As yet another example of the many ways Amazon is both a competitor and supply chain partner to small businesses is that an estimated 45 percent of the inventory in Amazon’s network of warehouses is related to fulfilling orders for sellers other than Amazon. Many of those sellers are small manufacturers and e-retailers. Four years ago, Amazon purchased Kiva, a warehouse automation and robotics company, to manage the operations of its vast warehouse system. Rather than continuing to sell Kiva products to other warehouse operators, Amazon has used the technology and robots (or bots) to automate its own warehouses. According to Bloomberg, since Amazon stopped selling Kiva (now called Amazon Robotics) products to other companies, a new generation of warehouse automation solutions have sprung up. All are aimed cutting the costs and speed of getting products into your store or onto the doorsteps of your customers.
How automation and robotics are revolutionizing warehouse operations
- Robots cut labor costs and prevent labor shortages during seasonal spikes.
- Robots help improve speed and accuracy and increase productivity.
- Typical warehouse robots look like automated pallets.
- Before drones become delivery solutions for Amazon and other companies, they will likely be used inside warehouses and fulfillment centers.
- Self-driving cars and warehouse robotics share many of the same engineering challenges and operational opportunities.
By the Numbers | Amazon Robotics
30,000 | The number of bots Amazon uses in its warehouses
20% | Operating expenses saved by Amazon’s bots
$22 million | Fulfillment expenses saved at each Amazon warehouse the bots are installed
100 | Amazon warehouses in which bots have not yet been installed
Other major users of warehouses are experimenting with new types of automation
Other big-box retailers are trying to catch up with Amazon.
- Walmart uses robots to ship apparel from Walmart.com.
- Walmart has been experimenting with flying drones that photograph warehouse shelves as part of an effort to reduce the time it takes to catalog inventory.
Startups and spinoffs chasing Amazon Robotics
There are warehouse automation projects taking place within many large technology companies as well early stage startups. Here are just a few:
Flexe | (Seattle) Utilizing an on-demand economy approach to warehouse space
Locus | (Massachusetts) A spinoff from a company called Quiet Logistics that owns two warehouses in Massachusetts
Fetch Robotics | (San Jose) Makesa warehouse robot that follows workers around, catching the items they pick off the shelves
Harvest Automation | (Billerica, Mass.) sells a robot that is similar in approach to Fetch
Toru | (Germany) From the company Magazino, its bot can grab individual items
6 River Systems | (Boston) Founded by former Kiva executives
What about the jobs of warehouse workers?
856,000 | Number of warehouse workers (May, 2016)
$16 an hour | Average wage of warehouse workers (2016) (Source)
Jobs that will be lost by warehouse workers | About half the human labor in warehouses carry out repetitive, unskilled, simple, arduous tasks that involve moving stuff around.
Jobs that won’t be lost by warehouse workers | While fewer people will be needed for the repetitive, simple and arduous tasks, there still will be a need for “high-value” (and higher paying) skilled and managerial managers and workers.