Unboxing Logistics: An EasyPost Podcast

Warehouse Automation and Sustainability With Kim Baudry From Dematic - Ep. 21

January 24, 2024 | 40:53

In This Episode

No initiative is an island—and that includes sustainability. By implementing efficiency-boosting changes like automation, your business will also limit its carbon footprint. Kim Baudry, market development director at Dematic, explains how automation helps people, profits, and the planet.

Sustainability, labor, and automation

Because labor is a resource, sustainability includes making people’s jobs physically and mentally easier.

Kim explains, “Automation brings everything to the level where you're not bending, you're not lifting. It can reduce the amount of time that you're walking back and forth. … We have to think about how we're treating [people] so we can retain and attract them.”

How software helps

Warehouse automation isn’t all robotics; software plays an essential role. As Kim puts it, “Good software creates efficiencies in operations. When you have inventory tied to where it needs to be and where it needs to go, you're spending less time, which means less energy. You should be able to take up less space, and you have higher accuracy on your order. All of those things are good for sustainability.”

Balancing the costs and benefits of eco-friendly practices

Is sustainability worth the cost? According to Kim, the answer is an unequivocal yes—when you look at the big picture. “It's a gut reaction to go, oh my gosh, this is going to cost me a lot of money. But you really have to look at the long term. If [automation] benefits your people, you're going to have a more stable workforce. You can avoid getting more space. If you can cube your trucks, you have fewer trucks on the road, fewer expenses.”



Lori Boyer 00:00

Welcome everyone to Unboxing Logistics. This is everyone's favorite podcast from Easypost, where we dive into the latest trends and going ons and happenings and get to know all of our peeps here in the shipping and logistics industry. I'm Lori Boyer, and I'm your host as always, and I am just really thrilled today to introduce our topic and our guest.

We are going to be diving into some really cool, interesting info around automation in your warehouses. So I have invited Kim Baudry from Dematic to come talk to us a little bit about sustainability and automation and how all of those things interplay together. Kim, kicking it over to you. Welcome, welcome. I'm so excited to have you here. Tell us a little bit about who you are and your background. 

Kim Baudry 00:57

Well, thanks, Lori. I really appreciate the introduction. I'm looking forward to spending our time together. I am the global markets development director over our vertical markets activation team at Dematic.

it's a bit of a unique role. We are a team that I guess to summarize what we do, we research to serve our internal and external customers in the industries that they work in. So we try to be at the tip of the spear, trying to understand what's going to be happening in our customers' worlds and how Dematic should be responding to those changes.

And so I've been in the industry, in the logistics industry for about 22 years or more, which seems like a long time. And that's only half my career. So but yeah, I've been around and been mostly in sales until I joined Dematic and became more involved in the strategic corporate strategy role.

Lori Boyer 01:54 

Fantastic, Kim, super excited to hear from you. We're talking everybody today about sustainability, automation, and all the things that come with that. So what are your hot takes that you feel like are the most important things for our community to get from today's episode? 

Kim Baudry 02:12

The first, I think may seem kind of obvious. But I would state that you really need to determine as an organization, a corporation, what is going to be your policy on returns. Right. Right. So if I could elaborate a little bit on that topic. So some companies have the benefit of having a store to take returns. Some have a store and a distribution center.

And a new thing that's happening that I think is really cool, and especially with what I guess would be labeled as sustainable brands. I would use Nicks, for example, Packed. They actually have rules built in to their, the returns logistics that say I think it's probably at a dollar value. If it's at a certain dollar value, you want to return this to me.

We say they will send me, they'll give me credit and then they'll say, but just keep the item and donate it to a worthy cause or whatever. And I love that policy because actually, when you think about the cost of handling returns, it's enormous. So if you're going to just get the stuff back and throw it away, let me make the decision. So I think that's a big, a big thing. And it may seem like I said, obvious, right, but really give some thoughts of what your long-term corporate policy will be on returns and how that you want to look like, like that. 

Lori Boyer 03:32 

I love that and I, I just wanted to say that while you say it seems obvious to have a returns policy, I recently was doing a webinar all around returns and one of our poll questions was how many of you have a solid returns policy?

And it was about 50 percent. So I mean, I think you're on there. I was like, what? How do you know? You know, and anyway, those things can be involved. 

Kim Baudry 03:53 

You know, it's, I think that we get caught up in our day to day business. And like you were saying, like this, this is not something that we often sit down and think about.

We're just keep, just keep moving. Right. So that would be my first thing. The second thing really would be remember the importance of software and analytics in not only managing returns, but also in the role it can play in the overall supply chain and inside your distribution center. So we often think about when we say automation, we're thinking equipment, but the software drives a lot of efficiencies and actually does a lot to help us with returns with managing our truck fleets or our yard and all that kind of thing.

So I think importance of software needs to be the second thing. And then thirdly if you are going to. Many, many, many companies now are making sustainability a core competency or part of their mission. And so remember that sustainability isn't just addressing, you know, carbon emissions, but it's also addressing how we treat our people.

And what can I do to help their lives and their jobs be better? And we can talk more about how automation fits into that, but just in general, it's a big part of you know, the ESG tracking and what you're looking to do with the sustainability policy. 

Lori Boyer 05:12 

Okay. I am so excited to talk about that. That is such an interesting take. And so I can't wait to dive into all of these. This is going to be a really great time. But before we do. Our community really, I feel like we're all out here fighting the same battle. We're soldiers together, but we don't always get to know each other very well. So, I want to learn a little bit more about Kim.

Okay. So, I have just a couple of questions for you. The first one that I've been really curious about. Tell us what you were like as a teenager. Through high school. I know. Were you the band nerd? Did you homeschool? Were you the rebel? Tell us a little bit about who you were. 

Kim Baudry 05:56 

Yeah. Isn't it funny? My brain can go back to that period of time. Like I just happened. So I was a weird combination of things. I think I was a, graduated eighth in my class. So kind of, you would say I'm a book nerd, but then I got in some trouble every once in a while, you know, that teenagers do. Not a lot. Actually was in cheerleading and student council. 

Lori Boyer 06:20 

You know, so now, now tell me, were there only nine students in your graduating class or is eight a big number?

Kim Baudry 06:28 

No, no, yeah, true. Right. Up here, it might be your whole class. It could have been. Yeah. No, we had about 320 people, I think in my graduating class. 

Lori Boyer 06:36

So, so you, you were just like the successful do it all, you know, do your grades, also extracurriculars. That sounds fantastic. 

Kim Baudry 06:47 

Well, it was kind of like the way, you know I always tell people my dad really thought that I was going to be a boy. And so he pretty much raised me like, you know, so I mowed lawns and I did, like I said, it's not a, it's just not a neat package that you put in your head. I did all the stuff that a boy would do too. So it was interesting, but he also expected me to rise to the top. So. 

Lori Boyer 07:12 

That's amazing. Okay. So my other question is, if you were to win the lottery today, what would your life now look like? Are you working? Are you traveling? What are you going to do? 

Kim Baudry 07:25 

Oh, that's a lovely question. Man, wouldn't that be fun to have it actually happen? Because my brain went right to like things I would do. I would probably work to the extent that it would be more from maybe nonprofits and doing some things that are meaningful to me.

I would definitely travel. I love to travel and I would be setting up things that could create generational wealth for my children and believe it or not, I have a granddaughter now. So yeah. 

Lori Boyer 07:55 

That's incredible. I feel like we could be best friends. Because ...

Kim Baudry 07:59 

If you didn't live so far away. 

Lori Boyer 08:00 

Yeah, I know completely. I would love that same kind of life, the nonprofits that, you know, even though where we, what we love, and I think that ties into some ways like helping others is the fact that we're here to kind of figure out what's going on in the industry and help businesses be able to succeed the best they can. You know, I love that kind of giving back kind of aspect.

So that's fantastic. Okay. Sometime when I am in your quaint Michigan locale, we are gonna gather, get together and meet at some cute little coffee shop or something. 

Kim Baudry 08:37 

Oh, it would be lovely. You would love it here. 

Lori Boyer 08:42

Okay, awesome. Alright, well let's get into the topic of today. First I want to learn Dematic. Why don't you tell us who Dematic is. I'm sure some of our community knows, but not everybody does. So tell us a little bit about you. 

Kim Baudry 08:55 

We are one of the world's largest material handling and automation companies, which includes software. We are owned by our parent company, Kion, which is based out of Frankfurt, Germany.

And they have what people, you know, would know as forklift trucks, automated guided guided vehicles. So we're, we're in this space that operates in the DC, primarily. Starting to look to expand outside the four walls. But that's where we've been, you know. For the last over 200 years. That's what we've been focused on.

Lori Boyer 09:27 

200 years. 

Kim Baudry 09:28 

Yeah, our little company is like 200 years old. 

Lori Boyer 09:31 

200 years ago, what did that look like? 

Kim Baudry 09:34 

Mostly the conveyance, moving things from one place to another. Yeah. 

Lori Boyer 09:39 

So always though the high-tech end of whatever was going on in the world. 

Kim Baudry 09:43 

I guess back then it would have been high-tech. 

Lori Boyer 09:45

Yeah. That's amazing. So let's talk a little bit then about how sustainability kind of fits into this package. Sustainability has been a big topic. As I mentioned to you I do a lot of webinars. It's something that's been brought up a lot as a concern for people. I think we see it in the news. You and I were just chatting earlier about the crazy weather and you know, so I think is everybody experiences kind of the things going on in the environment.

It's, it's front of mind. So how does sustainability sort of fit into automation and, and to Dematic's overall mission? 

Kim Baudry 10:19 

Well, actually it's driven within our organization, but our parent company as well as part of their leading goals and initiatives and plans that we have. So, and our CEO puts it in, I think a really easy way to think about it.

He says it's basically people, planet, and profitable growth. So obviously we're, we're traded, we're a public company. So we do have shareholders that we report to. But ahead of that profitable growth is the people, how our people, people that we support as customers, and then the planet. And we have to think about how we make sure we're taking care of those things and still delivering, you know, profitable growth.

So it's definitely, it's, it's at the top of the organization and down into Dematic, one of the key things that we've been focused on, not only because it's good for us, but we have a lot of large customers, global customers that are demanding that we, we support them and their sustainability initiatives.

Lori Boyer 11:23 

Okay. I love that. So people, planet, and profitable growth. Really cool. That reminds me of your hot take around people and sustainability. Can you dive into that a little bit for me? What, what do you mean by that? 

Kim Baudry 11:38 

Absolutely. So, you know, the, the great thing about some of the automation that companies like Dematic offer is that it can make a person's job inside of a warehouse much easier.

And in many of the countries where we operate, there are very strict laws and regulations, right, about how much you can lift, how much, how much you can twist, how much and all these things. So the automation can allow things to be much more ergonomic in the workspace for one thing. So we bring everything to the level where you're not bending, you're not lifting. It can reduce the amount of time that you're walking back and forth. And so those are, you know, kind of very easy things to know. The other thing is, is that it, it provides often, if you can think about like we have good, what we call goods to person workstations, so I'm standing in one place.

Product just brought to me. I take it out of a bin, and then I put it in probably to a customer's order into a store order. And so I'm moving very, you know, ergonomically, but I'm also being guided with the computer and other, you know, lights and things like that, so it makes your job a little more interesting I could say, you know, than reading a paper list and trying to hunt through a warehouse. So I think you know, taking care of people inside the building, automation plays a role very, you know, simply.

And at the other end, when we do things like, let's say we're helping a customer build a store-friendly pallet or cart to deliver to a store. When that person now is receiving that in the store, they're not just picking, you know, there's not just piles of cases laying on the floor where they've got to pick them up and figure out where they go.

And it's loaded so that I can actually wheel whatever it is into my store to put things away. And so, you know, it, it's throughout, it goes into the, into the distribution center, but also to, out into the stores and other things as well. 

Lori Boyer 13:36 

That's really cool. So just like in a way that sustainability and, you know, having environmentally sound practices helps our planet. You're saying in a way, like we need to protect the people and their bodies and all of that in a similar fashion. 

Kim Baudry 13:52 

Absolutely. And you know, we have an aging workforce. I mean, that's not probably news to anybody. Many of our customers are struggling to find labor and to retain labor. So we have to think about how we're treating them so that we can retain them and we can attract them.

So yeah, I think that the automation definitely in what. Now we have, you know, things where we've got the mobile robots moving around in conjunction with the people and so safety is a consideration, obviously. But again, they're there to aid a human in doing work that used to be physically stressful, possibly mundane. And so that's, that's how I think it fits. 

Lori Boyer 14:34 

Okay. I love that. So how else, so if we've got somebody watching right now and they're learning about, you know, they've got, let's say a couple of DCs or something, what should they be aware of in terms of sustainability, automation? How is their warehouse basically contributing to the challenges around sustainability?

We hear a lot about transportation and of course the emissions and gas and but we're inside the walls of the warehouse. What are the issues there? 

Kim Baudry 15:01 

Well, I think there's a lot of things. There's a ton of things you can do inside the DC to actually help be proactive on the sustainability side of things. We start with software as your foundation, right? So a software system that is connected to your inventory and to your equipment, first of all, can help you have increased inventory accuracy, which then contributes to increased order accuracy, which then contributes to less returns. So that's a simple, you know, drawing a line, right?

The other things are things, obviously, that we hear about, you know, using packaging equipment that doesn't require a lot of air and builds a package around an individual item or a group of items. I think also there's an opportunity and again, this goes with software and automation is being able to build out the cube of your truck, your outbound truck better.

So we have less trucks on the road. Right. So yeah, if you know what you're trying to build to and a lot of our large retailers do they'll know, you know, and it's a balance because they're balancing cubing that truck with also making the job at the store as easy as possible. So sometimes there is air, but you know cube utilization is really important.

And speaking of cube, which is about space, I think about when you use automation, especially when you can use things that store product in smaller spaces, pick pack in smaller spaces, we can actually shrink the size of a distribution center significantly. So globally, this is a, this is an issue and we operate in the Asia Pacific region. And there are, you know, five level distribution centers outside of Sydney, Australia, Korea is, you know, we have quoted on several, you know, levels.

Instead of going out, they have to go up. Yeah. So if you think about that, you don't, you can't have inventory spread across a million square foot distribution center anymore. You use a lot more energy when you're doing that. You're, you know, using land that you might not need to. And the cost of all that's going up too.

So space utilization is a big thing to think about when you're thinking about sustainability inside the four walls and, and even how it impacts the outcomes outside the four walls. 

Lori Boyer 17:29 

Okay. So the larger your distribution center, you were saying the more energy you're using. Is that, is that just if it's spread out? Like if you go up, are you not still using energy or how does that work? 

Kim Baudry 17:42 

You are, but if you think about, I've walked into distribution centers where I will look at all of the, the racking and everything is halfway up the height of the building. Right, rest is open air and it's a lot of energy to cool, heat, or just maintain the temperature.

So, when you are vertical, you actually can, and if you do use the vertical space of your building, you're actually more energy efficient. We don't have to have lights on inside of, for instance, an automatic storage and retrieval system. They can be dark and so the space that we're lighting is where the person is working. And during the night, all that's dark, but yeah. 

Lori Boyer 18:28 

Okay, so everybody is watching. Go look in your warehouse. Are you using all of your vertical space? Have you got a lot of empty space up there? I'm sure if you do, you're not alone. So don't worry. But that does mean that, you know, you're probably using up more energy than you need to be.

That's a great sign there. So we talked about returns. So inventory management, returns. I mean, Returns is kind of the bane of a lot of our existences. And returns is a huge issue when it comes to sustainability. Can you explain why returns are such a problem in sustainability? I mean, it's pretty clear, but can you dive into that for us?

Kim Baudry 19:07 

Yeah, I think that there's a couple industries that have a real black eye with regards to this. So apparel is probably the leading. Because we see regularly in the news, you know, islands of apparel showing up on the shores of someone, some other country. Right. And so, and then anything ecommerce gets a black eye.

So it, it returns is the pain because there's just no easy way to do it. There isn't. I'm not here. I'm not going to tell anybody today, we have the silver bullet for handling returns, because we don't. And again, that's why I think you, that's why making your decision, a corporate decision around how do you want to manage them is super important.

I've seen, you know, obviously our large retailers that have big, that have brick and mortar, they have a wonderful way of handling a return. I can take your online order back into my store. Then they still have this, I got to look at it. Is, can I, is it used? If it's used, is it broken? You know, and all those other rules that we got to look at.

But if it is resellable, then I can put it in stock on my, and I don't, then I'm not shipping it somewhere and shipping it back somewhere, you know, so they have a great benefit and having that, that space. You know, as far as ecommerce companies, you just have to have, again, make that decision up front.

How do I really, is it worth it taking it back? You know, because it might not be with all of the transportation and the handling once you get it and all that. But there are things that you can do once if you do have a returns coming to your distribution center. And again, I start with software as being foundational, because every industry and even in an industry with, each customer will have different rules about what they want a person that's doing receipts of returns to do.

So do I need to inspect it? If I check, yes, it needs to be inspected. Do I need to repair it? Do I need to, you know, any of those things and then after all that's done, because that's all manual, there's nobody automating that now. The software can walk you through the steps and even let you record what you've decided.

So you're tracking what you're doing, but it's not automated. Don't, maybe one day we're going to have a robot that can do that. But for the moment, it's, you know, humans. So then, from that point, if you do have returnable inventory, there are systems that allow you to put things. And what I would call it, it's really a buffering position.

So, let's say this item, you know, you scan it in and it said, this is still, you know something that we're selling. It has demand for it, and I can use something like a shuttle or what we call a pouch system. It's actually up in the air and it looks like a trolley that we do have at the dry cleaners, but it's holding a pouch.

So you can and inside the pouch, you can stick a return and then they'll take it away, hold it in the spot. And then if you have an order that has demand for that, you can bring it back out and ship it to somebody. So, you know, again, returns is the bane of everybody. It's not easy. It's not pretty. And everybody wants to talk about how do you do it better.

And, you know, I was like, well, again, you just, it's, I think it takes, again, defining how you want to handle it and then maybe experimenting with different ways to manage it once it's back inside your distribution center. But there, there are ways to automate it a little bit, but you got to have that front-end manual intervention pretty much.

Lori Boyer 22:43

And, and I think that what you said earlier about having a policy. and, and kind of knowing how you're approaching returns is so critical. I know that in terms of sustainability, I read some study that, you know, 50 percent of returns end up in a landfill and, you know, it's tons upon tons upon tons.

And as you said, it's a, it's a black eye for those of us who are, you know, in ecommerce or in, in clothing retail. It's something that consumers are aware of and aren't very happy. So let's say, you know, how do you determine, so your steps were first, determine if it's worth it to even have them return it, correct?

 And then once it's been returned, if you do decide it's worth it, I guess, let's go back to worth it. What, what would make it, it's simply resellable? Is that what would make it the value worthwhile for you to not, you know, advise that they donate it or something? 

Kim Baudry 23:47

Yeah, I, you know, I think, I think, and I don't know, because I'd like to talk to these companies more on this topic. But it appears that it's, it's determined like in a dollar value. So if it's, if it's going to cost me more to take it back than it cost, I made selling it, I'd rather you just keep it. Now, a lot of companies are still taking that stuff back. The majority of them are. And I stop and think, this is weird, I know, but I have a bunch of millennials and Gen Z's that are my children.

And I stop and think, I'm like, Oh, are they going to just throw this away? I might just donate it. And now I'm taking a hit, but it's usually not a large one. It might be 15 bucks. Right. But I'm like, Oh, I just know this is going to get thrown away. Another thing that's I think super interesting is that we're starting to service customers in the resale part of clothing, which is just exploding. Resale and rental.

It's the resale industry is growing in the triple digits in this country. And so imagine everything they handle is actually a return. So you have to inspect everything and then you have to photograph it if you know and then you have to store it and then you have to pick it and pack it, etc. But you see the likes of Levi's and Madewell and all those companies starting their own and companies like Patagonia.

R.E.I. And North Face have been known for doing things like we'll repair your clothing. Bring it into us, donate it, we'll give you money, you know, money off. So they've been very forefront of that. But this resale. My girls buy off resale platforms all the time. And it's just growing and so we have, you know, equipment that manages those kinds of things, garment and hanger.

And again, that pouch item that we talked about, but seeing that other companies are noticing that the thredUPs and Poshmarks and the real, real are growing crazy. They're starting to say, Hey, I better come up with a program too, you know, so I'm going to resell my loot, my used Levi's. That's a thing.

So, yeah, I think there's a lot of exciting, interesting, creative things coming out from the companies out there. 

Lori Boyer 26:07 

I love that. And I feel like as a company, it's a great opportunity for them to also ask their own customers for ideas and for it's you know, as we're in this sort of innovative period where people are figuring out what do we do with all this extra stuff?

How do we eliminate waste? I've been interested. So you were mentioning packing materials and whatnot. Is there any impact when you're using environmentally friendly or recyclable or is there anything we need to know about the actual materials in the warehouse with automation? Is there any conflict there? Is there anything that you know, our users should be aware of? 

Kim Baudry 26:50 

Well, on the, so on the receipt side, if we have this issue, anybody has this issue, if you're getting boxes. And I'll pick on China a little bit, but a lot of the times they'll package big boxes full of items and really cartons that are not made well. And so it will cause problems on your conveyance systems and in your storage systems, etc. So you know, I know there's probably a lot of companies out there that are already pushing back on their suppliers to provide something that can be used inside the DC. Then when you're, when you're going on the outbound.

So once we get it inside of the building, and it's in some kind of a container that is transportable movable, etc. When it's leaving the building. The only thing, and I know the companies that are using, there's companies that are coming out with this packaging specifically that is either, you know, recyclable or reduces the air and I'm not shipping boxes full of, you know, I'm going to hold up my mouse.

I don't know if we can get a huge box, you know, hold this little thing. Right? So, the companies that are making the packaging are actually, they're already doing the testing of whether or not that stuff's going to sort at like a UPS center. Or the United States Postal Service Center. There's another weird thing that I do when I'm packing something up and dropping it off at USPS or UPS and I'm like this, I'm.

I think this bag is gonna go through the sort center. Okay. But let's, you know, tape up this edge a little bit better. I'm afraid it's gonna get stuck. But you know this because I, my kids are always like, my gosh, mom, you're so weird. 

Lori Boyer 28:24 

You're, you're like, their, their dream, their dream customer coming in because you've already packed it well for them.

Kim Baudry 28:30

Right, right, right. With regards to that, there's not a lot you can do unless it's pushing back on the people you're getting product from to, to provide a better-constructed carton, because then it can move through your distribution center without any issues and doesn't have to be put into something else.

So I was going to mention too on that. We were talking about topics of, you know, the resale companies that are out there. This is the newest thing. And I was so intrigued. I just learned about it this week. One of the gentlemen on my team shared it with me, but there are companies out there now that are actually capturing carbon in the air.

It's I, I'm still researching it. So I was kind of blown away, but they captured the carbon and then they are able to put it in limestone slabs. And then they, and then they store it and then after a period of time, they clean the limestone and they reuse the limestone. So I don't know all about where that carbon goes, but interestingly enough, we're actually quoting a system that would hold those limestone slabs. I mean, that just really sounds amazing to me, so. 

Lori Boyer 29:47

It blows my mind. I was speaking with someone recently from DHL and they were talking about algae jet fuel and, you know, I'm just like, what is happening? Everyone is so smart. Like, how are we getting these cool new, you know, awesome inventions. So, okay. I want to talk a little bit. When we're talking sustainability in terms of the warehouse itself.

What are maybe some of the concerns? Let's talk about challenges in implementing sustainability initiatives. Especially, Kim, around cost. So I think the biggest question I hear is I want it, or the biggest statement I hear is I want to be sustainable. I want to do the right thing for the environment. I know my customers want it, but it's expensive. How can we address the challenges of cost when it comes to sustainability inside the warehouse? 

Kim Baudry 30:40 

Well, initially it could be expensive, but I like to think about the total cost of ownership more like over time. If you are doing things to reduce energy to reduce land consumption. And again, that involves a greenfield.

So, if you're talking about a brownfield situation, you got to work with what you have, but even there, I've worked with customers where they said, okay, if you can figure out how to take this inventory that I have in racks, taking up, you know, lots of square footage. And, and handle it inside of this automated storage and retrieval system, then I can avoid adding on to the building or buying a new building, releasing a new building.

So, so even in a brownfield, when you think you can't do anything, you can, if you, there are opportunities. And so, yes, up front, the CapEx spend. Yep. You have to come out of pocket for it, but long term when, and again, this customer was awesome because we were able to have a conversation about, again, that total cost of ownership.

Now, if I had decided I had to go lease a new space, what would that look like? I'd have to have a whole nother staff, right? I'd have to have all this other thing. So you, it's a gut reaction to go, Oh my gosh, this is just going to cost me a lot of money. And I, you know, don't see the benefit of it, but you really have to look over the long term.

And especially when you're, you know, like if it benefits your people long-term, you're going to have potentially a more stable workforce. You can avoid getting more space. That's amazing. If you can cube your trucks, then you have less trucks on the road, less expenses that way, right? As well, because that'll cost money. So I think that's kind of the way you need to flip the conversation. 

Lori Boyer 32:26 

I love that. And I think that it brings up a good point that maybe when you're about to make changes, when you need to get new trucks, when you are considering expanding to a new DC those are times I think that are golden opportunities to see how you can offset your costs.

And still be improving your sustainability options that there are, you just need to explore with the companies that are out there to see what options there are. What, what about regulations and environmental regulations? Do you have any recommendations for companies to, you know, this is a, another big topic beyond cost is how do I make sure I'm meeting regulations?

How do I. Do you know what regulations might be coming if I'm international? Do you have any advice for people dealing with regulations? 

Kim Baudry 33:17 

Yeah, I wish I was a better expert on that. What I do know is that what we see in Europe, almost every request for quotation that we receive over there, we are required to provide issues around sustainability.

So our sourcing, where are we sourcing product from? What is our energy consumption, et cetera. So that is government-regulated over there. So when I see that happening there, you know, America doesn't like a lot of regulation. We tend to fight that. But if we could learn from European-like companies, it could actually help us either get ahead of what might be coming down the road with regards to regulation or just really actually benefit ourselves by, you know, doing a lot of things that they do.

Again, it's written into a lot. Germany is one of probably the strictest countries about a lot of things. And so, you know, they have regulations, pretty strict ones around ergonomics. Again, you could kind of research what some companies over there are doing, leading companies in retail that are really kind of trying to do the right thing and actually are being forced to in many cases by their government. 

Lori Boyer 34:28 

Yeah. And, and I assume, you know, some, in some ways Europe is often the, we've said tip of the spear before, but you know, they, they're starting it, but that could be where our company in the U.S. maybe in 50 years, you know, moving on over to Asia or whatever the regulations are. And so I think that you're so wise in recommending looking at what they're doing.

Thinking how can I get ahead of it now that I can implement things in a cost-effective way so that down the road I don't pay the price for needing to redo everything that we may have. Tell us a little bit more about how software plays into the importance of sustainability as well as just the overall automation of your warehouse.

Kim Baudry 35:12 

Yeah. So software, good software creates efficiencies for one thing in operations. So when you have the inventory tied to where it needs to be and where it needs to go. So it's like a WMS with a WES, you get more efficient operations. So then you're spending less time, which means less energy. You should be able to take up less space.

And you should have a far, you should have higher accuracy on your order. So all of those things are good for sustainability. The other thing with software is we have, you know, we provide with the actual equipment itself, analytics and tracking of how systems are doing. So if a conveyor, we see that stuff starts recirculating on a conveyor over and over and over again, because there's a photo.

Something's not right. So we send an alarm and, you know, people do something about it, but if we're tracking that, we're becoming predictive as well. So we're saying, okay, this certain time we're seeing this happen, so we would like you to, you know, change out a roller, photo wire, whatever it might be, so that things don't get stopped again.

That all helps with efficiency too, right? So if you've got your equipment running when it should be and not failing, and you know how to prevent it from happening, then you also increase. It seems so like minutia. Overall, and over time, it definitely adds up. 

Lori Boyer 36:43 

It adds up to a huge amount of waste. And it's something that I think that we don't always think about, that inefficiency leads to poor sustainability. Which is not something I think that we often, we think, oh, inefficiency leads to poor profitability. Which it does as well. But that it also leads to poor sustainability. And I think that that is, that's really wise. And I, one of the things you guys out there listening, we often have the data.

We don't always make changes or listen to the data. So that is something that I think is a big takeaway for us today. Make sure that you're taking advantage of the data. Everyone from the smallest company to the largest corporation out there, you all have a ton of data at your fingertips. Please make sure that you're using it effectively.

So Kim, I, we're out of time, but I just wanted to say, I have loved learning from you today. I thought your three key takeaways were so great. So everyone again, to recap, number one. Kim, correct me if I get wrong here. Number one, please make sure you have a returns policy that makes sense for your organization and think about sustainability when it comes to that returns policy.

Think about how you're going to share that info. How can you donate things? I love the idea of reselling. You could create your own little division if you are an ecommerce company out there of your resale products. So it's just going to make you money and be a really great sustainability initiative.

Really cool. Number two, that data and analytics that is so critical. Please, inefficiencies leads to poor sustainability. So find out what data is telling you that you need to make some small changes. As Kim said, small things add up to big things over time. And then the third one was that people are part of your sustainability.

That was like mind blowing for me. But it is so true our ergonomics, the actual care of your people. Labor is a resource just like every other resource in the world out there. And we all know in our industry labor is a struggle. So protect your labor. Did I get it right Kim? 

Kim Baudry 39:03 

Yes, you did. Awesome.

Lori Boyer 39:05

That was perfect. Those were really insightful takeaways for our audience today. So thank you again so much for being here. I am so excited to watch you and your journey and Dematic and all the cool things that you've done. And I just want to thank you so much for being here. 

Kim Baudry 39:21 

Well, thank you, Lori. It was a pleasure.

Lori Boyer 39:23 

All right. And we'll see everybody next time.