How Amazon used Robots to Reduce its Operating Costs by 20%

Amazon is one of the biggest technology companies in the world focused on e-commerce, cloud computing, digital streaming and artificial intelligence. Consumers from across the globe purchase goods on Amazon and expect their package to be waiting at their doorstep the next day. However, it was not always so efficient. Each individual order used to take approximately 60-75 minutes to process. An Amazon employee would walk around the warehouse to collect the products, walk back to their station and package the product for shipping. This process was time consuming and labour intensive. 

In March 2012, Amazon leapt into the future of automation by acquiring Kiva Systems for US$775 million. Kiva Systems, renamed to Amazon Robotics, was a mobile- robotic fulfillment system for inventory distribution centers that helped companies optimize their operations. Various methods of robotic technology including autonomous mobile robots, sophisticated control software, depth sensing, machine learning, object recognition, and semantic understanding of commands are combined to automate fulfilment center operations. 

Source: designboom

Integrating robots into the fulfillment centers does not eliminate human employees. Instead the robots and humans work in tandem to create an efficient system. The process of shipping out one package starts with picking out the goods in the warehouse, returning to the packing area, and packing the items. Robots are not able to detect (for now) what is in a container or if the product could spill, which is why human interaction is still required to safely unpack items without causing damage. The robots assist with handling all the heavy lifting in the warehouses. As a result, employees now lift less and walk less because the robots transport the inventory to and from the picking / packer stations where employees sort and package goods. As well, the robots are able to grab totes, lift and store them. The machines are able to maximize space by organizing narrower isles and getting rid of certain handling systems.

Source: designboom

By 2014, cycle times increased approximately 80% to only 15 minutes per order. In addition, operating costs were cut by 20%, which is around $22 million in cost savings per fulfillment center. Amazon utilizes the technology in 26 out of their 175 fulfillment centers. The robots have not only helped the company save $550 million in costs, but also store approximately 40% more inventory. As robots are integrated into more fulfillment centres, Amazon will be able to efficiently store and pack more inventory to keep up with their growing demands. 

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