MODEX 2022 - Technology and Startups in the Logistics Industry
Last week I attended MODEX 2022, one of the largest international events for supply chain, warehouse, and materials handling technologies.
This was the first MODEX event since the pandemic impacted the US (the last one being March 2020).
Although this was my first time at MODEX, the regular attendees I talked to consistently said it was the most exciting one they've attended.
Why MODEX 2022 Was the Best MODEX Event:
Warehouses are cool now. Warehouse managers, manufacturing supply chain directors, and warehouse equipment vendors who languished in obscurity for years are now in the spotlight.
The logistics industry needs technology. The industry has no choice but to automate - the consumer expectation of rapid fulfillment that ramped up with the e-commerce boom was exacerbated by disruptions in the supply chain, labor shortages, and even more e-commerce. In the past, many of the most advanced technologies in this space were only used in very high-tech warehouses (like Amazon).
This stuff is fun! The biggest, busiest booths had autonomous mobile robots, automated, integrated materials handling systems, and many human/robot interactions. Robotics and automation have been around for a while but they're front and center this year - it's mainstream.
Our portfolio company HopStack, which built its warehouse automation stack from the ground up with robotics in mind, was there and had an excellent show. HopStack's co-founder, Gaurav, agreed that this was one of the best MODEX events, and they could feel the increased interest in technology solutions.
MODEX Breakout Sessions - Incorporate Technology into Existing Systems
I attended some of the MODEX breakout sessions and noticed a pattern. My "hot take" from those breakout sessions: people in this industry are only starting their journey with big data, IoT, and machine learning. They may have had PLC-controlled automation systems or begun to deploy robots to help humans with the picking process or move pallets around. Still, very few have built an integrated data platform or taken a "systems" view that can help them manage their demand and allocate resources proactively.
This lack of systems creates opportunities for consultants and systems integrators because, at this stage, strategy and architecture are critical. Systems integrators and management consultants must be having a field day selling into warehouses (if they can get time on the schedules to talk to the managers!).
However, this lack of digital maturity creates challenges for startups. Digital startups (hardware and software) thrive more when their corporate customers have a platform they can plug into. The corporate customers need a data platform (preferably with APIs they can use to feed data to or consume data), and they need clear technology architecture and operational standards.
Corporations often complain that startups aren't "ready" to work with them (meaning they don't have the track record, proof they can scale, robust documentation, or big enough teams to handle them). More often than not, I find that the corporations themselves are not "ready."
At Sente, we know that innovation and competitive pressure won't wait for a corporation's digital transformation journey to be complete. This is especially true in the supply chain and logistics industry, where the pressure to change is extremely high, but legacy systems and thinking are widespread.
Our special place between early-stage startups and big, digitally maturing companies helps us take a practical, balanced approach to find the middle ground between the "old school" ways and digital transformation.
Our LogisticsTech program is currently accepting applications from early-stage logisticstech startups. Check it out.
And on a personal note, I spent time with an old friend, Erhan, CEO of Logiwa, who's been seeing wild success leading and scaling his WMS software company. So glad he made the time for Mai Tai's with me at Trader Vic's!