Had Amazon (NASDAQ: AMZN) not purchased Kiva Systems for $775 million in 2012 and stopped selling its robots, Locus Robotics might not have become a spinoff of 3PL Quiet Logistics.
“The management team at the time had a choice of whether to not use robots, buy a robot or build their own,” Locus Robotics CEO Rick Faulk said during a fireside chat with Tony Palchek, managing director of Zebra Technologies, during the FreightWaves Future of Logistics Real Estate Summit on Tuesday. “I think they made a really smart decision.”
Quiet Logistics began using Kiva robots in its e-commerce fulfillment business in 2009. After Kiva became Amazon Robotics, Quiet Logistics operated a robotics project in stealth mode for three years before spinning off Locus Robotics in 2015. Locus publicly launched its product-picking robots in 2017.
In the three years since, Locus has raised $105 million in four funding rounds and surpassed 200 million pickings while expanding globally as a full-service supplier of autonomous mobile robots that navigate messy warehouses.
Rooted in the warehouse
“Locus is really rooted in 3PL and warehouse DNA,” Faulk said. “And it makes a big difference as we go to market to really understand the customer’s problems.”
The best use of robots in warehouses follows the rationale of manufacturing robots: the higher the volume and the more repetitious the task, the better.
“If an organization just had two or three SKUs (stock keeping units), it’s not really right for automation,” Faulk said. “They’re better off doing that by hand.”
A good baseline for automation is at least 500 SKUs and a minimum of 1 million units per year. Locus robots need at least 25,000 square feet in which to operate. But they can operate in more than a half-million square feet. The ideal products for picking fit on the robot’s h-picks and weigh less than 80 pounds.
Job collaboration over elimination
Workers often worry about being replaced by automation. Most warehouse picking today is done by workers pushing 300-400 carts through a building.
“They’ll walk 12-15 miles a day,” Faulk said. “With Locus, you’re still going to walk. But you’ll be down to two to three miles a day. The reality is that what we deliver is a job that’s easier, makes [workers] more efficient and makes them more satisfied in what they do.”
Less walking is one factor in Locus’ claim that its robots help businesses achieve two to three times greater productivity.
Locus robots speak the language of their human co-worker, displaying on an iPad screen information in the worker’s preferred language based on reading a bluetooth tag the human worker wears. Feedback on progress in meeting shift goals is also displayed on the iPad.
Picking errors fall where Locus robots are in use, Faulk said.
“For all those reasons, we find workers really love this,” he said. “There is some apprehension going in. But once management educates them and we train, they’re really excited about it.”
Staffing for the peaks
As companies seek to keep up with the growing demands of e-commerce, they need to be able to ship more goods from the same facility. Robots make multiple shifts possible when needed.
“Maybe the biggest thing, particularly going into this time of year is, ‘How do they handle peaks?’ That’s the problem that most of these organizations have,” Faulk said,
Locus will ship extra robots to its clients to cover busier times. Adding them to the workforce consists of unboxing and turning on the power, The robot finds the Wi-Fi signal on its own and downloads the image map of where it will be working.
“Within three minutes, it’s operating,” Faulk said.
Locus can check out a client site and deploy robots in three to four weeks, making few changes to a building. Windows metafile (WMF) integration — a list of records to appear on the robot’s iPad screen — happens at the same time.
Robots as a Service business model
Locus thinks following a Robots as a Service (RaaS) plan is the only sensible way to deploy them.
“There is no up-front capital for the client. There is a setup fee of up to $100,000 depending on the size of the facility. That’s the only upfront catch,” Faulk said. Customers pay a monthly fee for the robot, much as they would for a human employee — only cheaper.
One- to three-year contracts include support, maintenance and software upgrades. The RaaS model includes the premium-priced short-term robot loaners. Faulk stresses that this is better than owning the asset.
“Everything is operating savings, and they are going to see those savings in a matter of weeks,” he said.
Locus conducts structured business reviews of the data from its clients’ facilities, such as units per hour (UPH). It recommends changes for machine and men alike.
“We can look at the footsteps of your best worker and the footsteps of your worst worker” and recommend changes, Faulk said.