Specialist
Senior executive at Dematic North America (Dematic Group Ltd)
Agenda
- Warehouse automation supply, demand and pricing update
- AGV (automated guided vehicle) demand and shift from traditional forklifts
- Warehouse management system trends between hardware- and software-based players
- Outlook for major third-party logistics automation spend
Questions
1.
Our last Interview on the warehouse automation sector as a whole was in November 2020 [see Warehouse Automation – Q4 2020 Spend Update & Technologies – 18 November 2020]. What have been the major changes in the market since then?
2.
How have warehousing space purchases developed? Are you confident in continued demand for automated equipment, or do you expect any meaningful acceleration or deceleration in demand?
3.
Micro-fulfilment centres have been spoken about for a number of years. What do you think about the timeline of this acceleration? Has demand accelerated since we spoke in November or are you referring to a broader time frame?
4.
How has warehousing space purchasing been accelerating in recent times? Has there been increased activity over the last six months?
5.
Is the acceleration in warehousing purchasing meaningfully impacting the pricing of warehousing space?
6.
Do you expect any challenges with warehousing space availability?
7.
How is aggregate demand developing? Which regions have the strongest development and how are different regions thinking about the possibility of another wave of lockdowns and what that might mean for investment decisions?
8.
How are customers behaving around servicing decisions and new project expansion?
9.
What do you think is the risk of third-party servicing players taking market share?
10.
You mentioned integrators are happy with third-party servicers coming in to help them meet the demand. Do you think at some point growth will slow down and integrators will try to gain share in the servicing sector again?
11.
How sensible is it to focus on new installations at the cost of servicing material businesses? Why don’t integrators want to gain more of a share? Is this just a question of focus or is there a limited availability of servicing engineers that the integrators could use to build out their share of servicing contracts?
12.
Do you think the integrators will be at a disadvantage when securing talent compared to a focused third party servicer who might just be focused on a single OEM’s [original equipment manufacturer’s] equipment?
13.
Do you think it’s more attractive to work for an integrator or a third party in the servicing sector?
14.
What are the impacts of the semiconductor shortage and the challenges in container shipping? Are they meaningfully impacting the warehouse automation sector? You mentioned that most players have been affected equally.
15.
In our last Interview you outlined that around 25% of the forklifts required in a non-automated warehouse are required in an automated equivalent. Does this include automated forklifts or is this just a 25% reduction in all types of forklifts? How do automated forklifts threaten traditional forklifts within the remaining 25%?
16.
What would it take for this market to move from seven or eight forklifts for an automated warehouse to three or four? You mentioned many of these forklifts will be on standby and you need to improve the processing but how far down the line are we? This seems a good position for meaningful savings. What needs to happen at the customer and integrator levels for this to happen?
17.
Do you think there will be technology that reduces the need for the automated forklift truck? It seems the 25% reduction moving from a non-automated to an automated warehouse is not that large. I think when you mentioned the 75% previously, it seemed realistic given the amount of conveyor belts and the different picking solutions from the various rackings. Do you think the increase in technology will further reduce the need for forklifts or do you think that 25% reduction is a good final figure for how many forklifts the end game automated warehouse will have?
18.
How does margin break down between the OEM and the integrator? As the market scales, which players’ economics scale better and therefore which would you expect to take a greater share of the margin at a time?
19.
What do you think is the risk of OEMs downsizing the solutions they provide? Could they operate more in the mid-case level if they focused more on it?
20.
How do you expect OEMs to change their routes to market within the battleground you mentioned? Do you think they will stop using integrators to go to market or continue to use that as a portion of their sales? How do you expect those decisions to develop over time?
21.
Are there any pure-play OEMs or are all OEMs also integrators?
22.
How do you expect the pure-play integrators that don’t have any OEM business to perform in the market?
23.
In our last Interview you outlined that you think traditional players such as Manhattan Associates, who have worked in non-automated warehousing, don’t have the technology to compete as well in the automated warehousing sector. Is this trend continuing? Could you relate it to the conversation about integrators owning their own technology and the importance of them having their own software?
24.
What do you think is the end game for the traditional warehouse management system players? Do you think they will just operate in the non-automated segment or is there a certain set of customers who prefer to have specialised solutions from a warehouse management system player and an integrator to perform everything else?
