This article is from 2019. Read it before continuing as it will help you understand this post.
Ngoc Phan, VP of Supply Chain for Nordstrom, had an idea – leverage not one but two robotic systems to fulfill online orders for customers. Phan selected systems from the robotics company Attabotics Inc., and a parcel-sorting company Tompkins Robotics.
Phan selected the two technologies because Nordstrom could store items in Attabotics’ matrices, which tower more than 20 feet high. When items were needed, they’d be electronically picked and pushed toward Tompkins’ conveyor belt, where more robots would sort the merchandise.
Phan said, “Combining both systems would be a first in retail.”
Phan’s goal was to automate a facility in San Jose, CA, using a strategy of “test and learn” with both systems, and then scale the automation across 8 other fulfillment centers once the technology was proven to work together.
When I first learned of the project I was immediately concerned. In 2019, Attabotics was a startup with minimal experience using their system under real-world conditions. During a Wall Street investor call, I stated, “Nordstrom will fail because they don’t have the right strategy, leader, or an experienced team.”
Shortly after the project was announced, Nordstrom went radio silent. This was a Red Flag to me. I was right. The project wasn’t going well.
According to current and former Nordstrom associates and executives directly involved in the project that I spoke with, the project was “a complete disaster” for the following reasons:
1. Nordstrom “has a history of failed logistics projects.”
2. Phan chose not to test and learn from the Attabotics system. Instead, Phan used a “fail and scale” methodology. Phan mandated that the Attabotics system immediately be utilized to fulfill up to 21,000 orders per day. Something Attabotics wasn’t ready to do.
3. Phan made decisions that minimized the capabilities of each system. Phan made additional decisions that increased cost and complexity within the project.
4. Attabotics submitted proposals on three occasions that would correct the issues being experienced. Attabotics was ignored. Instead, Phan made the decision to keep utilizing the solution outlined in “her patent.”
When I learned of Phan’s patent, I looked it up and read it. I was shocked at what I discovered. The patent is the “smoking gun” regarding why the project failed. See my comments in the Comment section.
After “wasting $50M” on the project, Nordstrom pulled the plug in 2022. The project failed “because of ego, poor leadership, and a flawed strategy.”
Note: Tompkins and Attabotics have had multiple successful implementations. The systems work great and they’re a strategic fit together. I endorse each company, and I recommend using their systems.
