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Economist article "New robots—smarter and faster—are taking over warehouses" mentions that Amazon has deployed more than 350,000 bots in its "fulfillment centers." The deployment has saved Amazon time and money in the new era of wage inflation and worker shortages. Amazon accomplished this feat by acquiring Kiva Systems for $775M in 2012, adding $1B+ in R&D, and then automating its massive fulfillment centers (with an average size of 800,000 SQFT). The cost savings from automation allows it to offer a $3,000 signing bonus in select locations to its vast warehouse workforce while remaining cost-competitive.

How can a company with limited automation, a small investment budget, and a shorter timeline achieve these benefits? Here is a quick guide to the major steps required :

  • Explore automation solutions: Less expensive warehouse automation solutions offered by a few startups have already been proven at a host of mainstream companies (e.g., Gap, Uniqlo, and Carrefour). The cost of a small pilot can be as low as $100,000. A couple of examples of such automation solutions include:
    • Ocado Group’s 600 series bots that are among the lightest and cheapest AI-enabled bots
    • Exotec Skypod System is ideal for moving less than 100 pounds of goods
  • Assess the fit: Conduct a small pilot to see if an automation solution offers the right risk/ reward scenario for your situation
  • Roll it out: Once the pilot and fit assessment prove value, roll it out across the distribution footprint. The rollout could be based on region, warehouse-type (e.g., size), or product type (e.g., weight) 

If you already have experience with warehouse automation technologies, I’d love to hear from you about the challenges you faced as well as your success stories (please leave a comment or send me a message).

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