Rudi Lueg of Exotec: “Explore other post graduate education options like an MBA”

Explore other post graduate education options like an MBA. I earned a Master of Science from The Nuremberg Institute of Technology in Germany, and it was one of the best things I could have done for my career. As a part of our series about cutting edge technological breakthroughs. I had the pleasure of interviewing Rudi […]

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Explore other post graduate education options like an MBA. I earned a Master of Science from The Nuremberg Institute of Technology in Germany, and it was one of the best things I could have done for my career.

As a part of our series about cutting edge technological breakthroughs. I had the pleasure of interviewing Rudi Lueg.

Rudi Lueg, Managing Director of Exotec North America, is responsible for leading Exotec’s expansion into the North American market. Exotec is a global robotics company, building Goods-to-Person (GTP) System based on 3D robot fleets for Fulfillment Centers. The company recently raised a $90M funding round and signed Gap as the first North American Customer. Rudi has three decades of experience in the supply chain industry at industry-leading companies including KNAPP, Fortna, and SDI among others.

Thank you so much for doing this with us! Can you tell us a story about what brought you to this specific career path?

I ended up building my career at the interception of logistics and robotics primarily due to my fascination with mechanical engineering and information technology. The first time I saw a conveyor system in a warehouse, I was instantly drawn to the combination of technology, infrastructure, and operational systems. Since then, I dedicated my career to finding the best ways to route, sort, sequence, store, and fulfill goods with various technologies. I consider myself incredibly lucky to have found my passion and did so at the time when retail is embracing this massive transition from brick and mortar to ecommerce, which presents a host of interesting logistics challenges to be solved.

Can you share the most interesting story that happened to you since you began your career?

When I was still working at Dürkopp (later acquired by KNAPP) in Europe, I remember celebrating our team reaching 10,000 items processed in one shift. It was a monumental effort from the entire team, and we could not have been happier about hitting that milestone. Just a few weeks later, when I was chatting with one of my American peers, I learned that they have been routinely processing that volume in just one hour, every single day. This piqued my curiosity about the scale and the efficiency of their operations and sparked my initial interest in coming to work in the U.S.

Another story that jumps to mind is from the first time we tried to build an online fulfillment system at SDI leveraging already existing retail equipment. It was a very painful process. It took us several attempts and many changes to build an acceptable system from the solutions that were available on the market at the time. This experience opened my eyes to the fact that the “retail equipment” that was designed for getting goods to brick and mortar was not suited to meet growing ecommerce fulfillment needs. This is why I am so excited about the solutions that Exotec is bringing to the market. I am motivated to help logistics professionals solve incredibly complex challenges like ecommerce fulfillment.

Can you tell us about the cutting-edge technological breakthroughs that you are working on? How do you think that will help people?

My current focus is to bring sophisticated robotics and automated order fulfillment systems to fulfillment centers in the U.S. and around the world. For nearly a century, the retail industry designed material handling systems to deliver goods to, brick-and-mortar stores from a centralized distribution center. However, today the retail landscape is much more complex. Decentralized, omnichannel shopping is commonplace and ecommerce sales account for more than 20% of U.S. retail. While the retail landscape and how consumers purchase goods has evolved, brands’ logistics infrastructure is still catching up.

Many retailers tried and failed to shoehorn their brick-and-mortar supply chain infrastructure to meet growing ecommerce demand. One of the primary challenges was reconciling inventory inaccuracies with brick-and-mortar equipment. For example, oftentimes manufacturers send additional inventory — 32 red shirts as opposed to 30 because they have additional materials. For a brick-and-mortar store, this margin of error is acceptable because the shirts are distributed to stores in large volumes, so it became a common practice. Ecommerce is an entirely different story because apparel orders are fulfilled as individual items, making inventory visibility and accuracy paramount. This is just one of the many challenges logistics professionals face when deploying an ecommerce fulfillment strategy.

How do you think this might change the world?

Robotics and warehouse automation will increasingly become the foundational infrastructure for modern life. From clothes, electronics to groceries to beauty products, everything that we buy online will depend on a highly efficient order fulfillment system. To be clear, malls and brick-and-mortar stores are here to stay, but I believe they will look much different in the near future. Instead of supplying massive stores with a ton of inventory, I envision retailers adopting a “showroom” approach to in-store shopping, similar to what Ikea has been doing for the past 40 years. This model has already been adopted by many successful brands including Warby Parker, Bonobos, and Glossier.

Keeping “Black Mirror” in mind can you see any potential drawbacks about this technology that people should think more deeply about?

I often encounter the myth that AI and robotics will eventually control humans or kill jobs. I highly doubt it. Rather, I believe we are at the turning point in the latest industrial revolution that will enable machines to empower humans. Put in a different light, most individuals reading this consumed food that they did not grow, harvest, and prepare. This was not the norm multiple generations ago — all of our ancestors were farmers. Technology changed the way we procure food so that we had more time to do different kinds of work. I think the same is true with supply chain automation. Human-centric technology has the potential to improve warehouse working conditions and create a better environment for operators.

Was there a “tipping point” that led you to this breakthrough? Can you tell us that story?

When I worked for a traditional equipment manufacturer serving retail, I witnessed the company attempt to pivot their approach to better support direct-to-consumer retail. This is no small feat. To me, the transition was akin to GE or Toyota pivoting to electric cars or Nokia launching a touch screen. I realized how difficult it is for companies to disrupt themselves. I was inspired to be part of a company driving innovation and change in warehouse automation and happened upon Exotec’s automated storage and retrieval system.

What do you need to lead this technology to widespread adoption?

As with any innovative technology, we need to identify pioneers and early adopters who understand that supply chain automation is inevitable. Since Piggly Wiggly®, invented self-service grocery store in Memphis, Tennessee in 1916 consumers have been retailers’ primary “pickers” within brick-and-mortar stores at no additional cost to the retailer. Now that more goods are purchased online, brands are taking on more picking responsibilities. To put things into perspective, if all consumers stopped going to physical stores tomorrow, we would need more than tens of million people to accommodate direct-to-consumer sales. We’re approaching a 5th industrial revolution where consumers will continue to want their goods and services quickly, affordably, and conveniently. Meanwhile, brands face the pressure to customize and personalize their product to compete. Robotics and engineering aren’t the end. They are the means to a reality that we have not yet invented.

What have you been doing to publicize this idea? Have you been using any innovative marketing strategies?

The Exotec Skypod system is a combination of hardware and software, but it is an inherently physical product. Many supply chain leaders want to see how it works with their own eyes. For this reason, we prioritize live demonstrations as much as possible. This fall, we are installing a demo system in our North American headquarter in Atlanta and by the end of this year we will have our systems set up in Gap and Decathlon facilities.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

Don DeSanctis, founder of SDI, changed the course of my career. Back in the eighties and nineties he was working on distributing supply chain automation solutions for apparel retailers, a field that I found to be incredibly interesting. He discovered me in Europe, took me under his wing, and encouraged me to move to the U.S. Don taught me many valuable lessons about client management and the importance of trust and loyalty. I fully credit him for transforming me from a German geek into an executive and strategic thought leader. His impact on my career cannot be overstated.

How have you used your success to bring goodness to the world?

I am a big believer in paying it forward. In Don’s footsteps, I am extremely intentional about making time to coach young engineers and make sure that the next generation of talent has all the tools that they need to succeed in leadership roles. Beyond that, my work creates tangible value for Exotec customers — retailers and brands — and their employees. Our technology helps improve working conditions for millions of warehouse workers around the globe and that change can meaningfully contribute to the quality of their lives and long-term well-being.

What are your “5 Things I Wish Someone Told Me Before I Started” and why. (Please share a story or example for each.)

  1. Explore other post graduate education options like an MBA. I earned a Master of Science from The Nuremberg Institute of Technology in Germany, and it was one of the best things I could have done for my career. I focused on studying artificial intelligence and wrote my thesis about self-organized neural networks. I can’t emphasize enough the importance of education, and I encourage all those fortunate enough to have the opportunity to seize it.
  2. Don’t get comfortable in your career too early. Often, I find young professionals are so eager to get a job and do well in that job that they will settle and get too comfortable with the first company that offers them a role. However, I believe there’s tremendous value in exploring different industries after college. Specifically, I think consulting firms provide new graduates with a unique vantage point into many different companies and fields.
  3. Remember sales is king. It’s somewhat intuitive that sales are important to a company because without sales there is no company. However, too often young professionals overlook the art of selling and the critical professional development experience one can gain from a sales role. Regardless of an individual’s role at a company — marketing, engineering, accounting — I believe everyone must first learn how to sell the core product or offering in order to do their job effectively.
  4. Prioritize soft skills. It’s no secret that soft skills are both the most critical to master, but the toughest to coach and learn. No one studies critical thinking, empathy, and patience yet they are fundamental skills required across every industry and at every company on the planet. Prioritize mastery of the soft skills because you will always need them in your professional and personal life.
  5. Take care of your family and friends. The bleak reality is that at the end of the day we are all replaceable. Business will go on independent of any one individual. For that reason, we must always remember to take care of those around us and maintain a healthy balance between work and personal life.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.

I want to inspire people to fight global systemic poverty. I believe that if we prioritize education and foster ethical and conscious capitalism, we can eradicate hunger and poverty worldwide. I believe capitalism, when properly applied, is the best model we have for solving large scale problems in the most efficient way. A good recent example of that is BioNtech, a company founded by two highly educated immigrants that delivered a COVID-19 vaccine in record time.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

Always trust your gut, it knows what your head hasn’t figured out yet. As an engineer, I tend to be extremely rational in how I approach the world, but sometimes the best approach is to trust your gut feeling.

Some very well known VCs read this column. If you had 60 seconds to make a pitch to a VC, what would you say? He or she might just see this if we tag them

As more retail spend shifts online, the efficacy of a brand’s ecommerce operations will make or break the business. Enter Amazon that leveraged its unprecedented scale to set consumer delivery expectations. If you are in retail, it’s do or die, but few businesses can afford to match Amazon that spent nearly a decade automating and honing its ecommerce capability following the acquisition of Kiva in 2012. Retailers need sophisticated, easy-to-deploy, scalable solutions that can help automate their ecommerce operations to win market share and thrive in this new retail environment. Exotec is uniquely positioned to help customers meet that need with Skypod systems that have been deployed by some of the largest retailers in the world including Gap, Decathlon, and Carrefour.

How can our readers follow you on social media?

Please reach me on LinkedIn to learn more about Exotec or if you are interested in joining our team — we’re actively hiring in the U.S. and around the world.

Thank you so much for joining us. This was very inspirational.

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