AutoStore – Cube Storage Pioneers
With its invention of the densest order-fulfilment solution currently in existence, Norway-based AutoStore has shown what the future of warehousing may look like.
AutoStore, founded in 1996, is a warehouse-robot technology company that invented and continues to pioneer cube storage automation that is changing the world of warehousing. The core of the system is a perfect combination of hardware and software – the key enabler, that the company developed over many years.
The automated storage and retrieval system harnesses the power of warehouse robots for 24/7 order fulfilment within a cubic layout so dense it can actually quadruple storage capacity. And the beauty of the system is that is built around 5 standard components: bins, grid, robots, ports, controller.
AutoStore does not require a greenfield project or a new facility. It can be fitted completely or partially, as it suits the customers, as a new solution or complementing the existing warehousing system to as large or small extent as needed.
Karl Johan Lier, Chief Executive Officer, and President, who was at the birth of the company, describes how it all began: “In the 1990s, I was the CFO of Hatteland Group, one of the major electronic distributors in the Nordic countries. We were growing very fast, and we needed to expand the warehouse. Our technical director came up with an idea to make better use of space – to store things like a Rubik’s cube, with no air in between.”
That became the birth of cube storage automation and AutoStore. After 6 years, the company had the first prototype in operation, and went commercial with the product in 2004, with the first installation in 2005. Mr Lier explains that AutoStore went international in 2009, in the middle of the financial crisis, but that did not hinder its success. Since 2010, AutoStore has grown by 50% each year.
In 2021, the company took an IPO to the Norwegian stock exchange, and today, with more than 950 systems and 40,000 robots installed across 45 countries, AutoStore is poised to continue its aggressive global expansion.
Lean and Scalable
The recipe for success? Karl Johan Lier says: “The focus on R&D from the very beginning was strong. We saw clearly that we had a different product from everybody else, a product that saves space, time, energy and cost.”
He explains that to deliver this product to the world, the company devised a unique and lean business model where all sales go through a carefully built network of system integrators called partners. “We don’t have a direct commercial relationship with the end customers – we provide our partners with access to our standard modules, which they then design and integrate to become a fully working solution for individual customers.”
AutoStore’s partner network has a global reach and allows the company to scale very efficiently in all markets and geographies, as and when needed.
Carlos Fernandez, AutoStore’s Chief Product Officer, adds another important factor that has driven growth: “We decided very early on that we would offer a standard product to avoid complex customisations driving costs high and lead times long. That allows the integrators to create different solutions for their customers, without us having to modify the technology to meet different specifications.”
“The advantage of standardising the technology is high quality and reliability. I believe this aspect, together with the go-to-market model, has been key for scaling the business internationally, for us as well as for our partners.”
Warehousing Instead of Airhousing
Carlos further points out that one of the key values of AutoStore is that it was designed from a robot’s point of view, allowing for super-dense storage. “You don’t require all these aisles that manual operation or other technologies need, and that is why it resembles the Rubik’s Cube so much. The software behind the robots and the grid maximise the throughput all the time.”
AutoStore has been deployed by prime customers such as Siemens, Puma, and others; a telling example of how the system can save time and money is a warehouse consolidation accomplished for Texas Instrument. The company had several warehouses distributed around the Asia Pacific region with 500 million units of stock, which they wished to consolidate into a single warehouse. By installing AutoStore, the company was able to achieve four times the same inventory capacity under one system only, with a return on investment of under a year.
Carlos Fernandez highlights another advantage of AutoStore – it provides the ability to limit investment to current needs. “You don’t need to make a huge CAPEX investment. The system can be scaled very rapidly because it is so modular – just five standard building blocks that can be put together to create any solution suited for the day.”
As such, AutoStore significantly impacts the customer’s footprint and promotes sustainability, affirms Karl Johan Lier: “Reducing the storage footprint saves energy in its own right but on top of that, 10 robots use more or less the same power as a vacuum cleaner. As they are battery-driven, there is no need to extend the power requirements at your facility. You do not need any lighting as they can work in complete darkness”.
“We are taking ESG very seriously, taking many actions and initiatives in our development so that our system helps our customers to meet their ESG targets.”
A Strong Platform for the Future
Karl Johan Lier points out that at the moment, AutoStore’s biggest competitor remains the manual handler. “This market is under-penetrated, with only about 15% being partially or fully automated. We believe that during the next three decades, the drive towards automation will be substantial, opening a lot of potential.”
“However, we understand that the only way to stay ahead of the competition is by investing in the technology and its further enhancement,” he acknowledges, noting that out of the company’s 800 employees, 200 work in product development. The focus is not only on improving the technology but also on expanding into new verticals and applications for different environments.
Speaking about the company’s current position in today’s volatile and uncertain times, he affirms that AutoStore’s lean business model has proven resilient – in the second quarter of 2022, AutoStore continued to grow strongly with revenues up over 90% year-on-year.
“We are in a strong position to leverage global megatrends in the e-commerce and automation industries. Rapid market expansion, changing consumer demand, the emergence of Micro-Fulfilment Centres, and a general need for more sustainable and efficient solutions constitute a strong platform for accelerating our growth.”