Locus Robotics CEO on the future of warehouse automation

Any doubts that ProMat has become a robotics event were laid to rest the moment you walked on the floor at Chicago’s McCormick Place. Locus Robotics planted its flag in a big, expensive way front and center in the convention center’s south hall. In less than a decade of existence, Locus has become one of the biggest names in the category and is teetering on the edge of an IPO.

We climbed to the second floor of the company’s ProMat booth to sit down with Rick Faulk, who assumed the CEO role in 2016. The executive discusses the company’s birth as 3PL firm Quiet Logistics, growth and what the future looks like for automating warehouses.

TechCrunch: Yours is largely a brownfield solution.

RF: Both brownfield and greenfield. About 23% of our business right now is actually in greenfield buildings. We started in brownfield, but the great thing about Locus is we can go into both. Some other solutions can only go into brownfield — Fetch can do it, 6 Rivers can do it, Locus can do it, and that’s really about it. It’s really hard to go into buildings that were never designed to be automated, and deploying it by making minimal infrastructural changes is really hard to do.

In a greenfield building, if you’re given cart blanche, what does that look like?

We have a number of clients now that I can’t mention by name who do greenfield deployments, and the building is actually designed specifically for Locus. The great thing about it is it really doesn’t require any great design work — we can operate in most any aisle. But the design is for maximum efficiency. You’ve got an ideal induction area in the middle of the space, you’ve got a pack area that’s around the outside. And in most of these buildings, we do replen[ish] as well. The other day, I was in one building for a very large footwear manufacturer who actually has trucks that back up into the building. Robots take cases right off the truck.

You do truck unloading?

You’ll see some solutions [at ProMat] that automate going in and actually grabbing the box. Once the boxes come off the truck, they go onto the robots and then go to the right area of the building.

Adding payloads onto the robots is mostly being done manually?

Yes. If you happen to go to [the North Hall], you’ll see the Fanuc booth demonstrating an arm. It places one of the totes on a robot, and after a pick, the arm removes it. Generally it’s done with humans, but we’re experimenting with automating that whole process.

Why try build your own robotic arm in-house if a lot of people already do it really well?

That’s the last thing you want to do. It’s a discipline in itself. A lot of folks are really good at it. Our best approach is to integrate with them and not redesign it.

How are the robots communicating with one another?

We have an open API where we do communicate. With Berkshire Grey, our system talks to them, and it also talks to the WMS [warehouse management system]. Our system speaks to the WMS first, and it asks, ‘what are the ideal numbers and orders that should go on this robot to fill out the wall?’ The same thing goes for any sort of integration we do.

So you potentially have the foundation to automate the entire process.

We absolutely do that today. It’s not a dream.

Lights out?

It’s not lights out. Lights out might happen 10 years from now, but the ROI is not there to do it today. It may be there down the road. We’ve got advanced product groups working on some things that are looking at how to get more labor out of the equation. Our strategy is to minimize labor over time. We’re doing integrations with Berkshire Grey and others to minimize labor. To get to a dark building is going to be years away.

Have you explored front-of-house — retail or restaurants?

We have a lot of calls about restaurants. Our strategy is to focus. There are 135,000 warehouses out there that have to be automated. Less than 5% are automated today. I was in Japan recently, and my meal was filled by a robot. I look around and say, ‘hey, we could do that.’ But it’s a different market.

What is the safety protocol? If a robot and I are walking toward each other on the floor, will it stop first?

It will stop or they’ll navigate around. It’s unbelievably smart. If you saw what happened on the back end — it’s dynamically planning paths in real time. Each robot is talking to other robots. This robot will tell this robot over here, ‘you can’t get through here, so go around.’ If there’s an accident, we’ll go around it.

They’re all creating a large, cloud-based map together in real time.

That’s exactly what it is.

When was the company founded?

2014. We actually spun out of a company called Quiet Logistics. It was a 3PL. We were fully automated with Kiva. Amazon bought Kiva in 2012, and said, ‘we’re going to take the product off the market.’ We looked for another robot and couldn’t find one, so we decided to build one.

The form factors are similar.

Their form factor is basically the bottom. It goes under a shelf and brings the shelf back to the station to do a pick. The great thing about our solution is we can go into a brownfield building. They’re great and they work, but it will also take four times the number of robots to do the same work our robots do.

Amazon keeps coming up in my conversations in the space as a motivator for warehouses to adopt technologies to remain competitive. But there’s an even deeper connection here.

Amazon is actually our best marketing organization. They’re setting the bar for SLAs (service level agreements). Every single one of these 3PLs walking around here have to do same- or next-day delivery, because that’s what’s being demanded by their clients.

Do the systems’ style require in-person deployment?

The interesting thing during COVID is we actually deployed a site over FaceTime.

Someone walked around the warehouse with a phone?

Yeah. It’s not our preferred method. They probably actually did a better job than we did. It was terrific.

As far as efficiency, that could make a lot of sense, moving forward.

Yeah. It does still require humans to go in, do the installation and training — that sort of thing. I think it will be a while before we get away from that. But it’s not hard to do. We take folks off the street, train them and in a month they know how to deploy.

Where are they manufactured?

We manufacture them in Boston, believe it or not. We have contract manufacturers manufacturing some components, like the base and the mast. And then we integrate them together in Boston. We do the final assembly and then do all the shipments.

As you expand sales globally, are there plans to open additional manufacturing sites?

We will eventually. Right now we’re doing some assemblies in Amsterdam. We’re doing all refurbishments for Europe in Amsterdam. […] There’s a big sustainability story, too. Sustainability is really important to big clients like DHL. Ours is an inherently green model. We have over 12,000 robots in the field. You can count the number of robots we’ve scrapped on two hands. Everything gets recycled to the field. A robot will come back after three or four years and we’ll rewrap it. We may have to swap out a camera, a light or something. And then it goes back into service under a RaaS model.

What happened in the cases where they had to be scrapped.

They got hit by forklifts and they were unrepairable. I mean crushed.

Any additional fundraising on the horizon?

We’ve raised about $430 million, went through our Series F. Next leg in our financing will be an IPO. Probably. We have the numbers to do it now. The market conditions are not right to do it, for all the reasons you know.

Do you have a rough timeline?

It will be next year, but the markets have got to recover. We don’t control that.

Locus Robotics CEO on the future of warehouse automation by Brian Heater originally published on TechCrunch

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