Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev | Next
Author: Goofyhoofy Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 210442  
Subject: Re: OT: Amazon Prime vs. Costco Date: 3/23/2013 9:17 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Sorry, but... ninety-five percent automated warehouses?!
Could you cite a reliable source for that number?


No. It's a number I recall from some of the stories at the time of Amazon's acquisition of Kiva, the maker of those little orange robots. Those will replace many workers who walked the endless aisles, and they will allow for much of the inventory to be housed in un-air conditioned spaces (right now all millions of square feet of each Amazon warehouse must be suited to the workers [witness the imbroglio last year when some complained that it wasn't]) and there are many other advantages...

...which is why Bezos bought the company for nearly $800 million in his second largest acquisition, ever. (All cash.)

Win 1 - Savings - Your average warehouse needs a good 20-40 people working a single shift to process a fair volume, and that doubles if you want to have high service rates because you add a shift and have to cover for sickness. Robots would cut that down by 60-80%. Robots don't need shifts. They don't get paid by the hour. They don't get sick. They don't need vacation time. They don't sleep, they won't stop ever! (sorry watched Terminator again recently). Imagine going from 40 people running your operation to 8.
http://www.amazonstrategies.com/2012/03/an-inside-perspectiv...

Now you can increase productivity further by storing more in the same space (humans require wider aisles) and you can get rid of most of your air conditioning needs, which is huge. I don't think 95% is outlandish. I also don't know that Amazon has retrofitted all - or even any - of their warehouses yet.

This video is 5 years old, but shows them at work:
http://www.youtube.com/watch?v=lWsMdN7HMuA

During a TV special just a few months ago, just before Christmas in fact, it was clearly shown that Amazon associates were still walking up and down aisles fulfilling orders.

Sure. But does anybody think Bezos paid all that money so things would remain the same? The contemporary accounts I can find say that it will make the warehouses two to four times more efficient.

While the Seattle-based retailer has used some automation in its fulfillment centers in the past, it has depended heavily on people, hiring thousands during the holidays to cruise through football-field sized warehouses to pick items from shelves.

With Kiva, Amazon is now looking at a more automated approach. Though assessing the costs and benefits of robots versus human labor can be difficult, Kiva boasts that a packer working with its robots can fulfill three to four times as many orders per hour.

http://online.wsj.com/article/SB1000142405270230472440457729...

Amazon spends half the cost of a Kiva system just to add air conditioning to a warehouse, and then has a huge on-going expense in both "more people" and "energy." Given that the warehouses are 10% of Amazon's total costs, it seems pretty likely that they will be deploying Kiva as quickly as they can ramp them up. I really don't think Amazon owns them so they can continue selling the to Staples. What is the schedule for deployment? I don't know and Amazon doesn't say.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev | Next

Announcements

2013 Feste Award Voting Begins!
Who will win the 2013 Feste Award? Vote now for the Fool that most exemplifies the Fool Community mission of Learning Together!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Tax Strategies

TMFPMarti-Feeling Good
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement