December 2014: Amazon, one of the mega corporations in e-commerce, introduced to the public the massive potential a new business model can have through vertical integration and the application of cutting-edge technology, i.e. cloud computing, web-based client centric designs, and, nonetheless, the use of the Kiva robots, after it had acquired Kiva Systems Inc. for $775 million in 2012. As many as 15,000 Kiva robots have been installed at ten warehouses in the US, known as Fulfillment Centers, so that they can work side by side with more than 100,000 Amazon employees in the handling of more than a million purchasing orders from customers around the globe, or 426 purchases per second during peak seasons, namely Amazon’s Black Friday Sales record.
Amazon’s on-line order management via Kiva robots starts at the warehouse where its employees unload cargos from delivery trucks and place them on conveyor belts. More than 25 other employees progressively remove goods from the boxes and place them on trolleys which are rolled to warehouse staff in charge of automated shelving in different locations. As a result, each shelf contains diverse goods. Incoming orders automatically triggers 3,000 robots to scatter over the floor, retrieving items from specially designed warehouse shelves which are transferred to the appropriate stations for packaging and further preparation for outbound shipments. The digitized operation minimizes time and effort from step one to out the door to 15 minutes per order. Kiva bots are also equipped with sensors to avoid collision while transporting and inventorying. Malfunctions and glitches are quickly resolved on the spot by advance engineers which allow all processes to continue uninterruptedly. Such a synchronized mechanism sees warehousing dispatch 50% more items in comparison to conventional measures and entitles Amazon to the most cutting edge warehouse system in the world, thus, which has become the most advanced logistics model and the most successful business concept in comparison by a huge margin. From one point, such a model is impossible to replicate, let alone compete with on even grounds, since it itself has become the e-platform for e-commerce to operate upon.
But not so fast there Amazon, a new robot has been developed to match that of Kiva’s; the Locus robots by Locus Robotics Corporation, a company founded by Quiet Logistics, a third party logistics provider that carries out Fulfillment management for retail giants such as Zara, Gilt Group, and Bonobos with shipment volumes equating to over 1,000 million transports per year. Locus Robotics will sell these robots to numerous companies in the logistics field to enhance competitivity, as the bots are equipped with internal processies that allow more efficiency, designed to replace routine human tasks, or in other words, save man for more complicated chores.
The process from taking orders to retrieval from various segments in the warehouse, packaging, and shipment preparation all requires walking and moving from one place to another. Hence, Locus robots have been designed with characteristics that resemble a projector, with wheels. Different from Kiva bots that are geared for lifting and shelving with special designs, Locus’s are able to lift containers and bins on tray/tote with camera scanning capacities to avoid objects and obstacles. Operators can maneuver the bots effectively for faster moving operations from an iPad monitor, increasing safety where saved time can be put to other uses that require more human touch. Warehouse operators can focus on areas where robots do not provide suitable answers, such as quality control and inspections. Ten Locus robots were commissioned for Quiet Logistics’ warehouse that spreads over 500 thousand square feet, to administrate logistics processes for all e-commerce companies.
With its optimized warehouse-robotics hybrid system, Locus Robotics hopes to expand its services to various logistics companies during the New Year holiday period. eMarketer reported in 2015 that e-commerce transactions are expected to expand 13.9% over the previous periods, while e-commerce in the United States accounted for 9% of retail sales of the entire country. In all however, customer purchasing patterns and market adjustments must be closely watched for ever changing trends. The Locus bots represent a new armament in the company’s repertoire that small time retailers wishing to compete in the same market with Amazon are starting to take note of the alternative solution. Will the strategic“bots for boring bids saves humility for valuable bargains” supply chain design pay off? The warehouse operators probably have the answer to that one. Of course it does.
Compiled by BLOG.SCGLogistics
References money.com, statista.com, bizjournals.com