Inside Amazon's Smart Warehouse

Summary

Amazon, 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

00:00

🚀 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.

05:00

🤖 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.

10:01

🛒 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.

Keywords

💡Amazon

Amazon is the world's biggest retailer and the company at the center of the video's discussion. It is known for its lightning-fast delivery times and innovative logistics. The video explores how Amazon maintains its status as a heavyweight champion in the retail universe, largely due to its advanced technology and management practices.

💡Jeff Bezos

Jeff Bezos is mentioned as the CEO of Amazon and the world's richest man, highlighting his role in leading the company to its current success. His leadership is credited with Amazon's ability to quickly deliver goods to customers, which is a key aspect of the video's exploration of Amazon's operations.

💡Fulfillment Centers

Fulfillment Centers are Amazon's warehouses that play a crucial role in the company's logistics. The video discusses how these centers use advanced robotics and AI to predict and fulfill customer orders. They are often referred to as the backbone of Amazon's rapid delivery system.

💡Deep Learning AI

Deep Learning AI is a type of artificial intelligence that Amazon uses to predict customer purchases. By analyzing data such as age, location, and purchase history, Amazon's AI can anticipate demand for products and ensure that the right items are stocked in the right places. This technology is central to Amazon's ability to offer fast delivery.

💡Kiva Systems

Kiva Systems is a robotics company that Amazon acquired, which has significantly impacted Amazon's warehouse operations. The Kiva robots, now known as Amazon Robotics, are used to move shelves of products to human pickers, streamlining the order fulfillment process. The video discusses how this acquisition has given Amazon a competitive edge.

💡Pegasus

Pegasus is an updated version of the Kiva robot used in Amazon's fulfillment centers. It is designed to be more compact and capable of lifting heavier loads, allowing for more efficient use of space and improved productivity. The video mentions Pegasus as an example of Amazon's ongoing efforts to refine its robotic technology.

💡Xanthus

Xanthus is a newer, thinner robot introduced by Amazon, which is expected to further enhance the efficiency of its fulfillment centers. Although not detailed in the script, the mention of Xanthus suggests Amazon's commitment to continuous innovation in warehouse automation.

💡Gamification

Gamification is a technique used by Amazon to motivate its workforce, as described in the video. It involves turning work tasks into game-like experiences, where employees can compete and earn rewards for meeting or exceeding productivity targets. This approach is part of Amazon's strategy to maintain high efficiency in its fulfillment centers.

💡Workforce Management

Workforce management at Amazon involves the use of technology and management practices to optimize employee performance. The video discusses how Amazon sets high productivity targets and uses gamification to encourage workers to meet these targets. It also touches on the challenges and criticisms related to Amazon's intense working conditions.

💡Automation

Automation is a key theme in the video, referring to the use of robots and AI to perform tasks traditionally done by humans. Amazon's fulfillment centers are increasingly automated, with robots handling tasks like moving shelves and sorting packages. The video explores the balance between automation and human labor within Amazon's operations.

💡Robotic Arms

Robotic arms, such as the 'robo-stow' mentioned in the video, are used in Amazon's warehouses for tasks like lifting heavy items and manipulating shipping pellets with high precision. These arms are an example of how Amazon leverages automation to improve efficiency and accuracy in its operations.

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