it believes the addition of each distribution center represents positive economic impact in the communities it serves and takes several factors into consideration when choosing distribution centers sites including proximities to DG stores, local business environments and local workforces, among others.

Additionally, the company noted that it is deeply involved in the communities it serves and seeks to advance and support adult, family, summer and youth literacy programs through the Dollar General Literacy Foundation, which awards financial resources to nonprofit organizations, schools and libraries within a 15-mile radius of a Dollar General store or distribution center each year. Since 1993, the DGLF has awarded more than $216 million to help more than 15.4 million individuals take their first steps toward literacy or continued education.