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Hey, good morning, good afternoon, good evening, Scott Luton and Greg White here with you on Supply Chain. Now welcome to today's livestream. Greg, how are we doing here?
I believe that we are doing good. I can vouch for me and for you. So the both of us are doing well. <laugh>, we say good <laugh>. No, and I love it. I'm really and truly impressed by people who use good grammar.
They use well grammar when they
<laugh>. Well, we, and we both know one and the one and only Kelly Barner. Hope Kelly's doing well. But hey, really quick, big game's coming up. It's just around the corner. I'm gonna make all of our attorneys happy by just saying the big game Greg Chiefs and the Eagles. You ready for it?
I still haven't decided how I'm watching the game. I have decided that I'm not going, obviously. Okay. I haven't decided how I'm watching it, but what I have decided is it's going to have to be with Real Chiefs fans. Cause I don't care about, I don't care about commercials. Yeah. Especially I don't care about it ever. But especially when the chiefs are playing, I definitely do not care about commercials or side parties or ping pong games or any of that stuff.
So we wanna see your credentials. If you're gonna hang out with Greg White watching the big game, Hey, speaking
Round the only verification source on the thing <laugh>.
Anyway, uh, I love that monopoly. Okay. Hey, but speaking of big things, big gangs, big discussions today. We've got a big show teed up. We're gonna be diving into the hot topic, the critical topic really of automation, one of our favorites here at Supply Chain now. And we're gonna be offering in there, done that advice as to how to optimize success and return on investment when it comes to implementing automation within your operation. Whether it's big or small. Greg should be a great show today, right?
Yeah. Unquestionably, I, you know, automation, automation, automation, technology, technology, technology. Artificial intelligence. Artificial intelligence. Artificial intelligence. Blockchain. Blockchain, blockchain. We've hit all the keywords. <laugh>, no, we can just talk and talk about what it's useful for and I think that's the cool thing that Alex is gonna bring to us. Sorry, our secret guest that we've been, uh, promoting for two and a half weeks is gonna bring to us.
That's right. I guess we, I guess the cats already been let outta the bag, but we got a great guest. This is a topic that we talk about a lot. Greg is gonna have some interesting commentary today. And hey folks wanna hear from you, just like a man has dropped some welcoming comments here in the chat in the Sky Boxees and club seats. Just like Lee Luton's talking about the crazy Philly fans just saying, she says, we wanna hear from you, especially your thoughts on all things automation supply chain. So check that out. Ok,
So Greg, yes. How can the Chiefs automate more so that they win the big game,
Right Man, they've done pretty good. It's gonna be, it's gonna be an interesting game come Sunday night, but we're gonna save that for our next discussion cause Greg, as you mentioned, we've got a big guest here today. I wanna welcome in. Alex Haynes manager, new business development with Bastion Solutions. Hey, hey Alex, how you doing?
Hey. Hey, good afternoon. I'm fantastic. I think it's proper grammar so thank you for asking <laugh>,
Great to see you. And did you see Greg White powered that swoosh?
See, I was ready to swoosh it. Yeah,
The best part of being on the show, Alex, is being Swo coming back.
Alex, I wanna start with two quick things. First off folks, if Alex sounds familiar, as he's laying out his expertise today, Greg and I have coined him the Ray Romano of global supply chain <laugh> cause he's almost a dead ringer. So y'all let me know what you think.
Not quite me, maybe definitely not as nasally as you as we were talking about before <laugh>,
Close. So Remini just makes me feel good cause man, love that guy. Everyone loves
Ray. Everyone does love Ray. But speaking of things that everyone loves, it's National Pizza Day folks, it's National Pizza Day. So we're gonna start with a fun warmup question. Pizza is near and dear to everybody's heart here, Alex and Greg, I'm gonna oppose this to you too, Alex, where's your favorite place to get really good pizza from and what do you put on your go-to pizza?
Okay, so as a native Chicagoan who has been transplanted to Houston for a decade, you know, this one's kind of near and dear to my heart. So the answer is probably Lu Mals. Now, it used to be Genos, but since you got it since live in Houston, you gotta freeze it and fly it down. So they'll fly down some lu mals, it'll be frozen deep dish pizza, and then you gotta have a little bit of Chicago jar air. And my wife has learned to make our own jar air and ferment it in the fridge. I mean that's like, I don't know, I need to get outta this business and we're just gonna start selling that <laugh> and I think, we'll, it's gonna be great.
So that's why familiar. I thought I was a a Chicago pizza aficionado. What is chardonnay?
It's like a spicy topping for, it has like olives and it's a lot of oil and
Peppers, pickled peppers, vegetables, right? You stuff like that
Pickle. Dang, that was the word I was looking for. Yes, it's a bunch of pickled stuff. It's
Wow, that sounds really good. Sounds really good. Gregg, I can't wait to hear your question here. Your favorite pizza and what's on it?
Well first of all, any, anytime Gino's East gets na, I'm a fan. Had all of the Chicago style pizzas and the thing that I love about Gino's East is that they put corn meal in their crust so you don't get that dry flaky back corner like you do literally everywhere else. Um, so I applaud you and we have neighbors up the street that do do the exact same thing, Alex. They have Lou Mahas flown in and it is actually, it actually travels pretty well, but I can't believe I'm gonna say this, my favorite pizza in the, the entire world actually does come well, gets flown in or a lot of the ingredients get flown in every day. But it from Italy, but it does come from Atlanta, it's called Antico. So they have a frog di abla, giant pepperonis and like it's made the old fashioned way, which just kind of squares of mozzarella on it and hot peppers and it is spectacular, delicious. And the other fun part of it, which it fell appreciate, is you have to fight for your table. Once you get your pizza, you have to either wait or kind of force yourself to, to a table. What's the Italian beef place?
The one where they're really mean to you,
You're talking in the back room of
Cur you the whole time. Yeah, I forget name
So dive more into that delicious talk on the next ship out. But Greg and Alex, yes. Pizza.
It. Oh, I like so much of it. I've never met a b a bad pizza. Minsky's in Kansas City is my recent favorite. Greg, you and I have talked about that. Yeah. Uh, founded by this, by one of the same folks that founded Godfathers. It's that mid thick pizza's so good. Yeah, so good. So if you're in Kansas City, you gotta go to Minsky's. But Alex and Greg, y'all delivered and I'm, I'm sure made everybody hungry. Before we dive into our chat here today, Alex and Greg, let's say hello to just a few folks here. Erica is back with us from Illinois. Great to see you here. Hey, see him is back with us. See him. I really enjoyed your perspective across social from Philadelphia. She's a, I've been an Eagles fan, so great to see ya. We've got LinkedIn users from Southern California, Kansas City fellow cheese fans, folks, uh, YouTube's the easy way is Catherine is displaying easy way to connect and engage. Diesel is here in Atlanta. So welcome everybody. You got, we got a great conversation teed up here today. Okay. And there's lots of pizza suggestions and the comments Oh
There're Oh, absolutely. Huh? Have to come back. Yes. We're gonna drop that throughout the chat and keep everybody hungry. Okay, so Alex and Greg, let's keep moving forward here. So Alex, I wanna start with level setting before we get into our chin folks part of our discussion. Let's talk about, you know, you're out there meeting and working with business leaders and organizations from here to there. What are some of the things you're seeing out there in industry, Alex? So
I would say probably the number one thing we're seeing right now with an automation focus are many new technologies. A lot of new companies, basically a few years ago, venture capital and private equity got wind, um, supply chain automation as the next big thing. And as they did that investments skyrocket. So you had all these new companies, you had startups, you had established companies that grew their presence, they added new technology solutions. They're seeing more and more. And the thing is, they all kind of fit a special niche, right? Some of them have a broader application and some of them are very narrow, but what you're seeing is how do they fit in the market? Where do they fit when? And then as part of that, people are trying to understand flexibility. So we're hearing people asking about automation, like you guys said, right? It's the topic, it's fun, it's what we do.
It's automation, automation, there's a lot of buzz. But people are saying, Hey, there's all these technologies out there and I wanna understand flexibility because covid 19 changed the world and from a supply chain standpoint, from a demand standpoint, from manufacturing, from distribution. So that change, the fundamental change has just driven a lot of requirements for flexibility in automation and protecting your business going forward. So we'd say technology's part of that. New technologies flexibility. We could probably talk that about AI for a while and what that really means in supply chain. Well, those are probably the biggest hot button topics I think we're gonna dive into a little
Bit here. Man, the goodness is that the, what a great starting point. Greg. What'd you hear Alex walk through there?
I think what's important to understand is automation is inevitable now and it's assistive or augmented to the human to human operations in supply chain. And very necessary these days as people have stayed away in droves from many of the jobs that humans used to take, right? The, the great resignation caused this great generational transfer and the people who wanted physical jobs, the baby boomers retired in mass in 2021, 10 million more than were expected to retire in just in that year. And so there's this huge gap that needs to be filled.
Well said. Okay, I can't wait to get into the rest of our conversation, but before we do, I'll say hello to a few folks, Erica tuned in from Minnesota. Christie also tune in from Minnesota, Gino's back with us. Great to see you here. John Perry's back with us. John, you're e you're ex, we're expecting comedic gold from you here today. And he says hello from Maine. My daughter went to college near Philly. So go birds. All right. All right, we'll go with that. And finally, the
NFL team with a fight song,
<laugh>. That's true Fly. Eagles fly. All right, finally, Tom Kat is throwing some fighting words down. He says hot button topic deep dish is more casserole than less pizza. So we'll save that Greg.
Well one, just one quick point. Yeah. Chicago covers all angles because we used to live in Phoenix, the original witness protection program city. So there's a lot of great food there. I can't say on the air or in private lest I be heard. And but one thing I discovered out there was a fellow from Chicago who made the thin crust, which is like cracker thin crust, Chicago style pizza. So if you don't like the thick crust, go for the thin. It is unbelievably delicious. Amen.
Oh Alex, I like your response to that. Amen. Because all of it sounds good to me. Okay, so let's get into Alex. We're gonna take advantage of your expertise and all the cool things you and Bastion solutions team is doing. And really the center plate part of what we're gonna be talking about here today is four key considerations when it comes to really truly optimizing success and driving that critical return on investment when it comes to your automation projects regardless of size. So let's start with the first one, Alex, where do we
Start? I think the way to start is around flexibility I mentioned is briefly just the hesitation to go into much deeper levels of automation. So like Greg's point, people know they need to automate at some level. They don't know how much and they get scared of going in too far and too deep, too fast if they don't have a background in that. And not only that, but they're thinking, okay, how do I protect against all the unforeseen potential changes to my business in the future? So it's not just the fact that I've gotta do something, I've gotta put some automation in and I've gotta overcome that concern and that fear that I have about change. On top of that, I've also gotta put in something that I feel confident can withstand the test of time and changes to my business. And so I think that's really something we can dive a little bit deeper into.
And I can talk a little bit about the different kind of breaking points in terms of lower end kind of entry level and then higher end. Maybe just to touch on this quickly, but what you're seeing with all these new technologies I mentioned coming to the marketplace is a way to meet the market need for flexibility as well as lower cost of entry. So you're seeing technologies on the market, let's say in a warehousing environment that are called AMRs, which you've heard about. These are ACRs, automated case robots and there are some big stall words who've kind of made a presence and there's dozens of others who are coming up with competing technologies, which is driving everything forward. And the idea with those is they're lower costs, they're quick to install, you've got ability to have some flexibility as your business changes, pull robots in and out, charge it as a fee as opposed to as a capital outlay.
And so that gets people kind of introduced to automation. The challenges with those can be, you know, they're not gonna be able to keep up with higher rate businesses. They're typically gonna take up more space, they're not gonna be as dense. And we all know space, especially in the warehousing environment is incredibly tight right now. So you've got some trade-offs there. And then you've got the other higher end automation. And typically these systems in the past have been, were sort of more rigid and they've been set up to say, Hey, this is how my business operates today. It's gonna operate like this in the future. I'm gonna put in these monster systems and it's gonna do exactly what I needed to do for the next 10 years. Well the challenge now is you can still put in these higher automation systems, but how do you think about how to design that for your business changes in the future?
Right. Okay, so let's take a quick pause there. And by the way Greg, I'm talking to you next, but didn't you love how Alex's voice drop as he's, as he was given, offering up the voice of the business, Hey, this is how my business operates today. Um, I didn't notice that. I'm sorry.
More attention to your storytelling skill. You got to man it, you're putting characters in <laugh>, it's a effect here. Alright, so Alex spoke a lot of good stuff there around yeah, different definitions of flexibility. Your thoughts, Greg? Well I think, I
Mean mean if you talk about, look, I mean let's forget about robots in AI driven and yeah, if you think about just raw old-fashioned automation, I mean it, it's simple things like conveyors and things like that. So those can be very dogmatic. They have to do what they do and they have to be designed to do what they do each day nowadays because of, of new technologies and because of more independent and more flexible systems and technologies and automations and robotics and that sort of thing, we're seeing some level of flexibility. And I think companies need to, Alex to your point, companies need to be thinking about what business they need to do today and not to themselves into a corner, but instead to allow themselves some level of flexibility, right? And just accept that the dynamics of demand, the dynamics of season seasonal demand or maybe even the growth or fade of demand of various items over time may cause various needs for those things.
And start to think about the ability to be that flexible and you can really do it with so many of these automation technologies out there. Alex, you described a few that are con I would say are convertible, right? They can do this today and be changed to do that tomorrow. I think one of the other things that's important is to date you largely have had to commit to a, an automation, a robotics provider and you're kind of stuck with them because if you put another provider in your, in your warehouse, you don't, they don't speak to each other. So they, you know, not only do they take up so much space, they can run into one another and that sort of thing. But there are companies out there that are starting to create a universal language between these that allow you to have multiple types and brands of technology in the warehouse and have them all communicate with one another to be as efficient as they they can possibly be.
Love that. Greg. Hey, before we move to the second consideration, Alex, do you wanna respond to anything Greg said there, double down or anything Greg shared?
No, I appreciate it. Yeah, I think Greg's spot on. It's like, I guess the flashy word to say is the democratization of, you know, oh I love that supply chain people likes that <laugh> people like yeah,
If I could say it easier, I would love it more. But, uh,
Not only are we thankful that you said it, Alex and brought that up cause that's absolutely the case. We're glad it was you who said it. Yeah. Cause both of us struggle with that words
<laugh> practice beforehand. That's why. So, but I mean, I think what it's gonna become, instead of a few big solutions and players in the market, there's a lot of niche players and solutions and how do you tie those together? And then how do you find the balance of, you know, fixed versus flexibility? I mean, I can tell you this, as somebody in a business who's been around for 70 years, conveyor's not going anywhere, right? Right. You're still gonna have conveyor and he's, but what's interesting is you have people that we're just moving things by hand, maybe moving things by conveyor and it's just these sort of simple steps, you know, kind of into it. And then you think about how do I mix and match all of these together? And then from a communication protocol standpoint, you're right, there are a lot of software companies that are coming up. They're more open source Linux based standard APIs, right? It basically, they just talk to each other. Yeah. And how do you figure out how to tie those together? So I don't, I'm just reinforcing what
You're saying. Good, good. That's great. All right. So we're about to move the, so the first one, if you're keeping count at home or in the office or wherever you're listening. First one is before we move to the second one, I wanted just share a few things. Mohamed, great to see you tuned in from Dallas, the big D look here you, Alex. That's right. It's not just us. Gazi appreciates your good accent. Alex, how about that? And, and Derek says hello from Atlanta. Not sure I've ever turned down a pizza. Derek mean you're kindred spirit for my, yeah,
There's no saying that good, that pizza is just like another act that we perform. Even when it's bad, it's good.
Yes, <laugh>. Okay, man. All right, Greg and Alex, look, we gotta move on now. All right, so the first consideration is flexibility. The second consideration, again, when it comes to optimizing success and return on investment when it comes to automation, Alex is
What? It's really the labor shortage, which anybody on this call not, you know, privy to that. Not surprised by that. And Greg had mentioned this as well. So I think what's interesting is that a lot of people figured that after Covid we'd be able to have a, a less tight labor market and people would start coming back. And you know, we're not seeing that. Everybody sees what's happening in the news and they're not getting people back. And the other thing is, now when you have a tightness on the labor market like this, people can be a lot more discerning about the kind of jobs that they want to do. So there was already a migration away from, you know, manufacturing jobs. There was a 4 million person manufacturing labor shortage, I think just at the beginning of Covid. And same with warehousing jobs, because those were traditionally seen as, you know, dark and dank and challenging, and there were safety issues, ergonomically not friendly.
And so when people said, okay, I'm gonna go, you know, I'm either, if I'm not gonna go back to work and I go back to work, that's part of the problem. But if I'm gonna go back to work, how do I get some job then I just, I was challenged with, or at least I don't have a stereotype of that being a challenging job. And so part of the challenge in supply chain is also helping people at broad understand that it's not the way it used to be. And there are jobs that you can have inside of a manufacturing and a warehousing environment that are ergonomically fully, they're safe, they offer a competitive wage, and it can be supplementing these automated processes. And so the goal is, you know, as you add more automation to processes, you're trading up positions and people to have a higher level of capability and knowledge and overall satisfaction at work because now they're part of supporting something that's more complex and it's typically more intellectually stimulating.
And so they feel like they're comfortable, they're having better ergonomics, their stress on them personally is less to do that and be brought into the industry. And then the other part of the equation is obviously there just aren't enough folks coming to work for us to be able to ship product out the door or to hit SLAs. And so a big part of the conversations that we have is I need to automate to what Greg was talking about. And there's a multitude of factors for that, but a big one is inability to find folks. And then we even see people changing their business cases to say, it's really not an r o ROI anymore than I need to hit within a window. It's really, if I don't do this, what will happen to my business? That's starting to shift.
Okay, Greg, let's dive in there. When it comes to the people factor, your thoughts,
Well, I love talking about this topic because we get to use my four words. You're welcome to use these, Alex, and you nailed a couple of them. Dark, dirty, dangerous, and dull. Those are the jobs that people are staying away from in droves. Those are the jobs that the baby boomers left when the great resignation occurred. And those of us that are left in the workplace, gen X, Y, and Z, we don't really want those jobs. And frankly, those jobs, many of them could have been automated decades ago, but because they were, the baby boomers were the Stahl workforce of that type of job. It was apologized for, for, and even delayed to automate those type of jobs. But many of those can be performed much, much more effectively, rapidly, consistently by technology. And now there is no reason to apologize for automating those jobs because Alex, to your point, and you know, we've talked about this couple times already, people don't want those jobs. I mean they, at least not enough of them do, but they do want to interact with technologies. So the elevated job, right, the higher purpose if you will, what the kind of job, that job that people are seeking. And so we can elevate humans to do human things and let technology and automation do automation things and everybody is better
For it. Greg, that's one of my favorite phrases that you share here and put in your supply chain summaries. You know, let's lift up people to do what they're great at and let's let the machines do what they're good at. And it opens up so many windows and doors of opportunities if folks are willing to walk through them. So good stuff there. All right, so we've covered half of our four point lists. So flexibility was the first consideration. The valuable people factor is the second consideration. Alex, what's the third consideration when it comes to optimizing your automation projects?
The other big one is what we would call SLAs or service level agreements. And so this would typically apply a, a warehousing and a manufacturing sector. So let's say for example, I'm a manufacturer and I'm manufacturing a product for end customer A, B, and C. Well, my customer expects me to be a certain level of efficiency. If I have an agreement with them, a service level agreement, I need to make this many widgets an hour, they have to be at this quality and I have to improve that ramp. Or if I'm doing it at a fixed cost, I am probably putting together a business case against other manufacturers building components for somebody. And those manufacturing components are all, sorry, all those manufacturers as they're competing for the same business are looking for a way to lower their overall manufacturing costs. There's two ways to do that.
One is economies of scale, so making more ads, higher rates, and more efficiently. And the other one is helping to figure out how much human elements you could pull onto the manufacturing process. And so if you're going to bid on a project that's fixed bid, you need to be cost competitive and you need to be able to hit rates. Or if you're go an open bid, you need to be able to provide increased productivity metrics every year and quality metrics. So people that haven't done anything for years are gonna be substantially further behind others who have and a manufacturing automation's been core, you know, middle like, like you say Scott for a long time, the difference now is all of the material handling aspects of raw goods through the working process, feeding, blindside, finished product storage. That's the stuff that hasn't been automated for most people.
And that's where a bunch of the attention is right now. So how do I take this thing from end to end and automate it? And then the other piece on the warehousing side, a lot of it's, I mean you think very simple terms of peak, right? You got a plan for peak, Hey, I'm a retailer or I'm a brand and November's, well it's July now, but you know, when peak starts, I gotta make sure I have ability to receive product and I have the ability to ship product and I have to do it quality and I have to get stuff out the door asap. And people, as we all know myself included, have become pretty fickle where if we have a bad experience and it doesn't go well the first time or two, you know, we just jumped to the next one because there's so many options out there. So by looking at this is what's forcing people to move towards this automation is I've gotta hit these and they're only getting more aggressive, right? We all know that the demand is higher, everything's tighter, faster, shorter, but you can't slip on quality
Either. Okay, Greg, when it comes to the, his comments around service level agreements, third consideration, your thoughts.
Yeah, I think we talk a lot about short lead times in e-commerce, right? Everybody wants two day or next day or same day delivery or I had the option today buying something to get it between seven and 11:00 AM the next morning. You know what my great fear was, of course if it would come at seven and I don't want it have to answer the door at 7:00 AM But I think the other thing that people expect as much as speed is consistency. And that is what Alex is talking about is companies have to deliver consistency and predictability and reliability in terms of their delivery of their promise, right? And e-commerce, frankly, any of your commerce is a delivery against your brand promise. And you have to be able to do that. And consistency is every bit as important as the speed. So automation helps a ton with that. Robots never call in sick, usually there's a backup on site if you're doing it the right way, right? I mean, when they need to go take a break, there's usually two or three of 'em that, that are freshly charged or you know, or whatever. And of course, all I think of o when I think of automation, I'm already moving beyond things like conveyors and things like that, but all of that stuff is remarkably reliable as well. So Yep.
It's kinda like that the hockey line change, right? It's kinda what came to my mind as you were just sharing that. Yeah. Yeah. So Alex, any final thought before we move to the fourth? Yeah, and the fourth and final one. Any final thought on the on service level agreements based on maybe something Greg shared?
Yeah, I do. And I wanna just lean into the ROI piece and you know, the dollars piece a little bit. Yeah, I mean we're definitely seeing customers who've done nothing, just like, hey, let's put in some basic conveyor, a basic sortation and that's gonna help USS just be even exponentially more efficient, right? Some real basic stuff. And then on the high end too, you know, Greg saying he's thinking about robots, which is what we talk about every day and a lot of that too. And you're seeing more companies figure out ways to be flexible there. How do you lease these? How do you rent these? How do you design so you can add more in the future as opposed to right now. So going back to this whole flexibility comment, it isn't necessarily what it used to be in terms of one big capital outlay upfront. You can figure out ways to say, Hey, Laz are here, but I know they're gonna need to increase, but I don't wanna drop all that cash right now. How do I rent that? How do I grow into that? And I think that's what's really interesting.
Agreed. Agreed. Okay, so we're going into the fourth and final one and with this fourth consideration, Alex, you touched on actually in one of the, one of the first ones you tackled and we're talking space here, right? So tell us more, Alex.
Oh boy, this is one of our favorites. So space and uh, I'll call it labor. I don't wanna be derogatory, but you know, generally people and space are the most challenging things in terms of conversations we have. Last time I checked, I think the vacancy rate, Southern California was like 1.6%. I mean it's, there's just, there's no space and it's the same thing in a lot of the major metro areas. And so the thing is, when you talk about people from a, let's say warehousing and distribution standpoint and they wanna put up a warehouse or they wanna expand, guess what it's probably gonna be, or someone's gonna tell them it's in one of the same locations that everybody else has a warehouse. And considering factors we're seeing more and more is okay, yeah, we understand from a transportation standpoint and from a customer standpoint, we want to have a warehouse in, you know, the central part of the country.
Maybe it's Dallas, maybe we're gonna ship out of Indianapolis, we may have a west coast DC and LA you know, Georgia. But the other part of that is understanding what are the folks like in that area? How is the labor participation rate? So understanding not just the space and location, but the participation rate. And then because space is such a premium, we have a lot of customers talking to us about brownfield retrofits, which is a challenge. How do we keep operations running? How do, do I retrofit? What do I have? Or maybe I've got a little extra space, how do I add to that? And then the last piece is greenfield. And this is really critical. A lot more customers are being much more proactive in their thought process about when they build a new building, thinking about the material inside. So either the manufacturing or the warehousing and designing it around the automation and the material handling processes because that can determine your footprint and you can build it and leave opportunity to expand and to grow into the future as opposed just building a big footprint now because that space is harder to find and it just costs a lot more because it's harder to find.
So because of those factors, we're seeing a big increase on how do we intelligently look for automation solutions that I can grow into, but also that consume a smaller footprint because guess what, that business case to your executive team becomes exponentially easier when I'm looking to put up a new DC and I can save 200,000 square feet and it's, you know, however many dollars a square foot that drives a lot of investment decisions.
All right, Greg. Greg, your final thoughts here as we tackle the fourth and final consideration being space?
Yeah, I mean it, the Alex made the best point and that is space is expensive and it's hard to come by. So being able to be very efficient with that is very important. And I think one of the things that a lot of companies have discovered is that a lot of the way that old distribution centers were designed was not necessarily to accommodate the automation or even the material handling products or devices, it was the limitations of human beings. I mean, way, way back in the early two thousands when Amazon bought Kiva and made a divorcing couple billionaires, God bless 'em, both they, you know, they realized that the sortation process didn't matter as much because they didn't need to put everything that was the same in the same place because the Kiva robots could find where the stuff was and go to it now and that those were relatively unsophisticated robots back then. And now it, it has changed the entire dynamic to where I think you can start to think about how you design an even space, whatever, define the space requirements of a distribution center based on the portions of it that you can want to or should automate so that you don't have the same limitations that you have because we have to be reminded where stuff is stored, whereas it's always in the mind of a sortation device or robot or the shelves come to you like they can with so many of these auto automated devices.
Well said Greg. Okay, so as we we for four point list flexibility, the people factor, service level agreements, SLAs, and space. Alex, before we move into making sure folks understand what you and your team do at Bastion Solutions, Greg, I had to think about my subject verb agreement there. Back to your opening comments right before we
Some people do not way I guess <laugh>. So those four considerations, Alex, your final thoughts are around as folks are kind of chewing through the expertise you've laid out here, your final
Thought. I would say in a nutshell I would, I think that the North America specifically is following a lot of the same trend lines that Europe has followed over the past 10 to 20 years. Space is more expensive, there's less people out participating in the workforce and those people that are participating have a certain requirement for the jobs they wanna do and the type of expertise they want to have and how they wanna work. And the unknown future of the business, your business and the economic climate and the supply chain is creating all sorts of interesting conversations and that's being addressed by a drove of new technologies, a lot of expertise, a lot of focus, a lot of money, a lot of software solutions. And as we look into the future, I see we're gonna have more and more automation, but it's gonna be very application and customer specific. It's not gonna be, you know, round peg, round hole, round peg in a square hole it's gonna be, that's gonna fit your application every time. So all these dynamics are creating complexity but the complexity needs to be sifted through. Cuz at the end of the day it's gonna benefit customers the best. You know, customers are gotta win I
Think. Yep. Customers are certainly there winning already. They're gonna win a lot more on they Greg in the uh, months and years to come. Okay, so share sharing. A couple quick comments here. Patrick Kelly Love all his work in the produce industry, folks, if y'all love and dig, produce y'all, check out Patrick Kelly, great to see you here today. I think this is Scott. Scott says the API space alone could be a show in hello from North Carolina. Good point there. Yeah. And finally see him says yes, brown Greenfield does not sound as simple as many described. Good point there. Yep. Nothing is as simple as it should be I guess. Okay, so let's move along to folks understand what you and BA solutions in a nutshell, Alex, what would that be?
Sure. So a BASIAN Solutions is part of a Toyota Advanced Logistics and we are a trusted supply chain integration company. So about 1500 folks, approximately half for engineers, been a business for 70 years. Really we serve as a customers trusted advisor to help navigate through the various levels and types of automation. We support, uh, customers at a regional level through regional offices as well as large sophisticated systems, kind of everywhere in between. And really an engineering design services approach. So looking at how we can take your business, your data, your requirements, your growth plans, your challenges, and then look for the ways to solve that problem and then telling customers, here's what we think and here's what it's gonna take to do that. Or if we can't solve for the problem, you know, telling them that as well. So honestly it's a really fun company, it's a wonderful job, it's a great place to be and a lot of that has to do with a wonderful culture, wonderful people and
The ability and the desire for us to solve supply chain and automation problems for folks. Alright, good stuff. That was almost poetic on the front end, Alex, of what you shared there, Greg, bring all that stuff to me and we'll get it and solve some problems. It reminded me of the phrase from the poem, give me your tired, poor, huddled masses is what we're, you know, which famously I, I think led to America to beautiful floor or something like that. But anyway, bring it to Alex. Alex is ready, he's asking for it. Greg, your thoughts. Blessed are the problem solvers, is that right?
Yeah, no doubt. I mean I think we have to think about the way warehouses, fulfillment, whatever you wanna call it, we have to think completely differently about how it's done. So I want everyone to close their eyes, I mean it close their eyes and what are you picture, what are you picturing when you picture a warehouse, right? Think about the inside of it racks and stacks of 'em, right? So, okay, open your eyes. I want you to think about it from this standpoint and that is that those, that model does not necessarily have to exist. That flexibility that Alex has been talking about. We've, we see it all the time with systems that they can literally move and adapt and change the type of picking and sorting and racking solutions that you have based on the very high demand for the varying types of year or the varying types of product that that a company or even groups of companies are requiring at the moment.
So this changes things not just for self-distribution but al also for three pls, which more and more companies are going to as many smaller and smaller manufacturers, D to C brands, all of those sorts of things start to come together and have these kind of needs as well. But, and the same demands from the consumer. So I think that flexibility is gonna change already has changed the look of the interior of many of the distribution centers and fulfillment centers out there. And it will more and it will lead to more and more automation, less and less human interaction. And I think that, you know, cuz that goes to the second point, which is nobody, I mean I'm only slightly exaggerating, nobody wants these jobs. I mean these jobs are unbelievably hard to fill. It took almost three years after the shutdowns, it took almost three years to get back to the same level of employment in man in the manufacturing industry as it was just before the covid lockdowns.
And that was because of that great generational shift, that generational shift has had a lasting and frankly a permanent impact on the workforce. So we have to acknowledge that. We also have to acknowledge the fact that technology automation is more consistent, it's more reliable, right? It's more efficient than human beings ever was or were and frankly wouldn't have done if there had ever been any other option, they wouldn't have done these type of jobs to begin with. They would've been managing the systems that execute all of this. And now, I mean if we didn't know it before, now it seems like every time we talk to anybody in distribution or in real estate, all they're talking about is there's just not enough out there. I think the tide's gonna turn on that, Alex, I'd love to get your thoughts on that because I think we've been a bit overbuilt and we're gonna start to see that coming back.
But all that means is that distribution centers are gonna change hands from whoever built it and thought they were gonna use it to someone else who now can use it. And that again goes back to the top to flexibility and the ability to reconfigure these distribution centers as they change hands, as demand either shifts or companies relinquish control of some of these facilities. We know that Amazon is grossly overbuilt and a lot of those distribution centers will wind up being leased to or sold to other companies that will use 'em for entirely different purposes. So, you know, it all kind of is very circular coming right back to flexibility.
Yep. Good points sir. Alex, anything you wanna address there before we move to a couple of resources?
Yeah, no I don't wanna believe her that too much on the space piece. It's interesting. So one of the things I noticed recently was that, you know, the speculative build is what we're seeing start to slow down, right? But at the same time when people start to get nervous and they don't think there's gonna be demand for that space, they stop building but the demand is still increasing or still remaining somewhat consistent. I it's definitely gonna come down. What you're seeing is it was already tight, the spec builds are tightening up and so now that cap is shrinking a little bit further where there's still a tightness on space because investors and builders are concerned about spec building too many buildings because they anticipate more space will become open. So in the meantime, until some of that space comes open, I think there's gotta be a squeeze.
There's still a squeeze cuz there's still a demand, there's additional space. But no question there's gotta be tons of repurposing. I mean a lot of these shopping malls that are changing hands, there's gotta be unique ways to find fulfillment operations. You know, you think about some of the distribution, some of the, the corner, I can't think of it. The uh, JC pennies. I don't wanna try not to tow them under the bus or anything, but <laugh> the angels, sorry, the right. You know, like there's gotta be ways people are gonna find to use that space. So it's just gonna be a really unique way of thinking about things to great point in the future. That has not been the way everybody's thought about it in the past.
Excellent. You know, it's not the eighties anthem the heat is on, but as Alex points out, the squeeze is on a lot of good stuff here from Alex and Greg.
How does he do with Alex? I don't know how he does that. <laugh>. That's awesome.
All right. Hey Greg and Alex got some great questions here. We're not gonna go into 'em now, but I wanna point 'em out to Alex and his team. James is talking about preferred pick methods. James will see that the Bastion team gets back to you there. Great post show conversation. Tom's talking about insurance concerns and permits. I'm sure Alex and team can get back with you there as well. Okay, so Alex, you've got some great resources. You and the Bastion solutions team brought some great resources to bear. I wanted to share a couple graphics here. The first one is on this case study with the kathline. So tell us more about why should folks check this
Out. I did plan it like this, but it kind of worked out. Greg's point about repurposing face, this is kind of exactly a case study for that. So this is interesting, you guys can check it on our website. But basically decathlon, they're a large sporting goods retailer based outta Europe, large presence in Canada. And we worked with them to build a micro fulfillment center basically inside of a shopping mall. And inside the shopping mall you have a piece of automation that stores the inventory. It manages the transactions for a couple of things. One is it uh, well if you're in the shopping store you can walk around and you can find a tennis racket or you can find a pair of shoes and you don't have all the inventory stored out front like you do in sort of a traditional retail environment. Maybe have one or two of those.
It opens up the space to hold more SKUs as well. It's easier to navigate scan it and you add that to your shopping cart using your app and it's gonna start to pick and load automatically with some robots driving around on a grid. These items, items for a customer order. And so what's neat is you can have the shopping experience and you can be more exposed to more products. It's easier, it's cleaner and it's kind of fun to see robots pick. The other piece is you can buy a line pick up in store. So people are buying a line pick up in store, it's stored inside of the system, it's queued up and ready for people to come pick up when they show up. Mm-hmm <affirmative>. And the third is it's treated as a D TOC function too. So for customers in Western Canada, you're able to get your e-com orders shipped out of a system that exists inside, inside of the second floor of a shopping mall. So pretty cool that you can use it for D to c uh, e-com as well as your in-store shopping experience. So there you go. Repurposing of space right there. Kind of a neat
One. Wonderful folks, we got the link. We got link in the chat, y'all check that out Greg. You were gonna throw a comment in
There that which is old is new. Again, service merchandise. Does anyone <laugh>, what do remember service merchandise.
Remember we talked about that?
They had a big competitor too. I cannot remember what their name was. It seemed like it started with a G or oh, best product. I don't remember. It doesn't matter. Anyway, it's amazing how we've adapted some of these old models to the new methodology and how fit they are for exactly what you're talking about. Running a fulfillment or even a retail facility with fewer people, right? With automation and with high service levels and a sort of a single point of contact for whether you wanna buy, shop and buy in star store, shop online and pick up in store or shop online and have it delivered to you that the flexibility of those facilities is built right in. Because essentially they are a warehouse in the back, in a store in the front. So totally
Hear you. They were ahead of their time as as many others, right? For
Sure. Yeah, they would still be with us <laugh>.
Well, so y'all check out the decathlon case study also. We've got this a retail apparel and footwear fulfillment strategy guide from a forensic Bastion solutions. You can check that out as well. We're gonna drop a link to that too in the chat. Okay, Alex, man, we've had a blast with you and Greg and the whole conversation is such a, a relevant, uh, you know, we're, we're all redefining. You know, some folks when they hear the word automation, they may think, well, you know, that's relatively new man. It's been around forever and we're constantly reinventing its application and where we put it and how we use it. And, and clearly as you've laid out the four considerations here, there's a ton of new ways to think about automation that business leaders got to got to embrace in the boardroom. So Alex, if folks wanna learn more, they wanna connect with you. If they wanna lean into what you're doing at Bastion Solutions, how can folks connect with Alex?
Yeah, thanks for asking. So couple of in-person ways, there's a, if you're in the retail space, we're gonna be at a show called rela Link that is in a couple weeks here in Orlando, but probably more applicable to a general audience is Proma. If you don't know what ProMat is, I highly suggest you check it out.
If you don't know what ProMat is, I wonder why Disneyland for logistics
True. It's exactly what it is. Yeah, so we're excited about that show. Everybody's excited about it. There's gonna, it's gonna be high participation rate. I have to plug that we're gonna have a really cool, nice big booth of tons of really cool automation and the ability to teach you about other automation that is not in our booth as well. So he can come, I'll be there, happy to connect with you or you can reach me a note, you know, just through my email address here or shoot me a note on LinkedIn, however you wanna chat.
Wonderful, wonderful. Well, Alex had a blast. I know you've been traveling good bit. I'm glad you were able to get in a great meal as you were sharing. Appreciate with your family. Safe travels as you've venture back out, making things happen out industry. And Alex, we had blast with you here today. So Alex Hayes, thank you very much for your time today.
Thank you guys. It was a ton of fun talking with you. Really appreciate your time, your expertise. Thanks so much guys. Likewise.
Thanks Alex. Thanks Alex. Thanks. We answer those questions? Those questions
Are, that's alright. Thank you. Alex Hayes, manager, new business development with Bastion Solutions. Thanks Alex.
All right. I was hoping I was gonna be here after swoosh Greg happened. Come on guys. <laugh>, we're working on a variety of upgrades, so maybe we hit the wrong wire, but nevertheless. All right, well hey, thank you Tom Kat. And by the way, great to have you here today. Yeah, uh, appreciate feedback. We had feedback from Luis earlier who was tuned in from Mexico City. Thank you for that. I really enjoyed, learned a ton. I got my 18 pages of notes between Greg and Alex and all the great comments here and the great questions, which undoubtedly Greg will lead to some interesting follow up conversations. But Greg, enough yapping from me. What was your one big key takeaway from today's conversation that business leaders, practitioners, folks, if you're in automation, that you gotta keep front and center? Greg, can I
You know, if you ask me to do one, I have to do two. So my first big takeaway is that Alex knows of what he speaks, right? I mean, you can tell that he has a been there, done that kind of person, obviously has a lot of knowledge in this space and continues to build that knowledge as he continues to deploy these kind of solutions. But the other is the, that labor is the pivot point for all of these changes in supply chain. It's the reason that automation and robotics have become so much more popular and so much more necessary. And it's also the reason that it will elevate people to, to higher levels the kind of jobs, the greater purpose that they wanna have in their, uh, job experience in supply chain. Just, you know, when you think about this generational transition that we are going through and as we talked about was accelerated by everything that happened before and af with and after Covid, you know, it's dramatic.
I mean, I can't speak for the rest of the world, but I can tell you that it is dramatic in the states and in other countries around the world. So it really, this really put in stark relief the fact that we have to do something and that companies have to acknowledge that those people, right, our parents, Scott, they're not coming back to the workforce, right? And as they're not coming back to the workforce, they were the ones doing those physical jobs. We have to think of another way to fill those physical jobs, replace those physical jobs, or eliminate those physical jobs altogether and do it with automation or less labor, more effic, mis efficiency. And it's an opportunity, you know, some of the points that, that Alex brought up, the flexibility, right? You can be much more flexible with technology, robotics and automation because it's nanoseconds to train someone on a new warehouse layout, to train someone, to train a robot on a new warehouse layout in its days and days, maybe even weeks.
And not just the people who need to know it, but the people who need to train them on it. So the labor requirements there become much, much less as well. And also the incidents of error, which goes exactly to what one of the other points he was talking about, which is service level. And look, you know, I believe that the consumers are the beginning and the end of the supply chain, right? Right. Only everything that happens in, in supply chain is either because consumers condone it or allow it. And we are not allowing inconsistency. I don't, I mean for all of the kvetching we do about all the boxes that we get, Scott, right? Right. And we do this. And although I have to tell you, it's not less Yeah. In the last couple Christmases, hasn't it? But some companies are obviously doing better job, but we still expect them to be perfect, right? Perfection is the only goal here and automation and technology are the best ways to accomplish that.
Yep. Well said. There a lot, lot of good thoughts there. All right, so clearly we all learned a ton from Alex and love the things that he and the Bastion solutions team is up to. Hey, the folks connect with him. We've got, we dropped Alex's, uh, LinkedIn profile in the chat at his behest. I'm doing doing that right now, Scott. I'll be right. <laugh>. So we'll all be connecting with Alex. But folks, I love that cause there's so much more good that we've gotta drive the industry to get better to Greg's points and thanks for all the great words here. Uh, so maybe from South Africa. Really enjoyed today's conversation. We appreciate that. Okay, well we gotta leave it there for today. Greg, really enjoyed your take. Alex's take some of the resources we shared y'all check those out. We got links there that you can find both in the episode notes and in the chat On behalf, our entire team here at Supply Chain now, Greg White, uh, Katherine, Amanda, the whole team behind the scenes helping make the production happen. This is Scott Luton signing off for now. Challenging you to do good, to give forward and to be the change, and we'll see you next time. Right back here at Supply Chain now. Thanks everybody.
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