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Jul 09, 2023

Logistics Disruptors: GreyOrange's Deborah Surrette

With companies facing a proliferation of SKUs, growing customer demand for

With companies facing a proliferation of SKUs, growing customer demand for same-day delivery, and a tight labor market, smoothly automated warehouses are fast becoming a must-have. GreyOrange, founded in 2012 and headquartered in Atlanta, uses automation to accelerate and scale its clients’ warehouse fulfillment operations. The company specializes in providing and coordinating robotic solutions—sometimes helping clients orchestrate interactions between autonomous robots from multiple vendors.

"We want to make warehouse fulfillment quicker, more flexible, more scalable, and more cost-efficient," says GreyOrange chief commercial officer Deborah Surrette. "The way we do that is through robotic automation and our AI-driven, enterprise-level software platform."

In this installment of Logistics Disruptors, Surrette speaks with McKinsey's Sandy Gosling about the importance of educating clients, the value of launching bite-size automation projects, and the advantages of being "automation agnostic." The following is an edited transcript of their conversation.

McKinsey: What differentiates GreyOrange in the automation market?

Deborah Surrette: Our clients look to us when they want to achieve extraordinary scale. They look to us for our expertise and our years of experience. And they look to us to help them take the next step in automation—you’d be surprised, for example, at how many clients are accustomed to automated conveyors and sortation but have never used autonomous robots.

What we consider one of our sweet spots is that we’re not tied to using our own automation systems. If a client is using one vendor's automated system to do packing, and a different vendor's automated system to move items from the end of the warehouse to the front of the warehouse, GreyOrange can combine those existing systems—along with any other type of automation that might be needed—on our software platform. We like to think of it as being automation agnostic but enterprise grade. It allows clients to simplify complexities by using our enterprise software platform to organize whichever types of automation they need.

We can combine front-of-the-house sortation and shipment automation with middle-of-the-house racks-to-person and goods-to-person automation, and then add intralogistics throughout a warehouse to bring pallets, racks, or totes from one location to the other. Combining all of that helps our clients scale up by improving their throughput and handling levels of complexity that, in the past, might have required them to set up a whole new warehouse. They can now do this while staying in an existing location.

McKinsey: What are some key things that customers are asking for lately?

Deborah Surrette: If I think about the broad universe of clients that we speak to, the number-one thing that they’re all looking for is education, education, and more education. A huge part of the job that our go-to-market teams and industry experts have is to educate clients on how they can solve their problems. If we looked at a pie chart of our hours spent, at least 60 percent is on education about opportunities and alternatives.

If you think about what clients are looking for from a buying perspective—meaning what will make them decide to put automation into a warehouse and begin that journey—they’re looking to extend their labor: "We’ve got X amount of people available, how do we make them as efficient as possible?" Or they’re looking to make an immediate impact from an ROI perspective: "How can we automate certain functions, tasks, or capabilities to get a payback in less than a year, or less than a year and a half?"

McKinsey: What is the ambition for GreyOrange's growth over the next five years? And how will you accomplish that?

Deborah Surrette: As chief commercial officer, it's something I think about on a 24/7 basis. The way that we will grow is by continuing to innovate and by understanding how to help clients do things in a repeatable, scalable fashion so that they can recreate initial successes throughout their enterprises.

In terms of innovation, we launched our Certified Ranger Network platform this year. It allows various vendors’ robots to join our platform and be used by our clients. We use a rigorous process to certify each automation system that goes on our platform—checking things such as performance, safety, integration, trouble ticketing, and so forth. This lets clients take advantage of these automation systems while relieving them from needing to check those things themselves.

The talent market in logistics has been very tight. A retailer might want to put in place same-day shipping, but because they don't have labor available to them, that same-day shipping turns into three-day shipping. That is an immediate challenge that GreyOrange can handle for a client. And we can do that in a multitude of ways that fit into the client's existing footprint—meaning they don't necessarily have to go out and buy a new greenfield space to build another warehouse.

McKinsey: Given the initial capital expenditure required for brand-new warehouses, and all the setup involved, how do customers think about the benefits of robotic solutions using a current footprint versus using a new warehouse?

Deborah Surrette: We have done our fair share of greenfield warehouses for some of the largest companies across the world—where they’ve actually gone out, purchased a site, and they’re building the warehouse from the bottom up. GreyOrange can help implement the automation to get that warehouse up and running.

But we also see clients that have existing warehouse footprints that are not well utilized—meaning they’ve sunk a ton of investment into systems that are taking up lots of floor space but don't serve the client's current purposes. We have a team of presales engineers that does material-handling estimates and figures out how to fit different types of automation into a space. It could be anything from a co-bot [collaborative robot] or sortation machine that provides some productivity improvements all the way up to a high-storage, high-velocity, tote-to-person or goods-to-person automation solution. It could also involve intralogistics to help with pallet movement. We can take an existing floor plan and help utilize it in a more efficient way.

Right now, we work on about 50 percent greenfield and 50 percent existing footprints. Some of the more interesting use cases involve turning what used to be stores into microfulfillment centers. Those spaces were never built for high-velocity fulfillment, but we’ve found ways to help those clients repurpose them as high-velocity fulfillment centers.

McKinsey: What's keeping you up at night, right now, as a chief commercial officer?

Deborah Surrette: I have the good fortune to be the chief commercial officer for a company that serves some of the largest retailers in the world. When I think about the things that my clients are thinking about, it's how to go faster and how to do it easier.

I always want our teams to think about everything from the client's perspective. Clients often weigh the risk of moving forward versus the cost of staying where they are, and their decisions get cloudy because by staying where they are they haven't broken anything—but they also haven't fixed anything. So I always encourage our teams to ask themselves, "What is the client thinking about that's going to either hold them in place or help push them forward? And then how do you make it easy for them to move forward?"

Education is one thing that can make it easier for clients to move forward. Seeing how other customers have done it can help. Automation tends to require a lot of capital, so to help clients access automation faster we’ve also put together robot-as-a-service models that commit the client for only a year instead of committing them to a capital outlay that covers ten years. Sometimes, we might encourage a client to bite small and chew fast: take a project that's smaller, get through it quickly, and then take it from there. You don't necessarily have to boil the entire ocean to get good value out of starting an automation journey.

McKinsey: Can you give me an example of a project that's bite-size?

Deborah Surrette: Think about a nonautomated warehouse that's running with conveyors and personnel. Those workers have never seen an autonomous robot and never worked next to one. So some of our smart clients will first put in some co-bots to move product to those folks—as an intermediate step—before engaging in full goods-to-person or racks-to-person automation. That can help employees get used to what it's like to work next to automation, let them see the benefits, and then later the client can move into another area of automation that might be higher productivity but also be a little more expensive and a little more disruptive.

McKinsey: How did you get to where you are today, and what inspired you to get into this field?

Deborah Surrette: My first foray into supply chain was as a senior vice president of sales and sales operations globally for Sterling Commerce. We had one of the first electronic data interchange networks, which touched the supply chains of many companies. It was actually a SaaS [software-as-a-service] network. So I was in the SaaS game way before it was popular! From there, we acquired some amazing technology in the warehouse management and distributed-order-management space. That's really where I learned how critical supply chain and logistics are to every company.

We dealt with all kinds of companies, from retail to telcos to manufacturing and distribution. It gave me a sense of the vast networks of those companies. That, to me, has always been fascinating: you’re never going to find a company that's stand-alone successful. It's their interconnections through technology that help make them successful. I absolutely love that intersection of technology and business practice, and it's thrilling to me to be able to influence that.

McKinsey: What have been the most surprising lessons along your path in this industry?

Deborah Surrette: I’m surprised on a continual basis. I love to come to everything with a beginner mindset. I will tell you that the past couple of years have absolutely surprised me—in the sense that people are learning how critical the supply chain and logistics industry is to the health and welfare of economies around the world.

Many times, in the past, I’ve seen supply chain and logistics become a backroom function—meaning it's not one of those preeminent functions, like e-commerce or digital transformation, that gets the board's attention. But now, I’m finding that many of the decisions our clients are making are at the board level, because the board realizes how critical automation and robotics are to their company over the long term.

McKinsey: If you had a magic wand, what would you change or create to make the logistics industry better?

Deborah Surrette: I feel like sometimes the automation experts have so much knowledge that never makes it to the decision makers. We need to figure out how to bridge that information gap—whether it's creating more self-service tools, creating more forums for education with respect to supply chain, or enabling folks to see what transformation actually looks like when it's complete.

Deborah Surrette is the chief commercial officer of GreyOrange. Sandy Gosling is a partner in McKinsey's Miami office.

Comments and opinions expressed by interviewees are their own and do not represent or reflect the opinions, policies, or positions of McKinsey & Company or have its endorsement.