Inside Amazon's Smart Warehouse
Summary
TLDRAmazon, led by the world's richest man Jeff Bezos, has revolutionized retail through its lightning-fast delivery, made possible by advanced logistics and AI. The company's fulfillment centers are a symphony of human and robotic collaboration, with robots like Kiva handling heavy lifting and humans performing tasks requiring dexterity. Amazon's use of deep learning AI anticipates customer needs, ensuring products are readily available. Despite concerns over intense working conditions, Amazon's efficiency has been a boon during the pandemic, highlighting the importance of human labor even in a highly automated environment.
Takeaways
- 🌐 Amazon is recognized as the world's largest retailer with Jeff Bezos, its CEO, being the richest man, largely due to its unparalleled efficiency in delivering goods quickly.
- 🚀 The company's success is attributed to its lightning-fast delivery times, which is a modern logistical marvel, moving millions of items to customers' doors within 24 hours.
- 🤖 Amazon utilizes an army of robots and advanced AI systems to predict and fulfill customer orders, enhancing its operational efficiency.
- 💡 Deep learning AI has been instrumental in Amazon's operations since 2015, allowing the company to anticipate customer needs and stock local warehouses accordingly.
- 📈 Amazon's global revenues nearly doubled from 2017 to September 2020, reaching close to $350 billion, showcasing the company's rapid growth.
- 🛠️ Amazon's fulfillment centers are highly automated, with robots like Kiva handling the movement of shelves to human pickers, increasing stock capacity and retrieval speed.
- 🛒 The introduction of Kiva robots has been a game-changer, reducing the overall cost of fulfillment and allowing for more affordable and faster delivery to customers.
- 🔄 Amazon Robotics continues to innovate with newer models like Pegasus and Xanthus, further streamlining warehouse operations and reducing errors.
- 👷♂️ Despite automation, human labor remains essential in Amazon's warehouses for tasks requiring dexterity and problem-solving, such as stowing and picking items.
- 🎯 Amazon employs gamification and incentive schemes to motivate its workforce, maintaining high productivity levels during peak sales events like Prime Day.
Q & A
How does Amazon achieve its lightning-fast delivery times?
-Amazon achieves fast delivery times through a combination of smart warehouse automation, efficient management practices, and the use of deep learning AI to predict and prepare for customer demands.
What role do robots play in Amazon's smart warehouses?
-Robots in Amazon's warehouses, such as the Kiva robots, are responsible for moving shelves to human pickers, which increases the efficiency of the picking process and allows the warehouses to hold more stock and retrieve it faster.
How does Amazon's deep learning AI predict customer purchases?
-Amazon's deep learning AI uses algorithms that make assumptions about customers based on their age, location, socioeconomic background, and purchase history to ensure that local warehouses are stocked with products customers are likely to buy.
What was the outcome of Amazon's acquisition of Kiva Systems?
-After acquiring Kiva Systems, Amazon renamed it Amazon Robotics and stopped selling Kiva technology to other companies, giving Amazon a significant competitive advantage in warehouse automation.
What improvements have been made to the Kiva robot design over time?
-Amazon Robotics has refined the Kiva robot design, creating the Pegasus model, which is shorter, requires fewer parts, can lift heavier loads, and can be customized with a conveyor belt for use in sortation centers.
How does Amazon's cloud-based software manage the movement of robots in its warehouses?
-Amazon uses cloud-based software to operate an AI-run air traffic control network that coordinates the routes of every robot, optimizing for speed and avoiding collisions.
What are the two most common roles still performed by humans in Amazon's fulfillment centers?
-The two most common roles performed by humans are stowing, where goods are placed onto shelves or pods, and picking, where specific items are selected from the shelves for order fulfillment.
How does Amazon encourage its workers to maintain high productivity rates?
-Amazon encourages high productivity through gamification, where workers compete in in-house games that reflect their picking rates, and through incentive schemes like Swag Bucks, which reward hard work with Amazon-branded merchandise.
What challenges have Amazon faced regarding its working conditions and employee safety?
-Amazon has faced criticism for intense working practices, with reports of high injury rates and the need for ambulance calls at warehouses. The company invests in safety awareness programs but acknowledges increased injuries during peak times like Prime Day.
What is the significance of Amazon's new 40 million robotics lab, and what does it suggest about the company's future?
-The new robotics lab signifies Amazon's ongoing commitment to advancing automation and robotics in its warehouses. It suggests a future where Amazon continues to innovate and lead in warehouse efficiency and order fulfillment.
Outlines
🚀 Amazon's Retail Dominance and Logistics
Amazon, under CEO Jeff Bezos, has become the world's largest retailer and Bezos the richest man, thanks to their unparalleled ability to quickly deliver products. Amazon's success is attributed to its fast delivery times, made possible by advanced technology, smart management practices, and AI. Amazon's warehouses, or fulfillment centers, are highly automated with robots and AI, allowing them to predict and prepare for customer orders before they're even placed. The company's global revenues have doubled from 2017 to 2020, showcasing its rapid growth and efficiency.
🤖 The Role of Robotics and AI in Amazon's Warehouses
Amazon's warehouses are managed by an AI-run system that coordinates the movement of hundreds of robots, optimizing routes and speeds to avoid collisions and improve efficiency. The robots, such as the Kiva units, have significantly increased the capacity and speed of Amazon's operations, reducing fulfillment costs. Amazon Robotics continues to innovate with newer models like Pegasus and Xanthus, enhancing the efficiency and accuracy of their operations. Despite the automation, human workers still play a crucial role in tasks requiring dexterity and problem-solving, such as stowing and picking items. Amazon's management practices have made the company lean and efficient, but also intense, with high expectations for productivity and accuracy.
🛒 The Impact of Amazon on Retail and the Future of Jobs
Amazon's efficiency and ability to meet increased demand during the COVID-19 pandemic have highlighted its importance in the retail landscape. While concerns about job displacement due to automation exist, Amazon still relies on human labor for many tasks. The company's intense working conditions have been criticized, with high injury rates and strict productivity expectations. However, Amazon emphasizes its investment in safety and employee well-being. The future of Amazon's operations, including new robotics labs and innovative patents, suggests a continued commitment to innovation and efficiency, ensuring that as long as consumer demand exists, Amazon will continue to deliver.
Mindmap
Keywords
💡Amazon
💡Jeff Bezos
💡Fulfillment Centers
💡Deep Learning AI
💡Kiva Systems
💡Pegasus
💡Xanthus
💡Gamification
💡Workforce Management
💡Automation
💡Robotic Arms
Highlights
Amazon's CEO Jeff Bezos is the world's richest man, largely due to the company's unmatched ability to quickly deliver what customers want.
Amazon's fast delivery times are a result of advanced logistics, including the use of AI and robotics in its warehouses.
Amazon's global revenues reached nearly $350 billion in the year to September 2020, doubling from 2017.
Amazon uses deep learning AI to predict customer purchases and stock local warehouses accordingly.
Amazon's warehouses are highly automated, with robots handling the movement of shelves to human pickers.
Amazon acquired Kiva Systems in 2012 for $775 million, a robotics company that improved warehouse efficiency.
Kiva robots can carry up to 450 kg and travel at 3 miles per hour, increasing warehouse capacity and speed.
Amazon's fulfillment centers can now hold 50% more stock and retrieve it three times faster than before.
Amazon renamed Kiva Systems to Amazon Robotics and stopped selling its technology to competitors.
Amazon Robotics has developed Pegasus, a new robot that can lift 600 kg and is more cost-effective to manufacture.
Amazon uses cloud-based software and AI to coordinate the movement of up to 800 robots in its warehouses.
Amazon's human workers are involved in stowing and picking items, tasks that require dexterity and problem-solving.
Amazon's management practices have made the company lean and mean, with only half the employees per sales compared to traditional retailers.
Amazon uses gamification to encourage workers to meet high productivity rates, with in-house games and rewards.
Amazon has faced criticism for intense working conditions, with a high rate of serious injuries reported in 2019.
During the COVID-19 pandemic, Amazon has been processing significantly more orders than expected.
Amazon's human workforce remains essential for tasks that require a human touch, despite advancements in automation.
Amazon continues to invest in new technologies and facilities, such as a 40 million robotics lab and patents for floating fulfillment centers.
Transcripts
[Music]
amazon is the world's biggest retailer
and its ceo jeff bezos is the world's
richest man
for one very good reason his company is
better than anyone else
ever at giving people what they want
quickly amazon acquired its undisputed
status as the heavyweight champion of
the retail universe
thanks largely to its lightning fast
delivery times the astonishing feat of
ferrying hundreds of millions of items
from guitar strings to saucepans to car
parts directly to your door
inside 24 hours is nothing short of a
modern logistical miracle
so how does amazon do it a super smart
army of slave robots for one
ingenious if occasionally unscrupulous
management practices are part of the
answer too
and the modern day voodoo of deep
learning ai all of which are made flesh
in the most advanced stock rooms the
world has ever seen
so join us today as we button up our
hybris jacket and journey inside
amazon's smart warehouses
in the year to september 2020 with the
global economy and the teeth of
coronavirus and the bleakest employment
outlook in history
amazon reported global revenues of
little under 350 billion dollars
that's roughly double what it earned in
2017 by the way
only three short years earlier not bad
for a company which only started trading
in 1994.
amazon has built its empire on a
platform of sheer unbeatable convenience
for the end user
you the customer need a product so you
open the app or have a quiet word with
alexa and next day
hey presto it's sitting on your doorstep
moving products from a to b
quickly is not easy compared with other
modern technology giants which barely
need to exist in the real world
think of netflix google or facebook
amazon needs to shift an astonishingly
vast amount of sheer bulk
safely precisely and quickly all day
every day so how does it do it last year
a senior amazon executive described
amazon's warehouses rather poetically
as a symphony of humans and machines
working together
how does this symphony actually work
let's take it from the top
before you've even logged onto its
website amazon has a fairly good idea of
what you're going to buy
this is all down to the semi-occult 21st
century abracadabra that is deep
learning ai
which amazon has been leveraging to
incredible effect since around 2015.
put simply an algorithm makes some
assumptions about you
based on your age location socioeconomic
background and purchase history
it will then hours days or even weeks
before you actually log on ensure that
your local warehouse is stocked with
appropriate quantities of stock you're
likely to consider buying
this might be a certain style of racy
swimsuit that the algorithm anticipates
will be the hot new must-have come
springtime
it might be the paperback novel for a
soon-to-go viral tv adaptation
in january 2020 for instance amazon's
algorithm correctly anticipated high
incoming demands for face masks
and well we all know what happened there
so amazon's smart warehouses
also known as fulfillment centers not to
be confused with their post
office style sortation centers very
often know what you want
even before you do or at least they know
the very second you click
buy now in the case of those wine
inspired late night impulse buys
once you've clicked our symphony begins
in earnest
you may have read headlines in recent
years suggesting amazon workers walk as
many as 12 miles per shift
darting about between shelves
frantically picking up items
that's no longer quite true amazon's
modern fulfillment centers are largely
patrolled by an army of squat roomba
like robots that pick up whole shelves
also known as pods and bring them to a
human picker situated at a stationary
workstation
amazon's enlistment of this whirring
battalion began in 2012 when the company
purchased robotics company kiva systems
the market leader in warehouse
automation for an eye-watering 775
million dollars cash
the company's flagship model commonly
referred to as kiva
is around 30 centimeters high and
capable of lifting 450 kilograms in
weight
whilst traveling at around 3 miles per
hour the substitution of these squat
orange automatons in place of dashing
human workers makes a colossal
difference to amazon's bottom line
it's been estimated that amazon's
warehouses can now hold 50
more stock and retrieve that stock three
times faster
this reduces the overall cost of
fulfillment by some 40
cheaper quicker warehouses mean products
that are more affordable for the end
user
and crucially products that are much
more likely to be on the van driving
down your street the following day
amazon isn't about to stop there in a
move that could be described as either
ruthless or inspired
upon purchasing kiva jeff bezos changed
the name of the company to amazon
robotics
and told all previous kiva customers
household names like gap
walgreens and staples they'd no longer
be allowed to buy new kiva technology
this of course gives amazon an
incalculable competitive advantage
since rolling out the kiva robot across
its fulfillment centers by 2018 they had
100 000 of them by now that
has comfortably surpassed two hundred
thousand amazon robotics has been
refining the design still further
the new iteration of kiva known as
pegasus is 10 centimeters shorter
meaning more can be stopped on top and
uses half the parts so it's cheaper to
manufacture and maintain
amazon says pegasus can lift a hefty 600
kilograms and can be customized with a
conveyor belt to work in the sortation
centers
where amazon reports errors in delivery
have been halved
thanks to pegasus naturally amazon isn't
quitting there last summer it announced
a newer thinner robot still
called xanthus and coming to a
fulfillment center near you
so how do these pimped out room bars get
around without knocking into each other
all the time
cloud-based software operating what can
fairly be described as an ai run air
traffic control network
coordinates the route of every single
robot this is
all about optimization what's the
quickest route to get to a product that
won't interfere with other robots on
their own runs
what's the optimum speed acceleration
and deceleration as many as 800 robots
can be deployed at any one time on the
warehouse floor although in practice the
numbers tend to be kept lower to avoid
traffic jams
when their batteries run low the robots
are instructed to find the nearest
charging station
since robots took over the warehouses
changes have been implemented to
improve their working conditions
skylights for instance are now covered
up so the robot's sensors aren't
confused by glare
air conditioning units that blow
downwards in areas where humans work
now blow sideways so as not to topple
delicate items from the tops of moving
shelves
to navigate a camera on the robot's
undercarriage reads qr codes embedded in
the floor
and individual sensors help the robot
slow or swerve to avoid obstacles in
their paths
compared with these scurrying warehouse
servants some other robots working at
amazon look almost
humdrum and conventional the so-called
robo-stow robotic arm for instance
wouldn't look out of place in an
old-school car factory
except it can lift a hefty 1200
kilograms and manipulate shipping
pellets to within a tenth of a
millimeter accuracy
there's also the labeling robots
nicknamed slam machines by human
co-workers for their relentlessly
percussive racket
these can label up to one package every
second and for a hint of what will
happen in the coming years
amazon recently purchased canvas
technologies a firm specializing in
autonomous robotic carts
just picture the most sci-fi drinks
trolley you can imagine
robots of course are only part of the
story inside amazon's smart warehouses
even the company's most fervent
futurists admit the notion of complete
automation is a decade away
and even then probably won't happen so
what of the human side
amazon's management techniques in
concept with all that automation
have made the business astonishingly
lean and mean by historic standards
in 2016 it was estimated that by
bringing everything in-house
as opposed to all the duplication
inherent in a standard high street or
shopping mall
amazon requires only half the employees
a traditional retailer mine
per 10 million dollars in sales what are
all these humans
hundreds of thousands across the world
actually doing that well since kiva and
its robotic airs took over
there's much less rushing around than
they used to be but there's still plenty
of tasks requiring dexterity and problem
solving
the two most common roles still done by
humans are stowing and picking
when goods arrive at the fulfillment
centers they're stowed by humans onto
shelves or pods to be collected later by
the robots
the pickers then pick the specific item
from the shelves when the robots come by
then send it on to be packed workers on
the picking side are encouraged to work
fast in order to maintain their
so-called rate if workers rate falls
below expectations
employees can be disciplined and
ultimately sacked according to one
ex-employee this rate can be challenging
to fulfill
120 items per hour when they started at
the company rising as high as 280 items
per hour just three years later
errors are also punished according to
the same ex employee
workers were once permitted one error
per 1 000 items but now they're only
allowed one per 2
200. the rates only get more challenging
during prime day when sales on amazon
skyrocket
one way amazon encourages workers to
make rates is through gamification or
making the whole thing into a game
so instead of a plain old-fashioned
graph telling workers where their
productivity stands in relation to the
rate
workers instead play and compete on
in-house games with names like
picks in space mission racer or castle
crafter
so essentially the faster and more
accurately employees pick stock the
faster their little pixelated car moves
around the track
other incentive schemes such as in-house
currency swag bucks
reward hard work with amazon branded
merch such as water bottles or t-shirts
amazon has regularly found itself in the
firing line for its intense working
practices
according to reports as many as 14 000
serious injuries occurred at amazon
sites in 2019
a per employee rate of nearly double the
industry standard
deaths are infrequent but not unheard of
in the uk alone during the three years
to 2018
ambulances were called to amazon
warehouses 600 times
for its part amazon is keen to stress it
invests tens of millions of dollars into
workers safety awareness programs but
there's no denying injuries spike around
prime day
so are amazon's ultra efficient
warehouse is ultimately a force for good
while kovid 19 laid waste to vast
swathes of the conventional retail
landscape
this year amazon has been processing up
to 40 more orders than expected
in the month leading up to march 23
alone toilet paper sales increased 186
percent
sales of cough medicine skyrocketed 862
and children's vitamins went up 287
plainly in a world where going to the
shops can be a risky business
amazon is fulfilling a need and as such
ever greater numbers of people are
relying on it
will the robots steal our jobs then the
outlook is unclear
but within amazon it's plain to see that
humans are still needed for many aspects
of the work
and even if robots can one day stow or
pick as fast as humans
dealing with many crises like leaking
paint pots on a fast-moving conveyor
belt or identifying ripe bananas on site
will still need the human touch for some
time to come whatever the future brings
amazon's new 40 million robotics lab
just outside boston for instance or its
tantalizing patent for airship like
floating fulfillment centers
one thing can be guaranteed as long as
we're all buying
amazon will keep on delivering
you
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