29: Maximizing Warehouse Efficiency with AI and Automation | Featuring Maggie Barnett
Featuring Maggie Barnett, COO of ShipHero, in this episode with co-hosts Jason Rowland and Nick Agnetti the discussion evolves around:
📦 How AI is improving warehouse efficiency and order fulfillment
🤖 Practical, cost-effective AI solutions for SMBs and 3PLs
🚀 Real-world applications like AI picking and intelligent routing
📈 Lessons from scaling innovation across warehouse operations
🔮 What logistics leaders should expect as fulfillment continues to evolve
Listen now for actionable insights on using AI to drive smarter, more efficient warehouse operations or at your convenience.
Leave a question or comment for our panel.
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Maggie Barnett | LinkedIn
Maggie M. Barnett, Esq., is the COO of ShipHero. She is responsible for planning and executing the overall operational, legal, managerial and administrative procedures, reporting structures, and operational controls of the organization. Barnett’s greatest strengths are leadership, risk mitigation, change management and a passion for business transformation. She is known for her expertise in delivering operational excellence and her ability to provide guidance and mitigating risk. Her leadership of ShipHero is grounded in a servant mentality, always doing the right thing for our stakeholders. Her passion for ShipHero comes from the ability to drive operational excellence throughout the organization impacting the lives of our employees, customers and partners.
Transcript
Well, one thing we do at ShipHero is really focus on SMB and mid market 3 pls. And so what does that mean? That means we need to be able to get them tools quickly and affordably and they need to work.
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Nick Agnetti: Nevada for the Manifest Show: Jason Rowland:Thank you.
Maggie Barnett:Thank you so much for having me.
Nick Agnetti:Yeah. And Jason, good to have you back on. We just been knocking them out.
Jason Rowland:It's like I haven't seen you in weeks.
Nick Agnetti:I. I mean, how are you? Unreal. Good to see you. All right, so. So we're going to get right into it. But before we start, quick little anecdotal story about ship hero.
So I'd say we're going on.
Ten years ago, I had, let's say, working with a little bit smaller shipper profile and had this issue with this integration company, ShipHero, and I remember sending a message to whom I was told to send the message to. And the gentleman by the name of Aaron responded back and said, no problem. I worked the bugs out, here's the fix. They should be good to go.
Turns out Aaron is the founder of ShipHero and now they're much bigger than they were. And. And here we are today. So. So I like it a little full, full circle and I know Karen very well as well. So. Okay, let's get right into it.
So let's just start off with kind of a bang, a little bit of a buzzword as. As we know is. But how, how. What's the best practice? How do you use AI in the warehouse?
Maggie Barnett:It's a great question because I think so many people right now are just throwing dollars anywhere because they're so scared to miss out. Yes. Well, one thing we do at ShipHero is really focus on SMB and mid market 3 pls. And so what does that mean?
t's gotten a lot better since:Aaron only jumps in on a few tickets, but he still is there. He's a fantastic guy.
Nick Agnetti:I'm surprised he hasn't ridden off to the sunset yet.
Maggie Barnett:Oh, no, he loves it. He's at the warehouse right now in Vegas, tweaking. So some new vision stuff. So we got some really cool things coming up.
So AI AI picking is what we have released on Ship Hero, which has been fantastic. There's a few things it does does smart batching.
Because I can still see there's people with eight or eight to 10 warehouses who have humans batching their orders, which I am like, if you see an Excel sheet, let alone eight to ten physical locations, and they're still batching things, orders themselves.
Jason Rowland:That manual processing.
Maggie Barnett:Manual. It's. And it's unnecessary.
Nick Agnetti:Makes me sad because I can't even like wrap my head around they're using.
Maggie Barnett:BI and all these different things. I'm like, wait, we have AI picking. We're going to have smart batching, route optimization.
And what's really cool about this, I know you guys understand congestion in the warehouse. You've got some really hot skus, and all of a sudden you've got 10 people with parts right there. Great. They're all there.
But only one at a time can pick out of. Out of that tote.
So what we've done is we've actually brought that into the equation with the AI picking, so that it's actually routing them in like smart shifts so that everyone's not going there at once. We saw a huge. We have seven warehouses of our own with LVK Fulfillment. Huge, huge uptick in productivity.
Nick Agnetti:Let's make mention of that real quick because, you know, ShipHero there is lvk. Do you want to just real quick just talk about that? The difference there?
Maggie Barnett:Absolutely. So ShipHero is best in class WMS, you know, 15 billion in GMV.
One of the things that we launched about seven years ago was ShipHero Fulfillment, because we knew that we needed to be in the warehouses and have a lot of warehouses to truly understand the product. So we've been building that out. We rebranded it because there was some confusion in the marketplace.
Nick Agnetti:Okay.
Maggie Barnett:But yeah, that's what makes our product so good, is that we can test it first. Everything comes through the warehouse. We see if it works, we see what the bugs are before we release it to our customers.
Nick Agnetti:Okay, thank you.
Jason Rowland:Yeah.
So I'm sure one of the major things for ShipHero that you guys, I'm sure helping your Customers with is that scaling right up their business, helping them get their heads around what they have, where they have it and what the best way to move it is. So I guess a question for me. So I do a lot of our regulatory like issues.
So what is something that you guys tried to implement or implemented that looked really good on paper, but then when you finally hit the operations floor, it ended up being kind of a juicy chaos situation?
Maggie Barnett:This is a juicy effect. I have to double check too, since I do some of the legal. I have to say, what am I allowed to talk? Don't want to scare anyone.
Nick Agnetti:He's my legal fund killer right there. So.
Maggie Barnett:Well, compliance, regulatory. Yeah.
So I think what we started, when we first started, let's say rolling out some of this AI picking, we had to do it on our, on our, in our own warehouses because we thought, oh well, just engineers who don't actually work in a warehouse day to day. Here's how these things work and here's how this, this is how fast someone will walk. This is how long it takes to pick something.
It doesn't necessarily work that way. You know, people need breaks. People might be slower than other people and some people might walk faster.
You can't just make these assumptions that this person is a robot because they're not. So I think that was one of the things we learned through a lot of testing. Not even the bigger initiatives, but the smaller initiatives.
We have to test it with real people, real managers. And also through an eight hour shift. No more of this like, oh, it worked for an hour. Hit the edge cases, hit the exceptions.
And it's got to do multiple shifts before we declare victory and stamp it, deploy it. Yeah, exactly.
Nick Agnetti: So all right, if you: So if you had to look back at: Maggie Barnett:The biggest challenges was just the uncertainty. And I know everyone said that word ad nauseam and I think it was one thing we could all agree on.
Nick Agnetti:Yes.
Maggie Barnett:If you can't plan, all you can do is worry. And when things change and people are.
Nick Agnetti:Worried a day and everybody. You never knew what was going to.
Jason Rowland:Be in the news when you came.
Maggie Barnett:Most of us have kind of, you know, we're not speedboats all the time. You know, in Logistics and warehousing. We need time to make changes.
It's, it's, you know, it's a yacht that we're, we're trying to turn around or a cruise ship, not a speedboat.
Jason Rowland:That's true.
Maggie Barnett:So we needed that time.
And I really felt for many of our brands because they're getting hit from each way and I truly feel that we need to empower our brands because if we don't have packages to ship, doesn't matter how good our software is not there. We need packages.
Nick Agnetti:We'll just be podcasters then. Yeah, you guys are great. Oh, appreciate that. Okay, very good. Sorry, Jason.
Jason Rowland: look back, right? So looking: Maggie Barnett:So I love this question, Jason, because I'm an optimist.
Jason Rowland:There you go.
Maggie Barnett:I am like, I am like what's. I am like, I'm a quarterback that I can throw an interception and I forget about it two seconds later.
You got to have a short term memory in some of this stuff. So I mentioned AI picking. This is great.
But it's a larger initiative again for the SMB bin market to give them tools that are inexpensive so they can start to bring the cost down because there's costs going up everywhere else with inflation and things of that nature. So between AI picking and then attainable automation, we're seeing some very large robotics companies here which are fantastic for certain use cases.
That being said, we have 60 brands in a warehouse, you know, tens of thousands of SKUs that all look different. That's not always good for a 3 to 5 million dollars install with a long multi year contract. So attainable automation does a few things.
We're able to do things like direct pack with lights where we take 800 SKUs, put them in a module, have lights for the same person who's picking those items from the lights is packing them. 30 To 5, 35% efficiency. It costs about $2,000 to set one of those up. I mean these are very. Yeah, it's Amazon lights that we've like. We are tinkers.
Nick Agnetti:Are you like just letting out trade secrets right now? Is this.
Maggie Barnett:We've packaged them too. They're not trade secrets. No, we sell them for the right, the right price. Sure.
Because we want the SMB and mid market 3 PL and even the brands that need these types of automations, they should have access to them.
Jason Rowland:Yeah. It helps them automate without the large Investment expenses of doing, you know, major warehouse renovations, installation or something like that.
Maggie Barnett:We want to de risk their chance for growth.
Nick Agnetti:Sure.
Maggie Barnett:And I think that's the thing. We want to make it an easy decision for these brands and these operators at 3pls to say yes, I'll do some lights with carts. I'll do direct pack.
I'll use AI picking.
Jason Rowland:It trims the margins on the amount of time it takes.
Nick Agnetti:Dwell is pretty quick based on that price.
Maggie Barnett:Oh, super quick. I mean it's, it's. To me it's a no brainer. When Aaron brought it to me and we did some testing two peak seasons ago with a large customer.
Jason Rowland:Okay.
Maggie Barnett:I was like, put it everywhere. I was like we need more of this because our throughput was just insane thing.
Nick Agnetti:I, I couldn't even imagine. So. All right. I'd be doing everybody a disservice if we didn't talk a little bit more about just Ship Hero though.
So, so, so what I want to ask then is, you know, what separates Ship Bureau from where it manifest? There's, there's obviously tons of options and such, you know, and, and so what separates ShipHero from other industry options?
And what's a good ICP for ShipHero or I guess talk about LVK too if you want to separate them. But if we just go over that,.
Maggie Barnett:Then I think when we talk about ship hero again, SMB mid market, 3 PL and brands.
Anyone doing over 10,000 orders a month that just doesn't need a label creator like you need guided put away, you need locations, you need Rate shop, you need Rate shop plus all of those types of things, it's very accessible at a good price point.
Jason Rowland:Yep.
Maggie Barnett:And you get a lot of bang for your buck.
So that's kind of the ICP once you get over that, 10,000 orders a month and you just, you need something more than just length and you know, over 10,000 square feet, we can get you up and going pretty quick. And if you want to get, you know, go, you have two or three warehouses, we can do that too. We can go up the enterprise chain if we need to.
But really that SMB mid market is where we provide the most value at this time for those folks.
Nick Agnetti:And does that carry over to LVK too?
Maggie Barnett:LVK, yes. Anyone doing over 50 million in GMB on the brand side is a great option. You know, apparel, shoes, anything that's a little bit more difficult.
We like to specialize in that we only take on five to seven new customers a year. So we're Very selective. Yeah, we'd rather go very deep with our customers. Okay. Yeah.
Nick Agnetti:All right, very good. Well, I'm going to start off here just kind of recapping things. Is there anything you wanted to add, Jason?
Jason Rowland:Well, I would think that, that inventory management is such a big part probably what your, your value add is for your customers. What is like what makes ShipHero special for inventory management? What are some of the problems you're solving?
Maggie Barnett:So with ShipHero, it's a great question because one thing at ShipHero is that some people don't know. It's, it's a WMS IMS oms. We can route orders, we can do cycle counts, we do the guided put away.
We have created different things within the inventory that are processes, not just the tech. For example, we have something called hospital.
If someone goes to a location and there's a product not there, instead of them trying to go to overstock, they just hit a button that says hospital. The wham. A warehouse account manager will take care of it or someone from inventory and they can keep going.
I think we know it's a small thing, very intuitive and it's intuitive and it doesn't get the picker out of their flow because it pushes the exceptions to the folks who just work on exceptions all day and doesn't stop the process.
Jason Rowland:Yeah, it's fantastic. It's like non mechanical automation. That's great.
Nick Agnetti:That's what I said.
and I think I used the years:Is there anything that maybe we missed or that you want to add in before we kind of cap it off?
Maggie Barnett: ust hope everyone has a great: Nick Agnetti:Thank you so much. Thanks everybody for joining and we'll see you again soon.
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