In our continuing series of discussions with top supply-chain company executives, Stan Normand offers advice for starting an automation project and discusses the impacts that AI and machine learning will have on future robotic systems.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
Stanislas Normand is managing director of Exotec North America, where he works to drive the adoption of the company’s warehouse robotics solutions in the North American market. During his time at Exotec, Normand has held multiple positions and played a key role in the company’s rapid international expansion. He holds a master's degree in economics and finance from École Polytechnique in France.
Q: Stan, how would you describe the current state of the material handling automation market?
A: Customer demand for everything from faster year-round shipping to consistent order accuracy is expected to continue to grow despite the long and ever-changing list of challenges warehouses are facing now and in the future.
We’re seeing that the main challenges confronting brands right now are labor shortages, pressure for cost reductions, and uncertainty:
Labor shortages: Despite supply chain challenges easing up, the availability of labor is still a huge issue.
Cost reduction: In this uncertain environment, customers are increasingly looking to reduce costs to shore up against macroeconomic fluctuations.
Uncertainty:Customers increasingly are looking for flexibility because they want to be reactive to changes in their business and external factors.
Supply chain disruptions and labor shortages aren’t going away anytime soon. Since companies can’t control these mounting challenges, it’s important to focus on the control you do have, and that’s finding a solution to combat them. Warehouse robotic solutions lead the fulfillment industry in delivering the optimal mix of performance and flexibility to ensure customer order expectations are met and exceeded.
Q: What are your hopes for Exotec in the North American market now that you have been appointed managing director?
A: With the increase in demand for warehouse automation, my team and I are focused on growing our NA presence and delivering solutions that create warehouses where people work smarter, not harder, through robotics.
In March 2023, we reached a milestone of 5,000 robots built in record time—just three months after hitting the 4,000-robots milestone. This achievement is representative of Exotec's rapidly growing manufacturing capabilities and the growing demand for Exotec’s products. We have already made significant strides in making warehouse jobs less physically demanding. Exotec robots have saved warehouse workers from having to walk more than 16 million miles.
In December 2022, we officially opened Exotec’s North American headquarters in Atlanta, which supports and facilitates our growing business in North America, which is expected to represent as much as 40% of Exotec’s global business by 2025. We’re focused on growing our company in the region, which includes a goal of doubling our headcount by 2024.
Q: Your background is in economics and finance. How are you able to leverage that experience in your current role?
A: A background in economics is an asset in any industry, but particularly for a position in sales and operations. It gives you a set of tools to understand the market’s mechanisms and the drivers behind its growth, and companies can leverage that knowledge to their benefit.
With the current post-pandemic supply chain disorganization, worldwide inflation, and labor shortages, being able to understand how, despite that uncertainty, we can still leverage those challenges as business opportunities for Exotec is important for leading our business in North America.
My five years of experience with Exotec across different roles has also allowed me to develop a strong technical understanding of our products and understand how our solutions can be impactful for our customers. This helps me make quick decisions in a fast-moving and competitive environment.
Q: Does the approach to automation differ between the European and North American markets?
A: While there are differences in culture and business norms, many warehouses across the globe are facing similar challenges. They’re looking for reliability, efficiency, and adaptability in their warehouse, and robotic solutions can help to achieve that. Our solutions are equipped to adapt to any warehouse, regardless of its needs or size, so while our approach to automation does not change from region to region, our ability to customize solutions to our customers’ needs allows us to conduct impactful business across the world.
Q: What advice would you give someone looking to launch their first automation project?
A: Warehouse automation helps customers find answers for common issues within their supply chain. Those problems can range from a lack of resiliency in an unsure environment to difficulties with scaling in a fast-growing market. My advice for someone looking to build more automation into their operations is to really put effort into understanding what problem they’re looking to solve. Is it inadequate storage capacity? Is it throughput limitations? Is it labor shortages? Robotic systems provide a versatile and all-around solution for many typical operations shortcomings, but they don’t all address the same issues. So, it’s important to ensure that the selected solution will be the best fit for your specific needs.
The second piece of advice I can offer is to look for a solution that will minimize disruption to your operations. The initial automation project can be challenging for organizations that have to adapt to new technologies while also adapting to new ways of working. This often requires a strong change-management approach. With that in mind, the best solution will often be one that leverages technology to its full ability, to deliver massive improvements while implementing simple interfaces and an intuitive user experience. Shorter installation times can also be a huge plus to limit the impact of that disruption.
Q: How will the rapid developments in AI and machine learning affect future automation and robotic designs?
A: Rapid advancements in AI and machine learning have impacted many industries, and robotics is no exception. It’s easy to see how AI/ML has the potential to create more intelligent, adaptive, and effective robots. What’s hard to tell now is whether AI has a real purpose or place in warehouse robotics today, where perfection is so important. AI may not be at a place yet where it’s stable enough for business-centric use cases, like warehouse robotics.
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."