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The Logistics Matters podcast: Thomas Evans of Honeywell on automation for small businesses | Season 2 Episode 27

How automation can help small to medium-sized distributors compete with the big guys; 5G will influence IoT adoption; consumer pandemic shopping habits will continue.


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About this week's guest
Thomas Evans

Dr. Thomas H. Evans serves as the robotics chief technology officer for Honeywell. In this role, he is responsible for providing the technical vision and development for robotics and AS/RS shuttle solutions. He works closely with the Honeywell Offering Management teams to target and develop robotic solutions to customer needs.  

Evans has 20 years of combined experience in robotics and engineering research and development.  In previous roles, he served as the chief technology officer for Orbital Engineering Inc. in Pittsburgh.  Prior to that, he worked as a research associate professor at West Virginia University and did consulting research for various robotics projects for the NASA Goddard Space Flight Center. Evans has received many notable awards and authored numerous publications throughout his career.  

He obtained a Ph.D. and Master of Science in Mechanical Engineering from West Virginia University.  Evans also holds a Bachelor of Science in Mechanical Engineering from Wichita State University.  

David Maloney, Editorial Director, DC Velocity  00:01

How can small businesses survive tough competition? Will the 5G rollout accelerate IoT adoption? And pandemic shopping habits are here to stay.

Pull up a chair and join us as the editors of DC Velocity discuss these stories, as well as news and supply chain trends, on this week's Logistics Matters podcast. Hi, I'm Dave Maloney. I'm the group editorial director at DC Velocity. Welcome.

Logistics Matters is sponsored by Aptean. Aptean is a global provider of mission-critical, industry-specific logistics and transportation management solutions. Aptean routing and scheduling delivers the most advanced transportation management systems to world-leading brands, helping to maximize operational fleet effiencies, improve driver retention, optimize resources, and turn private fleets into profit engines. If you're ready to make savings of up to 30% and see ROI within 12 months, Aptean can help. For more information, visit Aptean.com and discover what's next now.

As usual, our DC Velocity senior editors Ben Ames and Victoria Kickham will be along to provide their insight into the top stories of this week. But to begin today: it's been a challenging year and a half for most businesses, especially smaller companies without the capital survive the tough times. Yet other larger distributors had the ability to quickly adapt and have actually thrived during the Covid-19 pandemic, and even continue to grow bigger during that time. So, how can small and medium-sized businesses compete with the big guys on the block? To answer that question, here's Victoria with today's guest.

Victoria.

Victoria Kickham, Senior Editor, DC Velocity  01:49

Thank you, Dave. Our guest today is Thomas Evans, chief robotics technology officer at Honeywell. Thomas is here to talk about how small and midsize distribution centers can compete in a world of corporate supply chains. Welcome, Thomas.

Thomas Evans, Chief Robotics Technology Officer, Honeywell  02:02

Thank you, Victoria. 

Victoria Kickham, Senior Editor, DC Velocity  02:04

First, let's start by talking about how you define a small to midsized DC. What are the key characteristics we're talking about?

Thomas Evans, Chief Robotics Technology Officer, Honeywell  02:13

Yeah, that's a good question, and I think that is a moving target. As we look at the demand and the acceleration that DC warehouse[s] face. From my perspective, you can gauge that on operational square footage, how much throughput your facility moves per day, per seasonal requirement and demand. But if you look at the square footage, you're seeing smaller DCs in the ranges of 50,000 square feet, and on the larger end, you're seeing some that are up to a million square footage, all trying to take advantage of not just the floor plan, but the vertical space. And a lot of technology comes into that as how these small to midsize facilities optimize that as much as the larger one. So, I think that's a moving question, so to speak, with the demand that you're seeing. But those are some of the operational parameters that we would throw out there as far as when sizing with those categories are.

Victoria Kickham, Senior Editor, DC Velocity  03:07

So, we see that sort of hyper fast pace of logistics today and the pressure that's putting on DC operations. Can you talk about some of the greatest challenges that are facing these types of facilities you just sort of defined here, and and talk about how they can compete with their larger competitors?

Thomas Evans, Chief Robotics Technology Officer, Honeywell  03:25

Yeah, I've had the opportunity to visit a lot of customers recently, particularly in the last year, when this demand has just gone through the roof, and you know, seeing the smaller operations working—and there are some limitations there. Maybe they weren't actually in the position to have full automation. Maybe they were still in the paper-prone processes in managing inventory, and not investing in the larger WMS/WES systems that can help guide their workflows and guide their productivity. But also on the other end, I think that there was an advantage to those larger players that have the larger workforce, or already have in place the automation and the robotics and technology to adapt and take advantage of the pandemic growth and the increase in e-comm and retail. But some of the things that we were seeing, and I think that talking to the customers, even across the board, whether it's a large player or a small player, the voice of the customer is "We still want, or [?] of the DC the operation space being the customer for us." It's "We still want to take on large pieces of automation, regardless of the demand right now." And that's something we're trying to piece out when we'd solution and talk to customers is how do we start them from various stages in their automation path and make sure that they can meet demand and be more resilient with the changes in demand over the course of years, particularly ones that are unexpected, like we saw with the pandemic.

Victoria Kickham, Senior Editor, DC Velocity  04:45

So, you know, how do you approach this? So, we're talking about robotics and automation, you know, you're dealing with a small or midsize distributor. How—where do you start. And I know probably depends on the particular customer, of course, but where do you generally start and how do you help them along the way, what are some sort of best practices?

Thomas Evans, Chief Robotics Technology Officer, Honeywell  05:04

Get out and see the facility and talk to the customer firsthand. Understand what their issues are that they're facing, the problems, what particular solution paths you can take. Some of the factors are, is this a brownfield site? Are you going to have to be retrofitting? What is their current capital investment capability? And some of the things that we would offer in response to that are how we built with Honeywell Intelligrated, the footprint, the adaptation with their material handling equipment, and being an overall solution provider. But ultimately, from ourselves and often the management side, how can we provide a CapEx option, but also provide robots-as-a-service option, which maybe they don't have to make that upfront capital expense? So, those are all things that I would want to talk and my team would want to talk with DC operators about is, what's the best path to get there? And time is of essence, in that case. How do we do that quickly? How do we do it effectively, and make sure they can take in these automation increases, and go live with that quickly?

Victoria Kickham, Senior Editor, DC Velocity  06:03

So, a lot of that is determining the right level, I would think, of technology and automation, and, you know, how are you advising smaller companies when it comes to that issue? You know, sometimes they may have these ideas of what they need and maybe it's not exactly what they need, you understand what I'm saying. How do you sort of counsel smaller companies along those lines?

Thomas Evans, Chief Robotics Technology Officer, Honeywell  06:27

By looking at their process, and for instance, I'll give some examples. I mean, just this week, being at some facilities, I mean, always starting, let's say, at the end of line: Labor shortages in the DC space, the environment is tough. I mean, picking up packages and placing them onto an induction is something that has high turnover. And you can see, I've visited through some pilots that were dealing with some technology, particularly around mixed-duty palletization, that led to our smart, flexible de-pall[etizing] solution, which we're offering now, you can watch the shift, basically changing their productivity over the course of the six to eight hours, and seeing those levels of productivity and telling our providers, Hey, if you put, at your end of line, where you may have some real estate to put in a robotic cell, which will help and aid your workforce to induct packages into bulk flow, into your system, and convey it, those are areas where we could start. I mean, that would be one option that we would evaluate a facility with and look at the product that we're currently offering this year to help DCs and warehouse[s] increase their throughput and address some labor shortages.

Victoria Kickham, Senior Editor, DC Velocity  07:33

You anticipated my next question. I was gonna ask you about labor challenges, how they remain a really, really key issue for warehouses and DCs. Can you talk a little bit more about how this is affecting smaller operations—more of in a general sense, and sort of how you help companies, smaller companies, sort of train and bring them along?

Thomas Evans, Chief Robotics Technology Officer, Honeywell  07:53

Yeah, I think that maybe when you're talking about the small to midsize DC, a labor impact of one or two FTE [full-time equivalent positions] change can be a lot more detrimental when comparing it to a larger DC warehouse operation where you can backfill, or you have readily available workforce to come in—or a quicker process to train new employees. That might not be the luxury that the smaller sizes have, and if you'd lose one forklift driver for the day, do you have that qualified replacement to keep the same throughput? Those are questions that a lot of operators probably have. One of the things that I think is beneficial—and you can talk about the other side of the house—is some of the labor-force management software that we have at Honeywell, understanding the productivity in different areas of the warehouse [that] your workforce is putting out. But then again, I think the resiliency comes around having smaller workforces that are trained in various departments, that can can be adapted to new phases, or seasonal changes where the productivity is high, or new waves of product come in, where they're trained on technology. And some of the things that we do to implement technology with that workforce is train them as we're commissioning it. We want to make sure our product can be almost error-proof, wher eanyone can pick it up, get it operational, identify faults in a robotic system, and get it back on line if it's happening. But make sure they understand how the technology works. That gives them, overall, more understanding of how to operate it and how to therefore be more beneficial from it.

Victoria Kickham, Senior Editor, DC Velocity  09:24

So, we've seen so much growth in interest in technology solutions, robotics, automation, all of that, especially in this last year and a half. I'll ask you a crystal-ball type question: Where do you see this all going, sort of, I guess, in the rest of 2021. and looking out a little further? You know, how do you expect this to shape up in terms of demand, and what kinds of things people are putting into use, in all kinds of facilities?

Thomas Evans, Chief Robotics Technology Officer, Honeywell  09:51

Good question. I answer that in a couple ways. When I started at Honeywell, [I} did an assessment of our technology, our robotics offerings, and also did an assessment of the industry, and some of the things that have changed in our R&D development engineering roadmap was focusing on some narrowing technologies, technologies that I see are going to be foundational to any direction that automation goes in the next three to five, 10 years. Of course, everyone across this industry has talked about lights-out, dark-warehouse, full-facility automation. I know that is a very aggressive statement to make because of the complexities we see warehouse operations, but on the same side, when I refocused where we're going, those foundational technologies are going to drive us there to do bigger footprints of automation in the future. When I say foundational technologies, I say the automation of robotics, pick-and-place activities, autonomous mobile robotics, interfacing those into integrated systems, and then the piece parts of machine vision, AI [artificial intelligence], ML [machine learning]. Everything is going to facilitate that for us on our roadmap of where we're going with automation at Honeywell Robotics. Do I see the demand increasing? Of course, I don't think it's going to go down. I think e-commerce and a lot of the customers, the end customers, have gotten used to online ordering. We were forced into that domain when Covid hit, and now our lot are very comfortable with online grocery orders, or e-commerce and 24- or 48-hour delivery. I think it's only going to increase the requirements of what providers are going to have to meet when it goes from 24- to 48-hour delivery down to 12 to 24, and then that same day. I mean, those are all things where I think the industry is going to go, and those that have the biggest investment and familiarity to operate automation and technology and robotics are going to reap the benefits of that demand.

Victoria Kickham, Senior Editor, DC Velocity  11:44

And I think you're right that the pace of growth is just going to continue, and the demand, for sure. Thomas, thank you so much for being with us today and for these insights. We appreciate you being here.

Thomas Evans, Chief Robotics Technology Officer, Honeywell  11:57

Thank you, Victoria. 

Victoria Kickham, Senior Editor, DC Velocity  11:59

We've been talking with Thomas Evans, chief robotics technology officer for Honeywell. Back to you, Dave.

David Maloney, Editorial Director, DC Velocity  12:06

Thank you, Victoria, and Thomas. Now let's take a look at some of the other supply chain news from the week. And Ben, you wrote this week about the ongoing rollout of 5G wireless networks, and how it's opening new doors for internet of things, or IoT applications. What more can you tell us?

Ben Ames, Senior News Editor, DC Velocity  12:25

That's right, Dave, and a lot of this follows on the theme that Thomas was talking about, about spiraling demand for technology tools in logistics. In this case, a lot of people talk about 5G cell networks as a really important next big thing, because that fifth-generation technology will allow much more, and much faster, data sharing than your current cell phone. It'll also open the door to a new age of internet of things applications in supply chain, as well as many other sectors, because that expanded capacity will support many more wireless sensors, and also let the batteries last longer. So, in logistics applications, that kind of technology will let companies do things like remote monitoring of conveyors and forklifts; inventory tracking; predictive maintenance; employee performance measures. But starting up a nationwide 5G network is not as easy as just flipping a switch. You need new antennas, new chips in phones and sensors—a whole new generation of technology. And this week, we learned about another hurdle: That's the electronic frequency bands that enable that high performance. It's measured in gigahertz, which is beyond my paygrade and education, but they don't carry as far as 3G and 4G wireless signals do. So, network providers are going to have to install a lot more base stations than 3G and 4G networks have needed to support the new data flow. And that's according to a study by a[n] analyst firm in the UK called IDTechEx.

David Maloney, Editorial Director, DC Velocity  14:02

Ben, did they say how big of a challenge that's going to be?

Ben Ames, Senior News Editor, DC Velocity  14:04

Yes, the IDTechEx report has a forecast that 45 million 5G small cells will need to be installed by 2031 to support this vision—so, that's over the next decade, 45 million new cells. Together, they'll form what the firm called "ultra dense networks" of a large number of small cells, just distributed over a very wide area. So, compared to what they call today's "macro cells," the new generation would include smaller ones, which include names like femtocells, picocells, and microcells. All that depends on the output power of each type. And users can expect to find this host of cellular antennas at what the firm called "semi indoor" spots, like sports stadiums and train stations, markets, outdoor malls, as well as fully outdoor locations like lamp posts and billboards, and also public areas—you know, airports, universities, factories, hotels, offices, and, of course, warehouses, according to the firm.

David Maloney, Editorial Director, DC Velocity  15:10

Yeah. Well it will certainly be interesting to see how quickly this all develops and we can take advantage of some of those faster capabilities of 5G. Thanks, Ben. 

Ben Ames, Senior News Editor, DC Velocity  15:20

Glad to do it. 

David Maloney, Editorial Director, DC Velocity  15:21

And Victoria, you reported that many of the online shopping habits that consumers adopted during the pandemic are here to stay. Can you explain more?

Victoria Kickham, Senior Editor, DC Velocity  15:30

Absolutely, yes, and we'll continue the theme here, just talking about increased speed of delivery and all of that. This week a study, or—we reported on a study by fulfillment services company Ware2Go, which is a UPS company, and it found that many of the online shopping habits we consumers developed during the pandemic are here to stay, as you mentioned, Dave. We've been hearing a lot about that anecdotally, but this study polled a thousand consumers about the issue earlier this spring as pandemic restrictions were easing and brick-and-mortar stores were relaxing their in-person shopping limitations. They found that people aren't necessarily rushing back to stores. About 80% of consumers said they had increased their online shopping during the pandemic, and about 90% said they plan to do as much or more of that shopping online, now, even with restrictions easing and in-person activities resuming nationwide. Another interesting statistic was that almost a third of those polled said they have an urge to spend now that the Covid-19 restrictions are easing.

David Maloney, Editorial Director, DC Velocity  16:37

So what does that mean for retailers and the supply chain in general?

Victoria Kickham, Senior Editor, DC Velocity  16:41

Yeah, well, the short answer is continued demand for logistics services, particularly fast and free shipping. A third of the respondents said the pandemic raised their expectations for timely shipping, as I think we can probably all attest, and 40% said it increased their expectations for free shipping. On top of that, 80% said they are more likely to make a purchase online if the brand offer offers free shipping, and 75% said they are more likely to purchase if the brand offers shipping in two days or less. Nearly 80%, so they are more likely to purchase from a brand again if the shipping was fast, and almost 70% said they are more likely to click on an ad that offers fast free shipping. So, there seems to be a clear link between shipping speed and brand loyalty, according to the survey authors, and another interesting find, at least to me, was that sustainability is also important when it comes to consumers and their e-commerce dollars. This is something we've talked quite a bit about on the podcast as well, sort of the growing importance of sustainability efforts across the supply chain. And I can give you just a few statistics from the report about this: 88% of respondents listed sustainability as an important consideration for purchasing decisions, and 66% said it has become important since the pandemic. More than half said they are willing to pay extra for sustainable shipping, and 66% said they are more likely to purchase from a brand with carbon-neutral shipping, if the product and shipping costs they're looking at are the same. Last thing is that other, is that consumers want retailers to use eco-friendly shipping protocols. They're looking for them to carry more green brands. And they're also very interested in in brands that promote conversations about sustainability on social media. So, just some interesting trends going on in the world of consumer e-commerce purchasing.

David Maloney, Editorial Director, DC Velocity  18:39

Yeah, it really is, and I'm happy to see that sustainability aspect to online shopping as well. Hopefully it sticks. 

Victoria Kickham, Senior Editor, DC Velocity  18:45

Yeah.

David Maloney, Editorial Director, DC Velocity  18:46

Thanks, Victoria.

Victoria Kickham, Senior Editor, DC Velocity  18:48

You're welcome. 

David Maloney, Editorial Director, DC Velocity  18:49

We encourage listeners to go to DCVelocity.com for more on these and other supply chain stories. And check out the podcast Notes section for some direct links on the topics that we discussed today. Thanks, Ben and Victoria, for sharing highlights from the news this week. 

Ben Ames, Senior News Editor, DC Velocity  19:04

Thanks. It was fun.

Victoria Kickham, Senior Editor, DC Velocity  19:06

My pleasure.

David Maloney, Editorial Director, DC Velocity  19:08

And again, our thanks to Dr. Thomas Evans of Honeywell for being our guest today. We encourage your comments on this topic our other stories. You can email us at podcast@dcvelocity.com.

We also encourage you to subscribe to Logistics Matters at your favorite podcast platform. New episodes of Logistics Matters are uploaded each Friday.

And a reminder: Logistics Matters is sponsored by Aptean. Forged from decades of industry experience, Aptean routing and scheduling supports logistics and delivery fulfillment operations with the tools needed to optimize resources, automate route planning, and drive savings of up to 30%. Your fleet operation holds the key to enhance profit. Aptean routing and scheduling can help you find it. Visit Aptean.com and discover how now.

We'll be back again next week with another edition of Logistics Matters when we will discuss the impacts that President Biden's recent executive orders will have on ocean, rail, and other freight markets, so be sure to join us. Until then, please stay safe and have a great week.

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