Tompkins Robotics: Mike Futch

Podcast: Play in new window | Download

Subscribe: Apple Podcasts | RSS | More

Mike Futch of Tompkins Robotics discusses how COVID-19 has affected warehouse automation and microfulfillment for good– and perhaps even for the better!

 

 

Danny:

Well hello and welcome to today’s Executive Series. Today I have Mr. Mike Futch, who is the president of Tompkins Robotics. Mike, thank you so much for joining me today on IndustrialSage Executive Series.

Mike:

Thank you so much for having me, I’m glad to be here.

Danny:

I’m excited to hear your story. We were having some great chatter before we were recording here, so I’m excited to kind of jump into all of that good stuff. But before we dive into the story a little bit, just for those who are not familiar with Tompkins Robotics, just give me a quick little high-level: what you guys do.

Mike:

So we’re a company that makes AMRs that do sortation and so we use these small robotic vehicles, and we sort items, such as a calculator here or a pair of reading glasses, a pair of shoes, and we sort the items for an order to replenish store shelves, fill your ecommerce order coming to your home, the grocery items at the grocery store that you would pick up on your way home from the office. We use them to sort all these different types of items to include outbound shipping, returns, and other channels as well. And so we’ve come up with a way to use these small autonomous robots, and use a fleet of them to do what big, heavy, long lead time, more expensive, less flexible types of sortation systems of the past did. And it is a very unique take. As a matter of fact, we have some really interesting ways that we can use our system. Everything in our system is on wheels, including the surfaces the robots run on, the charge stations, everything is portable and modular and configurable. And it’s an entirely different take on how to do those processes that are required to be done up and down the supply chain, in every tier of the supply chain.

Danny:

Awesome, well, I’m excited to kind of get into that a little bit more. I’m sure there’s going to be some great topics that we’re going to uncover as we have a conversation around that but before we jump on I want to get to know Mike. I want to get to know you a little bit more. So tell me, how did you get into… Well take me before Tompkins, take me before… how did you get into this crazy business?

Mike:

For a poor kid that grew up in North Carolina out in the country and worked on farms from the time that he was 11 years old, this is a far cry from what I was doing when I was growing up. I went to college, I was in the Air Force, I got out. A guy by the name of Jim Tompkins, same guy whose name is Tompkins in Tompkins Robotics, gave me a shot and I was a consultant for decades. I worked at Tompkins, I worked at Guard Consulting back in the day, Deloitte Consulting, I came back to Tompkins eventually. And then in 2017, I was sitting around and I was looking at these whole AMRs, autonomous mobile robots doing things like moving a trade across the floor of a warehouse. And it dawned on I and the two guys I was talking with that wow, if we could make that robot run a little faster, and we could put a little tilt tray on top of it, we could put individual items on it, go to a destination and tilt it into a container or receptacle. And as soon as we thought about sorting items for an Amazon order, and then we’ve realized we could use it for returns, and we could use it for store replenishment, we could use it for outbound shipping of small packages, that type of stuff is sent to your mailbox every day. It was almost like our heads exploded like a jet.com commercial and I was hooked. And so we went immediately and started working on this as hard as we could. And we’ve had some success. We’ve got over 10,000 robots in operation today.

Danny:

That’s awesome. That is awesome. So alright, when your consulting days before coming back as Tompkins but under Tompkins Robotics, were you in material handling space or the same space or something completely different?

Mike:

It was mostly supply chain consulting. So back in the 90s, it was a lot about how many warehouses you had and what inventory you put in them and how you process the goods, the orders through the distribution center. Later, when you got to the .com period and into the 2000s, it became more about ecommerce fulfillment. And then for a few years prior to getting into Tompkins Robotics, and the AMR, it was about the entire supply chain reimagining the whole thing and how you blend the customer experience. The different tiers of the supply chain, and how you blend the different channels, retail ecommerce, returns, all of that together to try to make it into the best network that you can from a physical perspective, but also the best information and material flows.

Danny:

Yeah, no, that’s very cool. So one of the other things that I want to ask throughout your journey, in your career and in your life, is there something that stands out that really helped you? I don’t know, maybe it’s a good piece of advice or a mentor, somebody that really sticks out from your career standpoint?

Mike:

It’s hard to put a finger on a single individual or event but if I had to summarize at a high level, I would say my parents because my first summer job I was 11 years old, they taught me how to work hard, how to go after whatever I wanted. They taught me to never give up. And I still look to them for inspiration. And dad’s gone now, but I’ll call mom up and just talk to her sometimes. And so, if I had to pinpoint a single individual group of people would be my parents.

Danny:

That’s awesome, that’s awesome. So in your downtime, when we’re not solving the world’s challenges or the world’s supply chain challenges, what are your go to hobbies?

Mike:

Well, to tell you right now, I live in Cocoa, Florida. And with all the social distancing, I was a big fisherman and all that stuff before, but now that you can’t go to bars and restaurants and other places like that ’cause we’re doing social distancing. My wife and I have spent a lot more time pulling out of the boat, Indian River, Banana river et cetera, around Cocoa Beach, Florida and it’s really been fun and that’s been our social outlet. I literally went this weekend and I bought five new fishing rods and reels so yeah, fishing and those things are big for me. I also like college athletics and anytime I can get together with friends around the pool or on the boat or on the water or whatever, it’s a good time and with the kids as well.

Danny:

Oh, that’s awesome. Alright, so the two follow up questions with that, number one, what’s your favorite fish that you like to fish? What do you like to go after?

Mike:

Tuna, dolphin, wahoo. And when I say dolphin I mean dolphin the fish. It’s mahi-mahi, a lot of people call it, but yeah: mahi, wahoo and tuna.

Danny:

So, the tasty fish.

Mike:

Love to eat all three of them and love to catch them as well.

Danny:

That’s awesome, alright. And then college sports who your team’s?

Mike:

Well, my team is my Alma Mater, NC State. I was an engineer from NC State and I still have lifetime football tickets. I don’t make it but to a couple of games a year because I live in Florida now, but I follow every game I can and I’m hopeful that there’ll be sports this fall but I’m starting to have my doubts that they’re going to actually have a game.

Danny:

I think we all are. But we’ll see. But okay, well… so you said you were doing consulting work, so then you said, “Hey, I want to… “Let’s go start a Robotics company”?

Mike:

Well, yes, so we, I worked with some colleagues and we figured out a business plan, and we started putting things together. We found an AMR manufacturer that was actually Using an AMR to sort packages, and we started doing modifications of that to be able to sort with cross belts, tilt trays, different types of devices to sort anything from the size of a penny. And now we can do things up to as large as 66 pounds and a meter long. So we now have grown from an idea to three different models doing different sizes and shapes of items, and a wide variety of applications for those different models, and it’s been a rollercoaster of a ride. And in that short amount of time that we’re talking about here, from 17 until today, over 10,000 of our robots have been deployed. So we’ve had a lot of success, and we’re really excited about where our future’s going. We’ve had a little bit of a setback in 2020 as a lot of people have, people postponed some projects, a little apprehension about what Covid-19 is going to do to their business, but it’s already turned a corner and the last half of 2020 and 21 and beyond, it’s just going to be phenomenal.

Danny:

So when you say that you think it’s turned the corner, what do you mean by that?

Mike:

Well, so there was a lot of apprehension of firms. And we weren’t getting the same quantity from each. We had a couple of projects. I’ll give you an example. We have an ongoing project right now in New Zealand. I think everyone that heard New Zealand shut the country down, so no one who’s not from New Zealand can even come in unless you’re part of the America’s Cup because they gave them a waiver, right? So we’re not the America’s Cup, so we can’t go over there. All the equipment has been delivered, but we can’t go to New Zealand to install it right now because they won’t let us in the country. And so we have some setbacks like that. But now the phone is ringing off the hook. RFPs are coming in. It’s all we could do to keep up with the tide of people asking for concepts, pricing, contract negotiation… And when I say turned the corner, the last half of 2020 and 21 and beyond, we’re bigger than we probably ever would have been, if it weren’t for COVID-19 . COVID-19 is having a bigger positive impact in our business long-term than anything we could have imagined. It did have a temporary setback, there was a three month period there where everybody was like, “What does this mean? What am I going to do? Where do I go next? Am I going to open my stores back up? What’s happening?” But that is over and now it’s pretty much wider.

Danny:

Yeah, I would agree with you. There was this ominous period, starting in mid-March. I think really, at that point, it was just like, “What is going on?” But it’s good, and it’s a very similar story, what I hear from a lot of other companies as well, specifically in any type of technology-based company for manufacturers, certainly if you’re in AGVs or AMRs, it’s huge yes. And I agree 100% that the COVID situation from a long-term standpoint has really created a big opportunity because of I think there was… Now we’ve been shown so many different vulnerabilities in the supply chain that there were already issues to begin with that were… We were going down this road anyways, but this just literally threw gasoline on. So right place, right time.

Mike:

And especially when you think about the micro fulfillment arena, because during COVID-19 that just leapfrogged and I read someplace where the amount of increase in ecommerce in a 12 week period of March, April and May, was equal to the previous eight or 10 years as far as percentage of growth. And so I don’t recall where I read that, so I don’t want to plagiarize anybody, but I did read that somewhere. And it rings true to me. It’s really taking things off, and it’s the new reality as well. When you think about micro fulfillment, specifically, not everyone’s going to go back to this in-store experience for groceries and other things like they were before back in January and February. There’s a new reality as far as people and their acceptance of microfulfilment, at home deliveries and buy online and pick up in store, that’s never going to go back. There may be a slight reversal on a small percentage of the ecommerce and the buy online, pickup in store, and home delivery once there’s a vaccine and we’re completely out of the woods on this thing. But I don’t think it’s going to be more than just a small tick, it won’t be anywhere near where it was before. And more than likely, as younger people and older people become more accustomed to using the type of technology to buy online, pick up in store and have it home delivered, it may be that growth even goes faster. So I think where we projected online sales and home delivery and buy online and pickup in store to be in say, 2022, 2023 we’re going to see that a couple of years earlier because of COVID-19.

Danny:

Yeah, and that was definitely a huge trend that was being pushed forward before. I mean, I remember hearing stories not that long ago, and I can’t remember which company was piloting it but in Walmart, for example, in the stores where they’ve deployed AMRs or AGVs to go and actually pick product for consumers to better do that. And so from your crystal ball, what does the future of retail look like from a fulfillment standpoint?

Mike:

Well, I think you’re going to have more and more situations where you’re trying to do a store- I mean, an order fulfillment at the store level, or at a micro fulfillment site that’s a dark store or nearby. And we’re already seeing a lot of that. There have been quite a few ASRS-type vendors, automated storage and retrieval types of systems that have been built or made for micro fulfillment either in a dark store or in the back of the store. I think you’re going to see more of that. I also think it’s going to change, though. I think it’s an unsustainable model to put $5 million on the back of every store. For example, Walmart has 4,800 stores. That’s not going to work. So I think there’s going to be some new creative ways of doing something that gives you a large percentage of the benefit that you would get from one of those: I call them ASRS systems for micro fulfillment, without having to spend that money and delete time it takes to do that. And we’ve actually come up with a design ourselves, that’s getting a lot of traction. We’re in a contract negotiation with several firms. We just rolled this out in April. It’s our micro fulfillment system. And what we like to tell people, it’s a 10th of the cost a 10th of the lead time, and a 10th of the space versus the ASRS-type systems. And I’d welcome anyone who wants to go to our website and look at it, it’s all over our website. We’re really excited about it. And we’ll have our first customers under contract here before the summer’s over.

Danny:

That’s awesome. Congratulations on that.

Mike:

We’re excited, I think we’ll sell more robots and micro fulfillment two years from now than we will to distribution center operators.

Danny:

I could see that because I thought this was a big shift that was- again, I thought it was happening anyways, and so it is the whole last mile piece: look, how can we get products from a consumer standpoint getting them down to consumers and really rethinking the way on how distribution happens at that point, and it was all good. Do you think that it’s going to be more of a flex model where you might have up front, you’ve got customer-facing stuff. And in the back, you’ve got actual fulfillment happening and it’s completely separated. Do you think that it’s going to be mixed? What do you think that’s going to look like?

Mike:

I think it’s going to have to be mixed. Because even when you put one of the ASR systems on the back of a store, you don’t put all the SKUs or all the items in that system. So I think it’s going to be a mixture of certain stores that have micro fulfillment at the store level, pulling from shelves and in the house on the selling floor with some reserved stock in the back of the store, The other options would be a dark store that maybe services three or four stores in a small radius for buy online, pickup in store and home delivery. And then you’re going to have more regionalized distribution centers. We have one customer that has what they call a local omni channel hub in Southern California, it’s actually in the LA area, and so it’s handling a couple hundred miles’ radius. And so I think it’s going to be different levels of different automations, I don’t think it’s going to be a one size fits all for every single customer.

And I think being able to do something with various types of technology such as ours and others, and ones that are complementary that can be joined together to create or craft a great solution in each one of those tiers of the supply chain. That’s where people are going to find value. That’s what’s going to allow people to work on razor-thin margins for ecommerce when they’re going out of the store. I think all that’s going to evolve, and not everyone’s going to survive. There’ll be some consolidation in the industry, there’ll be some firms that maybe don’t make it. But in the end, the consumer and successful retailers will find a way to make it work. The consumers will get what they want because they’re not going to buy if they don’t get what they want. And the successful retailers are going to come up with things like we’re talking about right now at every tier of the supply chain to be able to satisfy that convenience factor, that speed to market, that satisfaction level for the customer.

Danny:

Yeah, certainly I think it’s a fascinating challenge, because you really do have a nexus of technology. Obviously, these market demands you mentioned here, speed to market, the convenience piece. I mean, Amazon obviously has flipped everything on everyone’s heads because the consumer’s expectation is that “I need to have something in two days minimum, or an hour,” right? And so in certain cases, so what fascinates me is that you’ve got a really interesting challenge to be able to meet all those, but also it’s very multifaceted in the sense of, if you’re talking about expanding a retail location, you’re talking about a very expensive cost per foot expansion, whereas traditionally a distribution facility would be rolled miles away where the cost per square foot is going to be significantly cheaper. So there’s a premium cost that’s going to come to that, so finding that balance from a supply and demand standpoint I think is fascinating.

Mike:

It is interesting and I don’t think there’s a one size fits all model and I think different people will be successful doing different things because it’s going to work for them and with the demographics or where they’re located and the way their cost structure is. But we are seeing, for example, there’s an RFP that we are working on right now for a company that’s a large grocery chain. And they’re actually looking to convert a portion of the selling space at the store into reserve and order fulfillment- so not just what is called the traditional back room, but a portion of the selling floor. And their objective is to replace that site daily as necessary, have less stock on the shelves, still have the same number of SKUs and a smaller footprint, but have a warehouse so to speak as part of the location.

There’s another company that we’re looking at or working with and the design that we’ve come up with them. It’s a little bit unique. Every town you drive through, there are vacant grocery stores or retail spaces just sitting there. The landlord would love to get someone in there. Even if he’s only getting 50 cents of the dollar of what he was drawing two years ago. You could take a space like that, you can put a system like ours, which is a bunch of autonomous, small robotic elements. You can combine it with a storage system, like a good two person AMR type system. And there’s several of those on the marketplace- I’m sure you’ve talked to some of those guys in the past- and now you can rapidly deploy an AMR, just a person type robot, a la Kiva from back in the day, to deliver to a T-sort system to sort things out to an individual order and convert our vacant grocery space into a warehouse in two months. And so the rapid deployment and combining complementary technologies, taking advantage of open vacant space where there’s a need or a void, there’s a lot of ways you can skin this thing and create unique solutions for customers. And the customers in this case would be the retailers, whether that be for grocery or for general merchandise.

Danny:

Yeah, well, there’s certainly a lot of exciting things on the horizon, that’s for sure. That sounds like you guys are kind of on the leading edge of helping to provide those solutions and answering those challenges of the industry. So Mike, in kind of wrapping here, for any of those who’d like to learn more about you guys what you’re doing, what’s the best way to contact you or reach out to you guys?

Mike:

Well, barring me giving everyone my cell phone number here–

Danny:

I was hoping for in a credit card, but anyways…

Mike:

Just please go to tompkinsrobotics.com, it’s all one word: tompkinsrobotics.com, and there’s no h in Tompkins, it’s T-O-M-P-K-I-N-Srobotics.com. There’s video on our website, there’s information about our different applications, there’s information about our micro fulfillment solutions, there’s a lot of stuff there about the different models and the things that we’re doing. And we would welcome the opportunity to speak to anyone who’s interested.

Danny:

Awesome. Well, Mike, thank you so much for the time today. I really enjoyed our conversation. And yeah, for those who want to check out more and learn more about Tompkins, go to tompkinsrobotics.com

Mike:

Thank you very much. I enjoyed our time today on the phone, and I hope you have a good rest of the week.

Danny:

Thank you, this is awesome. Hey guys, so thank you so much for watching. This wraps up our episode today with Tompkins Robotics on the IndustrialSage Executive Series. Listen, if you are not subscribed to us on industrialsage.com, go ahead and go there right now. If you’re not there already and go ahead and subscribe. You want to get on the emails. This also goes out in podcast formats, sometimes people don’t know that: so you can go to your favorite podcast station, we are there- whether it’s Spotify or Stitcher or iTunes or there’s like a half dozen others that we’re on. So thanks for listening or watching, and I’ll be back next week with another episode of IndustrialSage. Thanks.

 

Thanks for reading. Don’t forget to subscribe to our weekly newsletter to get every new episode, blog article, and content offer sent directly to your inbox. You can also subscribe wherever you download podcasts so you can listen on the go!

Sponsored by Optimum Productions