Dematic sees tremendous growth during pandemic

Rise of e-commerce, grocery delivery has company’s automated intralogistics systems in higher demand.
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Dematic designs, builds and implements automated system solutions for warehouses and distribution centers. Courtesy Dematic

Dematic has been riding a wave of unprecedented growth during the past 18 months, largely thanks to a surge in demand for automation in the e-commerce and grocery sectors during the pandemic.

The provider of integrated automated technology, software and services — a subsidiary of Frankfurt, Germany-based KION Group — has its world headquarters in Atlanta and its North American headquarters in Grand Rapids.

Mike Larsson

Mike Larsson, Dematic Americas executive vice president and CEO, and Jenny Ferrell, vice president of human resources, said at a time when companies in many industries were struggling and downsizing workers, Dematic grew about 34% globally last year, adding 250 employees in Grand Rapids alone and about 800 across North America. It now has about 1,200 employees in Grand Rapids and 10,000 worldwide, and the company is on track to grow another 20% this year.

The global $3 billion company (2020 year-end figures) designs, builds, implements and supports automated system solutions for warehouses, distribution centers and production facilities. In the digital age, this includes providing real-time data analytics and dashboards to give insight into every aspect of a company’s operation, to help optimize production, distribution, labor, order fulfillment and all other functions.

Dematic has 60 engineering centers in 25 countries and manufacturing facilities in North America, Europe, China and Australia, and the company has installed and serviced systems for customers including Walmart, Meijer, Adidas, Patagonia, Nordstrom, Rubbermaid, The Container Store, Anheuser-Busch, Coca-Cola and Nestle, among many others.

Larsson said within the past year, Dematic’s growth has largely been driven by e-commerce, followed by grocery and general merchandising.

The Business Journal on Aug. 9 took a tour of Dematic’s design and development lab at its Grand Rapids campus to witness the company’s newest product offerings and beta tests. Larsson said Dematic will be renovating the facility over a two-year period starting next year to reflect the shift in Dematic’s business model away from convey-and-sort mechatronics toward robotics, AutoStore order picking and real-time digital solutions.

One of the most exciting developments under testing at the tech center in Grand Rapids — and which recently debuted at the Meijer store in Rochester Hills — is a smaller-scale automated system for order picking that can fit into the back area of grocery stores for order fulfillment, allowing the stores to fill online orders faster, more efficiently and more profitably than they could from distribution centers located elsewhere.

The multi-shuttle part of the system — somewhat like a vending machine that stretches floor to ceiling — stores common items based on customer data, and the operator stands at a workstation at ground level picking the items detailed in the order that are available in the machine and bagging them up. Less common items are then added in manually by sending someone into the store to retrieve them. The order is then finished for curbside or home delivery all within the store and not from a distribution center or by Shipt or Instacart fulfillment. Larsson said the advantage of using automation to keep fulfillment in-house is that it allows the grocers to retain customer data — something it does not have access to when workers from third-party delivery services are fulfilling orders. Another advantage is that the automated system helps during the present talent shortage, when fewer third-party shoppers are available.

Larsson said it wouldn’t necessarily make sense for all grocery stores to incur the expense of installing this automated pick system for order fulfillment.

“There’s a magic number of orders per day you would have to justify the automation,” he said. “Grocers are looking for a certain number of cents per pick, and if you have a store that’s very small and you don’t get that (number) of picks per day, you’re going to struggle to get the ROI out of the automation.”

Larger stores, or stores that are close to other sister stores — as in the case of the Meijer in Rochester Hills — can get a better return on investment from their in-store automated system if they are fulfilling orders for a large number of customers per day for curbside or home delivery — or if they know they soon will be experiencing rapid growth in online ordering.

Larsson said he does not view the automation systems Dematic installs as job killers — if anything, he said they increase customers’ growth potential and therefore are likely to provide more employment opportunities. He said Dematic sees it as a positive when automation systems can replace “dirty, dull or dangerous” jobs that tend to have high burnout rates. The jobs it creates — for operators, engineers, IT, etc. — tend to be higher-wage, higher-skill positions, which he views as a positive.

Jenny Ferrell

Ferrell, Dematic’s VP of HR, said the highest-demand jobs at Dematic currently are for engineers, software developers, installation and service technicians, electricians, and other skilled trades workers.

Although Dematic’s hiring boom happened during a historic talent shortage, she said the company’s brand, growth story, global presence and significance on the world stage is what made hiring possible last year — that and the fact that many other companies with these types of roles were laying off workers last year.

She said Dematic has high long-term retention rates, with employees that have had 40-year careers there, moving from technicians all the way up through the ranks to executive roles, or others that have moved from finance to HR to project management, gaining well-rounded experience and trying out different types of careers.

“I would say that our attractive incentives and benefits package, along with coming to a company that is in this tremendous growth mode that we don’t see an end to and that great career story that you could have coming to Dematic … (is what draws people),” she said.

Larsson said when you look at some of the world’s largest e-commerce players and how much their need for automation systems has grown over the years, it’s hard to even wrap your mind around it, thinking about how much the world buys online now. One e-commerce giant he cited has installed the equivalent of nine times the size of Central Park’s square footage in distribution center space during the past 10 years and shows no signs of stopping. For a company like Dematic, this means the growth potential can feel unlimited.

More information about Dematic is at dematic.com.

DEMATIC FACT SHEET

  • Global $3 billion (2020 year-end figures) intralogistics provider
  • Member of the KION Group, based in Frankfurt, Germany
  • North America headquarters in Grand Rapids
  • Global headquarters in Atlanta, Georgia
  • 60 engineering centers in 25 countries
  • Manufacturing facilities in North America, Europe, China and Australia
  • More than 10,000 employees worldwide; about 1,200 in Grand Rapids
  • Over 6,000 systems installed — all sizes and levels of complexity, from lower-cost manual options to fully-automated systems
  • Well-known customers include or have included Walmart, Meijer, Adidas, Patagonia, Nordstrom, Rubbermaid, The Container Store, Anheuser-Busch, Coca-Cola and Nestle, among many others

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