AutoStore: Customisability With The Cubic Storage Pioneers
In September of last year, you took over as CFO of AutoStore. Previously you held the same position at the Sage Group and Just Eat. Very different companies with different financial needs and considerations. How has this career trajectory influenced your perspective today?
That’s an excellent question and there’s a surprising number of similarities. All three companies are disruptive and highly profitable technology businesses staffed by ambitious and curious people.
Each of these businesses were at a similar stage in the life cycle when I became CFO and needed to lean into someone with financial leadership experience to complement their young and ambitious teams.
The beauty of the CFO role is the transferability of skills across industries and working across AutoStore, Just Eat and the Sage Group has given me a well-rounded perspective that enables me to be a strong strategic partner across the organisation.
AutoStore - you’re the cube storage pioneers - your cubic technology helps manufacturers across different industries efficiently store goods. Why is storage such an important consideration for manufacturers?
The challenge for most manufacturers is that the costs of each square foot are rising. These costs erode profitability, meaning expanding your operations becomes a bigger risk.
However, growth doesn’t have to rely on physical expansion. Instead, the focus should be on becoming more profitable per square foot. That’s where AutoStore comes in.
Cube Storage Automation makes use of vertical space with high-density racking systems to save significant space and tackle rising labour costs. It’s especially useful when large warehouse spaces are scarce, when customers expect same-day deliveries or manufacturers are looking to reduce their energy consumption.
Can you talk about the customisation of your systems, what customisation needs different manufacturers typically have and the financial aspects of this?
Our solutions are made up of interchangeable, standardised parts that can be easily customised to fit any warehouse space.
This modular design makes expansion a breeze because additional bins, robots, or grid modules can be added as needed with minimal downtime and disruption to operations.
For THG, this simplicity in implementation translated into cost savings and a fast return on investment, where it recovered the initial investment cost in under a year.
Our solutions are distributed, designed, installed, and serviced by a network of qualified system integrators we proudly call our partners. It’s here where we provide a kit of parts to shape and mould a customised solution that fits any space or workflow.
Throughout your career, how have attitudes changed towards emerging technologies and sustainability?
Sustainability has emerged as a key driver of innovation and efficiency, and I’m really interested in identifying where a real difference can be made as opposed to less impactful actions that, perhaps, only create the illusion of meaningful change.
Whether it’s partnering with Berggård Amundsen to build an environmentally friendly warehouse or helping Active Ants reduce their energy costs, I am proud of the positive impact AutoStore’s solution has had in helping our clients reach their sustainability goals.
Can you tell me more about your involvement with PUMA’s e-commerce distribution centre?
PUMA needed a high throughput system to maintain its high inventory volumes and deliver products exactly how and when customers desire, which is why the retailer implemented the AutoStore system in its Indianapolis distribution centre.
The current Grid holds up to 305,000 Bins making it the largest AutoStore system in North America.
The Grid itself takes up about 12,356 square meters (133,000 square feet), which is slightly less than three American football fields in a facility campus covering 59,457 square meters (640,000 square feet).
With AutoStore, PUMA has increased its capacity by more than 10 times and can ship over 100,000 same-day orders, even during peak times, with a 99% hit rate in order accuracy.
Industrial robots are seeing major investment across Europe, China and the US. You recently published a paper about the three biggest myths surrounding automation. Could you tell me more about these misconceptions and their financial implications?
Firstly, high workstation capacity does not necessarily mean an order fulfilment system will have a high sustained throughput. The problem is that workstation capacity is usually theoretical – isolated for a short period of time, away from the challenges of the real world.
Throughput, however, provides a picture of the system over an extended period. It considers the real world such as the picking speed of workers, the machine, and the surrounding material handling equipment.
Looking at the throughput provides a more realistic view of what your employees can handle and brings the workstation capacity into the real world.
Redundancy can help lead to system reliability, but it’s important to understand how redundancy is used in a solution. For example, redundancy can impact storage density, making certain stock unavailable to your team and it’s critical to have 100% access to your inventory as close to 100% of the time.
Lastly, too often we see vendors designing an automated system and guaranteeing its performance using theoretical numbers, which can lead to an investment in a solution that isn’t robust enough for your operational needs. Instead, request a simulation based on your warehouse performance.
Simulating the solution using your data will show how the system will react in a real-world environment with external factors at play.
As a CFO, you’re used to diagnosing and preemptively addressing financial challenges. What would you say are the biggest financial challenges you see with manufacturers?
Cyber disruptions, sanctions and geo-political turbulence, and the resulting uncertainty, are continuing to put pressure on manufacturers. While there are also more localised problems like rising rent and labour costs, automation technology is generally seen as the answer.
In fact, a recent survey of ours revealed that 86% of manufacturers either have Automated Storage and Retrieval Systems in place or are planning to get them in the next 12 months to overcome these challenges.
Hiring is a major concern in manufacturing. There’s a huge demand for talented employees, but future generations show little interest. One way to address this is by diversifying the industry, an industry that remains very white and male. Can you tell me about what AutoStore is doing to bring a diversity of people into the industry?
We're addressing this challenge of diversifying the manufacturing industry with a multifaceted approach to recruitment and workplace culture.
From ensuring our job advertisements and marketing materials use gender-neutral language and avoid exclusionary phrasing, to employing an objective, evidence-based approach to recruitment, we’re striving to attract and retain a diverse workforce.
But above all, we’re dedicated to creating an inclusive environment where all our employees feel valued and empowered. To do this, we offer weekly paid exercise time, paid volunteering opportunities, flexible working hours, and access to psychological support and mentoring sessions.
Is there anything else you’d like to share? Any advice to manufacturers moving forward?
Against a backdrop of macro-conditions affecting the industry, logistic professionals looking for sustainable growth, profitability and resilience need to start introducing automation into their operations now.
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