Will Robots Take Over Ecommerce Warehouses?
Robots have always played a prominent role in movies, television, and children’s toys. They are now navigating a new arena — warehouses — and changing the way businesses handle their fulfillment.
Manufacturers have been using “dumb” robots for repetitive tasks in product assembly for years. With advances in technology, especially in artificial intelligence, the era of the “smart” robot is expanding the range of tasks that robots can perform. Robots are now collaborating with humans and in some instances working autonomously.
Warehouse Robots: Early Adopters
Amazon was a pioneer in using robots in fulfillment centers. In 2011 Amazon started using 1,300 robots from Kiva Systems, a Boston-based robotics start-up. Amazon liked the robots so much, it bought Kiva Systems in 2012. There are now 15,000 Kiva robots spread across 10 of Amazon’s warehouses. Drugstore retailer Walgreens and office product retailer Staples also used Kiva robots at that time.
Amazon liked the robots so much, it bought Kiva Systems in 2012.
Using a collaborative approach, Kiva’s squat orange robots pick up shelves of products from the warehouse floor and bring them to a human employee who picks items and then packs them into individual boxes for shipping. Kiva’s robots avoid running into each other by using sensors. Amazon also uses an algorithm to determine which are the most popular items and situates these goods closest to the pickers.
Kiva enables Amazon warehouse workers to pick items two or three times faster than filling orders manually, and the system, when more broadly implemented, could result in the retailers reducing fulfillment costs by $450 million to $900 million in North America, according to Janney Capital Markets. Amazon has estimated that the average amount of time it takes to pull an item from a shelf and put it in a box is now 15 minutes per order, down from an hour and a half.
Other Warehouse Robots
When Amazon bought Kiva Systems (now Amazon Robotics), most of Kiva’s other customers eventually moved to alternative robotics systems. Fetch Robotics, founded in 2014 in the Silicon Valley, saw an opportunity. The company manufactures Fetch and Freight, a complete pick and pack system. Fetch can select the items from the shelf (up to 13 pounds), while Freight provides transit through the warehouse. They can work in tandem or customers can use just one. The system includes software to support the robots and integrate with the warehouse environment. Both robots are built upon the open source robot operating system, ROS.
Another robot manufacturer, Singapore-based GreyOrange, focuses on streamlining order handling in the warehouse, specializing in ecommerce logistics. It works mainly with Indian ecommerce merchants such as Flipkart, Amazon India, and Jabong. Its Butler robot is designed to help ecommerce and logistics operations efficiently deal with high-mix, high-volume orders by moving around a warehouse and collecting the products that are being shipped.
The company’s other offering, Sorter, is a high-speed sorting system that scans and sorts parcels for shipping. The system has eight components, including dimensioning and weighing, sorting conveyor and arm, and a bagging unit.
Hitachi has developed a two-armed robot that it says can pick up items from shelves in less than half the time required by existing robots. The camera on its arm can locate the requested item while the machine is still moving, which enables it to work more quickly. It should be commercially available in 2020.
Total Warehouse Automation
Amazon’s next foray is robots, like Fetch, that can grasp items with the objective of eliminating human pickers. In a new book, Machines of Loving Grace, New York Times reporter John Markoff writes that Amazon’s Kiva robots are “clearly an interim solution toward the ultimate goal of building completely automated warehouses.”
Complete automation of the pick-and-pack process could solve a public relations problem for Amazon, which built at least some of its warehouses without air-conditioning. During summer, temperatures reportedly stay at over 100 degrees all day. Not until this received negative publicity from a Pennsylvania newspaper did Amazon start retrofitting warehouses with air-conditioning.
However, another issue may arise. When Amazon negotiated agreements with several states to delay the collection of sales tax in exchange for locating warehouses and providing jobs, nobody presumably contemplated total warehouse automation. It will be interesting to see how states respond.
The price of robots is decreasing rapidly and robots that can act autonomously without human intervention are helping in fields such as medicine, search and rescue, and agriculture. Many drones can fly autonomously and Amazon has stated its intent to use them for package delivery.
Robots don’t require health insurance, lunch breaks, or vacations. They can work 24/7 and don’t call in sick. They don’t require training. This is particularly useful during the holiday season when ecommerce merchants typically hire additional warehouse workers. Robots can reduce logistics costs substantially with minimal human intervention.
Robots don’t require health insurance, lunch breaks, or vacations. They can work 24/7 and don’t call in sick. They don’t require training.
Ecommerce companies are under pressure to reduce fulfillment costs and send orders to customers more quickly. Any merchant that ships in substantial volume and wants to stay competitive will likely have to use robots. Third-party logistics providers are also converting to automation. The courier firm DTDC in India, for example, uses a 25-arm robot to pick orders at a rate of 3,500 orders per hour, about one per second.
The average cost of a Fetch warehouse robot is $35,000 and that price is certain to come down as more are sold. In five years a robot will be less expensive than a human employee with benefits, especially if the effort to implement a $15 minimum wage succeeds. Within the next five years, robots will likely replace humans who are performing simple, repetitive tasks in many industries.