Exclusive: SCMR goes one on one with Swisslog’s Sean Wallingford

Sean Wallingford was named president and CEO of the Americas region for Swisslog in January. He joined Swisslog, which is part of the KUKA Group, from Vanderlande Industries, where he most recently served as president of warehouse solutions for North America.

Responsible for driving growth and capability building in the North American region as well as directing the global warehouse software strategy, Wallingford has more than 15 years of experience there and at his previous employer, Honeywell Intelligrated. At Honeywell, Wallingford was responsible for Honeywell Intelligrated’s software strategy and solutions and Connected DC Software solutions as vice president of software product management.

In an extensive interview with Supply Chain Management Review at the ProMat 2023 conference in Chicago in March, Wallingford talked about his time on the job, his transition to the position, and what he sees for the future of the supply chain.

(Editor’s note: This interview has been edited for length and clarity)

SCMR: Thanks for taking some time with us today. Congratulations on the new role. You’ve been on the job for a few months now, how are you settling in?

Sean Wallingford: The good thing about being in the industry for almost 15 years now is I’m very familiar with the technology, the customers, and automation … in general. So, it’s probably easier to adapt to a new company in the space than somebody coming in from the outside. So, I think that’s good. Obviously, it’s learning the different dynamics about the company’s structure and product lines, and things like that, but it’s going well.

SCMR: You noted you’ve been in the industry for nearly 15 years, but have there been any surprises as you’ve gotten into the day-to-day aspects of the position?

Sean Wallingford: I’ve been pretty impressed with the portfolio focusing on where we think automation’s going, not where it’s been. I think some of the traditional sortation and conveyor systems have been commoditized, [but] they are useful. We all need to have them, but the focus on our ACPaQ mixed-case palletizing solution, it’s where are we going. We’re going up, we’re going more automated, we’re going less labor. And the portfolio is kind of laser-focused around those things. So that’s been exciting for me.

SCMR: You’ve touched a little bit on some of the solutions that Swisslog offers, but can you tell me where you think the greatest potential going forward is?

Sean Wallingford: The North American market is behind Europe. It has been behind Europe from an automation perspective for 10, 15 years. Land was scarcer, people were more expensive, especially close to major population centers. So, Europe got on board much quicker with large automated systems, high bays, building up and not out. I think in the U.S. market, especially with the labor challenges the last three or four years, but even before that, the acceleration toward more of those types of systems is driving the need for systems like the ACPaQ system where you can run what used to be a campus of multiple buildings in one building with an order of magnitude of less people than you had prior. That’s not an option anymore for a lot of our customers because they can’t staff the buildings that they have, or they can’t find land close enough to where they need to have this distribution center to meet their SLAs for either shipping time to customers or time for store fulfillment. They require larger automated systems.

More consolidation [is coming] around certain types of systems—large shuttles, large cubes from Auto Store, large high-bay warehouses. Those types of systems are where we’re at and where we’re going. And there’s so much of that network that was built up in the early 2000s to early teens that isn’t really fit for purpose today. I mean, there’s a lot of trying to sweat the assets, but they are still heavily people-driven systems. When you think about all the buildings that were built with pick modules that have hundreds of workers walking around the pick modules trying to fill orders, that’s not sustainable today. Think about the campuses where you have an inbound center somewhere with product, and you’re shipping it to try to consolidate it to try to do store fulfillment and omnichannel out of a building.

That’s not a sustainable setup for a network. So, the realities of the labor shortage, that tailwind, plus just the fact that we’ve really, in a lot of our major transportation corridors overbuilt, and built out most of the available land, the only thing to do is reuse [space by] going up. And so, the type of solutions that I think Swisslog and others have is where we are and where we’re going. Obviously more robotics in almost every application you can think of, whether it’s pallet building, breaking down pallets, or it’s item picking, which is basically almost a commodity now.

SCMR: “A lot of companies talk sustainability and how they’re going to be net zero. Gartner, not too long ago, put out a report about packaging companies, and the fact that many of these companies that set net zero goals for 2025 are never going to achieve those. From your perspective, do you see the industry having to make a shift away from these pledges of net zero to something that is more just a near zero approach, as Gartner is suggesting?

Sean Wallingford: Yeah, so I think in context … these things are great things because it helps set aggressive goals. And everybody can acknowledge that any movement toward less carbon emissions is positive. Pragmatically speaking, whether a company hit net zero, whether they got close to net zero, that’s a great improvement for everybody. I think that’s a win because it’s better than where we are today, and it should be markedly better. That being said, there’s always more complexity than there appears to be on first glance. When you start defining Scope 2 and 3 emissions and you start taking it down the value chain and through supply chains to second-, third-, and fourth-order suppliers and actually getting the details around that, a lot of those emissions aren’t known today.

When you start actually going, ‘Okay, well how do I manage this problem or that problem?’ even the best of intentions might make it difficult to fully make that change, whether it might be commercially because the technology isn’t ready to do it yet, or whether the alternative doesn’t provide an experience that a customer’s willing to pay for. I think there’s a lot of those dynamics in play.

What we’re doing is two things. One, we obviously have aggressive goals internally that we set for the company itself - how can we reduce our carbon footprint across the board? Number two, we’re taking a pretty pragmatic approach toward the solutions that we offer, because there are always things that we can do to reduce power consumption in the equipment that we sell. It’s a large ongoing expense when you have a lot of conveyors in a building running all the time—that’s expensive for customers—but it’s also a high source of emissions.

There are things that we can do from a product perspective where we reduce energy consumption. There are things that we’re working on with our suppliers to convert to more recycled materials, belts and things like that. We’re trying to look at the portfolio and say, okay, what are the things that we can do immediately that have no performance impact, but that we can start flipping these blocks over so to speak. And then thinking about the solution holistically long term. We’re early on in that process, and a lot of our suppliers are early on in that process.

SCMR: The last few years, if there’s anything we’ve learned, is that the supply chain is much more fragile than we thought it was. We’ve seen instances where one piece fails, and the entire chain comes to a stop. Has Swisslog looked at its own supply chain as far as how you’re addressing and making sure that you can continue to meet the needs of your customers going forward?

Sean Wallingford: Yeah, and it’s an interesting thing, right? Because the cost conversation with customers is always challenging because everybody’s trying to squeeze cost, cost, cost. But that does sometimes come at the expense of resiliency. And the last few years have at least allowed that conversation some oxygen where you can say, ‘Look, we can better our lead times.’ But when you start and think about resiliency, sometimes it’s additional suppliers. When you’re splitting volume between suppliers because you’re trying to get some redundancy and some reliability in the network, that affects your volume discounts. So there is a trade off. Those conversations are always ongoing, and at least we’re able to have those where it makes sense.

SCMR: Companies continue to struggle to hire talent, and talent with the right skillset to run the automation being installed in warehouses. How do you see this challenge?

Sean Wallingford: “I think the bigger challenge is that the skillsets that we start to need to run these types of systems, whether it’s the AI and robotics or the heavy emphasis on software … we’re now competing with other industries that pay a lot more, that traditionally throw stock options at people—the large tech companies and Microsofts and Facebooks of the world. And we’re dipping into a talent pool we haven’t been competing against. We’ve been competing against more traditional engineering and controls and things like that. And it’s different when you’re competing with the large tech companies versus when you’re competing with a factory hiring a PLC engineer. We’re all cognizant that we’ve moved up in the market and the type of talent that we need to deliver these solutions has changed. And it’s required all of us to pay more. And it’s required all of us to think about how we facilitate those folks having a larger impact quickly. Because you can’t hire thousands and thousands of people. And these are problems. Our problems in our industry require context.

So again, it comes back to, how do we have standardized solutions? How do we take best practices from outside of our industry, like agile development, like good product management, like requirements management, selling to a solution and not a white sheet of paper, that allows us to control some of those things to funnel it down to where it’s manageable. So, I think that’s a combination of pay, university partnerships, apprenticeship programs, and training. It’s everything you must do to build a competitive workforce today. And it’s a much more complicated thing than it was when I joined 15 years ago.”

SCMR: What is your vision for Swisslog in North America going forward?

Sean Wallingford: It’s always fun to learn how the company fits into the overall opportunity in this space. I think again, the opportunity is massive, especially in America. This is the best region to be in. There’s more automation that has to be done here.

Everything is bigger than it is in the rest of the world, so the opportunities are larger to solve. And I think we fit in pretty well. For me, the vision is a lot of the things that we’ve done globally, we need to grow in America. And I think the timing is right. It made sense to do our ACPaQ system in Europe first. That’s where a lot of, again, the customer demand has been the highest. That’s where a lot of our global experts have been. But now we have a great solution that the market needs. And bringing more of our full portfolio to bear in North America is one of my main focuses.

SCMR: Thank you very much for your time.

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