An Arkansas company redefines supply chain at the perfect time
Getting products efficiently from producer to warehouse to point-of-sale has always been a monumental and expensive challenge, right down to the lowly fast-food hamburger bun. In fact, that’s precisely where Charu Thomas, founder and CEO of Bentonville-based Ox, first began to unravel the DNA of supply chain issues.
“I went to school for industrial engineering,” says the Georgia Tech graduate. “The concentration I was doing was operation research, which is super deep in those upper-level classes of advanced optimization and statistics and stuff. Originally, my goal was to do that coursework and then get an advanced degree of some sort, whether computer science or mathematics or something. But obviously fate had a different plan.”
Thomas instead went to work for McDonald’s North America. At one of the company’s food distribution centers, she built automation and process improvement tools within the supply chain. The resulting technology was impressive, but so expensive and infrastructure-heavy that it was largely impractical for all but the very largest companies. “One of the biggest outcomes I learned through that experience was about return on investment,” she says. “We were selling these automated storage retrieval systems for the palletizers and de-palletizers—think of them as big vending machine robots. In order to justify the ROI for that type of physical robotic infrastructure, even though it’s incredibly efficient, you had to get it through space savings or through other ways in addition to the [machine’s] inherent efficiencies.”
Thomas began to think about designing a system just as powerful and efficient as using robots but without the overhead. Starting in 2017, she began to visualize a combination of machine learning, Artificial Intelligence, and even wearable technology (such as smart glasses) combining to boost warehouse efficiency, thereby reducing the human and monetary cost of order fulfillment, even down to the store level. “I had a little bit of funding, $100,000,” she says. “I packed up and moved to Northwest Arkansas, and started building a team.”
Like every startup in 2019, Ox (formerly Oculex) would have to prove its concept and identify its market. But unlike almost every other startup that year, world events would largely do it for them, as COVID-19 caused wholesale upheaval in how people bought goods—online—and how those purchases were fulfilled. Overnight, Ox was staring at a sea of opportunity, as big companies struggled to pivot quickly and small companies were desperate for technology they could afford.
“Once the dust settled, it became clear what the direction was, and it accelerated our technology and the adoption of our technology dramatically,” Thomas says. “If you’re really frank about it, fulfillment went from just a part of the supply chain to one of the top five priorities for every retailer or supply chain vendor on earth.”
Digitizing paperwork, reducing order errors, and eliminating wasted motion are key to overall efficiency in distribution centers. By substantially cutting the time it takes to fill a typical order, Ox minimizes this cost center by streamlining how online orders are organized, picked, and fulfilled. Using the Ox system, individual retail stores within a company chain operate like micro-fulfillment centers, thanks to a hands-free method for synchronizing the process, mapping the optimum path to find items for multiple orders at once, and tracking inventory levels in real time. The system, which needs no special hardware, provides other operational advantages, thanks to an intuitive, easy-to-use platform that even new employees learn and grasp quickly. “With Ox, we can automate a lot of manual tasks, route associates through the store in the most efficient way, and make the order fulfillment process more effective,” Thomas says. “We were able to take what was on average a 14.9-minute task down to about 10.5 minutes per order using the Ox system.”
The benefit to the company’s customers—which include Fortune 500 retailers, grocery chains, and national third-party shippers—is staggering. Clients report 25-percent gains in order fulfillment efficiency and 20-percent reductions in errors, each representing millions in cost savings. Client companies have enjoyed a collective ROI of 2,600 percent, so of course Ox’s phones are ringing off the hook. “The micro-fulfillment and nano-fulfillment technology space have absolutely exploded,” Thomas says. “Online grocery sales alone have 7X’d over the past year, which is mind-boggling. Those are obvious spaces that we’re already pursuing or continuing to grow into. Longer term, we’re thinking about opportunities to offer technology services to many different types of companies. I think that’s what I’m most excited about—offering that automation as a true service model.”
As for why she chose to locate Ox in Northwest Arkansas, Thomas cites several factors. “For us, it was a really strategic decision, based on the immense supply chain and retail talent being in the vicinity of Walmart, JB Hunt, and Tyson, obviously. There’s a wealth of talent in this ecosystem and that was really important when we were considering where we wanted to be based.
“That’s also given us access to expertise,” Thomas says. “When I started, I was just a 20-something college graduate, but I found that I could Facetime with Fortune 100 C-level executives. That just doesn’t happen elsewhere. When you combine that with an exceptional quality of life, it makes a really compelling case for Northwest Arkansas.”