Confessions Of Supply Chain Executives | Why 2025 Became Retail’s “Vanilla” Year

It's been one year since today's guest's last confession.

That's how I'm starting today's episode.

Because 2025 was the year supply chain executives had to make a choice.

They could sit tight and wait or take a calculated risk in uncertain times.

Here's the confession you are going to hear from my guest today, and that is that retailers are holding more inventory than ever.

Not because they want to, because, but because they're afraid.

They're spending a third of their warehouse labor on managing spreadsheets and manual planning.

And despite billions in automation investment, many are still flying blind because 2025 wasn't the year of innovation, it was the year of survival.

Today we're going to talk about what that really means and what comes next.

Welcome to Confessions of a Supply Chain Executive, the podcast where we get brutally honest about the challenges, failures and celebrate the victories in retail supply chains.

I'm your host, Chris Walton, and today we're going to take a hard look at 2025, a year that today's confessor is calling vanilla.

But vanilla doesn't mean simple.

It means executives are paralyzed by uncertainty, making incremental moves while their competitors do the same.

My guest today is Kim Beaudry, market director at Domatic, one of the world's leading providers of warehouse automation and logistics.

Sol Kim is a longtime friend of the show.

We have interviewed her numerous times in the past.

And every year we start the year off by getting her pulse on the state of supply chain automation and investment.

Kim, welcome to Confessions of a Supply Chain Executive.

It has been one year since your last confession, has it not?

Yes.

Yep.

Like I said, I have a little bit of trauma when you use the word confession.

But yeah, about that, I guess, Chris, we tend to like to talk to each other in January and February to get.

Yeah, we do.

We do.

Yes.

The recovering Catholic in both of us gets, gets a little.

Gets a little ski.

We get a little scared when we use that term.

But hey, there's no Hail Marys in our Fathers with this one, Kim.

No Hail Mary's in our Fathers.

All right, well, let's get right to it.

And I'm not going to, I'm not going to sugarcoat this at all, you know, in discussing, you know, and planning today's interview with you, you called 2025, for lack of a better way to put it, quote unquote, vanilla.

That.

And that's not exactly the word most people would use to describe their industry, which is why we love having you on the show because you're frank and candid.

So walk us through, like, why that happened.

What were the biggest takeaways when you look back at 2025.

So I think that we wouldn't have called the year 2021 and 2022 vanilla.

It, you know.

Right.

Was not vanilla.

23, 24, 25 were what I think kind of just the industry.

There's.

Everybody's just trying to keep up with all of the changes going around in.

Around them, trying to come up with a plan.

They're trying to operate in an environment where interest rates are high.

There just hasn't been a lot of exciting things going on in the material handling industry, supply chain and logistics.

There's a lot of movement in trying to figure out where I'm going to get product from.

That continues to be in flux.

But I think I use the word vanilla because there wasn't a lot of new innovation.

Everybody's just treading water, I guess is more of a way of putting it.

Our customers are treading water and trying to deal with constant change.

It's funny, when you brought up 2021 and 2020 and 2022, like, I'm curious what flavor of ice cream that was.

Neap.

I don't know.

Like that.

Or Superman.

Maybe Superman.

Or the one where you have Pop Rocks and.

I can't remember this one.

Pop Rocks.

Right, right, right, right, right.

Bubblegum?

Yeah.

Bubble gum?

Yeah.

All right.

But I think that's.

I think it's.

It's actually a very good analogy because, yeah, I think it was.

Those years were like that.

Now it's just everything's kind of slowed down to a degree.

So I'm curious, what.

What in your mind was.

What's been driving that?

If you were to point to main, key, main themes that have, you know, led to that outcome, you know, how would you summarize that?

What.

What are the factors that have been leading to you say to you calling it vanilla?

Basically, I think in 23 and 24, it was the discussion around access to money, to capital.

Right.

Continued high interest rates globally.

Interest rates, yeah.

When you look at 25 and into this year, it's really when we just finished a voice of customer survey that we do pretty much every year that's a global voc.

And the biggest response was the geopolitical uncertainty that is impacting our customers.

So not knowing, you know, we have the discussion around tariffs, we have discussion of interrupted supply chains where, you know, we can't get a product from a certain area.

So those things are kind of that Mix with interest rate conversation is elevated the top of the customer's concerns and how do they manage in that volatile environment and continue to do so.

Kim, I'm curious too.

Is there any difference in.

When you say the investment climate and particularly pointing to interest rates too, is it the same globally?

Is there the same hesitance globally?

Or do you see differences from the United States, say, relative to Europe or Asia Pacific as well?

Yeah, we're close, but the Americas is feeling a little bit even more uncertain.

When we interviewed the people, they came through with a higher rating of geopolitical uncertainty and supply chain uncertainty as opposed to Europe and apac, but, you know.

Yeah, so slight difference.

Slight difference.

Yeah.

I think we should poll again in another three months, though.

I, you know, it could, it changes a lot.

So.

Yeah, it probably changed in the moment, in the, just the time frame that we've been recording this podcast for the first four minutes of today.

But, but I'm curious.

Okay, so geopolitical uncertainty, high interest rates, just a lot of things in flux.

You know, in that regard, I'm curious too.

Like, are you, were you seeing it?

Did your survey say anything else in terms of like, the customer, the customer's expectations?

You know, how retailers are approaching their supply chain strategically?

You know, what else?

What else came out from the survey?

Yeah, well, this, the continued.

There's a couple continued conversations, which is we're having a lot of the uncertainty affecting our customers and at the same time, their customers continue.

And this has been a common theme I think you and I have talked about for a couple years, is there continues to be these customer service levels, delivering at speed, delivering accurately, being able to have their customers shop wherever they want.

Those service levels continue to increase year after year.

We see that raising up, you know, the percentage of people responding.

That's number one of the things they're really trying to solve for.

Continues to raise up the, the chart.

So there's that and, and there continues to be the customers in the retail market.

So grocery or grocery, we know that grocery, general merchandise, apparel, continue with that effort to get product closer to the customer and using their retail inventory to do so.

So seeing those two things, and again, that's all about meeting the customer where their customer, where they're purchasing and the way they want to buy.

In America, I think we talked about this too, last year, Americans kind of think, I want to buy where I want to buy, when I want to buy, and I want it delivered and picked up whenever I want to.

In Europe, they tend to have Windows that they're offered from the right the supplier.

Like you can get your order but it's going to be at this time of the day or you can pick it up at this time of the day.

So there's some differences but in North America and even Canada there's a lot of leeway to how a person can purchase things.

And the vent and the retailers are addressing that and providing that freedom.

So it's very difficult to manage, you know, the retail inventory, the what's, what's in the store, what isn't in the store, who's buying from my store and who am I shipping to their house.

So a lot of complexity continuing to go on.

So you have uncertainty, complexity, customer demand, you know, all these things going on.

Right.

And so yeah, so so basically what you're saying there is that the continued push towards E commerce and particularly speed across the industry and setting the expectation for the American consumer particularly that they can get things as fast and whenever they want is continued to play, continue to play a role in terms of how retailers navigate the situation, particularly with the other uncertainties that you already mentioned in mind.

I'm curious too Kim.

Does that impact like the inventory that the retailers are holding?

Like, you know, like how, how, how are the warehouses operating today versus how they were operating in the past?

Well, there's a couple things.

So inventory levels, stock levels inside of the DCs are actually growing because of to the thing I need to have inventory to my forward stores, et cetera, inventory for E Commerce.

But the biggest I think driver for that is the uncertainty of my supply chain and trying to mitigate supply chain risk.

So we're seeing the level of amount of inventory safety, stock and extra storage increasing year after year over the last few years.

And I think we talked about, we used to say before COVID really it was, you know, that was not the goal of most of our customers.

They didn't want to have a lot of extra stock.

So they had just in time concepts as opposed to now.

I say they have just in case, you know, I need to have this inventory here a because I know I can buy it as this price today versus I don't know what my price will be in the future.

And I don't know if I'm going to have some kind of interruption to being able to access that that supply from a given region of the world.

So those two things are increasing the need for increased inventory storage.

That's great.

Just in time to just in case man, my heart goes out to the retailers that are trying to navigate all this.

Oh, yeah.

Set this up.

Right.

I mean, geez.

I mean, could you throw more things at them?

But so I'm curious then, as we.

So that was 2025.

I thought you did a great job outlining 2025 and all the factors that are kind of driving the vanilla, you know, impression of.

Of the year.

What about 2026?

Like, is 2026 going to be more of the same or are we going to finally see a light at the end of the tunnel when it comes to, you know, how retailers look at their automation and their investments in their warehousing?

I don't think 2026 is going to be earlier.

I'm sorry.

That's why I feel like this podcast is kind of like vanilla too.

I'm sorry.

No, this, this podcast is spicy ice cream.

Because we're, we're getting to the root of the issues here, Kim.

We're going to spice it up here.

But no, I mean, if it is, that's the way it is, you know, like.

And that's why we do this podcast, to speak the truth to people about how things are going.

So.

Yeah, so.

Yeah.

So you think it's going to be more of the same.

So, so why is that?

Well, the studies that we've conducted every year, we also do, in addition to a voice of customer, we do a, A whole, what we call our markup model refresh, which is indicating where is money being spent, how much money is planned to being be spent on automation software and customer service types of offerings.

And for the last two years, so 24, 25, we were kind of flatlining and actually we had a blip and we made a correction to the market model in 24, where the people that were interviewed when all of that data was pulled together, we actually took a downturn, it dipped.

Now we're kind of flatlining 1% growth this year and automation spend overall, which is nothing really.

So, you know, it's not to say that there won't be, you know, you know, places where the automation is being purchased more, but as a general rule, we're seeing still another kind of flat year with, with indication that towards the end of 26 and going to 27, there will be some recovery as it's expected that interest rates will continue to go down.

For one thing, I think the midterm elections have some things to do with the Americas and maybe the world at this point, but knowing where we're going to come out and what to plan for going forward with tariffs and supply Chain availability, but primarily the interest rate conversation gets a little bit better is what our, our researcher tells us as we go into 27.

So yeah, and I also think there's some things going on that, you know, we don't typically think about for material handling equipment, but it's the introduction of AI, right.

And how can AI, where will it fit in supply chain, in the distribution.

And I, you know, you hear in a lot of conversations about how our customers are using AI to, to, to engage with their customers, where they're spent, you know, where they're in their store or online or et cetera.

Right.

But I think there's some, there's going to be some opportunities going into 27 for AI to touch the, the warehouse and the warehouse distribution center and the supply chain.

For sure.

I think it's already doing it, but I think it's going to take off a little bit more next year.

And what makes you say that, Kim?

First of all, you need to, you know, you need to get.

The products are going to have more maturity that are being offered.

I think helping customers understand how they can use it to be, manage their operations better, manage their inventory better, make decisions better.

I think all of that, it's a learning curve.

I think right now is what it is really.

Vendors that have it and are able to share what they can do are still just getting to the place where they can describe what they're going to be able to do for our customers and then educating the market about what can be, what can be done.

So I think there's some opportunities more like in the software side of things coming up.

Right.

As opposed to maybe the mechatronics.

Great segue for me actually.

So, you know, because basically what I'm hearing from you, you know, net net, when you get down to it at the end of the day, is like there's a focus on, you know, being very judicious with how you're spending your money.

So the, the retailers, especially those that are operating warehouses, are going to be focused on things like labor efficiency and throughput and reducing the operating expenses of their buildings, as they rightly should.

But at the same time, the customer experience expectations are going up like you said at the outset.

So, so how are, so in the money that they are spending, how are they trying to do that?

Well, they're spending money to increase the speed of delivery to their customers.

So that does speak to automation a little bit, you know, but a lot of it too.

And, and, and like I said, having the product in the right place so planning and inventory management and then accuracy is a huge issue, right.

Whether it's in your store, having inventory accurate or getting the right thing to a person directly.

So that can be managed through software and certain types of mechatronics.

But right now we're just seeing that it used to be just for sheer volume purposes, right?

And the, and the, and the, to get product out the door with the labor that was available.

People were, and this is just right after Covid, people were just spending money like crazy, right, to, to automate processes to get stuff out the door.

And now they're looking at more of incremental investments to their existing buildings because again, they're not moving towards new roy, new greenfield, DCs as much as they used to.

So it's, it's got to be something you can fit in my existing footprint or easily, you know, be added to give me, you know, more volume and throughput through the existing infrastructure.

In doing that, you can't go in with big bang, you know, automation all the time.

You have to talk about, you know, automated mobile robots or dense store in dense, highly dense automated storage and retrieval systems.

So, you know, and it's interesting because while that's happening and talking about, you know, the discussion we had around having more stock, there are a lot of more flexible mobile automation that can fit in a brownfield facility easier, fast and it can be implemented faster than the bolted down type of equipment that we used to put in buildings.

I mean there's, that's still happening, but there's, you know, there's things like it used to be what you would have a, what we call a mini load, which holds inventory, kind of bulk inventory, supplemental inventory.

And those were rack, it was huge pieces of steel rack bolted to the ground, very expensive and took a long time to implement.

But now we have simplified racking structure with mobile robots going in.

And we even are seeing those types of products be able to go up to 24 meters or 78ft high.

So they can even go in a new building, really high building, but they can certainly accommodate a building that has a smaller height, ceiling height.

So there's lots of new things in the flexible automation world that can solve problems inside of an existing building.

They just tend to be smaller in size.

And so I think that companies like Domatic, it's been a big shift, right?

Where our projects used to be really large, our customers now are buying more of smaller spend type projects.

So that's where we're seeing a big shift.

And that's been consistent Actually, for the last couple years.

Right.

And so the operative word there is flexibility.

People are wanting to put in technology that is flexible, that doesn't paint them into a corner in any of these buildings.

I'm curious too, Kim, from a financing perspective, going back to the interest rate conversation, how are the retailers looking to finance these?

Is it still through capex or are they looking at these installations more through like an OPEX type model?

Yeah, definitely.

When you're talking about mobile robots, the robots as a service is definitely an option that people look at.

Same for software.

Software as a service is gaining.

Well, actually it's been very popular.

So now we're starting to have like people look at how can I do my automation on the same kind of model with robots as a service?

So that, you know, is gained in popularity as well.

Definitely.

So it's an easier entry point.

You know, I can get in without a lot of front, front money or money up front.

And then, you know, if I need to add more or take away, I can, you know, adjust.

So.

Got it.

So you mentioned AI.

Now to me that AI, you know, everything you said is not.

Even though we were kind of joking before that, yeah, 20, 26 is going to be vanilla.

I'm not surprised at all by anything you said.

And I think the elephant in the room is really, you know, AI because, you know, everyone's talking about it.

The question is, is it real yet?

And I'm going to make a bold prediction here and I want to see what you think.

I want to get your reaction because I know you'll always, you always take me to task on my, on what I say.

And so, and I really appreciate that about you.

So, you know, I think that agentic AI particularly is going to hit warehouse operations faster than any other part of a retailer's workforce.

And so do you think I'm right about that?

Am I getting ahead of myself?

What is, what is your take on that?

How wrong or how right am I?

I actually think you're right.

You do?

Yeah.

And I won't say that it's there yet.

Right.

Fully.

And people are starting to work on it.

Companies like ourselves, we're starting to integrate AI or working to integrate AI.

The reason that it makes sense inside of a distribution center warehouse is because we have so many things that can be measured.

Right.

We can measure rates and speeds of conveyor and we can measure the throughput of the overall building.

We can measure how many people are on staff and what are they doing, Are they being efficient or effective?

There are so many places that you can measure and then therefore use that information to say, oh, I learned this.

If I do this, what will happen?

You can experiment with digital twins too, right, As a part of the equation.

But the amount of data that comes through a distribution center, I don't think people understand.

Like, there's a ton of information that comes through our systems.

And, and if you're using that better, like right now, everybody, we, you know, we give data back to customers.

They get data from their warehouse management system as well.

But then there's a whole team of people that sit around and look at that data and try to figure out what, what it's telling them and what they should be doing about it.

And there's a whole support staff built around that.

And when you think about what AI can do to make those people their work more efficient, completely, like, I think it has a complete.

There's a whole lot of good that can come out of that, I guess, is what I'm trying to say, a huge impact.

Well, I, I mean, I love that because I've never thought about that too.

Like, you're, and you're dead right.

Like, warehouses are run by engineered.

You know, they are.

They're run by engineers.

And so they're the ones.

I thought you just said engineered.

I did, I did, I did say engineered, and then I changed it to engineers.

But yes, like, because they're our friends.

Chris, don't be mean to them.

But, you know, hey, we're all friends here.

But like, you know, that's true.

And so they're the people that have the greatest proclivity to understand and how to use AI.

And you're right.

Everything inside a warehouse is absolutely tracked down to, you know, every nth degree.

And I'm curious, too.

My next question, though, Kim, is like, there's still a lot of people that work in a warehouse.

Did through your research that you've done, your surveys, you've conducted, you get a sense of, like, you know, how many people are doing what types of jobs inside these warehouses as well.

Yeah, we did.

And love to invite anybody that would like to talk to me about this further, you know, reach out to me at Domatic or we'll talk about that at the end.

But we have, we do these to help not only our, our company understand how to address the needs of our customers, but also to inform our customers, you know, what's going on.

But we found, first of all, and then this is consistent across the board in our vertical markets that we, that we follow.

But consistently the highest number of people that are using a warehouse are in the picking order fulfillment part of the, of the work because it's the most complex.

It's where I'm handling an each and not a case and not a pallet usually.

And I'm putting together an order whether it be going to a stor, to somebody's house.

So that is the highest amount of labor.

The second is in shipping and outbound activities.

Packing, shipping, outbound activities.

But what we found, which was kind of blew my socks off when we got this last report back was that and we looked across four major verticals.

General Merchandise, Grocery, food and Beverage and Durable manufacturing.

Of all of those verticals, a third of their headcount in a distribution center is for support functions.

So it's the stuff I was talking to you about looking at where am I all that data, what do I do with it?

And then which is talking about inventory control, order management, where do I staff people, where do I need to make moves for inventory, you know, all that.

It's all a third of the headcount business support functions.

And it's the lowest amount of people in that group was the actual, one of the lowest amounts, I think it was the third lowest was maintenance staff, which you would have that when you talk about support in a building you're thinking oh I got a bunch of maintenance people around.

And that wasn't the case.

It was more in the, you know, managing the operations type of thing.

So Kim, my hunch is like these people are like work in spreadsheets looking at data to try to decide what best actions to take inside the building.

Things that feel feel almost tailor made for agentic AI as it's defined.

Yeah, and that's why I think there's, there's going to be some really cool opportunities coming forward and you know, as people get their products solidified and there's just a ton of opportunity there to help our customers be more efficient.

And when you, and when you're more efficient, you have that data available, you're more agile and it speaks to those hitting those customer service levels.

I can make decisions faster, I can impact change for my customer faster.

There's going to be a lot of things.

I think they'll be really exciting with software and AI coming up in the next few years.

Okay, so Kim, you said you don't think it's going to happen this year.

We won't see a big impact this year.

But at what point do you think we'll see this impact where maybe that third number starts to, you know, be looked at very hard and take and people start to take action on it in some way, shape or form.

Yeah, I think we're, we're going to start then towards the end of this year seeing some impact.

But more into 2027 and, you know, there's a lot of focus now going on within, you know, companies like ours where our, our customer service or Lifecycle services team are doing a lot of work to support our customers around those topics, you know, and not just on spare parts and maintain, maintaining your equipment.

You know, we're getting more into how do we support you from, like I said that being able to see what's going on inside your building eventually what's connecting outside your four walls.

So that just will continue to grow and I think we're going to see a, you know, an interesting market into next year.

Wow.

Wow.

Really good stuff, man.

So, okay, so if I, if I take a pause for a sec, just kind of recap where we are for the audience.

We've talked about technology, we've talked about automation, we've talked about AI.

But there's more and more piece of the puzzle that I like to get your thoughts on every year when we interview you, Kim.

And it honestly, I think it's a topic that's still front and center in the minds of so many retailers.

And that is where do I actually want to fulfill my orders from?

And now I know you're hosting a panel on this very topic at RELA coming up soon.

And it's been one of my favorite topics for years.

And it honestly, I don't think it's going away.

So the question is that every retailer is asking themselves is do I fulfill online orders from my stores or from dedicated fulfillment centers?

So do you think we're going to see fewer or more retailers in 2026 trying to fulfill orders from stores?

I think more the trend has been to continue to have the retail store act as a fulfillment location for our retailers.

And the panel that I'm hosting, we're actually going to kind of have two different views.

One is from the UK and it's a grocer that's using a traditional micro fulfillment center to fill the orders.

And again, I mentioned earlier, the market in the UK is very different than the market in the Americas.

You have a much more concentrated population.

You have rules that are set for people when they can get orders, et cetera.

And they're all used to that.

But we're asking their perspective and how did they get to the decision to Use automation.

What were the parameters that helped guide them to that versus our.

Dick's Sporting Goods will be joining us on the panel as well, where Dick's is using their floor inventory in a very effective way to fill orders for their customers.

And they're going to kind of present their pros and cons.

And, and you know, why they came to the conclusion they did, how they made the, how they made the decision, which I think is really important to people because you got to look at a lot of things to decide what you want to do, and that's what we're hoping to bring to the audience.

But the, the.

Any again, that one of the key drivers we found in our VOC was speed of delivery for making sure my customer's happy speed of delivery response time continues to be pushed and pushed and pushed.

Right.

So because of that, that getting that inventory in a forward footprint is continuing to be something that customers are looking at.

It is a pain to do that though, because inventory in a store is so hard to, to monitor.

Right.

And, and then, and I've said this probably two years ago, there's a store that I don't go to anymore, I used to go to, and I won't name them, but it used to be so contentious going in and trying to shop where the person that's their store employee shopping for somebody else that isn't in that building gets priority over my inventory that I'm trying to get.

So it's, it's not easy.

Right.

You've got a service level in your store and a service level for your online customers.

Both have to be considered, you know, so I think nobody's perfect yet, but I think there's a lot of retailers that are doing a pretty good job.

So I'm curious then, like, so, you know, in your mind as an expert, if I'm trying to decide where to invest.

So either, you know, store fulfillment, micro fulfillment, or upstream with traditional fulfillment centers, which it sounds like that's probably not in the reality.

The last one's probably not in the reality stream, at least in the short term.

What factors should I think about as I try to make that decision?

So, you know, traditional store fulfillment versus micro fulfillment, either nearby or in the store.

What factor should I consider?

Well, I think, well, first of all, again, what are your goals in your customer service, your sla.

Right.

Service level agreements that you want to keep?

Also, how easy is it for you to keep inventory in your store?

And that can be regionally different.

Like if you think about a city, a store In a city which has no back room versus a store in the suburbs, you know, that's a different strategy.

So, and some of our large big box stores and Dick Sporting goes as example, right.

They, they have big stores, they have room to store inventory.

We have a customer over in France that has a huge back room and all.

We use that for order fulfillment replenishment to the.

They actually use automation to replenish product to the store floor every morning, which is kind of cool.

So it kind of depends on the size of your stores, where you're located, how much room you've got, and are you, are you willing to.

Because the most expensive place to hold your product is in your store.

Right.

So the factors of the store, the carrying costs of inventory also have to be looked at.

But yeah, so there's a lot of things to think about.

I, I don't.

I think in addition to seeing the store fulfillment become more important again, I think I mentioned this last year, we're continuing to see a growth in smaller distribution centers, not these huge monolithic 500,000 square feet buildings.

Right.

We're seeing them shrink, but get into closer to an urban area to service also as an E Commerce fulfillment, just completely fulfillment, no story plan, just fulfillment centers.

And those continue to grow.

So I think, I think it's, you know, you've got to look at where you're located, who you're trying to serve, what kind of built, you know, stores you've got and all, and your transportation costs.

All of that has to go into consideration.

Yeah, yeah.

It's really just math.

At the end of the day, you.

Look, you got to look at the math.

It's just money, right?

It's just math.

Yeah.

I mean, you got to look at the volumes you expect and, and what expectations you think your customers are going to have, and then you got to make some hard choices about what you want to do and don't want to do to meet those SLAs.

I think it's, I think it's.

Well said.

All right, Kim, let's bring this interview home.

We're going to ask you for some practical advice.

And of course, because it's the name of the show, we're going to ask you for a confession too.

So first of all, what's one step you would advise for someone who wants to move from.

Like, if I met, I imagine a lot of retailers listening, like, God, I feel stuck in survival mode right now, but I want to move to strategic improvement.

Like, what's one piece of advice you would have for them.

Yeah.

I think you need to think about finding a partner that can walk you through the different steps.

So, again, we, for instance, not all.

And it's like, you can't put a square peg in a round hole.

Right.

Don't try to do that.

Understand that you're a round hole and that you need something that will work where I am today and where I'm going to go tomorrow.

So either partnering with a company like Domatic that can supply.

We have the engineering resources and we have the breadth of offerings through products that we either make or we partner with to help you figure that out.

And we can look at, what do you want to do today, the next three years?

What do you want to do five years from now?

How do we start to plan for that?

There are also consultants in the industry that do that as well.

But you have to kind of know what you're starting with and where you want to go get to be, you know, what is the number one thing you're trying to solve for right now?

In our voice of customer service?

Our voice of customer, the number one thing that they're trying to solve for is reducing the cost per unit handled in their buildings.

Second number.

The number two thing, meeting customer expectations and speed of delivery, accuracy.

So they've got two things that are.

Almost contradictory to each other, diametrically opposed, right?

Yes.

Right.

So, like, if I had a magic bullet, I would tell you what it was, but it's.

It's.

It's a complex problem, and you need to partner with company that can help you with it.

Understand your baseline.

I say this every time we're on the.

On the phone.

Your baseline goals and your baseline data.

Right.

What are you doing today?

What do you want to be able to do tomorrow and next year, and then, you know, and then work with somebody that can help you down that path.

All right, Kim, it's confession time.

I actually want to push you on that answer a little bit, but I'm going to hold it for the confession because I might still push it depending on what you.

What you say here.

So.

So the confession question, the uncomfortable truth here, Kim, my question is, what is the uncomfortable truth about warehouse operations that most retailers don't want to admit or to hear?

I think things are still.

I want to say clunky.

We're still.

There's still so much room for efficiency gains that.

And again, I can't blame the retailers for this.

Right?

It's.

There's again, the constant change.

Everything is changing all the time.

So.

But it's Clunky.

It's, it's clunky.

Like, where should I have pe?

What should I be doing?

Where should I have people?

What should I be investing in?

What do I, what does my store footprint like look like versus my distribution center?

It's, it's still like a, not a well oiled machine.

I'm picturing like an old robot.

I'm thinking of the robot from Lost in Space.

Oh, my God, that one.

Yeah, I remember that one.

Yeah.

Wait, Danger.

Danger, Will Robinson.

Danger, Will Robinson.

Yeah, right.

And then he falls over.

Yeah.

But you.

So you're saying that's, that's kind of your, your, your mental model for, you know, just how much inefficiency there still is in this building.

Well, that's why I held my, that's why I held.

When I said I was going to press you, because what I thought you're going to say to the last question, and I think it plays into this too, is there probably is a big opportunity to look at the deployment of AI strategically inside of your building sooner rather than later.

Because like Angie Brown, the CIO of Home Depot told us and sticking with me, and I'm repeating it every time I get the chance.

She told us, Kim, she said AI enables us to do the things that were previously impossible or just took too many people to get them done.

And I think that is entirely applicable in a warehouse operation, especially given that you said it's clunky and it is everything, you know, and, and that's no one's fault.

It's just that's how we had to get the job done.

And now the tools and the resources are out there to potentially streamline that and to show us new ways of, of doing business.

So I'm curious, my last question for.

You is you sure it's the last?

Yeah.

No, this is the last.

And it's.

No more confessions.

No, this is.

No, this is the last one.

This is the last one.

Wrap it all up for us.

If people listening could remember one thing to act on, what would it be?

Look for ways to improve that clunkiness right where.

And it's, it can exist in the, in the warehouse, the store, everywhere.

But where are the biggest places that are impacting your bottom line and your service level to your customer?

And then find companies that can help you work through that.

That would be my, my biggest piece of advice.

That, I mean, that's, that's my takeaway from listening to this.

If I was still, still in the retail business and still an executive at A high level I would be.

Yeah.

Looking at my P and P L and looking at my expenses and being like, where can AI make the biggest hit immediately?

And let's go after that and see what we can do.

And God knows we actually might surprise ourselves.

So.

All right.

So you said you're going to be hosting a panel at rila, so if you're out there for.

If you're out there listeners, go and check Kim out.

She's gonna be talking about this with some really great folks and sounds like a really exciting topic.

But, Kim, if people want to get in touch with you, pick your brain, you know, attend that session too.

How can they.

How can they find you or find out more.

I'm on LinkedIn, so Kim Beaudry on LinkedIn is a really good way to.

I talk to people a lot over LinkedIn, of course, through my email.

And again, if you want me to spell it out, I will.

It's long, Kimberly, but it's K I M. Remember this.

Every year I have to do this, too.

Yes.

K, I M B E R L e y.

It's special.Beaudry b a u d r y@matic.com anytime, any.

I love talking to people.

I love to hear from our customers.

It's one of the really big highlights of what I do and the team that works with me does.

We just, we learn every time we talk to somebody.

So really invite anybody that's interested, reach out.

Love to speak to you.

Awesome.

Well, Kim Bowdry of Domatic, thank you so much for joining us on Confessions of a Supply Chain Executive.

I absolutely love when we do this every year and we've done this.

I think this is our third or fourth year in a row doing this, right, Kim?

I think it's got to be at least four, Chris.

Yeah, I think so, too.

So, so.

Thank you so much, Kim.

All the best.

Today's podcast has been produced by Ellis Sirjord.

I'm Chris Walton.

This has been Confessions of a Supply Chain Executive.

Never forget Omnitok fans.

Confessions are almost always good for the soul.

Be careful out there.