This story was originally published on CNBC.com

Scott Gravelle, the chief executive of Attabotics, a Calgary-based 3-D robotics supply chain maker, had an aha moment while watching a documentary about the interior structure of a fire ant colony.

Gravelle, who has a background in manufacturing automation, had been grappling with how to reconfigure warehouse space when he saw researcher Walter Tschinkel pour aluminum into an ant colony and then excavate the structure.

What he learned is that ants access their storage vertically. People, by contrast, are more two-dimensional.

“We walk on the ground; we drive on the ground. In warehouses, we need rows and aisles because you have to act up and horizontally from the floor. Forklifts give you vertical access, but it’s still this horizontal distribution of goods,” he said.

Inspired by what he saw the ants do, Gravelle and a team of engineers created a new system of storage that replaces rows and aisles of traditional fulfillment centers with a structure that maximizes horizontal and vertical space using robotic shuttles. Attabotics’ system reduces warehouse space by 85% and requires just 20% of the workforce that traditional fulfillment centers need.

Attabotics is part of a growing industry providing automation technology that allows companies to store and handle goods more efficiently. The rapid growth of e-commerce has pushed Amazon and other businesses to speed up delivery by opening more, but smaller, fulfillment centers near major metropolitan areas.

Attabotics’ efficient footprint appeals to retailers and brands that are looking to place so-called micro fulfillment centers near expensive, high-density urban areas. The company has customers across North America, including a luxury retailer in Los Angeles and a medical supplies company in the Greater Toronto area.

“E-commerce providers have moved the goal post as far as getting products to customers. They’ve invested a lot in robots,” said Rian Whitton, senior analyst at ABI Research. ABI forecasts 4 million commercial robots will be installed in 50,000 warehouses by 2025, up from 4,000 warehouses using robots in 2018.

Attabotics system resembles a 3-D grid, evenly spaced like grid paper, that goes from floor to ceiling. Each square space can hold a plastic tote that is 2 ft x 2 ft and then either 4 in., 10 in. or 16 in. high. The fixed size is intentional and designed to hold individual items — a piece of clothing, a single cosmetic, some tennis balls.

Gravelle says the bins can hold 99.8% of items that are sold online. Robotic shuttles then move the totes up, down and across to deliver them to stations located at the perimeter of the structure. One out of every five spaces is left empty so goods can move in and out.

In addition to being smaller, the system is also much faster than traditional fulfillment centers, which center around conveyor belts. Traditional fulfillment systems can take about 60 to 90 minutes to collate and package an order, but Gravelle says Attabotics’ system can finish a job in 60 to 90 seconds.

Automation in warehouses is needed not only to meet the demands of e-commerce but to create growth. “For a lot of companies, any form of economic growth means doing more with less. People only get fired if output stays the same. The hope is that output increases with productivity,” Whitton said.

Attabotics is operating in a fast-growing logistics market, full of third-party logistics providers that help companies compete against the likes of Amazon. There are also numerous robotics companies in the space, offering varied solutions from automated forklifts to shelf picking robots that can take objects off shelves and put them in bins. Attabotics’ system stands out as unique in this space, said Whitton, but it’s still early days and he expects the company will be targeting third-party logistics providers or retailers — any company that can afford Attabotics’ very large pieces of machinery.

Attabotics’ system costs more than most average storage and retrieval systems, but says it costs less when considering the total suite of functions, which include sequencing, circulation, buffering, and conveyance. “If you compare us to all that functionality, there are dramatically less capital costs than those other solutions combined,” he said.

Gravelle also emphasized the flexibility of the system, which can be scaled up or down depending on the size of the company. “Our goal is to create a platform that enables retailers of any size to be competitive,” he said. Honeywell Venture’s Grainger emphasizes that companies need to weigh the cost of the system with other factors, such as the cost of real estate and transport. Warehouses are traditionally very large buildings but Attabotics can maximize a smaller footprint in an expensive urban area.

“If you think about where most of the population is, it’s in urban centers where they don’t have big distribution center space. It’s a trade-off between having a huge distribution center way outside an urban area that ships everything to where the people are or a smaller distribution center that’s closer. That’s the way to think about the total cost. It’s quite efficient and actually cheap in that context,” Grainger said.

Expanding the Ant Colony

Attabotics’ learnings from ants go beyond storage. Ants have higher biomass than humans, meaning the total mass of all ants exceeds that of all humans. And yet they can support themselves without overwhelming ecosystems. Ants are not only extremely efficient at storing goods but are also adept at distributing resources across their colonies.

Gravelle says the company is also working on software and data analytics that can improve the efficiency of entire distribution networks. Instead of traditional fulfillment at a handful of centralized warehouses that then require shipping across half the country, he envisions a more efficient network that can reduce transport costs and carbon footprints. The trend toward multiple micro fulfillment centers requires complex data analytics to figure out how to stock warehouses and predict demand, he said. One discovery, he said, is how the current system learns to “self-optimize” based on a set of rules to use the least amount of energy and time. So, the most popular items tend to migrate to the outside of the stacks, closest to the stations.

“We have taken much of that inspiration by putting in simple set of rules for interaction with our robots. They start delivering complex behavior.”


THUMBNAIL: Photo by Thomas Kinto on Unsplash


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Ellen Sheng

Ellen Sheng is a writer and editor with a focus on business, finance, fintech and US-China investment. She was formerly staff reporter at Dow Jones/The Wall Street Journal.