When people hear that term they think of the robots that amazon installed that move product around the building for you and massive conveyor systems like UPS has for sorting packages. While those kind of machines are getting better and are slowly making their way into "smaller" companies (i.e. not the size of amazon) the biggest changes are on the ERP and data management side, tbh.
Cheap/plentiful handheld devices and robust/cheap wifi tech has been a game changer for us compared to the physical processes of using paper to direct staff on the floor. The processes we used 10-15 years ago are night and day to what we use in 2022, at least in my mid-sized fulfillment company.
> Amazon doesn't compete on lower salaries, it competes on automation.
Talking about automation and then the warehouse bit:
Automation in warehouses is something that was in the news in Netherlands recently. Some supermarket opened an partly automated warehouse, the news brought it as something unique. From the comments it was clear that various other supermarkets did that already either years ago, recently or they have such more automated warehouses under construction. Apparently fully automated is very difficult.
Having an automated warehouse isn't something that another company cannot do and/or requires unique expertise. Apparently various supermarkets hired the same company to build their warehouse.
> New tech is giving outsize advantage to the major players across almost every industry, who can afford to invest in creating internal teams for these big new technologies.
Oohh, this very much.
Inside Amazon warehouses, there are tens of thousands of employees called 'Pickers'. They walk around with these handscanners with 300x300 pixel screens that tell them where to go and what item to get next.
For two years, my job was to make the UX of that application a little bit faster. Not the order to pick the items (another team) not the decision of which shipments should be processed next (also different team) or which items should be picked by which picker (you guessed it- a different team). Just the UX for the 0.9MP of screen space in front of the user.
Labour costs for that job are in the hundreds of millions per year, so any team that made a 1% improvement to overall efficiency would be covering its own costs a many times over. And we did.
Amazon can afford to get those small 1% gains multiple times per year, but for smaller companies the gains wouldn't pay for the costs. If they want to beat Amazon, they'll need to find a very big win that Amazon didn't see first. The only company I can think of that did that was Kiva Robotics- wait, it's called Amazon Robotics now.
>I don't see a reason to assume Amazon does anything that every other warehouse doesn't do.
my understanding is that Amazon does do something that others don't - that is to bring extremely advanced tracking and analytics to employee performance and activity. This is of course imported as a philosophy from its side as a technology company.
I'm sure smaller warehouses / companies would like to do what Amazon does but cannot because they do not have the size and expertise to do it.
The bad part then comes that in the past warehouse work has not been algorithmically optimized as it can be now. Imagine monitoring a machine very closely, pushing it ever closer to peak performance, as you push it parts start to wear out quicker but that is ok because your monitoring catches this wearing out of parts as it happens and replaces them as needed - no one cares after all if the parts are worn out quicker, what one cares if the wearing out of parts damages the performance of the machine and due to your much better monitoring of this machine the wearing out of parts never damages the machine.
Now take a step back and imagine the parts are human beings and the machine is Amazon.
> "I'm pretty sure i could get a half assed DIY system working for a few hundred dollars."
you think the same thing when you see an Oracle instance that cost tens of millions and think you could have done it with postgres. what these retailers are really paying for is reliability, redundancy and support - having a big brand co. to call when something goes wrong.
that isn't to say that there isn't a mysql/pgsql style opportunity within warehouse automation and supply chain management - it is just that it isn't likely that Wal-Mart and Amazon would be your customer. Similar development and deployment cycle as with mainframes and servers - what was once the territory of only large companies and governments is now an accessible technology and competitive advantage amongst small and medium businesses as well
The most interesting aspect of supply chain management to me is the concept of a completely outsourced warehouse - where it is cheaper to have a specialized company manage and run your inventory and supply chain as part of their larger infrastructure (and economies of scale etc.) rather than building your own warehouses and system. Amazon became very very good in this field because an outsource style solution didn't exist at the time and they had no choice other than to do it themselves, but you could imagine that an Amazon being started today would not have its own warehouses and would not be writing long letters to shareholders trying to justify hundreds of millions in capital expenses in order to automate warehouses and bring down margins.
> If getting rid of human labor lowers operating costs then why doesn't that reflect on the price tag on the shelf
Are they getting rid of human labor? Who is doing stocking, as needed cleanup, opening/closing, and overseeing all that?
I'm guessing humans are doing that. And as a customer. It seems to be most of what the people who also work as cashiers are doing, outsidd of a few rush periods where those other tasks, except emergency safety-necessary cleanup, aren’t happening or are deferred.
Seems to be its more likely Amazon is adding tech (which has a cost) which mainly serves to enable less efficient use of human labor.
> But the interesting lesson here is that the real thing has not been "web presence" or world wide visibility, it was Amazon has built a pretty impressive logistics setup for moving stuff from vendors to users. It rivals what Sears & Roebuck did in the 60's and 70's. THAT seems to be the missing piece which one might call "logistics as a service."
I can't really agree with this. Amazon started out by using existing delivery services. And the quality of delivery from Amazon at that time was much higher. Now that they prefer using their own delivery services, their delivery sucks. They've built a logistics setup that is much worse than what we already had.
> no one moving physical stuff around in a warehouse could [move large company's revenue by 10%]
Sure they could. They're the feet on the ground, so to say, and so they have the best insight into inefficiencies which are occurring on a day-to-day basis. You can bet it wasn't a CEO who discovered UPS' "only make right turns" trick. Or Bezos who optimized Amazon's warehouses.
A 10% reduction in costs is very realistic for these kinds of finds, and those reduction in costs are worth more than a 10% increase in revenue.
> I'm not sure about Amazon Logistics in the US, but at least in Europe I got the feeling that management just doesn't care about automating processes because humans are still cheaper in most cases.
Historically this has been the problem with automation. Automation tends to occur when the labor supply tightens and/or the credit supply increases (i.e. the cost of borrowing to purchase new capital drops substantially). Interest rates being what they are right now I doubt anyone wants to think to hard about automating, especially when the labor market is flooded with people who've lost their jobs.
> I don't think Amazon will ever achieve an all lights off IXD with the current governance.
I mean, there doesn't really seem to be a strong push from up top for it, or at least no more than there is to fix Mentor for drivers.
> In order to be efficient on a macro level, it requires being (very) inefficient at the micro level.
This is put succinctly.
Seeing Amazon from within was an absolute shock. It is hard to be hyperbolic about the company's technical achievements: Prime, AWS, 2-hour Delivery, Alexa, Prime Video, Amazon Go ... absolutely incredible, world-changing stuff.
But the experience of working there felt like the place was on fire. People transferring teams in droves, joining in droves from outside, entire teams doing duplicate or triplicate work, managers of managers of managers of managers. And yet the speed at which they launch successful products at global scale is unrivaled.
I'm glad I got to be a part of it but there's almost nothing that could entice me to go back.
> I got the impression their warehouses were pretty damn good compared to other warehouses
This is the correct impression. Amazon warehouses are almost always a step up in both pay and quality of life vs. the other local employment options.
Source: many friends work(ed) the industry. Amazon was seen as trading your autonomy in for a better overall place to work.
The memes about their warehouses being the worst in the world only really exist in white collar circles.
I could never work for them in such a job, because I require too much autonomy to be happy. I don't deal will with strict metric systems that they enforce. However, others really do enjoy that aspect of not having to put an ounce of thought or problem solving into their dayjob.
> Currently someone has to pick stuff of the shelves for Amazon
There may be a fairly short time horizon on "currently"- Amazon bought Kiva, a warehouse automation/robotics company, a few years ago, and it wasn't because they thought it looked cool.
> This is something Walmart will not be able to pull off easily because their workers are out front, higher profile
Even then, they're cutting staff by increasing the number of self-checkout lanes. You still have to have somebody supervising, but you can just have one person watching 6-8 lanes.
At my local Walmart, the self-checkout is far more convenient than the regular lanes. They have more self-checkout lanes open than regular lanes, and people tend to scan their stuff and get out much faster than the cashiers would (seriously, the regular lanes move so slow...). I never use the regular lanes anymore, because they're always so busy compared to the self-checkouts.
I think the main thing holding Walmart back from further mechanization is that their aisles still have to be human-traversable. Amazon can use really efficient layouts when converting their warehouses to 100% machine-stocked because then there will be no reason for a human to ever walk down the aisles. At Walmart, customers still have to make their way through the aisles, and they have to be laid out to a) allow humans to walk through and take stuff off the shelves and b) arrange items in order to maximize purchases (e.g. put the milk in the back, impulse items at the checkouts, etc.).
> Amazon had a competition for bin-picking robots, but never got anything that could replace a few hundred thousand pickers in their fulfillment centers. There's a demand for this, but still few usable products.
I was going to say “what did they end up doing with Kiva?”, but the latest marketing [1] suggests “picking is hard, so we use the robots to carry stuff from A => B on a grid”.
What’s your sense on assembly robots at the high end? (E.g., for cars).
> Source: Used to run an e-commerce company that shipped up to 2 million packages annually. Once we optimised shipping and processing, customer service inquiries and complaints dropped dramatically, and customer trust / sentiment skyrocketed.
I used to work at company that shipped ~30k packages a day. I’d say 90% of customer complaints were about the delivery delays, and only 10% about the rest. It was really hard to optimize because we had 1M products and were using just-in-time logistics with very little inventory. This is a specific market that Amazon hasn’t really entered yet, but when they’ll do they’ll crush everyone.
> * Stock picking in an Amazon warehouse - robots taking over.
I just wanted to offer a data point here, my buddy worked at the Amazon warehouse in Breinigsville PA a few months back and said he never saw a robot. Reading Hacker News I would have thought that Amazon had their robots widely deployed but that doesn't seem to be the case.
Well the end goal of this should be a central warehouse(maybe run FBA style, maybe even hired on demand,inc. fullfilment from someone ) , and instead of ordering being on-demand, set up time windows, each at a certain area, enabling optimized routes(and on top of that network do on-demand orders).
That should reduce costs to minimum and build a somewhat defensible business(unless Amazon attacks).
And having a lot of customers will be helpful in achieving those goals, so what we're seeing is just step 1.
When people hear that term they think of the robots that amazon installed that move product around the building for you and massive conveyor systems like UPS has for sorting packages. While those kind of machines are getting better and are slowly making their way into "smaller" companies (i.e. not the size of amazon) the biggest changes are on the ERP and data management side, tbh.
Cheap/plentiful handheld devices and robust/cheap wifi tech has been a game changer for us compared to the physical processes of using paper to direct staff on the floor. The processes we used 10-15 years ago are night and day to what we use in 2022, at least in my mid-sized fulfillment company.
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