Industrial Insights with Michael Myers

Mike Myers 00:13

did, yeah, we were in the startup pavilion right there on the corner. So we got to catch everyone as they were heading to lunch and on their way back as well out of coming out of one of the main halls there. So it was a good show. There was a lot happening.

Mike Myers 00:31

It was huge. Absolutely. Yeah. If you didn't get 30,000 steps a day, you probably shorted yourself.

Mike Myers 01:24

Yeah, so I started in the warehouse, so to speak. So started as a continuous improvement, process improvement engineer, embedded within operations. And that's really where I got exposure to the problem set that we're solving. So it was a pain point that we dealt with operationally, regardless if it was. in a retailer or if it was in a 3PL fulfilling for a brand, the problems that was effectively the same. And we set out to see if we could solve it in a pseudo agnostic way. So when you think about an operation, everyone cares about shipping things on time in full as a primary concern. then secondary concern is how do you do it efficiently? How do you do it in a cost effective way? And what we found is that the WMSs do as good of a job as possible of giving you optimized plans, labor plans, execution plans, but there's a big gap in the quality of the plan that they're giving you. And that manifest as additional walking, additional stops, additional trips required, and that's what we're solving is how do you best utilize the equipment? How do you best utilize the labor to get the most volume out with the things that you already have? It's not too different from there's been a surge in the last 10 years of pick assist AMRs and it's not too different from what they're doing, right? They are solving the problem. with a specific end effector known as a robot, and we're just doing it without the robot. How do you solve the problem with the things you already have, right?

Mike Myers 03:35

Less intrusive. Yeah, less intrusive. So one of the one of the goals is always to just make your current process better. So we may think it's not the right process, but if I insert a hurdle of you having to change your on the floor process to get better, I've now made it harder to get better. And I don't care if that's lolly, if that's a WMS change, if that's a robot, I've now inserted a hurdle. So we're trying to intentionally not do that. Whatever you're doing today, however you're picking, we just want to make that better. And then over time, we'll talk to you about how you can pull on other levers to get even more efficiency. But step one is just making you better today.

Mike Myers 04:24

Yeah. Yeah. Yeah, we think so. I don't know that Mike is the full complete secret sauce. The reality is it's a really big complex problem. The math space of the problem is huge. And sorting through it is really complex. So if you go way, way back, WM's had some functionality to start creating batches and releasing them to the floor.

Mike Myers 05:15

And then some smart operations person said, Hey, if we put a pick sequence on these locations, we can control the way that people move through the building. And that produced a good general heuristic to minimize travel. It's not perfect, but it's a good general heuristic. And then another smart operations person said, you know, I should group all my singles together because that will create pick density. If I have a fast running skew and I just batch all my singles. By default, I will go pick that one skew that blew up all on one trip. And that's going to make me more efficient. And then I'm going to batch my two lines together because that cubes my vehicle out really nicely. So they've developed all these heuristics. And over time, those heuristics became selectable rules within the warehouse management system. They produce success. They produce value. So the WMs replicated them as code. And that is effectively the optimization that happens today. But taking that next step to fully explore, I have all of these orders. I have 3000 orders. I'm taking 15 per trip. I made a post on LinkedIn a couple of weeks ago that the number of combinations you can generate of that 3000 orders and 15 orders per trip is more than there are grains of sand on the planet, right? There's more combinations than grains of sand on the planet. So when you think about dealing with a problem space that big, it's complex. And so that's not to say that a WMS can't do it. It's just to say that they haven't figured out how to break that problem down today. And I'm sure that over time, inevitably some will.

Mike Myers 07:09

Yes, absolutely.

Mike Myers 07:25

Yeah. Yeah, yeah. Yeah, I've got two that jump out. So Waco shoes is a good example where over time their drop shipping volume has exploded. So they're self-fulfilling their own demand. Their drop ship volume has exploded and their skew base has grown quite a bit. So the historical approach of trying to grab like orders in a very simplistic way, started showing cracks, we'll say. And over time as that SKU-BASE grew, the spread of the inventory grew and the performance in the operation continued to decrease, it continued to drop and it required more and more labor to fulfill. by happenstance, their CFO found me on LinkedIn. and said, hey, would you take a look at it?

Mike Myers 08:43

He was... I've got it. Right? So, and they, they will sit, tell you that they are not necessarily experts in warehouse execution. They are experts in shoes and making really good shoes and making customer experience good. Right? So he, he reached out and it was a tough environment. Frankly, it, it's a very, they laugh, but I say the warehouse is very organic. It's just kind of grown.

Mike Myers 09:15

and changed and morphed over time. It's not what you would consider an ideal layout. So from our standpoint, it was a tedious mapping exercise, right? Very, because we have to generate all the XYZs and understand the layout and the rules of the operation. And it was a tough one on our side just to set up the map, get things built. But I'll use his verbiage. So they had a large sale with a a big retailer resulting in a bunch of drop ship volume and what had historically taken them four or five days to complete, they completed it in two days. So that it's a pretty good proof in the pudding, so to speak of there is opportunity to squeeze here. It's just you got to find it and you got to find the right people to assist. Similarly, with FST, they have an e-commerce customer. and FSTs of 3PL based in Columbus, Ohio, they're traditionally focused on the food, beverage, space, and this e-commerce customer was pumping out pretty meaningful volume. They don't have a massive skew base, but what they do have is a high line count. So as your order line count goes up, the... the complexity operationally goes up, right? Getting the replants done, being able to release, getting all the right things on a trip together to minimize the stops, minimize the distance, it gets harder and harder. They had looked at a couple of, we'll say, physical technology-based solutions. And I think the thing that ultimately stopped them was value proposition and complexity, depending on what you were looking at. And we formed a relationship. It took a couple weeks to get the deployment stood up and live. But when it was all said and done, the favorite tagline that they used recently was during peak season, they brought in 25 less temporary laborers. So even though throughout the year, right, there's continual savings and there's value being generated, simplifying peak season to that degree. is a huge win, operationally.

Mike Myers 11:56

Yes, just using what you have. Using the same carts or order pickers or pallet jacks. Yeah, just using it more effectively.

Mike Myers 12:09

Yeah. Mmm.

Mike Myers 12:43

Sure. Yep.

Mike Myers 13:19

Yep.

Mike Myers 13:35

this building. I mean.

Mike Myers 14:14

Mm-hmm.

Mike Myers 14:31

Yeah, yeah. I mean, this was a constraint we ran into with in the 3PL world all the time. There can be a piece of technology that would be phenomenal for a specific operation, right? And thinking about an ASRS or goods to person or whatever it may be. But if it doesn't align with the 3PL's... customer agreement or if it doesn't align with the building agreement, it may be a non-starter. It can be really hard to get all the pieces to line up right, which is I think why typically you see those automation projects happen to your point at building inception. Right. So I'm going to stand up a new building or I'm just starting working with this client. That's when you see the automation going in. But that's, you know, five or 10 percent of their client base, not the 90 to 95 that are already existing in their current facilities.

Mike Myers 15:56

Mm-hmm.

Mike Myers 15:59

Mm-hmm. Yeah, so typically when we're onboarding and going through that discovery, we will identify things that we want to happen in the future just through the data, just through the simulations. But we won't expose it just yet because again, we're just trying to solve the current day. But then quickly after deployment, we'll work really tightly with that operation. and start actually making recommendations to make tweaks, to make adjustments, assuming we didn't learn anything new in the deployment process. And then, you know, we let them to a degree be the driver. So we're trying to give them data insights about item relationships and velocities and those types of things. But that's all surface level. When they see changes occurring though, We're letting them be the driver unless an anomaly really sticks out. If we start seeing, hey, we're always going to this back corner of the building, you should address that. We may call it out proactively, but otherwise we're letting them be the driver until we have an insight that's worth pointing out to them to make a change.

Mike Myers 17:42

Can you look at it? Yeah, well. Yeah, yeah, and I you know new equipment is is one of those things or new racking We'll use that as an example, right? People are always growing up taking down Racking and that's one of those things where locations are gonna change pathways are gonna change You can either Facilitate that change through us. You can let us know we can go make the adjustments on our side But there's also the tooling to self-serve. So If you want to go into the map and delete five bays of racking, go ahead. Go ahead and do it. Map will recompile so that you can really self-serve in that way. Equipment, you got to let us know though. If you got a brand new order picker that reaches 400 inches instead of 366, well now you're kind of in a new world. We need to make some changes on our side to accommodate.

Mike Myers 18:45

Always. Yep. Shuffling in and out. Yep. Yeah, so it. give you two different perspectives on it. So a lot of times the folks on the floor actually doing the work don't necessarily have to know that Lolly's in place because the workflow is the same. So they may notice I'm traveling less or I'm getting more units per location, but they may...

Mike Myers 19:29

Right? Yeah. But they don't necessarily have the why behind it. But there are times where we'll deploy, so we support what we think of as static or dynamic pathing. So this is the sequence that you move through a building. And we talked earlier, the WM already has a sequence on the location. They kind of already do that. And if you want to honor that sequence, we're happy to do it. But if you go to dynamic, Now we have more freedom. can make more adjustments to how you move through the building. But that can sometimes feel not intuitive to an operator. Why did I hop in this aisle and get one unit, come around, grab another unit, and then end around the second aisle? It won't mess up. So we'll get those questions. And a lot of times it's about

Mike Myers 20:24

you know, validating first. Okay, did we make an error? But if we didn't make an error, then okay, let's show you the math. Let's show you here's what would have happened if we had routed you the other way versus here's what actually happened. And even still, sometimes there will be good feedback. Like we had one recently where we thought an aisle was wide enough for an order picker to pretty easily make the swap in flip directions. And that turned out to not be the case. So we needed to make an adjustment. So we value the feedback, right? Because we don't want people doing things that are A, dangerous, but B, feel way out of left field from intuitive or way that they want to be operating.

Mike Myers 21:10

Right? Right? Yeah.

Mike Myers 21:26

roughly 60 % or three PLs. Yeah.

Mike Myers 21:44

Yeah. Yeah, I do think that the last couple of months will say have been a bit of an outlier in terms of normal engagement. The concerns have shifted. The pain point of cost still exists. It's still there and it's still paramount. But uncertainty has crept up to a degree that it wasn't there, you know, two months ago. I do think that... in the 3PL world, it's a little different from a deployment standpoint because they tend to have, especially in a multi-client facility, they tend to have rules on rules on rules that don't exist in a brand. So what could look like a one building deployment for a site in a 3PL could end up being for us, five, six, 20. mini deployments because there's all these little nuanced rules for each of the clients. Whereas in the brand, you kind of capture that all upfront, right? They know them all, they can articulate it, it's part of their operating system. Whereas with the 3PL, you typically start with one pain point and then you're expanding and growing over time. So you have all these nuances that you need to capture and account for.

Mike Myers 23:30

It's, I mean, that's the fortunate thing is that it's not fun, right? Because you're going through the discovery again, you're inserting delays. But the fortunate thing for us is that it's really as much a framework as it is optimization. So if we can get people to sit down and talk through what those rules are and explain them, you know, relatively concisely, then turning that into configuration on our side isn't terrible. Once you kind of have the map stood up everything else is pretty easy.

Mike Myers 24:15

Yeah, man, if I could just get everyone to name the key things the same way, that would be great. Yeah.

Mike Myers 24:26

We don't like to talk about it. So it's, you know, because we're generating the XYZ and bounds of all of these locations, we need pretty detailed information and we can infer and intuit a lot of it. But that is easiest when the location nomenclature follows some type of pattern. When that pattern is sporadic, that becomes difficult. That's when we need just lots of time or we need you to get out on the floor with a camera to show us what you're talking about because we do the mapping exercise remotely. So we're not primarily coming on site to do it. So normally, you know, good layout, good nomenclature. It's not a painful process. It's a couple of hours of work. When you get into the really organic, it can be multiple days of work to stand up a map and become painful because it's hard to validate. you need somebody with on the customer side who knows the operation, knows the layout well to help you really step through it.

Mike Myers 25:42

You Yeah, it's, we could absolutely go do them in person. Our aim is not to, right? So we don't charge for a deployment upfront. So a big part is us trying to make sure that we're keeping cost to deploy on our side reasonable.

Mike Myers 26:05

I could be. The airline miles just aren't worth what they used to be though. So because we want to keep it affordable, we try to do it via CAD or Excel file. But there are times where we've had, Waco's a good example, we had somebody from their team actually walk us around via a virtual call to help us get a sense of.

Mike Myers 26:31

where things actually were relative to this wall or the bathroom or whatever it may be. Because there just wasn't enough detail and the naming convention was done in such a way that you couldn't intuit it, you couldn't infer it, you kind of needed eyes on the process.

Mike Myers 27:03

Yeah. Yes, absolutely. And I mean, even when you get up to the really big orgs, the naming nomenclature can vary wildly. The layout can vary wildly. It really just depends on what type of growth they've gone through and what time period. I'm sure this is something you see from like a warehouse standpoint. You could envision this operation for today's volume, today's throughput. and suddenly it changes. Something in the market drives an adjustment and you're now storing 30 % more. Well, that reflects in layout changes and expedited deployments, which can just mean weird things happened operationally.

Mike Myers 28:06

Exactly. We have, so...

Mike Myers 28:35

I've, we've never deployed and not found improvement, but we have backed out of an engagement because we didn't think it was the right customer. So there are. if you're shipping three SKUs and they never ship together, I'm not going to provide a lot of value to you, right? You can develop very simple rules to optimize that really effectively. You maybe need material equipment changes, but lolly isn't the right answer for that type of environment. So it may turn into just pointers on operations instead of us providing software. But... By and large, the target market of e-commerce, especially multi-line orders, we're pretty confident that we can go in and make a meaningful improvement.

Mike Myers 29:37

Yes. Yes. Yes. That's a good analogy.

Mike Myers 30:11

Yeah.

Mike Myers 30:37

So from a vendor standpoint, location, location, location. The location of your booth matters a lot. And.

Mike Myers 30:52

getting your assignment early is worthwhile. How about that? From a general market standpoint, I think The biggest thing that jumped out at me is that integrators aren't going anywhere. we have, know, especially in the U.S., there's a large population of integrators who are bringing technologies forward into operations. And I think the market and Myself as well believe that over time that space would shrink it would get compressed especially as More natural partnerships formed across technology providers But I after the show I just don't believe that to be true I think that the operations still want the integrators who have the expert knowledge of a the operations be the relationships, but then see all of these diverse technologies because they've seen them, they've talked to people, they're like an encyclopedia of information for warehouse technology. So I think integrators are here to stay. That's my big takeaway.

Mike Myers 32:24

Right, right. And I think to a degree we've seen that. are organizations out there that have their own in-house teams. But I think it's kind of like the middle market 3PL space. They are the bulk of the market and they don't have that capability internally. So turning to somebody who's in the know, who's acting as an expert, I feel like is gonna keep making sense for quite some time.

Mike Myers 33:13

Mm-hmm. Mm-hmm.

Mike Myers 33:41

Mm-hmm. Yeah. Yeah, I don't I don't foresee it going anywhere, especially not with the the change rate that we're going through, right, both from a digital technology standpoint, physical technology standpoint. It's harder than ever to keep up with what's good, what's bad, what's new, what's old. And that that's the role that the integrators are playing is just, hey, I know your operation. Here's what I've seen in the market. Here's an informed recommendation on how you approach this problem.

Mike Myers 34:29

No, Yeah. So there's no, there's no formal sales team. most we're doing no active, marketing or promotion in that way. And today almost all of our opportunities are coming either via word of mouth or somebody spotting something on LinkedIn and reaching out. so about is organic. Yeah. Yeah.

Mike Myers 34:58

I mean, word of mouth isn't gonna scale forever, but it's been pretty daggone good to us so far.

Mike Myers 35:09

Yes.

Mike Myers 35:33

Yeah. No, I haven't actually. I haven't chatted with the prologist group at all.

Mike Myers 35:46

Let's do it. Yeah.

Mike Myers 35:53

You

Mike Myers 36:26

Yeah. Yeah. So I'm on the other end of the spectrum here and I love all the new technologies and the new capabilities. But for me, there's going to be more old buildings than new buildings, right? And there's going to be more existing operations than new operations. And there's a lot of folks that can get better without spending tons of money.

Mike Myers 36:57

So, selfishly, I'm in love with the idea that Lolli is bringing to the table. If you force me to give you an answer on the thing I was really pumped about from a new technology standpoint, I did really like the new ExoTech SkyPod system. I thought that was really clever. I'm not.

Mike Myers 37:24

It's flying. Yeah, yeah, yeah. I still don't know how it shakes out with AutoStore. Like I think that's a really fun exercise to go through of, all right, if I had these two options in my hand, what I would pick. I still think it's very dependent on the operation and the inventory and the throughput needs and all that fun stuff. But I did think the new SkyPod was pretty great. And then you'll laugh there was a really low tech banding solution at the show that I got excited about. All it is is putting a band around a box, right? It's banding two boxes together or putting a band around a box. But they had solved a safety problem related to it. And I thought it was phenomenal. If I can find the right, right. that's

Mike Myers 38:23

Yeah, it just resonated with me. It's like, all right, that's such a simple solution to solve a real problem Bring it to fruition. Why aren't we doing it? Yeah

Mike Myers 38:40

Yeah. Yeah. So there was a gentleman credited with being the first composer. His name was John Batiste Lolley. So we took his abbreviated namesake and that's really the way that we think about Lolley over the long run is interlogistics orchestration. So how do you orchestrate within the four walls? But that is a big, massive, complex problem. And it's one that most operations don't actually need solved yet. But that is our chip on the table for automation will keep growing, more operations will become automated. In the meantime, we're thinking about it as how do you solve the problems within the four walls of the island, we'll say, of this fulfillment method, this order type, whenever it may be, how do you solve them individually? And then we'll...

Mike Myers 39:40

roll them up into an orchestration over time.

Mike Myers 39:55

Yep, you can't get rid of it. Yeah, so I think it depends on how you define AI. So we think of it as entirely AI, but we don't really talk about it that way. And maybe we should. I'm not sure. But.

Mike Myers 40:24

So, no, so we, maybe this is the wrong marketing stance and that's okay. But I think that operators don't care if it's AI or if it's anything else. I think by and large, they're indifferent to how you get to the outcome or the answer. And we've elected to not highlight that as what we do or who we are.

Mike Myers 40:54

But in its purest sense, sure, it is about as AI as AI could be. It is not a LLM, if that makes sense. But yeah, we don't proactively talk about it a ton. Maybe we should, maybe I should use the buzzword more.

Mike Myers 41:19

I just need to add the with AI on, right?

Mike Myers 41:26

Yeah. Yeah, yeah,

Mike Myers 42:05

sure. Yeah, thank you for having me on and it was good to chat with you. Yeah, we didn't get too too deep but if anyone has questions don't hesitate to reach out. Happy to provide any insight you need.

Mike Myers 42:22

Thank you, you too. Bye bye.