[00:00:00.000]  

Hi Raphaël. Hi David. 

 

[00:00:01.340]  

Are you okay? 

 

[00:00:01.810]  

All good, and you? Yes, all good. It’s our podcast, it’s the end of the week. Exactly. It’s the end of the week. I don’t think it’s the first time we’ve done this together. No, we’ve done a few.  

  

[00:00:11.750]  

No, we’ve only got a few left. 

 

[00:00:12.060]  

Yes, some time ago. Good. Let’s get straight to the point. Today, we’re going to talk about a subject that is very much on the agenda, I think, and which has many thoughtful leaders and operations managers, and it’s not artificial intelligence. No, no, no, it’s not artificial intelligence, but in fact, we’re going to talk more about automation. Automation, here, really tasks through robotization and not necessarily the automation of processes through software, although the two are interrelated. But with us, we help a lot of people, a lot of companies to think about that. And one question, I’m sure you get the same question that comes up often, is: should we automate our operations. And the other question is: if we have to do it, when should we do it? And personally, I’ve reached the point where, instead of debating it with them, I’ll give them an answer straight away, which is: yes, you should consider automating parts of your operations. And when? 

 

[00:01:40.529]  

Immediately. Not later. Then we can talk about why, but I am now really convinced that yes, we need to automate and we need to do it now. 

 

[00:01:53.300]  

When I say now, it doesn’t mean that it has to be operational right away, but it’s because there are so many factors exerting pressure that when an organization decides to take action to progress towards some form of automation, we are potentially still a long way from the goal. 

 

[00:02:16.740]  

That’s right. There’s a proverb that exists, that I’ve heard you say before, that famous proverb. Yes, you’ve said it before. The best time to plant a tree was 20 years ago. The second best time is now. I think it’s also true with automation. The idea is to As you said, it’s a long process. From the moment we decide to take the necessary steps to automate, as you said earlier, we can’t just snap our fingers and it’s done. There are a lot of steps along the way. We have to prepare for this automation. There are bases that must be present and necessary to even hope to be able to automate our processes. It is a process that takes place over a long period of time. Yes. 

 

[00:02:55.610]  

By the way, the saying about the tree, it’s not mine. No, I know it’s not I I heard it, but indeed, I think it’s good. You use it from time to time. Yes, indeed. Then, maybe even before talking about the prerequisites, we could touch on why we can now respond with, maybe not with certainty, but still with a lot of authority that at least, any organization in supply chain distribution must seriously start thinking about this aspect, because we are saying that it is inevitable. That’s it, I don’t know if you want to elaborate on that. 

 

[00:03:40.500]  

Yes, absolutely. The reason often given for automating certain processes, I think everyone can see it too, is the lack of manpower. Often, companies have growing needs, companies are growing, so it’s a good thing to see. But obviously, our workforce has to be able to keep up with this increase in volume, this increase in growth. And in some cases, it can be very difficult for the workforce to grow at the same rate as demand. So, ultimately, that’s where solutions like automation come in, enabling more to be done with the same number of resources. It’s something that’s of interest to these companies, being able to respond to market demand without having to increase their workforce. So that is obviously one of the very important and very interesting factors for companies, which drives the need and the desire for automation. There is also the issue of productivity, tasks, etc. There is also the aspect of available space, the term escapes me. There are companies that have a strategically defined location, but as they grow, they can start to run out of space. 

 

[00:04:59.280]  

They don’t want to move at all, they don’t necessarily have the leisure to expand or relocate. They don’t necessarily want to lose this strategic location which, sometimes, can also be linked precisely to the workforce. It’s close to an urban center, it’s easily accessible by public transportation. We often hear companies say: I can’t move from here, I’ll lose half of my workforce. This is where automation also makes it possible to increase the density of warehousing, where in fact you can do more with the same number of staff, you can do more with the same space. That is another element that is interesting on the automation side that we often hear, which can once again drive this need to automate. 

 

[00:05:36.080]  

Yes, you bring up two points. The labor point, I think the world is tired of hearing it because there is nothing new in it, but we may be tired of waiting, but we are even more tired of having difficulty coping with it. That said, in Quebec, with seven Amazon distribution centers that are no longer there, there may be some labor freed up. But that said, demographics are such that this is not a problem that will be solved by natural births. It is not temporary, but a challenge that companies must deal with for the foreseeable future. The other point you touch on is productivity. I don’t necessarily have the figures, but I think productivity in Quebec is also fairly stagnant. If we talk about GDP per capita, it hasn’t improved much over the past few years. So when you talk about doing more, whether through growth or simply being more productive in our activities, even if this growth is not necessarily very aggressive, that’s where we want to aim to eliminate tasks with no added value. 

 

[00:07:06.550]  

At the same time, eliminating tasks with no added value or performed by humans is a concept that is well accepted throughout the information system and people are doing it. But when we start thinking about physical tasks, it’s the same kind of mentality that needs to be applied. If we talk about Let’s say we’ve convinced everyone. Everyone is convinced. Tomorrow, everyone will start to see what they need to do for automation. But why do we say: OK, yes, automated, but why now? Why… Maybe I don’t see the need right away. Maybe I don’t know what I’m going to do. Why should I start thinking about it sooner rather than later? That’s an excellent question. 

 

[00:08:01.480]  

I think because of that, we even have the discussion. The discussion we are having right now is an example of this. I think more and more companies are starting to realize what we are talking about. So, to stay competitive, it is simply better to get started sooner rather than later. Because if the players and competitors in a certain market start to be significantly more productive, to have levels of service that are significantly more attractive than those we offer, there is a certain danger associated with that as well. So that’s one of the elements. The other point is simply that it’s a very long process. From the moment you say, “I want to automate, I want to introduce robotization into my center to be more efficient, precisely to reduce the need to continue hiring at the same rate as I am doing at the moment,” there are several steps that must be taken to achieve this. The first, in my opinion, is one where we establish the basis to even think about automation and robotization, that is to say, having good information systems in place, having a good, robust WMS. 

 

[00:09:06.126]  

Because without WMS or WMS functionality in a center, it’s a bit utopian to believe that I can carry out complex robotization to optimize my order preparation and localization tasks. 

 

[00:09:17.660]  

And a WMS project in itself is a major project that has to be prepared, which can take, I must say one to two years, from the moment we start thinking about the selection, drawing up specifications, understanding our needs in this respect, selecting a partner and carrying out the project, it can be very long. Even establishing the basis for starting to consider automation can be very time-consuming. When I talk about establishing the basis here, I’m really referring to the WMS, which is a necessity. 

 

[00:09:47.990]  

We’re even going to go with the ERP, which might also need updating. What we’re saying is: OK, we see, we’re I don’t know We’re distributing to retailers and the peak period is in 10 to 11 months’ time. We’ve just passed one and then we say to ourselves: OK, I’ll be ready for the next one. And a few months down the line, once we’ve spent a few months on our evaluations and research, we realize that no, no, we’ve potentially just been added to another project and I’ve already missed out on, put off the gains I can make thanks to improvements in automation, which will be pushed to the following year. That makes a big difference. Then I would add the fact that yes, we are talking about WMS. Even today, there are several companies that are not well equipped, so to speak, or that do not make ideal use of their system. So that has to be either improved or replaced. But when you come to put automation in a center, there are also components that are affected. 

 

[00:11:03.134]  

Then we’re going to come up with other acronyms, whether it’s warehouse execution system, warehouse control system, material flow system. 

 

[00:11:14.270]  

They are all It is other layers of logic that are integrated into the software and hardware ecosystem. And then, if we don’t have the skills in-house or it’s the first time we’ve dealt with this, again, it can add a burden and necessary learning and ultimately delays. 

 

[00:11:46.240]  

Yes, and even if I want to take it to the extreme, at the moment, we are working on a project to help a client set up an automated system in their center. They have hired resources specifically for this project. It can go as far as saying: Look, we don’t have the necessary resources at the moment, we don’t have the necessary skills at the moment, we’re going to find the right resources. It’s a process of: You post a job, you interview, you hire. There’s that to think about too. You don’t think about it instinctively, but you can go and look for expertise that you don’t have at the moment, and that can also lead to delays in a project like this. Yes. 

 

[00:12:21.980]  

Other factors that add to this. Because now that we’ve convinced just about everyone that it’s time to do it, people are going to be clambering to get in with the I see above the clue. Yes, that’s right. But that’s because the suppliers, whatever they are, small, medium or large, they too have… How do you say? I apologize for the English, but a book of business and then with an acceleration in demand for their products, whether it’s new software or robotization, they too have to update and increase their production and implementation capacity. So, there may be queues starting to form, right? Yes, absolutely. So, that’s another point to consider. Once our project is clear, we know where we’re going, it doesn’t mean we’re going to find what we need. It’s not like going into a shop and coming out with it. 

 

[00:13:22.530]  

No, no. Exactly. Those deadlines can be long. As you said, it’s a work schedule. They have production slots, they all have timelines associated with each of the projects. So if they can’t get the part of your project to go in the right place, it pushes you back and it can push you back several months, basically, with these projects, simply because of the capacity of these suppliers to provide these solutions. The other element is Let’s suppose that once again, the project is starting, we have been put in the production unit of these automation suppliers. There is an aspect of… There is a business case study. Before embarking on these projects, a study has to be done. As you said earlier, there is no magic solution that will enable us to automate 100% of our processes. The odds are that I will have… Ultimately, it’s the 80/20 rule. Maybe in my automated system, a system that can accept 100% of the bets that there are, for example, it has astronomical costs without adding much interest to the ROI, ultimately. 

 

[00:14:24.806]  

It’s not going to save a huge number of working hours, but potentially there is a study to be done to say: Look, we’re just going to take a sub-category of these products, the smaller products for example, which generate a lot of order lines after all, and automate that part of my business. 

 

[00:14:42.950]  

So, all this analysis It really needs to be done in detail before embarking on such a project, because it can significantly change the solutions we are looking at and the ROI on the solutions we are looking at as well. So, there is the whole study aspect to get an idea of what the system should look like, what size it should be. As you know, there are a lot of systems on the market at the moment that perform similar functions. Just think of unit pricing, for example. There are several systems that exist today, good-type systems of people that meet the needs of unit pricing. Why one versus the other? It performs the same function. 

 

[00:15:21.360]  

Here, we are not talking about one supplier versus another, but really about the type of system. 

 

[00:15:24.340]  

Some of the systems themselves are I won’t mention any names, but some bins have been piled on top of each other, while others are in pallet racks, and each bin is accessible. These are small distinctions, but it’s worth studying them in detail to really find the most appropriate solution that best matches the company’s order profile. 

 

[00:15:42.150]  

It reminds me of something because we quickly got to the heart of the matter without necessarily talking about what automation and robotization mean. If we don’t take the time to talk about it a little, maybe the audience can imagine that I have this center that is 100% automated. I have robots everywhere, robots or cranes. It’s hard to find the French terms, the lady, but shuttle systems. That’s not necessarily what we’re saying. In fact, that’s not what we’re saying at all. We’re saying that we need to find opportunities to eliminate certain tasks, whether they involve movement or repetitive handling. And it can also be as simple as – I’ll use another Anglicism – putting up a put-wall. We imagine that we are a distributor that ships to stores, but now, more and more, our online business activities, direct delivery to consumers, are increasing significantly. And when I had, I don’t know, 50, 75 orders to fill per day, it was fine, but now, when you get to 200, 300, 500, 1,000 orders per day, it’s a whole different ball game. 

 

[00:17:09.560]  

There are systems and solutions that exist that will make it possible to handle this volume much more efficiently, again without adding an army of people who have to stop what they are doing to work on this. Then the put-wall, without necessarily going into detail, is a type of solution that is really inexpensive and simple, but which allows for quite significant gains. Even in its simplicity, it remains a solution that, again, must have a basis The organization must have a software base that allows it to set this up. 

 

[00:17:55.060]  

Exactly, which allows you to pick several orders at a time. Not all systems allow you to do this. Here, you have a wall pot, but if you can’t pick several orders at a time, it’s not really useful in the end. 

 

[00:18:05.910]  

So, we’re not necessarily saying to automate everything, but really to find which portion of the products offered or of our inventory or of our activities would merit it. As you say, obviously, there is a return on investment analysis that has to be done again, where we shouldn’t get caught up in expecting, at least not yet, expecting that these solutions pay for themselves in two years. But at the same time, if we have solutions that take more than five, six, seven years to pay for, we mustn’t eliminate them because, in fact, the criteria that justify putting them in place are also evolving, as we were saying. That’s where I’m not able to meet the demand. And at a certain point, in the longer term, it It can hurt the organization a lot. 

 

[00:19:01.830]  

Exactly. Once again, when we ask ourselves, because you said it, the idea, we are not saying that we need to automate 100% of the processes, that’s utopian. The idea is really to ask yourself: What should I do? A good solution path for That is to say, what should I consider automating? These are tasks that we find unpleasant to do. And even that doesn’t mean that we will be able to automate them or tasks that require a lot of effort. That’s really it. To have I’m still the English-speaking thermo, the biggest bang for your buck, it would be: OK, if I have a lot of employees who are dedicated to a specific task, is it worth automating it? If, for example, I had only one employee for my returns, it’s a relatively simple process, it may not be worth investing a lot of time in, but if I have a unitary collection process, for example, where I have 50 employees doing this, 75 employees doing that, it’s worth looking into these issues. 

 

[00:19:57.000]  

I say 50, 75, it could be a lot less. It could be twenty employees, 15 employees. It’s worth starting to look into it. 

 

[00:20:04.330]  

Okay. Maybe we can wrap up with that. Again, I know we’ve convinced just about everyone, but the question becomes Okay, where do I start? What is a roadmap at a very high level that tells me… To start thinking, because we might be tempted to call suppliers we know because we’ve seen the name. Obviously, in that case, we encourage everyone not to start making choices based on the marketing efforts of these organizations. But really, as we said, these are organizational transformations, and like anything else, they must be done with great diligence. So, should we call suppliers? What should I do? 

 

[00:20:54.500]  

I think, then there, obviously, I’m going to sound biased in what I’m going to say. 

 

[00:20:57.960]  

Because you are. 

 

[00:20:59.130]  

But But ultimately, before going to talk to suppliers, and obviously I don’t attribute any bad intentions to automation suppliers, they are very good at what they do, but ultimately they know their own world. Obviously, they may not offer all the solutions. So going to see experts who know everything that’s going on in the market gives you a better overview at the start of the project when you have a world of possibilities to really quickly target what can be a good technology. First, it’s really looking in the mirror. Do I have the infrastructure, a digital infrastructure, for example, at the moment, that would even allow me to implement this type of automation? If the answer is no, that’s definitely the first step, as we’ve discussed. So really doing maybe an audit of your technological infrastructure, understanding whether I’m very far away, I’m close, is it feasible with what I have at the moment. That, in my opinion, would be the first element. The second element, once again, is this: it’s about talking to the experts, being able to understand. 

 

[00:21:55.008]  

But look, what is logical at a high level, without going into an incredible level of granularity, is a detailed model that could be implemented the very next day. 

 

[00:22:03.560]  

That’s not the idea. It’s really saying that if I look at it a bit more at a high level, coldly, what kind of technologies would make sense for me? With the help of experts, we can find those answers. Then we can compare the different technologies that exist on the market, go and see different integrators, different automation suppliers, and then see what they ultimately have to offer us. That, in my opinion, would be the logical approach to follow to ensure, first, that we don’t invest too much, that we don’t automate everything, which is illogical. Find the right level of automation, find the right processes or the right products to automate and find the right technologies on the market that could adequately meet this demand. That would be my initial roadmap. Of course, this is prior to an implementation project. Eventually, a partner is chosen, a PO is signed and the implementation project begins. But really, if we look at it before an implementation project, those would be the steps that I know would be involved. 

 

[00:23:02.610]  

Okay. So, we say: look into it now or start taking a serious interest in it, because the challenges or the consequences of not considering automation will become a real problem and it won’t be €100,000. Then, make sure, make sure, it’s done in parallel. As you say, we have to determine what seems appropriate for our company, for our operational profile. What seems adequate and are we able to justify it? Even if we say that returns are investment, the return periods can be lengthened, obviously, there are some things that are a categorical no. Once we have a good idea about that, it’s: are we ready to receive? Are we ready in terms of software? Are we ready in terms of internal skills? Are we ready in terms of the capacity we will have to continue our current operations and put effort into that? Because any transformation project cannot be about taking our best resources and then telling them: Add this to your tasks, you’ll do it at the end of the day, it won’t work. 

 

[00:24:24.448]  

Exactly. 

 

[00:24:25.300]  

Another point that I That’s what I forgot to mention earlier. 

 

[00:24:31.330]  

When we think about this automation, in many cases it is a method of preparation. For example, people are thinking, right now, I am serving salespeople in size, I have a few shops, I send to my shops. Eventually, I want to introduce an online sales channel into my operations. This can be something that drives the desire to automate. Something else I would mention is that there is a cautionary aspect, because no matter how big our visions are, we have the impression that this sales channel, for example, is going to have incredible volumes, it’s going to explode and we obviously want that for our customers. But from the perspective that we are going to build a system, we design a system based on that and that the volumes never necessarily go where they are, that’s where maybe we’ll say 

 

[00:25:20.800]  

Yes, because that can even become very dangerous. You have assets that end up on your balance sheet that are underutilized. That has an extremely negative impact on a company’s financial performance. 

 

[00:25:32.720]  

This also pushes in the direction of working with systems that are flexible and easily scalable. And even in the design of these systems, don’t even think about it: I’m going to put you in a corner of my warehouse, there’s a wall there, then there’s a wall there that I can’t enlarge. Really, keeping the aspect of scalability and flexibility in mind when thinking about these solutions, which is to go with a slightly more discreet system at first, see how the business can evolve and then easily increase this system when the volumes go where we think they would go. That, I believe, is another important element when considering these systems. 

 

[00:26:12.810]  

Yes, because arriving and starting operations with a system that is almost the perfect size or capacity for the volume we want to handle is almost impossible to achieve. Either it will be a little too big or a little too small. If it is a little too big or a little too small, that is fine. If it is much too big or much too small, we will be penalized in a different way in either case, but we will be penalized. Then we’re going to say: I’ve put a lot of effort, a lot of sweat, a lot of capital into all this, and yet I don’t get what I want. In the end, we’re saying: Hurry, but take your time. So, hurry up and get started, but after that, you have to do it properly, of course. 

 

[00:27:04.260]  

Absolutely. To finish off, I had a question for you. I was curious to ask you. 

 

[00:27:11.440]  

We may have to cut that. 

 

[00:27:13.320]  

Maybe. Jeremy is excellent at his job. The question I had for you, now that we are seeing more and more, I’m going to call it the democratization of automation, we are seeing more and more companies getting into it, there are new players quite frequently. How should we navigate, in fact, new technologies versus Take a leap of fate versus saying to oneself: I’m going to go with a technology that is older, but still very tried and tested, technologies that have 500 systems in the world, 1000 systems in the world. How How should companies navigate this risk, of going with the new technology that is perhaps a little more efficient versus something that has been tried and tested. How? 

 

[00:27:54.190]  

What I perceive in your question is that sometimes we find ourselves with our clients where everything seems good, the solution, the price, the team, but our client or the operator has some reservations or is worried because the supplier that is being considered does not necessarily have many facilities locally or where I can feel that I feel that I am not a guinea pig. We literally come across this. Sometimes it’s a shame because the solution would work, then we decide to go with another supplier that is more established, but that doesn’t mean that it will provide a better solution, again, for a whole host of good and not so good reasons. How do you navigate that? One thing is for sure, I think you absolutely have to consider the whole picture, as you say, once we have identified the types of solutions that could be good for us, we have to consider all the players who are capable of doing it, even if they have not been established in our market for many years, we still have to consider them because if we also think about the software side of things, there are things that can be done in another country and still be well served. 

 

[00:29:35.930]  

There are certain tasks that we want to be done locally, but there are other things that it’s okay to do further away. The other thing, we’ve seen some of your situations: I’m going to use a particular supplier because they have a very wide range of products and so I’ll always be able to go to them when I want to add pieces. I have automated my page, now I want to automate the movement of my pallets on the docks, there’s all that. That too, that argument could be valid or was valid, but I think it is less and less valid because on the software side, there is more and more progress in what Gartner refers to as multi-agent orchestration, MAO. Yes, MAO. There are software layers that allow for optimized synchronization or coordination, or in fact, I should use the term orchestration of the different solutions. This argument, where it was true that two suppliers Having several suppliers for several solutions on the same operation made it very, very complex, is less and less true. 

 

[00:30:54.670]  

Because these MAOs, these multi-agent orchestration platforms, what you’re saying is that not only do they have a function of orchestration, thus ensuring that we are as optimal as possible with robotic equipment, but they are also capable of ensuring that various systems from various suppliers communicate with each other. 

 

[00:31:12.380]  

Yes, so being agnostic about suppliers and instead dealing with a workflow, if we can call it that, a process in a non-uniform way, but I can’t think of the right term. 

 

[00:31:27.870]  

All the systems are going to create this certain log of tasks. He is going to look at this independently of his VNK, he is going to make sure to prioritize the different tasks in order to have a better use of the equipment. 

 

[00:31:39.160]  

Yes, that’s right. I think the leap of faith is still valid with certain safe guard rails, you could say, certain safety limits. But because the other thing, you make me think of other things we see, we have clients who say: OK, my choice is made, I want to confirm it, I want to see in my due diligence process, I want to see other operations like mine, just to make sure that the supplier is capable of delivering. Then sometimes we say: I want to see someone local in my industry with a similar size to mine. Maybe in Europe, but here in Quebec, but even in several places in North America, we are not yet I I’m not going to say we’re in our infancy, but there is more to be done than has been done. What I mean by that is, the point escapes me, but it’s saying: Yes, that’s right, we have to accept that when I go to visit sites, that I may have to travel a little further, then that, in itself, shouldn’t be a negative point. 

 

[00:32:54.675]  

If they were able to do it in Ohio, they should be able to do it here. 

 

[00:33:00.440]  

Absolutely. 

 

[00:33:01.800]  

Perfect. Maybe the last point I’ll talk about, but this is really- I thought it was over. 

 

[00:33:06.130]  

I thought we were done. 

 

[00:33:08.870]  

Okay, go ahead. I was teasing. The last point I’m going to make is that obviously we’re talking about automation, there’s a huge ecosystem of solutions out there. We’ve talked about it at length today. There are obviously platforms that exist to see what’s happening in the market. Promat is a conference, I can tell you, a trade show that takes place every year from March 17 to 20 in Chicago. By the way, LIDD, we’re going to be there, so for sure, we try to stay up to date with what’s going on in the market, and so on, to find solutions for our customers that make sense. If you’re listening, you know, you can come and visit us. I don’t know about our boot, but Johnny will put it right here. 

 

[00:33:51.110]  

Yes, because ProMat is indeed, well, we’re talking about it now, but seeing it adds something real to all this. It’s quite surprising. Yes, there are technologies that are still They may have passed the research and development stage, but the application is not yet well established. We are thinking more and more about humanoid robots. But again, the investments that are being made will lead to something, but seeing it adds reality and also to see technologies that exist, that have been established for a long time. This particular conference is definitely one that is very popular with operators. It’s coming up soon? 

 

[00:34:41.270]  

Yes, from March 17 to 20. 

 

[00:34:42.800]  

March 17 to 20. Ok. Perfect. Thanks, David. Thanks, Raphaël. Bye, see you next time. Bye.