More automation could transform warehouse productivity
In a world where innovation and technology are transforming the way in which enterprises work, it sometimes feels as if operational assets such as warehouses are behind the pace. Many large manufacturing businesses and logistics operators still run noisy and dirty facilities that rely on large numbers of staff working through manual processes. Slowly, but surely, however, that is starting to change, as supply chain executives recognise the potential of new technologies to increase efficiency and drive productivity.
Recent McKinsey research, based on a survey of logistics and supply chain leaders found 70% of them intended to invest more than $100 million in automation over the next five years. And there is a huge amount of investment required. Research from MarketsandMarkets suggests that on current trends, only a quarter of warehouses in the US will have any level of automation by 2027.
MarketsandMarkets sees entrepreneurial new entrants to the sector as playing a major role in accelerating innovation. It reckons the global size of this market will increase from $33.3 billion last year to $51.0 billion by 2029 – growth of 8.9% a year. “Market growth is expected to be fuelled by various factors, including the increasing number of start-ups offering robotic solutions for warehouse automation,” analysts at the market research firm explain.
One start-up hoping to play its part in this theme is San Francisco-based LuminX, which is today announcing it has raised $5.5 million of seed funding. The business, launched last year by CEO Alex Senemar has developed a new platform that uses vision language models to speed up warehouse operations.
The idea is disarmingly simple. Using cameras on mobile devices, LuminX’s technology can process warehouse deliveries as they arrive, instantly recognising what products are in a shipment, whether that matches what the business is expecting, whether there are any quality or damage issues to worry about, and where in the warehouse the delivery is subsequently moved to.
The technology significantly reduces the time currently taken up with manual delivery processing, which requires warehouse staff to check each box individually and enter records on a system. It generates data that flows into a company’s warehouse management system so that it has single record of what goods have come in. It also provides a visual record of goods that have been delivered, eliminating inconsistencies and the potential for disputes, much in the same way as consumers now receive photos of e-commerce deliveries they receive at home.
The inspiration for LuminX came from a previous logistics start-up, Senemar explains. “I was spending a significant amount of time on warehouse floors and was constantly surprised by the amount of manual effort dedicated to bar code scanning and verification tasks – it struck me as a major bottleneck and a source of inefficiency,” he explains. “It felt like a problem waiting for the right technological approach, and recent improvements in large language models and mobile cameras provided an opportunity to significantly improve this process.”
Senemar subsequently teamed up with co-founder Reza Javanmardi to launch LuminX. The company has already sold the technology to a number of US warehouse operators and is in contract negotiations with more.
One early adopter is Vertical Cold Storage, which operates a network of warehousing facilities across the US. COO Robert Bascom credits LuminX’s technology with “revolutionising our warehouse productivity and operations”. He explains: “It’s allowing us to automate critical tasks, significantly enhancing quality, and reducing claims.”
LuminX’s seed round is supported by investors including 1Sharpe, GTMFund, 9Yards, Chingona Ventures, and the Bond Fund. At the first of those firms, 1Sharpe Capital, Kat Collins says: “By turning a low-cost camera into a perceptive co-worker that sees, understands and acts in real time, LuminX is unlocking a step-change in operational intelligence and efficiency for every pallet, conveyer and forklift.”
Investors believe LuminX has the potential to be one of a wave of start-ups that are now starting to transform warehousing. Companies such as the Israeli business Flymingo are also exploring the use of vision technology in logistics; the Spanish business Friday Systems is using artificial intelligence to help robots take over complex tasks currently carried out by humans. Australia’s Vypex enables logistics teams to track inventory more closely than ever before.
In short, start-ups from across the world are increasingly moving the logistics sector forward. The warehouses of the future will be run almost entirely automatically, eliminating the waste and inefficiency that currently causes so much disruption.
