Every weekday in December, tED magazine is counting down the Top 20 Stories of 2015. Below, the #9 most-viewed story of the year, originally published on January 9, 2015.
By Jack Keough
Through the use of industrial robots, Amazon has sharply reduced the time its workers take to pick, pack and ship products, creating a strong competitive edge over its rivals, a list that could eventually include distributors and manufacturers.
The robots have led to Amazon being able to receive, process and pack orders onto delivery trucks in less than 15 minutes, down from an hour when done manually.
Instead of warehouse workers having to walk through the facility picking products, the robots bring the shelves to the packers, increasing the picking speed time by two to three times. The products are then sent on conveyor belts, some of them many miles long, to be packed and shipped. This Christmas season was the first time the robots were in full use and the robotic program seems to have met expectations.
The use of these robots answers the question as to how Amazon intended to expand use of Kiva robots, a Massachusetts company that the giant e-retailer bought in 2012 for $775 million. After the purchase, Amazon stopped selling the Kiva robots to other retailers, instead focusing on ways to improve the Kiva software.
The short, squat Kiva robots are about a little over a foot tall, weigh about 350 pounds and can lift up to 700 pounds, according to Dave Clark, Amazon’s senior vice president for worldwide operations and customer service. The Kiva software determines which items each packer at a station needs and in what order. It sends instructions to robots throughout the warehouse and tells them to bring the shelving units that contain those items to the packer.
In November, Amazon announced that it would have 15,000 of these industrial robots in operation at the end of 2014. That number is much higher than the 10,000 predicted by Amazon’s CEO Jeff Bezos in mid-2014 when the company had only 1,300 of those robots in operation. Amazon’s robots are now being used in about ten of its warehouses in California, Texas, Florida, New Jersey, and Washington State. And it will be rolling out the robotics program to many more facilities in 2015.
One analyst, Shawn Milne of Janney Capital Markets, has estimated that Amazon could save anywhere from $400 million to $900 million annually in savings by using the robots.
Here’s how it works. The system uses bar codes to track which items are on each shelf, so a robot can be sent to a specific one as orders come in. Travelling about 3 to 4 miles an hour, the robots are equipped with motion sensors to prevent them from bumping into other objects. The robots go underneath the shelves, bringing them to a packer who stands at one location while the robots slowly pass by. The workers pick the products and place them in bins that are put on conveyor belts where they are eventually boxed, labeled them and put on trucks for delivery.
And Amazon may be working toward completing the “last mile” for delivery. Amazon is using companies like UPS, USPS, and even cab services for deliveries but they are also testing its own delivery service in San Francisco for its AmazonFresh food unit. If successful, that program could be rolled out nationwide.
The automation means that Amazon can pick, pack and have those products on a truck in under 15 minutes down from an hour, Clark said according to news reports.
There are other advantages as well.
Since there is no need for aisles, the shelves can be stored more closely together, resulting in the storage of more product. One Amazon warehouse in Tracy, Calif. which opened in 2013, had about 21 million items in stock. That will now increase to about 26 million items because of the increased efficiencies created by the robotic system, meaning that Amazon will need to build fewer warehouses/fulfillment centers. Amazon has been on a building binge of these centers the past few years and that has led to a major negative effect on the company’s bottom line. The Seattle-based company now has about 90 such centers in the U.S. and a total of about 105 worldwide.
Before the robots were in operation, warehouse workers walked through the facility picking items and putting those items in carts that were brought to a station to be sorted and packed. Workers no longer have to walk up to 15 miles a day picking products from the 1.2 million square-foot warehouses.
Clark has emphasized that robots are not replacing humans in the warehouse workforce, telling reporters that Amazon has doubled the size of its workforce despite the use of the Kiva robots.
He said that Kiva is only moving inventory while workers are the ones who have responsibilities for ensuring that the right products are being picked correctly.
Some of Amazon’s fulfillment centers also use Robo-Stow, a six-ton robot that moves merchandise pallets as high as 24 feet onto Kiva robots, and “vision systems” that can confirm each item in an entire trailer of inventory in as little as 30 minutes by capturing an image of the trailer’s contents, according to the Seattle Times.
Internet Retailer magazine also reports that Amazon is boosting its sortation center network, another likely focus for 2015. Designed to promote even speedier deliveries and to allow Amazon to steer clear of stumbles that might be made by the major carriers, the centers enable Amazon packages to be arranged by ZIP code before heading to nearby post offices for the final delivery leg. This past holiday shopping season, Amazon was expected to have 15 U.S. sortation centers in operation, up from eight in 2013.
Jack Keough was the editor of Industrial Distribution magazine for more than 26 years. He often speaks at industry events and seminars. He can be reached at email@example.com or firstname.lastname@example.org.
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