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Episode 39: Levelin’ up with automation

Sippin' & Shippin'
Sippin' & Shippin'
Episode 39: Levelin' up with automation
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Tanya Phipps|May 12th, 2023

Description:

From machines that build boxes to robots that can sort 1,000 packages per hour, automation is a game-changer for e-commerce brands. While it won’t solve all problems, it’ll certainly help optimize operations! But when does it make sense to invest? In our newest episode, we sat down with engineers Terry Neidiffer and Rob Schabinger from Ryder System, Inc. for their inside take on automation: different levels of automation, finding the right fit, and a look into the future. Tune in, grab a drink, and level up!

Timestamps:

1:43       Rob & Terry Intros

3:33       What is automation in e-commerce?

6:08       When does automation make sense?

7:51       ‘Entry-level’ automation: solutions that won’t break the bank

12:05    ‘Level 2’ automation: lean concepts

16:13    ‘Level 3’ automation: advanced technology

20:36    Risk factors to consider

23:35    The importance of Cubiscans

26:45    What’s ahead in the world of e-commerce automation?

32:39    Before investing, consider ROI

Transcript

How Dorabot is creating more cost-effective, streamlined fulfillment for our customers banner.

Brian Weinstein: Welcome, everybody, to Sippin’ & Shippin’. I’m your host, Brian Weinstein. We’ll be kicking it here every other Friday, quenching your thirst for an insider’s take to enhance your customer experience. Grab your drink of choice. Kick back. It’s Sippin’ & Shippin’ time.

All right. Welcome, everybody, to another episode of Sippin’ & Shippin’. I am your host, Brian Weinstein. With me again this week, it’s like she cannot get away, Caitlin Postel.

Caitlin Postel: Hey, Brian. How are you?

Brian Weinstein: Good. Are you trying to get away? Are you making any effort?

Caitlin Postel: I am, actually. In lieu of the topic of conversation today, all of my responses will be automated, and I’m actually taken off for the weekend. As excited as I am for the conversation and our special guests, I’m just going to go fully automated on this one.

Brian Weinstein: Well, because you’ve got to get out of Dodge.

Caitlin Postel: That’s what it is. That’s what it is.

Brian Weinstein: Exactly. All right. We have with us today, from our very own engineering automation solutions team, Rob Schabinger and Terry Neidiffer. How are you fellas doing?

Caitlin Postel: Hi, guys.

Rob Schabinger: Hey there. Great to be a part of this.

Brian Weinstein: We don’t have a lot of engineers on the program. As a matter of fact, I think it’s pretty safe to say you two might be the first ever. No, no, no. I take that back. Andrew Bagwell was on our episode about a year or so ago.

Terry Neidiffer: Not having engineers on a podcast may be the smartest decision you’ve ever made.

Rob Schabinger: Well, I do have to say that, for a while, Terry and I were debating starting our own podcast. We were going to call it Shots With Robots.

Caitlin Postel: Yes.

Rob Schabinger: But you guys were doing such a good job that we decided to leave the heavy lifting to you guys.

Brian Weinstein: That’s great.

Caitlin Postel: That’s awesome.

Brian Weinstein: Yes.

Caitlin Postel: Shots With Robots. Bringing it back, Brian, to the beverage reference, right?

Brian Weinstein: Always, always. Yeah. The problem with having engineers on the program, Caitlin and I can’t really go toe to toe on the intelligence level. I’m not speaking for Caitlin because she’s brilliant, but I’m just saying …

Caitlin Postel: I’m with you, Brian.

Terry Neidiffer: Well, the problem having engineers is we can’t go toe to toe in actually talking with people, so it’s okay.

Brian Weinstein: Yeah. I’ve been in a couple of meetings where actually Caitlin had to take her shoes off to keep up with the math.

Caitlin Postel: That’s what it is.

Brian Weinstein: I don’t know. Rob and Terry, you guys can figure out who to go first, but why don’t we just start out with a little bit of introductions and backgrounds with the two of you?

Rob Schabinger: Sure. I’ll start us off. Again, my name’s Rob Schabinger. I’ve been with Ryder’s automation team for about two years now. Prior to that, kind of a diverse experience, both logistics, other 3PLs, manufacturing. Prior to joining with Ryder, I was doing logistics and supply chain consulting for about seven years.

Became a part of Ryder’s automation team as Ryder took the initiative to really expand and try to create more and more opportunities for automation to help our customers out. Really enjoy being a part of it and looking forward to talking to you guys.

Brian Weinstein: Terry?

Terry Neidiffer: Yeah. Thanks for having us on. Yeah. Terry Neidiffer. Been with Ryder here, this is my fourth year. I’ve been in some form of third party logistics, engineering, continuous improvement, lean solutions, et cetera, for 18 years now. Yeah.

Brian Weinstein: Great. Awesome. This is a little bit of a different episode. A lot of our focus when we’re speaking out to our audience and bringing on guests is choosing around a lot of marketing and [inaudible 00:03:45], and in some cases there’s shipping into international, like EU and UK. So this, we wanted to go …

There’s a lot of buzz around automation. We’re hearing a lot of people talk about automation. We’re a little listening to brands talk about, “Hey. We need to have automation,” but is that really true? Rob, when you’re looking at brands, a lot of people just think everybody should have automation. Is that true?

Rob Schabinger: Yeah. It’s interesting how it’s evolved. The term automation has become everyday vernacular nowadays, where we’re driving electric cars, we are using smartphones. 60 Minutes episodes about the newest and greatest automation.

Terry Neidiffer: 60 Minutes episodes that you watch on your refrigerator, right?

Rob Schabinger: Exactly. It’s interesting how it’s evolved. Automation has been a part of industry for probably a hundred years, Henry Ford and the first assembly lines and things like that. But it was really segmented specifically more to the manufacturing sector for a long period of time.

One thing I always say to people is that variation is the enemy of automation. For processes that are highly repeatable, that are being done … If you’re manufacturing a million widgets a year …

One place I worked manufactured, again, going back to Sippin’ & Shippin’, I worked at a company that manufactured wine corks. We manufactured four billion wine corks a year. It’s just something that you could never do without automation.

But within the logistics and distribution world, there has always been so much variation that it’s been hard to get automation up and going, and really make it financially viable. Within the last 10 years, the amount of strides for automation have really gone through the roof and made it much more commercially available. It’s something that has really become a new buzzword in the industry. The toughest part is finding the right fit for every customer.

Brian Weinstein: Yeah. I think there’s that ROI component of when certain automation makes sense. I think there’s … What’s the word I’m looking for? I think there’s a belief that you’re going to replace people with automation, and it’s going to protect you. The automation is really geared to help the associates perform better and more efficiently.

Terry Neidiffer: Yeah. There’s a ton of ways that we look at automation from a standpoint of actually making the job better and safer. When you think about a lot of the equipment, there’s a lot of automated processes now that ensure that your hands are kept out of the way of moving parts, or the parts of the process that could get hot or anything else that poses a danger can help automate those things. Yeah. We look at automation a lot to help reduce back strains, reduce repetitive motion injuries. That’s a huge one. We look at it a lot to make the process better so that the company itself is efficient, and moving forward, and hiring more people, and expanding and those types of things.

So yeah, definitely automation is one of those things where it doesn’t solve all your problems, but if you approach it correctly, it can definitely help you out.

Caitlin Postel: Yeah. I love to hear that. We know how important people are in our business, and keeping people safe, so that’s great to hear, of using associates and automation in tandem.

To Brian’s point before, a lot of times I find, during the sales process, startup and emerging brands, they confuse bad processes or a bad relationship with a 3PL with, “I need to replace that with automation. My next solution needs to be automated.”

Terry or Rob, whoever wants to take this one, can you tell us a little bit about … Okay, Rob, could you tell us a little bit about some entry level, and I’m doing air quotes, entry level automations, or simple investments that smaller brands can make early in the life of their brand?

Rob Schabinger: Yeah. I think that there’s always value to be found. Usually, the more what I would call simplistic or commoditized type of automation are really there to replace repetitive tasks. If you are building a bunch of shipping boxes every day, can you get some automation that would have the ability to erect the cartons automatically, instead of a person who’s spending eight hours a day taping boxes together? If you’re shrink wrapping a lot of pallets, can you utilize a machine to help make that task that you’re doing frequently during a given time period, can you use that to create time savings and efficiency gains for the operation?

There’s a lot of those kind of straightforward ones that can replace the frequent activities, and try to make that a little simpler. Those carry much lower price tags, and can usually result on a better return on investment, for some brands that are more emerging and maybe don’t have the maturity or the consistent volume levels of others.

Terry Neidiffer: Yeah. I think that’s an excellent point, Rob. I think for a lot of the smaller customers, the ones that are emerging and growing, the biggest thing about growth that I see with supply chain is the unknown.

Especially during those fledgling years, where you’re getting off the ground, or even into some of the later years, but still young in the life cycle, there’s so much change. Whether it’s that you’re deciding how you want to go into brick and mortar, whether it’s you’re deciding how you want your marketing campaigns within your e-comm websites to function, those can all have a very, very different impact on the units per order and the overall profiles that your supply chain is trying to fulfill.

Point being there, to Rob’s point exactly, you want to keep a lot of that entry level automation very compartmentalized, very flexible, very fluid, where you can pick it up and move it, whether it be to a larger facility as you grow, whether it be because now you’re shipping a whole lot more poly bags than boxes, or whether you’re going the other way. All those types of things are going to change over the course of your special … especially the starting years. So keep it small.

Brian Weinstein: Yeah. It’s interesting too because we have people that come in with preconceived notions that automation is the way to go. We’ve even recently spoken with companies where there’s just no ROI. What’s the point of using AMR or Goods-to-Person for an account when you’re really not going to get any real ROI on the automation itself?

If you keep it simple, to your point, those lower level activities that are meaningful, if you can make more boxes an hour, or if you can auto bag and auto tape, there, you can get value without breaking the bank.

Rob Schabinger: I think another major takeaway, especially as companies are going through that maturity cycle, is you always want to develop good processes. Terry mentioned lean. A lot of continuous improvement, a lot of industrial engineering concepts are really process driven. You want to develop good solid processes and look for ways to automate those good processes.

A lot of companies will come to us and say, “Well, please, we just need to put in a bunch of conveyor to move stuff around.” But what you want to do is you want to make sure you’re not just building infrastructure around bad processes. You want to make sure you’ve gone through and done good evaluation, and try to optimize your processes, and then look for automation that can be a good augmentation on top of that.

Brian Weinstein: When you start to get into this … Rob, when you get to maybe a phase two level of automation, where you are talking about AMR or Goods-to-Person, what are some of the metrics that you’re looking for that you say, “Okay. This is the right solution or direction to go”?

Rob Schabinger: There’s a lot of different sub-segments of the supply chain automation world. Looking at it from the inbound and outbound side, how do you get product out of containers you’re getting from vendors, and how do you get them loaded into containers that are going out to your end customer? There’s options to look at there.

If you look at a general distribution facility, picking and the consolidation of orders, getting the right product together to go to the right end customer, is usually the highest percentage of effort and labor associated with that process. So that’s usually where a lot of the automation focus starts.

Brian, you mentioned AMRs, automated mobile robots. What those have come and are now available to help in a lot of e-commerce type facilities .. We’re still utilizing people and their ability and their knowledge base to execute the picking part of the process. But what we wanted to automate were some of the non-value added steps in the process, the travel time, the walking, things like that that are not adding value or not helping you get product out the door. That’s the type of stuff that AMRs are able to help.

There’s a lot of technologies now where robots are there to hold and travel and transport product. It helps you get more throughput out with the same number of people, which is really the goal as you start growing and scaling up your business.

Brian Weinstein: And minimizing fatigue, right?

Rob Schabinger: Exactly.

Brian Weinstein: The fatigue factor. Right, exactly. No. That’s a great point.

Terry Neidiffer: Yeah. Remember that, historically, automation … It’s evolved heavily, especially the last 10 years. But historically, automation has meant bolting a bunch of conveyors, and going vertical with pick modules, and different things like that that really, really, really restrict your ability to flex in the future.

If you have to get a larger facility … Let’s say you’re in 50,000 square feet, and you decide to put in some type of bolted mezzanine on that’s going to get you some square footage going vertical. At some point, if you keep growing, you got to get out of that facility. Now, that thing is effectively a boat anchor. It’s just steel that has no value really to the next person. Whereas AMRs, now you can pick those up and move with you.

A lot of the newer technology is a lot more flexible and a lot more growth capability. Another example there is, traditionally, with those conveyor systems, I have an entire system that is all networked together. When I need to grow, I hit a point that’s stairstep, where I have to replace motors, replace sorters, replace massive pieces of whatever the bottleneck of that system is. Whereas with AMRs, I can just add more AMRs and spread the space. So it’s a much more flexible solution for the customers who do have unknowns in their supply chain, or they know they’re going to be changing drastically over the next five years.

Caitlin Postel: Sure.

Rob Schabinger: Another … Sorry about that, Caitlin. Another point on top of that is not just as you grow, but even as your business flexes throughout the year. A lot of e-commerce companies are heavy leading up to the Christmas time. Others might be seasonal in other seasons. The term build the church for Easter Sunday. If you’re going with a heavy infrastructure, heavy steel based automation strategy, you’re going to have to build something that will handle capacities that you might not be facing on a day-to-day basis. So the more flexible you can see can really also add a lot of value.

Caitlin Postel: Makes sense. So we have level one, which is low entry, low cost. It’s for repetitive tasks, very little variance. We’re doing auto tapers, box erectors. Level two, now, you’re incorporating some lean concepts, you have some AMRs, maybe some robotics. Now, you have good processes in place. Now, Terry, kick us into gear level three. What does that look like?

Terry Neidiffer: Yeah. Rob’s really the expert on level three. That’s getting really gnarly. That’s getting into some really fun stuff.

Rob Schabinger: Terry doesn’t have that level of clearance to talk about level … phase three.

Caitlin Postel: Level three unlocked. Call in Rob.

Rob Schabinger: Yeah, we call it DEFCON three here. DEFCON three.

Terry Neidiffer: No. … Sorry, Rob. I was going to say, before level three, one thing I would mention is, for a lot of customers, I think there is a point between, call it in phase two, where before you ever get into a phase three automation discussion, you really want to squeeze as much as you can out of your WMS capabilities around clustering and batching.

Clustering, for anybody listening who doesn’t know, that’s where you’re grouping multiple orders together and treating it as one order. So you’re picking all of SKU A, and you’re putting one of them into box A, one of them into box C, one of them into box G. You may have 10 boxes on that overall cart or vessel that you’re using. Batch picking is where I’m taking all the orders that are a single unit. Everybody’s ordering, let’s say, the newest iPhone 15, so they go out and buy that iPhone 15. I’m going to take all 20 of these orders, I’m going to go out and pick 20 iPhones, but they’re all going into 20 different boxes. That’s batch picking.

Point being, those technologies and how it effectively groups and does it logically, that’s a huge step that, if you really get that running correctly, that can actually give you more ROI while you’re in that phase two world, before you ever start jumping now into the deep end that Rob will tell you more about.

Rob Schabinger: Yeah. I don’t want to put on my nerd hat too much, but a lot of this stuff-

Terry Neidiffer: It’s already on, man.

Caitlin Postel: Put it on. Put it on.

Rob Schabinger: It might be too late. But a lot of this really is dependent on our data capabilities. I think companies know that their data capabilities grow as they grow. As you transition to the much more sophisticated automation opportunities that are out there, a lot of that is based off of data that is collected throughout the history of your organization, and really getting an understanding of what has happened in the past, and start projecting what do we anticipate will happen in the future, because that’ll drive you towards the right direction. But-

Brian Weinstein: Yeah. I’m sorry. Go ahead, Rob.

Rob Schabinger: No. I was just going to say that the next step is where a lot of things have evolved in the last five or 10 years. Steps one and two are relatively low capital expenditure expectations. As you transition to a more mature operation, and start to see that your throughput would warrant additional capital expenditures, that’s when you can really start to find optimization and efficiency gains by doing it.

The number one area that has evolved in the recent past has been the concept of Goods-to-Person. In a traditional distribution environment, you have the goods stored in shelves or racks or wherever you have stuff. You have stuff stored, and people go to the product to pick it and get it to the end customer. The evolution has been creating automated infrastructure and automated systems that will store the product and then bring the product to the person.

We have automation types where we’re able to store tens of thousands of SKUs, hundreds of thousands of items in a given area. The people that are responsible for doing the picking never leave their workstation, because the product is brought to them through an automated process.

SKUs explained: SKU meaning and how to manage them banner.

Again, like I was talking before, the goal of this is to remove non-value added activities out of the processes. Walking and travel and transportation is one of the major culprits for that. These automation options are really doing a great job of bringing the goods to the person and avoiding the person having to get to the goods.

Brian Weinstein: I guess, Rob, with each one of those steps, you could be coupling different automation components together. It could be a Goods-to-person to a put wall or some sort of sortation system after that.

But doesn’t that … With these brands, you really need to be good and sure of the direction of your company moving forward before you start making investments. Doesn’t it get more complicated if your business evolves? Let’s say you’re 100% direct to consumer, and three years from now, you find yourself at it’s 30% wholesale or brick and mortar. Isn’t there a risk of going too early into those types of automation?

Rob Schabinger: Yeah. There definitely is. That’s why you want to make sure that any decisions you’re making are based off data driven factors, understanding the direction, strategic. A lot of times we’ll spend time with customers and understand their strategic objectives, not just the numbers and the spreadsheet moving forward, but what is your strategic objective? What do you expect to be doing the next five years?

Because by the time we’re talking about this level of automation, we’re talking about things that have return on investments in three to five year range, and are really wanting to guide you to the next level and into the future for what you’re looking to accomplish.

Terry Neidiffer: Yeah. Keep in mind that transportation is going to be two to three X the spend within the four walls of the warehouse, as a general rule of thumb. When we’re talking about the future, especially for some of the smaller organizations out there, it’s one thing to say, “Hey. I think I’m going to be here, and this profile’s going to be there in three years or in five years,” and where that’s going to move. It’s another thing to say, “Yeah, but what if I now want to split my network so that I have a facility that’s in the Midwest, and I have a facility that’s in the Southwest”. Now all of a sudden, I have half the space in that facility that I need, and now my automation looks quite a bit different because I’m fulfilling half the volume.

So a lot of times, the more I think important question that Rob is alluding to there is not just in the data, but also what if. What if I, all of a sudden, do want to have a second facility? What if I want to ship into Canada tomorrow? What if tomorrow the carrier networks charge me twice as much, which you have a tendency of seeing, with fuel costs as volatile as they are over the last several years?

All those different things are going to change, so I think the more you can say what if, what if, what if, and really vet those worst case scenarios, you can really get an idea of what’s going to happen to your automation, because I guarantee a one of those what ifs is going to happen.

Brian Weinstein: Yeah. There’s nothing that engineers like more than other than unplanned variables.

Terry Neidiffer: That’s what makes it fun, right?

Brian Weinstein: Exactly. One of the things that we talk about all the time, and I know we brought this up in our pre-call a little bit, was talking about, for e-commerce brands specifically, the importance around Cubiscans. Talk about that. Because there are definitely some benefits there. That’s probably one of your phase ones, but it’s probably a good one to highlight.

Terry Neidiffer: Cubiscan is important, not to have a Cubiscan, it’s important to have solid, solid data on your dimensions and weights. A Cubiscan is a tool to do that very effectively, very efficiently and very accurately.

If I’m very accurate with a tape measure and a small scale, I can do the exact same thing that a Cubiscan can do. Now, I do not want to do that several hundred times a day. That’s where Cubiscan comes in. I don’t even want to do it a hundred times a day. That’s where Cubiscan comes in.

But point being, the importance of a Cubiscan is really right-sizing all that information for a lot of the downstream processes of the supply chain. Everything from how your storage structures are set up, and making sure that they’re storing efficiently. If I can store twice as much product in the same sets of rack because I have my dimensions properly set up and my triggers properly moving, that’s a lot of ROI back to your system without ever talking about automation.

You get that set up. Your replenishment triggers, having those optimized. Now you’re talking about much more optimized labor and service, because you got the product on the floor at the right time ready for picking, before orders ever come down to it.

Slotting, cubic velocity. I can’t do cubic velocity slotting, which is really the better form of slotting as opposed to pure unit velocity … I can’t do cubic velocity slotting without having accurate dimensions.

Finally, all the ergonomics that go along with it. From a slotting perspective, I would like to zone it such that the heavier items are in the middle, so I’m not bending or reaching for them. They’re at waist level.

All those types of things are dependent on having good weights and dims. The Cubiscan is a method of achieving that. So yeah, the data itself’s super important.

Caitlin Postel: Yeah. Sounds like a common theme here is just really letting the data drive. Brian, you said the Cubiscan is a phase one. That Cubiscan, I think, has a pretty serious price tag for maybe some of the JV folks in there. Terry, what is it? I think you said 25,000, something like that.

Terry Neidiffer: Yeah. It depends on all the bells and whistles you get with it. You can get the Cadillac model, and it’s probably more. But what I would recommend to anybody starting off is you definitely want to have your weights and dims correct. If the way that you need to go about that to start is a tape measure, then use a tape measure. As you start to get more and more measurements, more and more SKUs, and more and more times that you need to take those measurements, then that’ll tell you when it’s smart to go ahead and start looking at a Cubiscan.

Brian Weinstein: Right. That goes back to what Rob said, the repetitive tasks. Where can you replace … Just in the beginning, how do you replace those repetitive tasks by and leveraging automation.

Terry Neidiffer: [inaudible 00:26:45]

Caitlin Postel: So forward thinking, I know we discussed a few different types of automations, what’s ahead? What do we see coming down the pike in the future, as far as automations within this distribution and fulfillment space, guys?

Rob Schabinger: Yeah. I think that’s really what’s exciting. I guess if you’re a 40-year-old engineer, that’s what’s exciting. That’s really what’s exciting about where the horizon is on this is.

As technology has gotten significantly better, the commoditization of the technology has made it more viable, from a financial return on investment perspective, for more and more people. So it’s becoming … It’s not just Amazon doing it. A lot of companies can now cost justify putting it into place.

As technology, things like AI, have changed drastically the ability to process … Again, I talk about variability. The ability to process a lot of different variable type of things, through the use of AI and technology and algorithms like that, that’s bringing things like robotic arms to do repetitive tasks. It’s bringing optimization on how to store and how to process different orders, to reduce the overall time for a product to reach a customer. Things like that.

Connecting the dots between AI and 3PL in e-commerce banner.

I would say that the idea of robotic arms, the idea of vision picking systems, that’s really going to be the wave of the future as technologies continue to advance.

Terry Neidiffer: Rob, it seems like, at least from my vantage point, the big technology move over the last call it five to 10 years has all been software driven. I think that’s going to continue going forward. There’s some mechanical stuff, like you were saying, with robotic arms, but when you go back to the ’70s, ’80s, and ’90s, most of that automation, growth and innovation, in my view, was more mechanical related. As advanced as you might get, you started to get into PLCs and some different things that started controlling, but a lot of it was all mechanically driven innovations.

It seems like, while there’s some mechanical stuff with the AMRs and with the robotic arms, the software is just moving faster than a lot of people can keep up with. Would you agree with that?

Rob Schabinger: Yeah. We’ve found that software is really the major differentiator with providers. The mechanical, the robots themselves, the bots that roll around on the ground, they’re becoming commoditized. They’re just the mechanical execution of what the software is describing. So that’s a great point.

As the software gets better, the learnings behind it … There’s a lot of vision systems that, as they pick a box, they’ve now learned that box, and they will pick it better the next time. All of that aggregate learning is really where the leaps and bounds are occurring.

Terry Neidiffer: Caitlin’s real question is, when does this thing go live, and destroy the human race and kill us all?

Rob Schabinger: Yeah, no. It’s funny. I think a good way to summarize it, a lot of people ask us about lights out warehouses. That’s the concept that you should be able to do an entire warehouse process lights out, no people and all that. While there are segments of the process that can be done and automated completely, I’m still a believer that the best use of people is the use of their brains. We cannot recreate the thought and knowledge and decision making that people are making.

So while there are processes that can be improved through automation, we’re always going to need people to make good judgements, handle exceptions and things like that throughout the entire process found within a warehouse. It’s all about augmenting and putting people in a position to be successful, and really utilizing what makes humans unique in that we can process that type of information. So it’s always going to be a collaboration effort. It’s just understanding how can we collaborate the best.

Brian Weinstein: Yeah. I’ve-

Caitlin Postel: Go ahead, Brian.

Brian Weinstein: No. I’ve been saying for a while, decades ago, people would always look to the warehouses and say, “It’s an unskilled labor.” Honestly, in today’s world …

Speaker X: Not any more.

Brian Weinstein: … everyone on that floor is skilled. They have to work with some sort of technology, and in a lot of cases, to your point, use good judgment, Rob, and be able to handle all these different levels of automation, tech, WMSs. There’s a lot more sophistication out there today.

Rob Schabinger: I agree completely.

Caitlin Postel: I just got a little nervous. I thought Rob was going in a different direction there. When he said lights out, I thought he was going phase three on all of us. We were about to … It was over. It was a wrap.

Rob Schabinger: Yeah, no. I don’t think we have to worry about Terminator 2 level of [inaudible 00:31:55]

Terry Neidiffer: Yeah. To Rob’s point, you do hear some things about different facilities. I don’t see that happening with anything, other than a few really niche markets that have to do with really dangerous processes. When you think about certain processes where they’re dealing with either very, very caustic or explosive materials or things along those lines, where you don’t want people around them who are heavily exposed to the fumes, or anything else like that, that’s where I think you’ll see some of those take a little bit more ground. You’re not going to see that, in my opinion, with successful e-commerce distribution fulfillment. That is not on the horizon right now.

Brian Weinstein: Just to put a bow on all this. Look. You want to avoid over-engineering. You want to avoid really putting in more automation than is required. There has to be an ROI. You want to make sure that you’re not putting in anything, in terms of the automation process, that is not going to suit your business for the foreseeable few years, at least until you get your ROI back and out on that initial investment.

Terry Neidiffer: Yeah. We haven’t really talked about investment. It’s really hard to get an ROI in less than a year. So when you’re thinking about what you need to support from your business perspective, by default, that’s telling you that your automation needs to support what you’re going to be doing beyond 12 months.

That’s hard for all of us to crystal ball, everything from volatile economies, to how people are going to purchase things, to your own competitors, all those types of things. If you’re not getting ROI within a year, again, all of your planning needs to ensure that it’s including that 12 to 24 or even 36 month mark.

Brian Weinstein: Well, guys, this has been fantastic. Really appreciate it. As I mentioned when we first started this episode, this was a different direction. This is different for our audience. I hope this really resonates. There’s a lot of decision making, and people keep going around this buzzword automation, but clearly, there’s a time and a place for it, where it can help your business, but you don’t want to get too far out over your skis on it as well.

Rob Schabinger: Yeah. You always want to use it as a tool, not as a cure all.

Terry Neidiffer: Yeah. Augment. Augment. Don’t replace.

Rob Schabinger: There you go.

Brian Weinstein: All right. Appreciate it guys. Terry, Rob, thank you very much. Caitlin, you want to walk us out?

Caitlin Postel: Sure. Thank you, everyone, for tuning in. Thank you, Rob. Thank you, Terry. Make sure you check us out every other Friday at sippinandshippin.com or on your favorite podcast platform. Thanks, everybody.

Brian Weinstein: Thank you.

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