Many companies measure success by framing the first dollar they make, hitting a target number of revenue or customers, or even marking how many individual product items they have sold. When your business is creating robots that help warehouses, retailers and logistics providers pick orders more efficiently, it makes sense to track orders picked.
As part of its robots-as-a-service delivery model and ability to track robots through its cloud-based software, Locus Robotics has been able to determine how many units its robots have picked since the early days of the company. Earlier this month, Locus announced it had surpassed its 100 millionth pick with its LocusBot mobile robots. In fact, the data was quite specific on the time of the pick – it happened at a DHL Supply Chain fulfillment facility in Hanover, Pa., on Tuesday, Feb., 4, 2020, at 5:38 a.m. ET.
This wasn’t the first time the Wilmington, Mass.-based company made announcements about the number of orders that LocusBots were picking. During last year’s holiday shopping season, Locus said its robots picked more than 13 million units, representing a 400% increase in units picked when compared to 2018, which saw more than 3 million units picked.
Robotics Business Review had a chance to speak with the company’s CEO, Rick Faulk, about marking the achievement and its recent growth through sales and partnerships with companies in the supply chain space.
The hockey stick is real
Q: Congratulations on the 100 millionth unit picked. Did you expect to reach this milestone so quickly or had you figured that this was always on the road map, and were just waiting to hit that specific number?
Faulk: We’ve been on a pace where our volume has been escalating every single month. You’ve seen hockey stick graphs that show sales or something like that. This is the hockey stick you can believe in – it’s real. We’ve been tracking it ever since we started the business, and it took us several years to get to our first million [units picked].
We had days during peak season where we did over a million units a day with our robots, and it’s been escalating dramatically. Every time we add a client, we add to that curve – and we’re adding lots of clients.
Q: A lot of other robot companies in the autonomous mobile robot space generally don’t report numbers of units picked in the same way that you do, or if they do track them, they don’t announce them publicly – especially during the holiday season. Why is it important for Locus to make these kinds of announcements? Is it to say that you’ve proven the numbers, or is there another reason?
Faulk: The big friction in the sales process now for a lot of these accounts is skepticism – do these solutions really work? When you announce things like this that demonstrate volume, it shows that the solutions really do work. The reason why we invest so much in video on our website is to get peers going on record saying the solutions really do work. It’s been changing over the last six months, where that skepticism has turned to real belief. So that’s why we do it.
Q: Do you believe that Locus is basically setting the bar for everybody else in this space, or do you think maybe they don’t care about achieving those types of numbers?
Faulk: We are setting the bar. I think in many cases, others don’t talk about it because of scale, or they’re much smaller. We have the largest installed base in the industry right now and doing the most amount of volume. Customers now want to deal with market leaders that have the resources to go out and develop solutions and get results. We’re doing that, and I think there’s a concern they’re going to suffer by comparison. We don’t worry about that.
The value of partnerships
Q: The company has partnered up with several warehouse management software vendors recently, including HighJump Software and Manhattan Associates, to name a few. From your perspective, why are these partnerships so important?
Faulk: The partnerships with major WMS providers are really important. First, it smooths the integration process for our clients. These major WMS providers are developing connectors between Locus and the WMS solution, so that means it takes less time and less cost. For the WMS players, it enables their platform to be robotics-enabled. That’s why they like it – we do a lot of co-marketing with them; we do a lot of co-selling with them. For their clients, it just makes it a lot easier in terms of cost and time.
Q: We have also seen a lot of robotics companies build partnerships to help extend processes within an order fulfillment warehouse, so one robot company doesn’t need to solve multiple automation tasks. In May 2019, Locus teamed with RightHand Robotics, another Boston-area company, to deliver cross-platform robotics solutions. How has that gone, and do you think customers are looking for these types of automation partnerships?
Faulk: In our partnership with RightHand Robotics, our LocusBots are delivering a bulk list of goods, and then their arm will grab those out of a tote. We’re in the process right now of discussing that solution with several clients. Right now, the technology over the last few years has really enabled that to happen. We can do the integration between the two systems and significantly increase efficiency of both solutions.
What customers are looking for is a solution that solves their problems, especially at scale and volume. A lot of clients now are growing so quickly and they’re trying to put increased capacity through the same footprint. By integrating these solutions together, you’re able to increase that capacity in that existing footprint to deliver better value for the client.
Q: When you announced the 100 million units picked, the company also reported that companies have seen 2x to 3x productivity improvements through their deployments of the LocusBots. Are customers happy with these numbers, or are they looking to go even higher, let’s say 4x or 5x or even higher?
Faulk: Every sale we make is made on an ROI basis, and we get measured every single day based on ROI. As part of our sales process, we’ll go through and make claims and commitments about what the ‘bots can do. The client gets brought into that, and those become the targets that we get measured against.
Having said that, we always introduce new applications that will increase efficiency and increase the utilization of that asset. For example, we just introduced replenishment, which is really the reverse of a pick process, and that increases efficiency in the offset, so that’s a way to increase the ROI.
New applications on the horizon
Q: With record numbers of online orders during the most recent holiday season, we heard lots of stories about companies needing to focus on automating their returns as well. Are your customers seeing the same issues?
Faulk: Absolutely, and that’s another app we just introduced, where you can do the put away of an item or box. Obviously around the holidays, come January, 28% of the items come back – so you need an efficient way to take those individual items and stick them on a shelf. The robots are uniquely positioned to do that. When you have 50 items that come back that need to go in multiple places in the building – having a human walk the whole warehouse to put away items that are going to get dispersed all over the building is really inefficient.
Q: Do you expect to see more customers deploying these new applications once they’re happy with that first process (order-picking)?
Faulk: Our biggest demand right now is that exact use case. We hear it every single day from our clients, and we’re in the process right now of working with a number of them. It’s the biggest request we get.
Q: How is Locus handling the process of scaling up the number of robots produced in order to meet customer demand?
Faulk: We have increased our capacity significantly in our facility in Wilmington – we just signed the lease on new space about a week ago where we’re significantly expanding our manufacturing capability in the Boston area. We’re also expanding our network operations and support center to be able to deal with demand. We’re also building a whole operation in Europe – going into the Amsterdam area. I’m looking at space right now and we’ll be replicating what we do here in Europe.
Q: What advice would you give to robot companies that might be struggling in terms of their companies or their robot solution?
Faulk: The advice is really simple – you have to start with the problem. A lot of robot companies are looking for a solution as opposed to starting with a problem and how a robot can solve that problem. There are a lot of cool robot businesses out there – but they don’t understand the business problem.
In our case, the biggest problem [customers] have is labor. The labor problem has turned from a gap to a crisis, and that is the big problem they have to solve, as opposed to be a cool robot that travels around a street but doesn’t really solve a problem.
Q: On the flip side, do you ever worry that Locus is growing too fast? If not, what issues are ‘keeping you up at night’ in terms of the company’s growth?
Faulk: The big thing is we have massive opportunity around the world, so we’re trying to get smart about it. Our first strategy was to be successful in the U.S. – and we’ve done that. Then expand to Europe, which we’re doing right now. About a year from now, we’ll go probably to Asia, but we wanted to start here in the U.S. and be successful.
We’re doing it in a very controlled way – building the talent out as we go because all of our installations are mission critical, and you’ve got to make sure each one works, and make sure each installation is successful. That’s how we approached the problem, by taking it one at a time, nailing it and then going onto the next one.
Q: Is there a temptation of where you get so much demand that you have to figure out which projects you are going to take on?
Faulk: That’s a problem every single day (laughs). There are opportunities that are better than others, and we try to prioritize those with our clients. We are seeing right now a number of multiple sites with existing clients that are all undergoing expansion plans. We prioritize those first, because we have relationships with them.
The great thing about deployment is that we have it down to as much of a science as it could be. We could deploy a 200,000-square-foot building in less than 30 days by making next to zero infrastructure changes in that building. Our customer success team has done a great job in being able to systemize how we do that installation, testing, and then going live.
[In another example], we had a client who was a bit of a skeptic and wanted to prove that robots could navigate around their building in New York. We went down to that building, set up around 25,000 square feet of the building in a day – and the robots were operating with orders the next day. I’m not exaggerating. We didn’t fully integrate it into the warehouse system – they just wanted to make sure the robots could navigate around successfully.
New markets and innovations
Q: Do you expect that other types of companies of different sizes or use cases will begin to look at mobile robots? For example, instead of using them in a large warehouse, will we start to see these types of systems in the back of a retail store or even smaller locations?
Faulk: Going back to your question regarding so many opportunities – the question is which one do you go after? We have active conversations going on with an entity that delivers operating software to grocery chains. If you look at a lot of grocery stores, they have a back-end warehouse behind the building where they have to pick product for e-commerce. We’re having conversations with them as an example – it’s the same function. We’re not going to go into manufacturing anytime soon, because that’s separate. But the task of picking an item off a shelf and delivering it to a spot is what we do very, very well, and there’s a lot of use cases for that.
Q: What excites you about new robotics technologies or innovations that you can apply to the LocusBots? Or, what other technologies is the team paying attention to?
Faulk: There are a number of new sensors coming out that allow us to do very streamlined navigation, thanks to the automobile manufacturers, lidar and self-driving cars. The robot is really a small self-driving car, if you will. A lot of the enhancements and money being invested in that technology we can now bring to our market.
The cost of all that has come down because of quantities, and it enabled us to build a much more streamlined solution. The ability to crank out volumes that we’re cranking out reduced the cost as well, and we can afford to be more competitive as volumes go up.