An Automated Future Part III: Warehouses

Warehousing is a critical part of the supply chain and one that is rapidly evolving due to the new trend of automation. Companies all over the world are turning to innovative technologies to streamline processes, making them leaner, more efficient and strategic. Automation certainly provides companies a competitive edge, but are employees losing their jobs as technology and robotics replace them?

Early Adopters

Retail giant Amazon has proved to be a leader in warehouse automation. During the past few years, Amazon has made a series of acquisitions that have led to some of the most advanced warehouses. For instance, Amazon expanded in 2009 when they purchased Zappos for over 894 million dollars.  Zappos, one of the world’s largest online shoe retailers, grossed over 1 billion dollars the year Amazon acquired it (Supply Chain Digital). Another Amazon subsidiary,, is now noted as the largest specialty retailer of baby products in the US. Both aforementioned companies have extraordinary automated warehouses that are powered by Kiva Systems – a company Amazon acquired for 775 million dollars in 2012 (Wall Street Journal).

Kiva Systems

Kiva Systems produces one of the most revolutionary technologies seen in Amazon warehouses. Kiva uses small, self-propelled robotics to locate, transport and package products. These highly mobile robots navigate using high-speed sensors and are capable of reading barcodes .They can even communicate to one another if they sense that a product is out of place, automatically re-registering where the barcode is. Kiva’s products are unique in that they are not stored on shelves, but in vertical pods. This gives the robots flexibility to seamlessly slide underneath products, lift them and carry them to wherever need be.

But Amazon isn’t the only company utilizing automation in their warehouses. For instance, UPS Worldport, the hub for Unites Parcel Service, is equipped to handle 84 packers per second, or 416,000 per hour (Supply Chain Digital). Furthermore, the FedEx Superhub contains 300 miles of automated conveyor belts and supports nearly 3.3 million packages each day (Supply Chain Digital). Many warehouses feature automated storage and retrieval systems (AS/RS) that use up to 40% less space than their traditional counterparts to house the same amount of product. (Inbound Logistics)This means lower building costs, lower energy consumption, and fewer resources used in construction.

Does Automation Lead to Job Loss?

Although extremely useful, there is a large stigma associated with automation and the use of robotics. Critics claim it will lead to related job loss as workers are replaced with technology. However, the jobs that are automated, such as palletizing and heavy lifting, are dangerous as workers are more prone to injury. As a result, turnover rate for these positions are high. Automation isn’t replacing workers but instead relocating them to more value-added roles. Furthermore, the use of robotics supports job creation as they require operators, technical support, customer service and sales representatives.

Proponents point out that automating the supply chain will eliminate the need for manual data entry – a time consuming and error prone process – and it will also save a vast amount of paper. If the estimated 40 billion business-to-business transactions a year were automated, it would save 2.3 billion pounds of carbon dioxide, 9.6 million trees, eliminate 7.6 billion gallons of wastewater, and 911 million pounds of solid waste (InfoWorld). It is evident that more and more warehouses will turn to automation to save money, increase efficiency, and to cut waste- both internally and externally.

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