Shownotes
Warehouse automation promises major gains in efficiency, accuracy, and labor optimization, but the reality inside fulfillment centers is often far more complicated than the sales pitch. In this Omni Talk Ask An Expert episode, host Chris Walton sits down with Blake Neal, Director of Business Development at TGW North America, to unpack what actually separates successful automation projects from expensive operational headaches.
Drawing from years of experience designing and implementing automated warehouse systems, Blake shares practical insights on everything from robotics and fixed automation to labor planning, throughput expectations, and the hidden operational challenges retailers often underestimate. Together, Chris and Blake explore why collaboration, realistic planning, and organizational readiness matter just as much as the technology itself.
Key topics covered:
• What caused warehouse automation adoption to slow after the COVID-era boom
• Why the first question every retailer should answer before automating is simply: “Why?”
• The difference between mobile robotics and fixed automation systems and when each makes sense
• How labor shortages, throughput demands, and storage density drive automation ROI
• Why automation projects rarely hit full throughput on day one
• The operational and cultural challenges that derail automation implementations
• How retailers should think about seasonality and designing for peak demand
• Why oddly shaped products and low-volume operations may not be good automation candidates
• The hidden infrastructure issues retailers overlook, including warehouse floor requirements
•How TGW approaches collaboration, onboarding, and operator training during implementations
• Why communication and pressure-testing assumptions are critical before signing any automation contract
Whether you’re evaluating robotics, scaling fulfillment operations, or trying to understand where automation actually delivers value, this conversation offers practical guidance for supply chain leaders navigating one of retail’s biggest investment categories.
Music by hooksounds.com
*Sponsored Content*
#WarehouseAutomation #SupplyChain #RetailTech #Robotics #Fulfillment #Logistics #WarehouseManagement #Automation #DistributionCenters #RetailOperations #Intralogistics #TGW
This podcast uses the following third-party services for analysis:
Podcorn - https://podcorn.com/privacy
Transcripts
Foreign.
Speaker B:Thank you for joining us.
Speaker B:Ask any honest integrator what percentage of automation projects hit their projected ROI targets in year one and the answer undoubtedly is going to make you probably a little uncomfortable.
Speaker B:And yet the capital keeps on flowing year after year, Billions of dollars every year change chasing the promise of lights out fulfillment, labor independence and throughput that never sleeps.
Speaker B:But what's actually going on inside of the four walls?
Speaker B:What separates the automation wins from the automation write offs?
Speaker B:And what does the oddest version of the automation conversation actually sound like?
Speaker B:Well, today, with the help of an expert, we are going to find out the answer to those questions.
Speaker B:So welcome to another exciting and elucidating activity episode of the Omnitalk Ask an Expert series.
Speaker B:My guest today is Blake Neal, Director of Business Development for TGW North America.
Speaker B:Tgw, as many of you probably know, is one of the world's leading intra logistics companies, designing and implementing automated warehouse systems for some of the most demanding fulfillment operations on the planet.
Speaker B:And Blake works at the intersection of customer need and solution design, which means he's seen the full spectrum, the implementations that transformed operations as well as the ones that quietly became cautionary tales.
Speaker B:That's probably putting it nicely, isn't it Blake?
Speaker B:So Blake, welcome.
Speaker B:How long has it been since we last spoke to you?
Speaker B:Do you even remember?
Speaker A:I think it's been in like a year or something.
Speaker A:Manifest, I want to say.
Speaker A:Last year, I believe.
Speaker B:Yeah, that's right.
Speaker B:Yeah, we interviewed you live on the floor.
Speaker B:Yeah, that was a blast.
Speaker B:How you been keeping since then?
Speaker A:Busy, very busy.
Speaker B:Yep, yep.
Speaker B:And now where are you located, Blake?
Speaker A:Metro Detroit.
Speaker A:So Michigan.
Speaker A:Right now I'm at our head office in Grand Rapids.
Speaker B:All right.
Speaker B:I saw you grinning in the background as I was doing that, that intro read.
Speaker B:What struck your fancy with that read as I was doing it.
Speaker A:You know, I'll say the lights out is totally possible.
Speaker A:I just feel like we haven't gotten there yet here in the US I feel like, and I always laugh because people try to get there and then you get certain way down the engineering road, they're like, yeah, it's a little much.
Speaker A:I don't think we want it.
Speaker A:We're ready for that yet.
Speaker A:So that's why I laugh because I think a lot of companies like the idea.
Speaker A:But to actually implement it and go down the road and change your process, that's, that's a big one for some of these big companies.
Speaker B:Yeah, it takes a lot of stick to itiveness to, to make these things work.
Speaker B:So at the end of the day.
Speaker B:All right, well, I can't wait for that reason alone.
Speaker B:I can't wait to have this conversation with you in front of the live audience.
Speaker B:So before we get started, just a quick reminder for all of you watching live on LinkedIn.
Speaker B:I'm sure some of you are listening later.
Speaker B:But for those watching live on LinkedIn, feel free to ask your questions of Blake at any time via the chat session window in LinkedIn on the right hand of your screen if you're on your desktop or just down below if you're on mobile.
Speaker B:All right, Blake, let's start with this.
Speaker B:So you spent your career in business development for automation systems.
Speaker B:That's, that's, that's what your bread and butter is.
Speaker B:When you look at where, wherehouse automation actually stands today versus where people thought it would be five years ago, how would you characterize the gap, if there is even a gap in your mind?
Speaker A:I think there is a gap.
Speaker A:And I personally, I think it had to do with five years ago.
Speaker A:We were slowly tailoring off of COVID Everyone had this huge push of COVID We couldn't find labor and everyone switched from retail to E commerce.
Speaker A:You couldn't go in the store and they couldn't find labor.
Speaker A:So automation was a big thing.
Speaker A:And then I think as everyone started ramping up, getting ready for those projects, we could go back to stores again.
Speaker A:Everything started opening up.
Speaker A:E. Com kind of changed a little bit.
Speaker A:And they felt, they didn't feel the need for that level of automation.
Speaker A:So I think there is a gap.
Speaker A:And now I think they're starting to see, hey, we really need this.
Speaker A:Labor force is changing what people do and don't want to do.
Speaker A:They might not want to work in a DC anymore.
Speaker A:So they're starting to feel that I think a little bit more now.
Speaker A:And that's where this, this, we're seeing this gap, at least I believe got it.
Speaker B:So you said there's a pullback.
Speaker B:So what?
Speaker B:Like, be more specific about what drove that pullback.
Speaker B:So, like, you know, was it was that people just want to get more out of their stores as fulfillment nodes or, you know, what, what was it?
Speaker A:The pullback from like a D.C. you mean?
Speaker A:Or like.
Speaker B:Yeah, from the investment side.
Speaker A:I think labor came down and availability of labor was there.
Speaker A:Well, we didn't have the process.
Speaker A:We're going to keep doing what we've always done.
Speaker A:You know, it's a huge investment, you know, depending on what kind of technology end up going with.
Speaker A:So, yeah, I, I think they just saw things were Returning to normal.
Speaker A:We don't need to go spend $30 million in automation, guys.
Speaker B:So it wasn't necessarily dynamic, as I was kind of assuming that of, in terms of like where you're fulfilling the product from.
Speaker B:It was more availability of labor in the warehouse.
Speaker B:Specifically, I think that.
Speaker B:Labor in the warehouse.
Speaker A:Yep.
Speaker A:Personally, I think that's, that's where you're seeing it.
Speaker B:Got it.
Speaker B:Okay.
Speaker B:That makes sense.
Speaker B:That makes sense.
Speaker B:Yeah.
Speaker B:I mean, it's pretty self intuitive or it's pretty intuitive when you step back and look at what's happened over five years.
Speaker B:So let me ask you then.
Speaker B:So when a, when a VP of a supply chain or even a CFO comes to you and says, you know, we want to automate our warehouse, you know, we, we actually want to, you know, get better at, you know, doing this more profitably, more efficiently.
Speaker B:What's the first honest question that you tend to ask them?
Speaker A:Why?
Speaker B:Why?
Speaker A:Just start out why?
Speaker A:Why you want to do this?
Speaker A:Because you'll hear some people, it's the, the big shiny new thing that you want.
Speaker A:I'm like, well, let's talk about the re.
Speaker A:What you're trying to solve for what the issues are today and where you want to be, say, five, 10 years down the road.
Speaker A:If you can't answer that question, it's like we need to take a step back then because you're going to put in some automated system, whether it's mobile robotics or fixed automation, whatever it might be, and it might not solve the problem you're looking to solve and could cause more issues down the line.
Speaker A:If you've created a bottleneck somewhere now, you didn't go through it properly.
Speaker B:So.
Speaker B:Okay, Blake, so let's get real here.
Speaker B:So like in those, and you don't have to call out any names, but like in those conversations, when you ask why, what percentage of the time can the person you're asking that question articulate their rationale?
Speaker A:It really depends on who it is and at what level.
Speaker A:If you talk to an engineer, they're going to tell you, say, let's uptime.
Speaker A:We might have old equipment, it's, it's aging.
Speaker A:We need something better.
Speaker A:If you talk to someone, logistics, you might not be getting shipments out on time.
Speaker A:So I think the answer is a little different depending on who you're talking to.
Speaker A:But yeah, a lot of time I think it comes down to we are not efficient enough.
Speaker A:We can't handle things.
Speaker A:The labor is not where it needs to be.
Speaker A:It's expensive.
Speaker A:We want to try to save money.
Speaker A:So I think that's usually a why and that kind of gets the conversation going.
Speaker B:So yeah.
Speaker B:Which and the why is kind of self explanatory in a way.
Speaker B:But then there's probably a lot of levels to the, to answer the why in terms of Right.
Speaker B:Spectrum of where the investment comes.
Speaker A:If you can at least say we're having an issue now, these are some of the issues we're seeing, then we can dive into that and that's where the discussion starts.
Speaker A:And to me that's, that's the perfect way to start any of these engineering designs is we're trying to fix X, we need Y.
Speaker A:It's not necessarily that simple, but you know what I mean, it's let's figure out what the issues are first.
Speaker A:Right.
Speaker B:What's, let's set the scope too.
Speaker B:Like what types of warehouse automation are we generally talking about?
Speaker B:Are you generally talking about or pitching to the market?
Speaker A:Yep.
Speaker A:We can go two totally different ways.
Speaker A:I, I think the, the less fixed, I don't say easy, but mobile robotics, if you're having trouble moving things around a warehouse, mobile robotics works, you know, you can add take away.
Speaker A:You don't have to really change much within your building.
Speaker A:But then you start getting a little more fixed automation where we start getting into like mini load cranes, you get into shuttles, goods to person type systems.
Speaker A:So you can go any direction possible.
Speaker A:And it really just comes down to what's your investment level, what are you trying to fix, what kind of products are you moving.
Speaker A:All those things you really take into consideration as you're looking through the correct type of technology for you and then you know, what does the building look like, where is it going to be?
Speaker B:Let's, let's take both those use cases.
Speaker B:Let's take the robotics use case, the flexible use case.
Speaker B:So how do I know like what is the business case that you typically see around the implementation of that solution?
Speaker B:And then I'll ask you the same thing regarding the fixed solution.
Speaker A:So I think a use case in that scenario is someone that is probably doing, and this isn't for everyone but let's say less volume, that it's not going to be a fashion company that's putting out a hundred thousand orders a day.
Speaker A:You're probably not going to have mobile robotics when you need that level of throughput.
Speaker A:It's someone that might be putting out, I don't know, a thousand orders a day.
Speaker A:You need to be moving things around this warehouse.
Speaker A:And that's where your bottleneck is right now is the transportation piece or getting, getting products to one side of the building to the other or whatever it might be.
Speaker A:I think that would be the best use case for mobile robotics in that scenario.
Speaker B:Things aren't as tried and true in terms of what you can go back on and count on in the building every single day.
Speaker B:Like the footage of the building may be needing to change the volume of the going through the building.
Speaker B:Might also need to change the availability of the.
Speaker B:Where the workforce might also need.
Speaker B:Is that factor into it too?
Speaker A:I think that does.
Speaker A:But a lot of times with a lot of customers I've been discussing mobile robotics with, it's like our issue is one of them was manufacturing.
Speaker A:We're having trouble of getting products from this, this stage to this stage.
Speaker A:And sometimes it's literally just a, an operator that stops and talks for 20 minutes.
Speaker A:Well, now someone down the line is waiting for that product and they can't get it because the tug driver's talking to someone else.
Speaker A:Well, robots don't talk, they don't stop, they just keep doing their process.
Speaker B:So it's not yet.
Speaker A:We'll see with AI, who knows?
Speaker B:Right?
Speaker B:Yeah.
Speaker B:Right.
Speaker A:That's a great use case for that.
Speaker A:It's something that's fairly repeatable.
Speaker A:You're calling on it when you need it, you need some level of urgency, but it's not.
Speaker A:I have to have this here now.
Speaker A:So I don't need a conveyor that's running at say 3,000 units an hour, let's say.
Speaker B:Yeah, I mean, essentially, like what you're saying, what you're getting at is like you're going to use robotics.
Speaker B:If you are not comfortable with the decision that you're going to make, that it's still going to be the way you're going to be doing things.
Speaker A:Sometimes it just doesn't work for the facility.
Speaker A:Like, it just doesn't make sense to have some massive ASRs in this building because of what you're storing, how you're storing it.
Speaker A:And you might be fine with the labor you have.
Speaker A:It could be cheaper to run a forklift operator in that scenario.
Speaker A:But I just need the forklift operator bring that unit down and then I can transport it with an AGV from there.
Speaker A:That's cheap, that's repeatable.
Speaker A:So that's when you start looking at the different technologies and what you're trying to achieve.
Speaker A:To say this makes sense.
Speaker A:Otherwise you might be spending tens of millions of dollars in something you're never going to see an ROI on.
Speaker A:And that's, that's something we usually Try to avoid.
Speaker B:Got it.
Speaker B:So is the vice versa use case for like the fixed, the fixed infrastructure the same or are there other dynamics or nuances that you have to, you know, think about as the implementer before you go about doing those as well?
Speaker A:They're similar, but there's some others as well.
Speaker A:When we need to talk more about can the building handle it?
Speaker A:You know, I could probably put an AGV in almost any facility.
Speaker A:Whereas with fixed automation, we need to figure out how tall are the, how tall is the ceiling, can the floor support it?
Speaker A:Does it make sense lengthwise?
Speaker A:You know, the longer you go, the higher you go, the more efficient it is.
Speaker A:You might have like a really oddly shaped building and, you know, it's really not efficient to put something like that in.
Speaker A:So we try to take all that into consideration when we're looking at the different types of technology and what would make most sense for your, your business, but also the problem that you're trying to solve.
Speaker A:So all that comes into consideration.
Speaker B:So you mentioned labor before.
Speaker B:So is, is labor, is labor generally the anchor of the return on investment models that you're creating with the, these companies?
Speaker B:Or like, how do you, how do, how should my audience think about that?
Speaker B:How should I think about that too?
Speaker A:I think that really depends on the industry.
Speaker A:So I'll start with fashion because that's kind of my, my, I don't say specialty, but what I focus on a lot is, is fashion.
Speaker A:Usually it is labor related.
Speaker A:A lot of times we can save 60 to 40 to 60% in labor by putting in fixed automation because it's high throughput, usually very dense storage is what you're going to want.
Speaker A:You think about your peak season when you're, you're jumping up your labor by 40%, let's say.
Speaker A:And if we can reduce that, then there's a massive ROI to be had there.
Speaker A:But then you look at say medical device and labor plays a role in that.
Speaker A:But a lot of times they're looking to add automation because of accuracy and the speed in which they can get this product out.
Speaker A:Because if someone's having a surgery, hospital's like, I need this.
Speaker A:They need it.
Speaker A:There's now.
Speaker A:And they need to make sure that all the bits and pieces you need to do this operation, whatever it is, is in that order.
Speaker A:And if you're doing that manually, then you add the human factor and you might miss things.
Speaker A:So the ROI is different.
Speaker A:A lot of people, you know, they always want to say three to four years is what I'm hoping to return on but depending on the market or the industry, there might not be a financial one attached to it.
Speaker A:Sometimes it's just what you're doing what, what you're trying to achieve with it and fix.
Speaker B:So yeah, so you're basically saying like automation in a warehouse will part and parcel, all things being equal is going to be a more accurate operation than heavily depend on human labor.
Speaker B:Yeah, it makes sense.
Speaker A:In some of this medical field it's serialized.
Speaker A:So I need to know exactly where this one individual part is in that warehouse at all times.
Speaker A:And if you say I need it, I can call it down for you.
Speaker A:Whereas if you're in a manual situation, it might be, might be using a piece of paper and I've seen that too where they're still working off of paper orders and that they're going through and checking things off.
Speaker A:And if when we're talking about a serialized item and I need that exact specific one like first in, first out, it becomes a lot harder to do just on a piece of paper.
Speaker A:And so that's when the automation and the software really plays a huge role in that.
Speaker B:Got it.
Speaker B:So the ultimate business model also has ways into this greatly.
Speaker B:Okay, I'm curious, so in addition to labor like what other, what other elements go into the business case as you know, as you look at roi.
Speaker B:So like you know, I think you said throughput a couple times.
Speaker B:I imagine you know, that is one in terms of how many units you can get out the building.
Speaker B:Talked about labor but you know, is it picks per hour, like what are all the key metrics that you generally use in the industry to you know, assess whether or not an automation implementation.
Speaker A:Will work long run.
Speaker A:So I think of some big ones, accuracy is one because there could be a, some sort of fee if your order is not correct like say in the medical industry or something like that.
Speaker A:Storage density.
Speaker A:If I can increase your storage density, that means I don't have to buy a new building for say another 10 years.
Speaker A:There's an ROI there if you start looking at that long term.
Speaker A:Another one is cost per pick.
Speaker A:A lot of times, especially in the E Comm world, it could cost, I'm making some numbers up here.
Speaker A:Might cost, yeah, 20 cents, 50 cents a pick if it's very manual.
Speaker A:Whereas one of our largest customers, they just reported to us that it was, I think it was 6 cents a pick during their peak season, which is crazy to think about.
Speaker A:So that's you, you talk about a hundred thousand or sorry 100,000 orders with say 250,000 picks a day that adds up quick.
Speaker A:So those are some of the metrics that, that they're starting to look at to figure out, does this make sense?
Speaker A:What are, what's our return on investment going to be?
Speaker A:And in a lot of cases, on average, it pays off in about four years, depending on the type of technology, or even less.
Speaker B:So I'm curious too, like, this is always a question I've wanted to ask you.
Speaker B:You know, so as, as you sit down with these companies and you're like, you know, you're designing the models for roi, you're looking at the throughput, you've got the productions and your experience.
Speaker B:How often does the system that you've designed actually hit the plan throughput in year one?
Speaker B:And if, you know, how often does it happen?
Speaker B:And then what, what, what are some of the things that maybe prevent it from happening too?
Speaker A:I think on average we hit those numbers.
Speaker A:But I'll preface this with we set real expectations.
Speaker A:Because anyone that says you were going to hit your, your max day one is lying to you.
Speaker A:I don't see anyone that could possibly do that.
Speaker A:It's not because, say, the system can't do it.
Speaker A:You have to get the entire company on board to, to run a system like that at its most efficient, you need operators that know what they're doing.
Speaker A:You need management that can process the orders properly or they might need to move things in and out.
Speaker A:You need the logistics piece of it as well.
Speaker A:So if everything's running smoothly, yeah, you can hit those numbers.
Speaker A:But day one, I think if you set real expectations of this is what we can expect in the first year and things start to ramp up and that's much more realistic.
Speaker A:Not to say, you know, we haven't had our issues, but, you know, things happen.
Speaker A:These, these systems are advanced.
Speaker A:There's a lot of moving pieces from the software to the mechanical.
Speaker A:And to get all that married together on top of a, let's say a homegrown wms, that's over us as well.
Speaker A:All that has to communicate just absolutely perfectly.
Speaker A:It never does.
Speaker A:It just.
Speaker A:Yeah, right.
Speaker A:Things, you know.
Speaker A:Right.
Speaker B:Yeah.
Speaker B:If I read between the lines, there's a couple of words that are coming to mind for me.
Speaker B:Like culture becomes a factor here.
Speaker B:And then also like the people and process, part of the people, process and technology.
Speaker B:I think that is what you're hitting at, right?
Speaker A:Yeah.
Speaker A:I mean, we can, we can do everything correct on our end.
Speaker A:The software is there, the mechanical pieces are there, everything's ready to go.
Speaker A:And let's say just the operators haven't figured things out just right or all the products not in the building the way it should be.
Speaker A:Those are some things that just, they're variables that you can't always take into consideration when you're, you're going live.
Speaker A:So you set up contingencies, you set up real expectations and then everyone's on the same page.
Speaker A:So customer is not coming back saying, hey, you guys are only doing 75% of what you said you would.
Speaker A:And that's a problem.
Speaker A:That's a huge problem.
Speaker A:Also, we try not to go live at peak, so it's kind of right, we're going to go live.
Speaker A:Let's do it.
Speaker A:When you're kind of in a low spot, generally a good rule.
Speaker B:Generally a good rule.
Speaker B:Yeah.
Speaker B:I'm always, I always laugh.
Speaker B:Somebody, I can't remember who, but somebody did that last year and I was like, you're crazy.
Speaker B:But, but yeah, that, that's funny.
Speaker B:It's, it's good to hear, it's, it's good to hear the real story.
Speaker B:So the big takeaway for me then if I extrapolate out what you just said is like if, you know, for the retailers listening, like if you're gonna invest, because these are, these are, these are, you know, pretty big capital projects, you're gonna invest in this.
Speaker B:You also have to really think about how you are supporting the team in the building and organizing them and giving them the tools they need to use the new technology successfully.
Speaker B:Like that has to be part of the plan and there's probably an additional cost to that too somewhere in the modeling or how do you guys think about that?
Speaker A:Typically we already have that built into our cost.
Speaker A:So we know that there needs to be ramp of operators, there needs to be training that goes along with that to floor managers, to upper level supply chain people.
Speaker A:We've already got that in place.
Speaker A:Also, what's been great is I've been really impressed with this.
Speaker A:Our community of customers that we have really good relationships with, they've actually invited some of our new customers to go to their sites, work the site for a couple of months and train their operators.
Speaker A:Just because they're like, hey, we want everyone to know what's, what's going on, how to do this.
Speaker A:I mean, so long as you're not a direct competitor, they're fine with it.
Speaker A:You know, they get labor out of it too.
Speaker A:That's been fantastic.
Speaker A:So then by the time that these new operators are working their system, they have some running knowledge of how to use it and then of Course, we have our people on site too, that are helping to give advice, maintain certain things.
Speaker A:And, and there'll be a.
Speaker A:We'll kind of taper off as time goes on.
Speaker A:Say a couple of months down the road.
Speaker A:You guys are running fine.
Speaker A:We're going to step back, or if you want us to stay on, then of course we can do something like that as well.
Speaker A:But we try to make sure everyone is as prepared as possible.
Speaker A:So it's not a, hey, here's your cool system.
Speaker A:We'll see you later.
Speaker A:Yeah, that never goes over well.
Speaker B:No, right.
Speaker B:I doubt it does, but so, so it's, it's overtly in the thought process as you're having these discussions, so.
Speaker B:And I can tell it's top of mind for you too.
Speaker B:All right, so let's flip the script a little bit now.
Speaker B:So I'm curious because we kind of talked about, like, what are the conditions you need to be, you know, to think about if you're going to do an automation implementation?
Speaker B:But I'm curious too.
Speaker B:Like, are there situations that you encounter where Automation is just 100% not the right answer, not something people should think about?
Speaker B:Like, what's the profile of an operator that should be pumping the brakes on these discussions, you know, with you in your mind?
Speaker B:And how hard is that to tell folks too?
Speaker B:I gotta imagine it's not the easiest thing to do.
Speaker A:Depends on the person.
Speaker A:But a lot of times it's low volume.
Speaker A:If you have low volume, slow moving equipment or products, it really doesn't work well for automation or it's an oddly shaped item.
Speaker A:Automation likes repeatability.
Speaker A:So if you have some very oddly shaped products that are moving slowly or really, really, really heavy, it just doesn't make sense sometimes, you know, if you're more along the lines of a startup company and it sounds cool.
Speaker A:Yeah.
Speaker A:If you're not pumping out thousands of orders a day, this might not make sense for you.
Speaker A:And then it's just, you're wasting your money.
Speaker A:Come, come back in a couple years.
Speaker A:When the volume's there, then let's talk.
Speaker A:That's usually the profile of people that were kind of like, you want to pump the brakes here?
Speaker A:So far, I haven't encountered anyone that was upset about that.
Speaker A:They're usually happy that you're like, hey, thanks for being honest.
Speaker A:We appreciate that.
Speaker A:Um, you know, we don't want to go invest all this money in something that's just not going to work and we're never going to see that ROI on it.
Speaker A:And there's, there's There is automation out there that can help some of these other robotics companies that will, might bring something to you that could be great.
Speaker A:You might have five robots and that helps out, but maybe not something large scale.
Speaker B:Yeah.
Speaker B:It reminds me of some advice I got back in my target days from the chief supply chain officer at the time.
Speaker B:He said, Chris, you should just use, use human labor as much as possible until you absolutely cannot anymore.
Speaker B:Do you agree with that or you, what's he get right or wrong?
Speaker B:I mean, he was being deliberately hyperbolic when he told me that.
Speaker B:But I'm curious, what, what's your thoughts on that?
Speaker A:I, I would disagree that you use it until you can't anymore because I think there's a, when you get to that point, you're in like an emergency situation.
Speaker A:If I can't use human labor anymore, that means I've surpassed it and I can't get orders out.
Speaker A:So I think there's, there's a transition period where you're looking like, hey, we're starting to get here now, let's get in front of it.
Speaker A:Because These projects take 2, 3 years from the time that you sign a contract to designing it, implementing it, all of that, that takes a couple of years.
Speaker A:So you need to kind of be ahead of that before you get into that emergency situation.
Speaker B:But the big takeaway then, so you know, is, is you know, you should probably be thinking in that, in that, with that mindset, particularly if you've got slow moving items and oddly shaped.
Speaker B:Yeah, it's not to say don't talk.
Speaker A:To some, we're happy to talk to anyone.
Speaker A:And it's, it's pretty easy to do a quick analysis if we have some data to support.
Speaker A:Like here's your order profile.
Speaker A:This is what the, the dimensions are of your, your cartons.
Speaker A:We can quickly put something together in a couple of days.
Speaker A:So yeah, there, there's technology that could help you or no, I don't think you're ready yet.
Speaker A:Let's, let's talk in a couple years when your volume's higher.
Speaker B:Okay, so let me ask you the next question that, so like the, the, the other, the other thing that throws a wrench into this, and you've mentioned it a couple times just in the conversation is seasonality because you know, like you could go from being a slow moving business to all of a sudden a very, very quick moving business if I'm the one operating that business.
Speaker B:So that happens.
Speaker B:Like how should I be thinking about automation in that case?
Speaker B:Can I still get the benefit of Automation in the peak times of the year.
Speaker B:If I'm slow moving the rest of the time.
Speaker A:Yeah, we make a joke that you don't want to design to Easter Sunday.
Speaker A:So you don't want to build an automated system that's designed for your peak.
Speaker A:Because the other, let's say 90% of the year, it's half, it's going to be dormant, not doing anything.
Speaker A:So a lot of times we try to find a nice middle ground of, hey, throughout the entire year, we can handle everything you're doing with some buffer.
Speaker A:Peak comes in and either we change the style of the way it operates, like, say it goes into a batch mode and then you bring in some extra labor just to supplement it that we've been successful with, because then you're not spending an extra.
Speaker A:I'd make numbers up at 10, 20, $30 million on this ridiculous system for your peak.
Speaker A:But then it's not doing anything the rest of the year.
Speaker A:So we can find this nice happy middle ground between the two.
Speaker A:And that, that's been really successful with a lot of our customers is just designing kind of for the average, let's say, and then we can handle the, the peak when we get there.
Speaker B:Which is interesting because that's, I mean, I, I, I think, and maybe some of the listeners will correct me if I'm wrong, but that's a very different approach when you're talking about physical infrastructure versus, like software or website volume.
Speaker B:Like, you've got to design your website to handle peak volume on Black Friday.
Speaker B:You can't supplement that with human labor.
Speaker A:Right, right.
Speaker A:It's again, if, if we're using automation, let's say it always becomes a discussion with the customer of what that profile looks like, how they're, what their customers are expecting.
Speaker A:Because there's ways that you can say, all right, let's, let's change your standard delivery times.
Speaker A:Let's say normally it's, it's a day or two days, but maybe during that peak time we make it three to five days.
Speaker A:Well, now all of a sudden your order window gets wider and the system can handle it as is.
Speaker A:So those are some things that we kind of work with.
Speaker A:Customers say, hey, we can design it or we can do it this way.
Speaker A:Your customer should be okay with that and you're saving money.
Speaker A:Or we have a couple extra workstations and bring in a, you know, say 10 extra people instead of having to hire 40 extra people, now you're just hiring 10.
Speaker A:So that way you're not spending all this money on something that you're not going to use the rest of the year.
Speaker B:Right, Right.
Speaker B:And there's puts and takes with everything.
Speaker B:That's, that's what I, that's what I hear from you.
Speaker A:It, it comes down to collaboration.
Speaker A:You can't do something in the dark by yourself and then say, here's your system.
Speaker A:You need to work hand in hand with your customer to make sure that they're on board with, makes sense for their, their customers and how that they manage their, their supply chain.
Speaker B:So from TGW standpoint, you say collaboration.
Speaker B:I'm curious.
Speaker B:I mean collaboration, you know, has, there's points where you can no longer collaborate too.
Speaker B:So like, is there any point in which, are there any non negotiables in which, that you insist on at TGW before any steel goes in the ground or any robot starts roaming the floor?
Speaker B:Like, what are the non negotiables that you just have to have in place with that, with, with whatever customers you're working with?
Speaker A:It's a very physical one.
Speaker A:But I'm just going to say the building, specifically the floor, the.
Speaker B:Okay.
Speaker A:And it's, there are other things that we want to, we're concerned about as well.
Speaker A:But if you're building specific specifically like a brownfield environment, if the floor isn't ready for a shuttle system or a mini load, it doesn't matter what you do.
Speaker A:Like it will crack the floor, it will not run.
Speaker A:We'll have to redo everything.
Speaker A:So for me, that's like one of the big things.
Speaker A:When we're talking about either a brand new building or existing one.
Speaker A:What does that floor look like?
Speaker A:Can we put in large fixed automation and we're talking mobile robotics is nowhere near as big of a deal.
Speaker A:But I think that's a.
Speaker A:We can't do anything until that gets fixed or we're certain that it can handle something like that.
Speaker B:Wow.
Speaker B:So then, so then the operator has to go through the calculus of do I fix the floor?
Speaker B:Do I switch buildings?
Speaker B:Is that, is that, is that what they get into?
Speaker A:Usually we, we can find economic alternatives to redoing the whole floor.
Speaker A:Maybe it's just like the actual points where, where we're bolting our equipment down.
Speaker A:We've done something like that.
Speaker A:Instead of ripping out the entire floor and having to redo it, we're like, here's some spots that you have to concentrate on.
Speaker A:It sounds like a small, a small piece of the whole puzzle.
Speaker A:But it's a big deal because you think about, I mean you've, you've been to some of these DCs before these shuttles and these cranes are moving at high speed and there's vibration, there's weight, and if you don't have it anchored to the floor properly, you know, bad things happen.
Speaker B:I mean, I've actually been almost single handedly responsible for taking down one of those operations when I didn't know how to, how to run the, the forklift correctly.
Speaker B:It was getting trained on it.
Speaker B:But that's a whole other story for a different day.
Speaker B:Blake, as I'm sure anyone that knows me, that doesn't surprise anyone because I have no dexterity with automating or any type of electrical equipment.
Speaker B:But.
Speaker B:All right, so what when you've, you've kind of touched on this a little bit, but I want to make sure we bring it out as we close this interview up.
Speaker B:So like, you know, you've said those are your non negotiables.
Speaker B:Where have you seen implementations just go, go off the rails in your history of doing this?
Speaker B:Like, is it, is it solely the team side?
Speaker B:Is it, is it the integrator side, the customer side?
Speaker B:Some combination of both?
Speaker B:Like the technology you're picking, like, what is it?
Speaker A:I wouldn't necessarily blame it on one side or the other, but I think where we see a lot of issues is at startup and because we, we can get things on site, so long as we're not having some massive issue with freight going across the ocean installing it, we usually have the labor that's not a problem.
Speaker A:But when you go to turn it on, that's where we sometimes run into issues.
Speaker A:Is everyone ready?
Speaker A:Has, has it been trained properly?
Speaker A:Have people decided to quit that were supposed to be there on either side?
Speaker A:So that's usually where we see the biggest challenges.
Speaker A:At the very end of it, when you go to turn it on and start to run it, you know, the ramp up might be okay, but when you start processing orders, there might be some variable that we didn't take into consideration or the customer, their data changed potentially.
Speaker A:So we planned this whole system out two years ago.
Speaker A:What if something changed and we weren't made aware of it and now all of a sudden the volume is totally different or the order profiles are totally different.
Speaker A:That's a lot of times where we can start to see some issues.
Speaker A:Unfortunately, it's at the very end.
Speaker B:Right, so what does that go, no go decision look like?
Speaker B:You know, in the, in the quote unquote boardroom?
Speaker B:Like, is there like a, you know, an airline, airline pilot checklist?
Speaker B:You guys are all working through Together, like, take me into what that looks like.
Speaker A:We set that up at the beginning ST stages.
Speaker A:When we're, we're engineering it, we come up with, here's our various checks.
Speaker A:This is what our final acceptance is going to look like.
Speaker A:We have factory acceptance tests.
Speaker A:The customer will be on site for a lot of these where we do it digitally, then we'll do it in the physical sense at their facility.
Speaker A:So we try every step of the way to be as transparent and collaborative as possible so everyone's on the same page.
Speaker A:If there's an issue, it's like, let's go fix it now.
Speaker A:So when you do finally flip that switch, if there are errors, they're as minimal as possible.
Speaker A:We don't like surprises like that, especially when you're expecting to utilize that capacity in that, that building and something doesn't go right.
Speaker A:That's always a bad day.
Speaker B:Yeah, yeah.
Speaker B:To your point, hopefully you're pre identifying where the issues are going to arise, so then when you see them, you're ready and prepared to deal with them as well.
Speaker B:All right, well, let's, let's close it up.
Speaker B:Let's get you out of here on this.
Speaker B:You know, given everything we've talked about today, I'm curious if you could give supply chain executives one piece of advice.
Speaker B:Blake, One piece of advice.
Speaker B:You get one.
Speaker B:One.
Speaker B:One piece of advice.
Speaker B:Before they sign an automation contract, what's the thing that would save them the most pain?
Speaker B:What would it be?
Speaker A:Oh, man, that's.
Speaker A:I'm gonna say communication and collaboration.
Speaker A:I know it's two, but they're hand in hand.
Speaker B:Okay.
Speaker A:I think those are the two biggest things is talking, you know, figure out exactly what's, what we are providing and what you need and that it will, it will solve the problems that you're trying to solve.
Speaker A:Don't work in a black box like that, to me, is the best piece of advice I can give to anyone that is looking into doing automation.
Speaker A:Classic.
Speaker B:Know what you want.
Speaker A:No, you want.
Speaker A:But, but spend the time to talk to the integrator that you're working with or that you've chosen to make sure that we are on the same page as we're going through the design process.
Speaker A:I think that's absolutely key to have that, that collaboration with them and the partnership.
Speaker A:Let's say that that's, that's huge.
Speaker B:So I kind of.
Speaker B:So the way I interpret what you said is like set up a relationship with the integrator where the integrator's job is to pressure test the assumptions that you've made exactly in terms of what you want.
Speaker B:Yeah, that's good advice.
Speaker B:It's good advice.
Speaker B:Not everyone wants to do that either.
Speaker B:Not every executive likes to be pressure tested.
Speaker B:It.
Speaker B:I'm sure as you're shaking your head,.
Speaker A:Yeah, it makes for a good system in a good relationship.
Speaker A:Some of our best partnerships we've had, and that's, that's the relationship that we have with them is that collaboration and partnership with them.
Speaker A:It's been good.
Speaker B:Yeah.
Speaker B:Yeah.
Speaker B:And I think any executive worth their salt always wants somebody that's willing to pressure test them as well in any partner they have inside the organization or outside the organization.
Speaker B:All right, well, thank you, Blake.
Speaker B:That was really great.
Speaker B:You know, if people watching or listening later want to get in touch with you, learn more about tgw, what's the best way for them to do that?
Speaker A:So you can reach out to me.
Speaker A:I think we'll put my email here, but it's blake.nealtw-group.com you can find me on LinkedIn or even our website.
Speaker A:Just come check us out and we'd be happy to share whatever information you're looking for.
Speaker B:All right, Blake.
Speaker B:Well, thank you so much for that conversation.
Speaker B:We got into it a lot more than we usually do, too.
Speaker B:I thought it was fun.
Speaker B:We had a blast.
Speaker B:So thanks everyone for watching live with us on LinkedIn again.
Speaker B:If you're listening later, hope you enjoyed today's episode.
Speaker B:Episode, of course.
Speaker B:Today's webinar was produced with the help and support of producer Ella Ella Siriord.
Speaker B:So thanks to her, as always, and on behalf of all of us here at omnitalk, as always, be careful out there.