Shopify acquired 6 River Systems for $450 million in September 2019, simply three months after unveiling its Shopify Fulfillment Network, which makes use of machine studying to make sure well timed deliveries and decrease transport prices. What did Shopify need from the achievement automation startup? That’s easy: 6 River Systems’ Chuck autonomous robots that may transfer packages in warehouses.
During the pandemic, Shopify is flourishing like by no means earlier than. Shelter at house orders should not solely driving extra individuals to buy on-line, however many are diving into beginning their very own ecommerce companies. As a consequence, 6 Rivers Systems’ enterprise has additionally taken off. We checked in with 6 River Systems co-CEOs Jerome Dubois and Rylan Hamilton to see how they’re doing. Dubois handles the business aspect and Hamilton the operational aspect — they prefer to say that Dubois is the CEO outdoors the 4 partitions and Hamilton is the CEO contained in the 4 partitions. We mentioned the acquisition, Chuck, automation, the pandemic, and the whole lot in between.
After the acquisition, Shopify requested the startup to not simply provide the Shopify Fulfillment Network, which opened to U.S. retailers in May, however to proceed supporting present business relationships. 6 River Systems licenses its know-how out to some 50 logistics firms — together with DHL and different huge names like Office Depot, Legend Valve, and Lockheed Martin. Customers can select to maintain receiving robots and software program and/or faucet the Shopify Fulfillment Network to generate income for his or her enterprise. In this manner, 6 River Systems is run as an impartial group inside Shopify.
Founded in 2015, 6 River Systems got down to construct a collaborative answer that was, above all else, straightforward to deploy. The result’s Chuck, a self-contained, autonomous robotic now working in over 40 amenities worldwide. The newest model, revealed in March, gives extra payload capability and harmonized security requirements, so it’s fully licensed wherever you need to run it. That streamlines the corporate’s provide chain “significantly,” Dubois advised VentureBeat.
In the primary few years, 6 River Systems was referred to as a warehouse choosing answer. It helped firms get merchandise off the shelf, into containers, and out the door. In the previous 18 months, its capabilities have expanded on the inbound aspect of issues — getting merchandise onto cabinets. Dubois calls the enlargement a pure evolution: “Once you get the technology in the door, customers are asking us ‘Hey, this is wonderful stuff — what else can you do?’ And our response to that is ‘Well hang on, we’re building out this roadmap. Here’s more and more functionality that we’re going to provide to you over time.’ And that’s worked out quite well for us.”
“But the real work is all in the software,” Dubois mentioned. “That software is really where the advancements are coming from, where we’re enabling these different workflows. Whereas before it was seen as a picking system, it’s now a much more comprehensive solution. And over the next few months, we’ll be making more announcements around more of a wall-to-wall capability, and that’s really where the advancements are coming from. It’s really expanding the use of not just the hardware automation but the software within the warehouses.”
Buy or lease
Chucks are working within the Shopify Fulfillment Network, however firms can even put them in their very own warehouses. The minimal order is eight robots with software program and integration, accessible for both lease or buy. Renting eight Chucks involves about $200,000 a 12 months, whereas shopping for eight of the robots prices roughly $400,000, plus a recurring annual payment of about 20% (for licensing the software program and upkeep). You obtain the identical tools and software program whether or not you lease or buy. Eight Chucks can assist 4 to 5 pickers performing some 5,000 models (ecommerce operations) per shift.
That’s the low finish. On the excessive finish, “we have customers with over 50 pickers using the system at once, approaching or exceeding 100 Chucks in the warehouse and doing very significant lines,” Dubois mentioned. “We’re talking about 60,000 – 70,000 units of picking a day.”
Chuck is supposed to be cost-effective, Hamilton defined: “Jerome and I come from circuits-to-person automation and mobile robotics, where those systems were not affordable to many of our customers. And then if their business changed, it was very hard for them to adjust. And so we started this company because we could actually make an affordable automation system, where instead of needing 10 to 15 mobile robots per picker you needed less than two. And the whole reason we started this was like ‘Wow, we can give a system that our customers could afford, and it’s based on a lot lower number of Chucks per installation.’”
Hamilton says 6 River Systems’ roadmap hasn’t modified because of the acquisition. In reality, the staff “has been able to accelerate it. We don’t have to worry about raising money every two years, which is great. And we’ve been fairly autonomous in terms of just building out technology within the four walls of fulfillment centers to make our customers’ lives easier and help them do their job.”
To be truthful, the roadmap might be precisely what Shopify would need it to be.
“The vast majority of our roadmap is focused on fulfillment centers and warehouses and the clinical boring work that happens in there, which is really the lifeblood of the supply chain,” Dubois mentioned. “But we do have some other initiatives, and we’re working with some of our customers in other places, like in the retail space and stores.”
Dubois declined to share particulars concerning the merchandise which might be “running around the stores right now.” But he did discuss concerning the shift the staff is seeing within the coronavirus period.
“There is definitely a movement toward supporting operations that are buy online, pick up at store, click-and-collect type of operations,” Dubois mentioned. “Or even, obviously, with the shift over to a lot more ecommerce spending, there’s a lot more retail space available. People are really thinking about what to do with that space. That’s one of the areas that we’re actively exploring. We’ve been working with a couple of retailers, actually working on technology that has been used in stores to help those initiatives, make it easier to fulfill orders as more and more people choose to pick up their groceries or [items] in pharmacies or whatever it is, their day-to-day needs, to pick them up as opposed to walking around the store and doing the shopping themselves.”
The COVID-19 impact
6 River Systems appears completely positioned to maintain up with the tempo introduced on by the pandemic.
“Just like Shopify, we’ve really had to think about what are our priorities and how can we ship product even faster to help our customers in this changing world,” Hamilton mentioned. “One of the things that we’ve always believed in is the flexibility of our technology, the ability to get warehouses up and running very quickly, or to adapt to changing business needs. And so even now, our product resonates even more with our customers because we don’t have any fixed infrastructure. We can get our technology working in weeks, even with the work-from-home [measures] and shutdown. We’ve invested even more in tools to be able to support our customers remotely so we can spend less time in warehouses and get it up and running even faster. We’ve been able to support every single customer throughout the COVID-19 pandemic, and that really resonates with our customer base.”
Dubois added that the corporate is fortunate it’s not “overly focused on retail, ecommerce, manufacturing, distribution, or whatever” throughout its 40 websites worldwide. “What we’ve seen is steady growth from the classic wholesale distribution market,” he mentioned. “We’re seeing a jump in demand, near peak or above peak levels for those that were exclusively ecommerce fulfillment operations. And, of course, that coincides with a substantial decrease in those warehouses that were supporting retail stores. They were doing retail store replenishment, shipping to retail stores directly from the warehouse. We’ve seen a mixed bag, but frankly speaking, the vast majority of the customers are doing quite well. The operations are growing in terms of the volume of the business. On the commercial side of things, I think that’s indicative of what we’re seeing as consumers today. And I think that that trend is going to continue, as Rylan pointed out.”
6 River Systems is including extra achievement capabilities to its software program, together with “some pretty sophisticated work allocation” that makes issues extra environment friendly within the warehouse. If a mean day is 10,000 orders and a peak day is 70,000 orders due to, say, a flash sale, the corporate’s software program mechanically adjusts to fulfill customer support ranges.
“At the beginning of the pandemic, for some of our customers it was ‘business as usual,’ some had put a temporary halt on their operations, while others were exploring opportunities to take on new business,” a 6 River Systems spokesperson advised VentureBeat. “Now, with a few months of operating in the pandemic under our belt, we can look at how our customers have been using our fulfillment solution and Chuck. The table below, pulled from historical data in our analytics solution powered by Tableau, shows 2019 mean-peak data for two sites. One of the sites has been operating above their 2019 peak levels since the beginning of the pandemic. The second site has on average 50% more daily volume compared to their 2019 off-peak days. We use this data, plus our customers’ own projections, to estimate the number of Chucks they require for a successful peak.”
Off-peak common strains per day
Peak common strains per day
Peak Chuck rely
Off-peak common strains per day
Estimated peak common strains per day
Estimated further peak rental Chucks
More demand for automation
One of the numerous unwanted side effects of the pandemic is that folks don’t need to work in shut quarters if they’ll keep away from it. That means demand for automation is rising at the same time as unemployment has spiked.
“The install base continues to grow, the number of deployed systems continues to grow,” Dubois mentioned. “And that’s because people are looking to put more and more automation in their buildings. The effect of the pandemic has actually caused an even more difficult time for the warehouse operators to source labor to work in their buildings. They are having a harder time finding people to go to work in the buildings even though unemployment is up. People are just simply worried about the pandemic. They’re taking care of their children. They are taking care of other family members. So they’re looking to put more automation in, as opposed to less, to obviously be able to support their service levels and the volumes that are being placed on them.”
6 River Systems has been capable of sustain with growing demand, however not with out making changes.
“We’ve had to be creative,” Hamilton mentioned. “And our customers have raised their hands and said ‘Hey, instead of sending deployment engineers from the East Coast to a West Coast facility, maybe we can actually do some of the work ourselves and do some of the installation.’ And we have engineers out of their homes and helping them do the mapping and other parts to set up the systems. We also have partners all over the world that we’ve leveraged so people don’t need to travel and get onto planes. We have local people in those areas — we’ve been leveraging them to do the work to either set up new customer sites or support them with existing operations. But it’s definitely — I think it has tested all of us.”
Robots and social distancing
More automation doesn’t imply no people are working on the warehouses. In addition to serving to people straight, Chucks can even assist maintain them protected.
“Recently, we actually came up with kits for customers to help them with social distancing and to make our systems even safer to use,” Hamilton mentioned. “They can add accessories or wipes or whatever type of sanitizers on the robots so people can be safe. Those are little things that we can do. And then we’ve also set out guidance for how our customers can use the entire system. One of the nice parts about our system is Chuck can do all the walking between different zones so people can stay separate. Our customers, many of them do essential work, so while many people are sitting at home ordering online, our customers have to make sure that these warehouses are up and running so the economy can work.”
“This alludes to what I said earlier with respect to our customers looking to put more technology in the buildings, because of this lack of labor and because they want to protect their associates,” Dubois added. “So now you expand out the footprint and the years of the automation, not just for picking, but now for things like replenishment work or for put-away. Other areas of functionality that we normally wouldn’t have deployed the technology in over the last year or so, this has just really accelerated that deployment of those technologies to again really help with social distancing and safe operations somewhere else.”