Industrial Insights · Returning guest
Before the Robots
What has to be ready before the robots?
A warehouse can look ready for automation and still fail a basic check. The floor may be flat but too smooth for the selected robot. The switchgear rating may not tell you what the transformer can supply. And a system can go live before anyone has clear responsibility for keeping it running.
Parth Pethani of Prologis returns to Industrial Insights to walk through these decisions with Justin Smith. Their conversation connects the building, warehouse software, automation and the people who operate all three. It follows their December 2024 interview.
Parth also describes where he sees AI helping with analysis and software development, why those gains still depend on physical execution, and how smaller 3PLs can approach individual tasks before committing to a larger system.
Five decisions from the conversation
- Check the building before the purchase orderConfirm the requirements of the selected system, including floor conditions, fire protection, power and permit sequence.
- Ask what the power number describesParth’s Rialto example distinguishes a switchgear rating from transformer capacity. His figures describe one project; they are not a building specification.
- Give someone responsibility after go-liveOperations, maintenance, facilities and IT need a clear owner who understands the system.
- Use AI where the work supports itParth describes faster development and analysis. He also keeps cost and physical execution in the conversation.
- Start with the customer’s prioritiesGrowth, service, staffing and timing may matter more than an immediate automation purchase.
Jump to a conversation
Resources mentioned and visual sources
- Parth’s Warehouse Automation Maturity Model: his framework for matching operational capability to the work.
- Warehouse Robotics Insights: Parth’s newsletter.
- Prologis: DEVELON in Boom, Belgium: source of the illustrative warehouse footage and exterior image. This is not presented as one of Parth’s anonymous interview examples.
- Justin and Parth’s previous Industrial Insights episode.
Clips and trailer
Before you buy the robots
Before the robots, the real work
Check the transformer
A flat floor can still be a problem
Fire, floor, power, and permits
Who owns the system after go-live?
Build the team that can run it
AI helps. The physical work remains.
Where AI changes the project schedule
Meet the customer where they are
What would you ask a warehouse camera?
Start with the task
The conversation goes beyond the building
The value of hands
Five connected spends
When the conveyor stops
Free rent and the schedule
3PLs are still investing
Old WMS, new business
Let people disagree
AI in the shipping office
Conversation transcript
Transcript follows the edited episode. Names and flagged technical terms have been reviewed; a few uncertain words remain listed in the final-review notes.
Justin Smith
All right. Parth Pethani of Prologis, Director of Strategic Advisory and Engineering. Thank you for joining me. It's been two years since we talked on the pod last, and thanks for hosting me when I think it was ProMat. was good to walk with you and your team on the floor and see what everybody is doing out there, which is always a fun place to be.
Parth Pethani
For sure.
Justin Smith
Yeah, super. So how long has it been that you've been in this role now?
Parth Pethani
I'm inching towards three years. So thank you for having me, Justin. I think it's been fun, right? I think last time I was in the pod, I had no beard. This time I have a beard. So that's a big change, if you will.
Justin Smith
Yes, you're getting more confident, more comfortable in your role.
Parth Pethani
Yeah, that is true. That is true.
Justin Smith
Yeah, so good. If I were thinking back just to start with your experience now going on two, three years now in this particular role, help me understand a little bit of the numbers. Like if you had to guess, and I'm sure it's hard to guess how many clients or like customers you guys have met with or how many buildings you've walked or how many projects you've bid or some form of like putting a number on how
Parth Pethani
yeah
Justin Smith
many miles, how much mileage you've gotten since you began and since we talked, how would you try to estimate that number?
Parth Pethani
I think the best way is that I have a Platinum Medallion on Delta and inching towards A-star on Southwest.
Justin Smith
Okay?
Parth Pethani
So that is my travel miles. That is a lot of travels between Delta and Southwest. And I think hotels probably, Marriott is of course the one that I'm inching to a platinum elite as well on that. So a lot of nights away from the family. But
Justin Smith
Yes.
Parth Pethani
I think the biggest success has been, think for last two years, we definitely, within the essentials business, we have been meeting our numbers, exceeding our numbers, which is great. A lot of customer conversations are now beyond just, hey, we need this size of building. Our conversations have evolved. So if you think about a soft target or soft metric that we are tracking internally, like customers are actually coming to us like, hey, what should I do about my supply chain from a network perspective, from the design perspective? Are we ready for automation? Is my building ready for automation? Do I have the right technology? So conversations have evolved over the last two years. I think that's something I'm very excited with in Prologis overall, because I
Parth Pethani
think that's something Hamid valued in Essentials when he ideated Essentials a few years ago. It's like, hey, how can we help our customers beyond, of course, helping with the real estate and amazing experience around real estate, but can we help them with the supply chain? So I think that's been a fun ride. And I think under Marv's leadership, think things have really kicked in with a lot of conversations in a lot of markets. So overall, just excited, excited to be at Prologis, excited to build this function within Prologis and help our customer get more out of the buildings.
Justin Smith
Yeah, and so to your point about measuring in miles, it's not as if you only see customers in Atlanta. Customers are global, but like throughout the states, you get to go coast to coast, top to bottom, left to right.
Parth Pethani
My countries that I started traveling is to Canada and Mexico. I have a Puerto Rico trip coming up as well for a trip. yeah, capturing slowly going south of border as well, trying to meet our customers.
Justin Smith
How's your Spanish?
Parth Pethani
They're working on a habla espanol, un poco espanol, that's all.
Justin Smith
Nice. It's a great skill to have.
Parth Pethani
Yes, that's it.
Justin Smith
I was thinking one of the tough questions, it's like a growing pains for you probably, is like things you've changed your mind on since you've been there. Because I would imagine now that you've seen so much, talked to so many people, and got so much feedback and worked through projects, that you've evolved and you've learned. And I'm sure there's a couple things that you thought you knew to be true, maybe that aren't so black and white or aren't so true. And
Parth Pethani
you
Justin Smith
for me, part of that I got from you last time we talked was your maturity model, which was great. Like that was a framework I needed that really helped me. I'm sure you've developed other sense or have other things that like you've changed your mind on. What would be some that come to mind as you reflect on it?
Parth Pethani
I think the biggest learning lesson I have found over the last almost three years at Prologis is that everything is connected. While we as an end user, or I would say not an end user, but as someone who works in one function within the supply chain, let's say warehouse automation, warehouse real estate, warehouse technology, warehouse design, they are all siloed function, but on the end user end, there are only a few people who are looking at all the functions, right?
Justin Smith
Yep.
Parth Pethani
And they have to meet, they have to bring all these silos together to make a decision which is right for that business in that given time for that given year. So I think one of the biggest lesson I would say for me is, and as I help customers think through this is that everything is connected. Everyone has a time bound, resource bound decisions to be made. and while I would like everyone to think about robots, I like everyone to think about the automation everywhere. I think that the conversations are different, right? Maybe 2026 goals for that organization is to buy new business, grow the business revenue versus our thinking of optimization because that was 2026 goals. So I think going back to your original question, for me, that has been the
Parth Pethani
biggest learning that I need to understand. I need to meet the customer where they are for that year. It doesn't mean that it's automation, it's technology, it's design, it's real estate. It could be none of those things, and it could be completely anything else.
Justin Smith
yes that's
Parth Pethani
Yeah.
Justin Smith
awesome yeah what
Parth Pethani
Yeah.
Justin Smith
a learning to have and then
Parth Pethani
Yeah.
Justin Smith
like knowing that everything is connected is even more powerful too
Parth Pethani
Go right there.
Justin Smith
uh in our world connected the easy ones are real estate labor transportation
Parth Pethani
Yeah.
Justin Smith
now power we're lumping power
Parth Pethani
Yes.
Justin Smith
into that.
Parth Pethani
Correct.
Justin Smith
And maybe
Parth Pethani
Yes,
Justin Smith
those
Parth Pethani
exactly.
Justin Smith
are like the four main things we focus on and we hear the most from clients. So
Parth Pethani
Yep.
Justin Smith
I was looking at your newsletter, which kudos to you. You keep it going. I
Parth Pethani
Yeah,
Justin Smith
love
Parth Pethani
thank
Justin Smith
it.
Parth Pethani
you.
Justin Smith
It's so good.
Parth Pethani
Yeah. Yeah,
Justin Smith
Yeah.
Parth Pethani
thank you. I appreciate that.
Justin Smith
It was like a warehouse, WMS and automation. And so you
Parth Pethani
Yeah.
Justin Smith
and I are talking because real estate's in both of ours, right? And
Parth Pethani
Yes.
Justin Smith
so I could see how, yeah, it turns out those are just my four and your three. And there's
Parth Pethani
Yes.
Justin Smith
probably a
Parth Pethani
Correct.
Justin Smith
hundred of them in there that are important. It's just which ones are most adjacent to the others.
Parth Pethani
Yeah. Yeah, and I think I've been blessed. To your point, I've been blessed to see when I think about a warehouse supply chain officer who has to make a decision. think, again, this is my understanding. There are four or five big decisions that they have to make. One is, course, the labor spend. Second is transportation spend. Then it's the automation spend, real estate spend and the technology spend. Right. And I think I've been blessed to be at least on the three side, three of both the sides of three of those things,
Justin Smith
Yep.
Parth Pethani
automation, real estate and the technology side.
Justin Smith
Yep.
Parth Pethani
So I think when I just think about those things, it makes it very it just reminds me that I've been blessed to see both the sides of the aisles. And that actually, when I talk to my customers, I probably know when they are in one
Justin Smith
Thank
Parth Pethani
of this cycle of thinking about automation, thinking about technology, thinking about real estate, I try to meet them where they are that, hey, guys, probably too early, probably too late, maybe the right time and stuff like that. So to your point, everything is connected. And one of the great thing to have that is just community around that. So I think to your point about warehouse robotics newsletter that I write, it's honestly my way of writing things that I see. I think that has definitely helped me A, build the street cred and B, actually invite a lot of great conversations.
Justin Smith
Yeah.
Parth Pethani
I have multiple times folks responding to my emails or to my newsletter saying oh this is great or can you expand on this or I'm not sure if I agree to that and that's a great conversation because I'm also learning something from them and they don't agree like yeah actually that that makes sense so that's that's that's an amazing thing
Justin Smith
Yeah, I remember the first time someone told me, that's not exactly how it works. So you didn't quite get that right. And then you're
Parth Pethani
yeah
Justin Smith
like, oh, okay, tell me more. And it was with like letters of credit for security and like how that works sometimes. And I just had not seen that.
Parth Pethani
yeah
Justin Smith
That had not been my experience. So it wasn't wrong per se. was just like good to get other people's experiences too.
Parth Pethani
yeah and i think that's growing as well like learning is growing which is great
Justin Smith
Yeah. Do you have any insight into, you said technology and IT spend? Like I don't get involved with
Parth Pethani
yeah
Justin Smith
that. I would just be more curious because AI, my technology spend has gone up. I'm sure yours has.
Parth Pethani
yes
Justin Smith
I'm sure Prologis has,
Parth Pethani
yes
Justin Smith
I'm sure your customers has, and that is not WMS and that is not automation, but isn't it? Or
Parth Pethani
yeah
Justin Smith
to some extent.
Parth Pethani
definitely
Justin Smith
So I would imagine all of customers is going up and maybe that's a line item you don't pay attention to, or it's not in your wheelhouse, or maybe it is a little bit.
Parth Pethani
I think right now, I would say I have started hearing a lot of use cases of success when it comes to using AI in the day-to-day workflow, especially like I was in MODEX and one of the regional tire distributor gave me a good example of how they're using Claude for their lot of development because they have a custom WMS And right now, if they had to go out, that project could have taken 80 hours and the developer was able to do it in eight hours, right? So almost 10x improvement. And that's huge. Of course, there is a cost to that. I'm not, I have not double clicked into that yet. But I do see the use cases specifically around using AI to improve your code base and using AI to really help you with faster execution side.
Justin Smith
Yep.
Parth Pethani
I think the great thing that I come back to from my side of the world is like, I'm still physical in the world, right? So I need to build buildings, I need to put real estate, I need to build racks, need to put automation.
Justin Smith
Yep.
Parth Pethani
So I think for us, it's definitely a value creator where a lot of things can be from a project execution perspective. really helps us synchronize a lot of things. We are able to build better decks, do a better deep analysis on what could be the problem statement. But at the end, I think when it comes to physical execution, I think it definitely helps having folks on the ground.
Justin Smith
That's not going away, no doubt, but I would imagine that number of analysis that you have to go through, crunching through everybody's data to help them figure out what they need and what they don't need, that that would be incredibly powerful and
Parth Pethani
Yeah.
Justin Smith
ubiquitous for sure.
Parth Pethani
Yeah.
Justin Smith
I love it yeah it's amazing I've seen everybody use it everywhere and
Parth Pethani
Yeah.
Justin Smith
then just be like okay what is the WMS version of that or what is the automation version of that what
Parth Pethani
Yeah.
Justin Smith
is the landlord version
Parth Pethani
Yeah. Yeah. Yeah.
Justin Smith
of that and
Parth Pethani
Yeah.
Justin Smith
everybody has like their
Parth Pethani
Yeah.
Justin Smith
own 10 or 15 or 20 use cases that have been incredibly helpful All right.
Parth Pethani
think Prologis overall has leaned in really well. I think our leadership has done an amazing job of putting things together, putting the right technology in the hands of right people, putting guardrails around it for the right reasons. So I think I'm excited. We have been using a lot of AI in our day-to-day work. Actually, the whole organization is encouraging us to really think about how can we incorporate more AI. So there were like a whole AI teams around it and encouraging us to do that. So I think I'm pretty excited for that. I've started using a lot for my data crunching as well. Before it would have been Tableau or Excel. Right now it's pretty much AI to help me with that.
Justin Smith
Yeah. I would expect it would be all over your analysis, for sure.
Parth Pethani
Yeah, it is definitely from the AI perspective, from analysis perspective, definitely helps me do a faster crunch. We are on a project right now for network designing a whole supply chain network for one of the sporting brand. and the way with how fast we are able to crunch data is definitely helping with the execution speed on the project whereas the project that we want the competitors were at least looking for 15 to 18 weeks we are doing that in nine weeks just because of the data the crunching of data is pretty fast for us so
Justin Smith
yeah
Parth Pethani
like ai has broad efficiencies which we are able to pass on to our customer in terms of speed
Justin Smith
yeah with those types of projects i always remember the timelines of how long and you're like there's no way it takes that
Parth Pethani
Yes,
Justin Smith
long or like gosh
Parth Pethani
great.
Justin Smith
there's so many manual moments that like and from person to person and different people's schedules
Parth Pethani
Yes.
Justin Smith
and it kind of reminds me of negotiating contracts sometimes with parties on both sides attorneys on both sides brokers
Parth Pethani
Yes.
Justin Smith
on both sides and it going up and down and back and forth and like sometimes that just takes so much time that,
Parth Pethani
Yes.
Justin Smith
yeah,
Parth Pethani
for sure
Justin Smith
anything that squeezes these projects.
Parth Pethani
yeah
Justin Smith
Since this is your area of expertise or like a domain, I would imagine you get a lot of people asking about the humanoids and when they are and if you should get the figure one or if you should get the Tesla one or if you should get the other one
Justin Smith
instead of or like in addition to all the regular things we have, like the articulating arms
Parth Pethani
yeah
Justin Smith
and things like pallets and pallet runners and stuff like that. How deep are you in all of that? Have you shooken hands with one?
Parth Pethani
no actually i haven't shook hands with any of the humanoid but i did go deep into the supply chain one of the articles that i wrote was literally going all the way to their supply chain and i I had someone who makes one of their component comment on my post as well.
Parth Pethani
So I think overall, humanoids do, At least in my view, I am a big fan of dexterity, so I like hands. When
Justin Smith
Yeah.
Parth Pethani
it comes to warehousing space, I feel like there is a value of hands. We do need that ambidextrous component or function where there are so many use cases I can think about. One simple use case comes to mind from my past life is inducting apparels and unit sorter We do have solutions. We tried solutions before the AI revolution using robotic arms, and I feel like we didn't get the adoption that we should have got
Justin Smith
Yeah.
Parth Pethani
it. But hopefully with the new AI adoption, we should be able to see if there is a way for a humanoid, half-humanoid, if you will, if that's a real term as well, but with hands who can induct on a unit sorter, let's say.
Justin Smith
yeah when i saw the ones that ProMat that were soft enough that could pick up smaller things that
Parth Pethani
Yeah.
Justin Smith
are more delicate and smaller items that's when it became more real for me anyways that like okay cool this is like making a difference that's not on the pallet scale like it can get down to each piece and that was exciting so I could only imagine now it's like continue to get better
Parth Pethani
yeah for sure and i think that's where i think one of the biggest challenge for us as well and you touched on this in the beginning the power conversation right
Justin Smith
yep
Parth Pethani
i think humanoid humanoids or anything and I think we are in this very critical infrastructure growth stage where we will have data centers. We do not want to lose the lead on data centers as a country. And at the same time, we are trying to put up more automation in the warehousing space. But overall, there is a huge deficit from a power perspective that we need to meet.
Justin Smith
Yeah.
Parth Pethani
So I think one thing that I'm honestly trying my customer and helping them think through is something I talk about a lot is the building readiness aspect.
Justin Smith
Yes.
Parth Pethani
I think one of the challenges we have is like, and again, I would say anyone listening, do not sign the PO until you know your building is ready in
Justin Smith
Yeah.
Parth Pethani
a good way because sometimes that can impact your lead times, your ROI conversations because it can incur cost. can push your
Justin Smith
Don't
Parth Pethani
timelines from,
Justin Smith
sign
Parth Pethani
let's
Justin Smith
the
Parth Pethani
say,
Justin Smith
PO until the building is ready.
Parth Pethani
correct
Justin Smith
Yeah.
Parth Pethani
in a in a good way i will say and again you won't be able to answer all the questions because there are some questions you can only answer after the after you know what robot you're buying
Justin Smith
Yep.
Parth Pethani
uh for example like i would say like you can have a flat surface but if it's too smooth it's also a problem uh right so i have a customer that i'm working with right now they have an amazingly flat surface there's no no grinding needed amazing flat surface but the challenge is their floor is super smooth. So they have to actually, we have to put some friction on it so that way the wheels are not rolling, right? And the
Justin Smith
Yes.
Parth Pethani
robots can actually work. So those are the minor detail that when it comes to automation that we need to take care of it. Similar for fire, right? A power, sorry. I have a building in California, Rialto, California, where we are actually, it's funny, the switchgear is 2000 amps. The building without automation was around 530 amps. With automation, we'll go around 1600 amps. And the transformer that is on the building can only sustain 1200 amps.
Justin Smith
Yes.
Parth Pethani
So when we talked to the customer first time, I was like on the first call with them, was like, hey guys, so what is the power capacity in here? 2000 amps, great. I was like,
Justin Smith
Yeah.
Parth Pethani
okay, cool. I think we should still do a due diligence on that. And then we found out that gap on customers like yeah thank you guys for doing the due diligence because now we have to work with the utility to upgrade the transformer get more power and that's another adds time uh to that go live and that's that's something that we need to as as the end users we need to start thinking about it if you are thinking about bringing a heavy goods-to-person automation or any kind of heavy automation in the building
Justin Smith
Yeah, we talked with someone on your team on
Parth Pethani
yeah
Justin Smith
one of their buildings, and it would require going from 2,000 to 4,000 amps, and it's for, I think, almost like a food manufacturer.
Parth Pethani
and
Justin Smith
And the building we ended up with does need the upgrade.
Parth Pethani
and
Justin Smith
Part of it will be funded by the landlord. Part of it we fund on our own. And then when you just think of what needs to work in the contract with the utility and then anything that's like heavy manufacturing, all of the not only like permits, underwriting laboratory,
Parth Pethani
Yes.
Justin Smith
like a certificate and overlapping and anything that goes into like setting up the building or the mezzanine or any of the box and boxes and just trying to like layer all that on. It gets incredibly cumbersome pretty fast.
Parth Pethani
Yeah. And especially when it comes to... So one other thing that we have started doing is coming up with this building readiness help for our customers. So we do fire, floor, and power, and we have a permit strategy around it. So we wrap a permit strategy on top of that to help our customer think about who goes first, what kind of permits, who doesn't go first. Because if they go first, they're going to block the entire other permits and
Justin Smith
Yep.
Parth Pethani
the timeline around that and all of those different things. So it's specifically when you are in a high stakes automation decisions, I would say just having a second due diligence doesn't hurt. It's just simple to just make sure, do I have enough power? What can I do for my fire? Because the county officials have the power to close your building with one walk. And that can be millions and millions of dollars of lost revenue. So you want to measure twice, cut once kind of thing.
Justin Smith
Yeah. And to your point of everything being connected, like I'm not even sure I know all the timelines on the machines
Parth Pethani
yeah
Justin Smith
or that it's my business to know that. That's not the part that I'm playing or the role that I'm in, but I'm in the role of make sure it all works
Parth Pethani
yeah
Justin Smith
out and
Parth Pethani
that
Justin Smith
that it's all successful
Parth Pethani
is yeah
Justin Smith
and that you got enough
Parth Pethani
yeah
Justin Smith
time from the landlord and enough free rent and I'm like a part of the critical path. So yeah, I could definitely see why having another set of eyes that tries to look at the whole pie all at the same time is incredibly
Parth Pethani
all
Justin Smith
powerful
Parth Pethani
right yeah
Justin Smith
and
Parth Pethani
and
Justin Smith
helpful.
Parth Pethani
and that's one thing that i i feel very confident on our side just because i think we do have that county level access in a way where we we probably have done some projects there or are doing active projects in that county or surrounding county so we can at least bring that kind of insights on like hey this county six weeks of timeline this is eight weeks of timeline if the revision comes you should expect another four weeks or another two weeks i
Justin Smith
um cool i would uh the one thing you had written about that um i thought was noteworthy to bring up with you was uh talking about people and integrators and the amazon story of like going direct to auto
Parth Pethani
Mm
Justin Smith
store
Parth Pethani
-hmm.
Justin Smith
and um uh it is interesting to see like that part of the industry evolve and then I went with integrator and a client and auto store like five times around the track and it's a long process it takes a long time to get design and to get buy-in and get a decision and get everything signed and so I could see that big people that have internal resources might want to develop that skill in-house and like are you seeing more of that or you think that's just kind of like Amazon specific really because they're because they
Parth Pethani
i
Justin Smith
can or
Parth Pethani
would
Justin Smith
because like that is so important to them that they've developed that.
Parth Pethani
say i think i chatted recently about it i think when it comes to automation and probably it's same for everything but when is because i've been not i'm in automation world for a while i think for me when i think about automation i look at the success stories the the the not failures but the lessons learned if you will uh
Justin Smith
Yep.
Parth Pethani
the success stories and i've been in this space for a while i probably have read almost all the news that come out of this space for a while
Justin Smith
Yeah.
Parth Pethani
because i have my own like website for news right so i pretty much before anything goes on the website i actually read through it before i post it so probably i read everything that is happening in the market and because of that i i have started developing and having customers conversation, I started developing this framework in my mind where I think the capability of automation or the adoption of automation comes down to two major things. Either it's a capability and urgency, right? I can have tons of capability in me, but if I'm not urgent to build the automation case or adopt the automation, I'm going to find a reason not to do it. And
Justin Smith
Okay.
Parth Pethani
I think it's the same way for like, if have the urgency and I don't have the capability, I will either fail or have a lessons learned, which will be very expensive lessons learned. Because
Justin Smith
Yes.
Parth Pethani
I did something, I implemented automation, and now that goes back to the maturity curve. Like I borrowed some level of expertise from my partners, from the systems integrators, from the OEMs, and I believe that I can do it. That's great. You implemented it, you went go live. But if there is no, and I'm a very strong believer that if you do not name a person or a team who has the oversight over that automation and have every maintenance team, facility teams, IT teams, operations team, some kind of minor dotted line into that team to make the automation successful, you will run into challenges post-go-live. and again not because system failed or not because the operations didn't do a good job it's just that it needs maintenance it's like building muscle right
Parth Pethani
if you don't build muscles and if you lose if you do the bodybuilding for one year and yeah exactly if you do the bodybuilding for one year and stop it you're gonna start losing the muscle and you need to have that exercise so what i'm seeing back to your question what i'm seeing is a lot of
Parth Pethani
big leaders are thinking about automation seriously and building capability around that i think i remember early days when i was Berkshire Grey working with a lot of customers and one customer is pretty much we all know which is number one retailer in the world they they were looking at automation really closely but i think at least my take is they they realized that amazon is coming for the market share on the grocery side and overall and
Justin Smith
Yeah.
Parth Pethani
i think they got serious about it And they're like, you know what, let's just go build teams around it. And I believe that since then, 2019-ish, you can see a lot of team job titles having automation as a word in their job titles, which basically tells me that they are building capabilities. They are pushing for having that capability internally.
Parth Pethani
So I'm a believer that they saw the urgency, they built the capability and they're like, you know, let's go do about it.
Parth Pethani
And I think a lot of 3PLs have started seeing that as well. But my belief is that the folks who have not seen the urgency will not build the capability. and we honestly wouldn't probably need a capability as well. So there are, and this all comes down to like a heavy, complex automation.
Justin Smith
Yep.
Parth Pethani
Of course, there is a place for a point automation, like an AMR fleet or like automated forklifts and stuff like
Justin Smith
Yep.
Parth Pethani
that. That doesn't, it's not a heavy automation. You can do a point solutions around that and there is always going to be a market for that. But if you're looking for relying automation to be really a game changer for your various operations, yeah, you've got to build the capability for that.
Justin Smith
Yeah. Yeah, it's probably an increasing line item of spend, I would imagine, on the budget. And I remember interviewing the CFO for GXO at the time and talking about how much they are investing in that. And they're like the prime,
Parth Pethani
yeah
Justin Smith
like one of the first movers
Parth Pethani
yes
Justin Smith
in a significant way in their 3PL space.
Parth Pethani
exactly
Justin Smith
and they seemed like they were going bigger than anybody or bigger in their particular category and
Parth Pethani
yeah
Justin Smith
I could imagine, yeah, for the bigger ones and for the national and for the global companies.
Parth Pethani
But I think the value is going to be the North Star that I'm chasing is to put more robots in the building for a long time, not just for a sign of PO, right? Signature of the PO.
Justin Smith
Yep.
Parth Pethani
But honestly, the success comes when automation is there for a long time and people are using it.
Justin Smith
uh yeah i feel like um a lot of things i see that you put out there have some version of um before you go live and after you go live because for us maybe in a real estate deal like there's so much that goes into it but oftentimes once it's signed like there's not a whole lot to do or there's not a whole lot to help on like that's when the operations team takes over or that's when they go back to running the business so to speak where this is part of running the
Parth Pethani
Yep.
Justin Smith
business and so I love how so many of your stories are like you were expecting this the ideal outcome is this and then you met the reality and like here's how it's different here's how it was tough and i could see why the problems when it doesn't work like the assembly line analogies like don't stop the line or when the line is stopped like everybody is stopped and
Parth Pethani
yeah
Justin Smith
like it's a big problem so i that is i'm sure that's always like paramount in your experiences of like go live day and then like thereafter after?
Parth Pethani
yeah and the challenge is always is gonna be i think i'm i i the the blessing or the curse is that I've seen almost every side when it comes to automation.
Justin Smith
Yes.
Parth Pethani
And what happens is if the company
Justin Smith
Because you've got the software
Parth Pethani
that,
Justin Smith
side experience.
Parth Pethani
yes.
Justin Smith
You've had the robotics side experience. You've got the real estate side experience.
Parth Pethani
Yeah.
Justin Smith
Yeah.
Parth Pethani
So when I think about automation, and it goes back to if the end user has not built the capability. When I say capability, that doesn't mean that you need to read the books. But what I mean is like, hey, you need to have someone who understand the system well enough, be it technical technology team and be it maintenance team, facility team, or even the operational super user.
Justin Smith
Yeah.
Parth Pethani
If you don't have that team, what happens? You keep pulling your integrator or OEM back to just answering that question. And now that starts creating a friction where like, guys, we helped you. What else do you need? Guys, we helped you. What else do you need? So we reach a point where like either some of them one of the person has an issue and i i believe that it's not never personal it's more of like guys this is a gap we got to build it let's build it around it it's a process gap it's not a individual problem
Justin Smith
Yeah, I would think every, like,
Justin Smith
it would be hard to imagine people making such a big investment and going live and not having that capability. But then perhaps it's more of you're doing something you've never done before. So you need someone who's prepared to own it and go through the experience of learning and adapting and dealing with uncertainty and with whatever inevitably is going to break.
Parth Pethani
and honestly sometimes it could be the first foray into the automation and they don't even know right if you don't know you don't know the things you don't
Justin Smith
Yeah.
Parth Pethani
know you don't know right and that's one of the uh messages that i try to do it in my conversations like guys i had a customer who's like Parth i want to i want to have an automation i want to we took them to a building which was almost 25 million dollars of automation fully full automation from end to end inbound to outbound with just humans in the loop where needed for intervention and it was an amazing site amazing building and customers saw it and customers like i want this i want this i want this i'm like you can have it but there is a road to that uh you can't just write me a check right now and i say you have it because i would love to do that but at the same time
Justin Smith
Bye
Parth Pethani
i don't think so you
Justin Smith
now.
Parth Pethani
will
Justin Smith
Yeah.
Parth Pethani
yeah you will you will like me or you will hate me after that in a in a in a professional way like i think there is a method to this madness let's get your designs right let's put make sure your warehouse is set right let's get you some technology layer WMS and stuff like that so you know what you are measuring what you are where you're leaking what are the operations you get a control layer and once you are stable with WMS for at least nine to twelve months that's when actually i'll come back to and say are you still open for that automation and again this goes back to my counter thesis that i'm the automation guy but that's the reality i don't want to sell them something that they're not ready for
Justin Smith
Yeah, I would think WMSs everybody has everywhere in every building. And that's
Parth Pethani
uh
Justin Smith
not,
Parth Pethani
you'll
Justin Smith
you
Parth Pethani
be surprised
Justin Smith
would say,
Parth Pethani
just
Justin Smith
you'd
Parth Pethani
you'll be surprised you'll
Justin Smith
say
Parth Pethani
surprised
Justin Smith
at 30%, 50%, what would you say?
Parth Pethani
i mean manhattan and blue yonder and a lot of WMS guys still have on a macroeconomic level yes WMS is now a replacement market. It's not a new market, whereas robotics is a new market.
Justin Smith
yeah
Parth Pethani
But there are still big giants who are, I would say, have a WMS which is 25 years old, or are trying to find the right WMS because they grew the business in a different direction.
Justin Smith
yes like
Parth Pethani
Yeah.
Justin Smith
legacy
Parth Pethani
Yeah.
Justin Smith
and then I'd be remiss if we didn't spend a little time on 3PLs and like experience with them and like what their needs are these days or what is like area that they're focused on or places where they are maturing more
Justin Smith
I would think we should spend a little time making it nice for them bringing some knowledge to them and like a thinking through like what do you see there what are the good ones doing what are the like medium size ones struggling with or let's do a quick five minutes on the 3PL market if you don't mind
Parth Pethani
Yeah, I think I'll start with the big ones.
Parth Pethani
I'm very close to a few other 3PLs. I think all right now, overall market is very,
Parth Pethani
they're fighting for business in a good way, which is like, which is good. They are looking for new business. They are trying to find what will make the deal win. But from a technology side, everyone is leaning in a lot on the AI side. Automation spend with the 3PLs has not reduced, at least in my from the vantage point that i sit on uh
Justin Smith
Yeah.
Parth Pethani
they are actively talking to about us about like hey what should we think about it uh i'm actively working with two or three 3pls where they are going on full automation uh for their brands which uh which is good which is which is great uh what also i'm seeing from the mid-market 3pls is that they are catching up in the they are at least thinking about automation in a way where they're like okay big guys have done We are in the second phase of, I would say, automation maturity, where folks are thinking about automation. But the good thing, or I would say the second focus point for them has become AI as
Justin Smith
Yep.
Parth Pethani
well. How do we incorporate AI in our day-to-day workflows? AI definitely helps on the back office side of the world, right? Because they can find so much optimization on the back office. Maybe shipping office has a lot of emails and Slack messages going back. you put AI, can help you there. Similarly for WMS I've seen folks, I've seen solutions
Justin Smith
I would
Parth Pethani
that
Justin Smith
think
Parth Pethani
have
Justin Smith
I'm
Parth Pethani
came
Justin Smith
like timing
Parth Pethani
up.
Justin Smith
and scheduling on
Parth Pethani
Yeah, all
Justin Smith
dock doors.
Parth Pethani
of those labor planning.
Justin Smith
Yeah.
Parth Pethani
Yeah, everything has changed. Everything with AI has definitely helped. I'm a big believer on a site and I'm a big believer in vision. So I'm hoping that there are some vision solutions out there, vision to help with the warehouse
Justin Smith
Vision.
Parth Pethani
optimization, warehouse yeah vision accuracies and like the inventory accuracy and stuff like that i know there are a few great solution providers in the market but vision is going to be the next thing for warehouse optimization and i think
Justin Smith
Give
Parth Pethani
finally
Justin Smith
me an example
Parth Pethani
like the
Justin Smith
if
Parth Pethani
yeah
Justin Smith
you don't mind.
Parth Pethani
sure i think one of the things that i've been thinking in my mind and ideating is like what if i put a camera in the places where i let's say on the dock doors right focusing all within the dock doors the ai algorithm the so Vision algorithms have already caught up and they can tell me, you know, this forklift went for this building 10 times. Like a Verkada system, if you know. So Verkada is a pretty amazing software solution from a security side of the world. And you can literally say, tell me all the blue cars, right? And it will tell
Justin Smith
Yeah.
Parth Pethani
you all the blue cars. Similarly, think about tell me all the forklifts, tell me all the reach trucks that cross this aisles in the
Justin Smith
It's
Parth Pethani
last 10
Justin Smith
like
Parth Pethani
minutes.
Justin Smith
heat maps too sometimes is what I
Parth Pethani
Yeah,
Justin Smith
think of when I think
Parth Pethani
exactly.
Justin Smith
of that.
Parth Pethani
heat
Justin Smith
Yeah.
Parth Pethani
maps, you can do optimization like, hey, show me the picker route that all of my pickers took to fulfill
Justin Smith
Yep.
Parth Pethani
the order. Tell me if my conveyor is stopped, where it is stopping and I can see that. If the conveyor is stopped, bring me a cell phone ping and I can see, my conveyor is stopped, go solve for it.
Justin Smith
Yep.
Parth Pethani
I don't have to wait for someone to radio in. That was usually what is the process where you have to radio in someone. Hey, my conveyor is stopped. There is a way to do that. All of those, there are many use cases around it. Of course, you have to understand the use case cost versus where do you put the cameras and all of those things and privacy around
Justin Smith
Yeah.
Parth Pethani
it. But I think vision is going to be a change. think there are providers like that, blanking on their name, right now who actually has a solution where they can track a pallet. If you put a camera on the forklift, they can literally follow the forklift and they can see where their pallet was dropped
Justin Smith
Yeah.
Parth Pethani
and kind of visual inspection of pallets. There are solutions which are on the dock doors that can tell you how good the quality of pallet was when it was loaded onto the truck.
Justin Smith
Yeah. yep
Parth Pethani
And that helps you with the OTIF compliance and stuff like that.
Justin Smith
yep
Parth Pethani
Yeah.
Justin Smith
that's a big you can see that proliferate in the next couple of years
Parth Pethani
correct
Justin Smith
yeah
Parth Pethani
yep
Justin Smith
between sensors and cameras
Parth Pethani
yes for sure
Justin Smith
and maybe lastly if you just think of like in this 3PL talk you were talking about like the middle sized players what's like a regular setup? How many pieces would they have? I know there's so many when you just think of like
Justin Smith
systems, different machines or different equipment that are all like under the category of automation. Would you say, like give me like a typical setup that you would think of like a mid-range player would have.
Parth Pethani
I think from a 3PL perspective, I do believe that if you are not trying to do a goods-to-person automation, I do see a value in pallet moves using AMRs. I think folks have exploded. I know a few people, a few friends of mine actually have done a good business with 3PLs for selling their AMRs. I think I'm still, especially this year, I'm still under the belief that the mid-market 3PLs are really trying to get extra value of AI and make sure that they are able to find the efficiencies within their existing workflows through
Justin Smith
Yep.
Parth Pethani
the back office optimization, right? be it emails, be it scheduling and all of those different things. I think they are really focused on that. They are looking into point automation solutions as of right now. It could be as simple as like, hey, just get me a packaging automation or get me a robot who can move pallets. But that's where I have experience this year. Based on my few understandings and few visits to the conference, that's where my head is right now on them.
Justin Smith
Yeah, I could see it take time just to distill through the economy and through all the different companies. It just takes time for everybody to be exposed to it, to try it, to learn from it, and then to figure out what was valuable.
Justin Smith
Cool. Anything else coming up for you? Are going to hit the conference circuit? Are going to be on stage? Are we going to see you out there? Or is that
Parth Pethani
No,
Justin Smith
not a
Parth Pethani
not
Justin Smith
big
Parth Pethani
on
Justin Smith
focus
Parth Pethani
stage.
Justin Smith
for you this year?
Parth Pethani
Yeah. For not this year. think this year I'm pretty much work, work trips, but I think I'll definitely be in ProMat that's my toy land
Justin Smith
Yep.
Parth Pethani
so I'll be always being ProMat doing stuff there but I think no other conference circuits as I planned off but yeah I'll be excited to see you there but yeah and anyone who is there hit me up always active on LinkedIn because that's my I would say things that keeps me busy which is great
Justin Smith
Yes, totally. Okay, well I know you're busy Parth, I appreciate you spending time, that was better than I was expecting, although I had pretty high expectations and it's so fun to see your career blossom and to see you have fun experiences and learning and growing and helping people.
Parth Pethani
I appreciate you having me again. Thank you for your time and great questions. Appreciate it.
Justin Smith
Yep, we'll see you later Parth, have a good
Parth Pethani
Yes,
Justin Smith
one.
Parth Pethani
sir.
Justin Smith
Bye
Parth Pethani
Thank
Justin Smith
bye.
Parth Pethani
you.
Justin Smith
Yep.