As the last blog posts of Belen and Lucas showed, the company Amazon is driving innovation forward in the logistic industry like no other company. In accordance with our last class about warehouse design, I was curious about what innovations might come in the next years and found some unbelievable patents of Amazon for new era warehouses.
As the chart above indicates, Amazon is obtaining hundreds of patents every year. By doing this they want to assure their position as a world leading online marketplace. In order to have the warehouses as near as possible to the customer, Amazon is looking up to the air and down to the ground to find new possibilities for warehousing in highly urbanized areas. Two of the patents that astonished me the most are listed beneath. More incredible patents can be found here.
An underwater Warehouse
The goods would be stored in watertight containers that have a fish-swim-bladder-like cartridge in order to control their height in the water. When a container needed to be retrieved, acoustic waves would be sent to it to activate the cartridge, which would send the package to the surface of the water. In the pool warehouses, boxes could be stacked in endless piles with no need for humans or robots to move around them and therefore no space for pathways between the boxes is needed. This would give a huge advantage in space usage in comparison to usual warehouses. [More Info]
The beehive-like Drone Tower
Described as a “multi-level fulfillment center for unmanned aerial vehicles”, the tower would be particularly useful to Amazon in densely populated areas. Amazon is already testing the drones aka. bees that would be needed for this type of fulfillment centre, as we have seen in the last logistics class. The drones are able to fly at heights of 122 meters with a speed of 80 km/h and around 2.3 kg of cargo weight. Despite many regulatory issues that the towers would face, this could become reality much faster than we expected. [More Info]
Many articles of this blog talk about the big company, Amazon. As you know, this company always use new technologies to improve their process and ways to deliver their products.
In 2019 the CEO Jeff Bezos, announced that Amazon would create a futuristic fleet of 10,000 electric delivery vans with Alexa, and built-in routing software.
Now, in less than 2 years since the announcement Amazon has tested the electric deleivery vans from Rivian in the city of Los Angeles. You can see the real result in the video below.
This new 100% electric delivery system has created as part of the aim of Amazon to achieve net cero carbon emissions across its operations by 2040.
Amazon wants to reduce the carbon footprint, due to the fact nowadays is one of the most polluting company in the world, in 2019 their CO2 emissions were 51.7 millions of tons of CO2.
The director of Amazon’s global fleet and products, said the electrification effort is a point of pride for the company. This project has required to Amazon to install thousand of electric vehicle chargers and change up the electrical design and layout of delivery facilities in North America and Europe.
RIVIAN ELECTRIC VAN
The actual fleet of vans of Rivian manufactured in Plymouth, Michigan, assure until 241 km with an unique charge. So far we do not know the technical specification of the van performance, so we hope that in the next moths Amazon will give us more information about these wonderfull vans.
Nowadays, there are only 16 units of these vans in the USA cities, there are in test phase. But Amazon have a plan, they will manufacture 100.000 units of vans with the colaboration of Rivian in the next 9 years.
Before the ending of 2022, the first 10.000 units will be available for Amazon, and they will start delivery some products to their customers with 0% of carbon emissions.
Regarding automatization in warehouses, today it has been announced the opening of Amazon’s fourth robotic distribution center in Spain (first was built in 2017), this time located in Murcia, which will join those in Seville and Barcelona with more than 160,000 square meters equipped with Amazon Robotics technology, to support the Amazon operations in Spain and Europe, let’s take a look at robotics within Amazon.
After the adquisition in 2012 of Kiva Systems, most of technology and robotics used by Amazon is developed in-house through its Amazon Robotics division, headquartered on the outskirts of Boston, and is not marketed or sold, it’s developed only to build their empire. It took amazon six years to get 100,000 robots working for them in their warehouses but in just the last two years that number has already doubled to 200,000 robots. Amazon is investing heavily into building their robotics where it is currently investing $ 40 million in a new innovation hub, which will feature research and testing labs, as well as manufacturing space to design and build new robots designed by highly skilled teams.
At amazon’s fulfillment centers robots transport items to humans who then pick and pack them to be delivered. This robot alliance raises a human’s productivity from 100 items packed per hour to around 300 to 400 items an hour. Some of the Amazon robots:
The first in the family coming from Kiva Systems, is called Drive (changing the original name Kiva) and is very easily described if you imagine a Roomba, as well as their bigger cousin Hercules. Both capable of lifting and moving from 450 to 1,300 kilograms of products in a special rack called Pod on the surface on which they operate, called Robotics Field, at a speed from 5 to over 6 km/hour.
The Pegasus, which also moves pods on the robotic fields. However, it is only 19 cm high, 10cm less than the original Kiva. These alone make up 200 000 of amazon’s robots. The Pegasus is also intended to be a generic base for different attachments on top, such as The Pegasus X-Sort Drive which has a different fuctionality as the following video shows.
The technollogy keeps evolving and The Pegasus already has a succesor, The Xanthus, first presented at the Amazon MARS conference in June 2019. This new model is much thinner, has one-third the number of parts, and costs half as much as the original Kiva, and as the Pegasus has the option of different attachments, but in a wider variety. The Xanthus sort bots (similar to the Pegasus X-Sort drive) is used for sorting parcels to different chutes. The Xanthus Tote Mover can move the yellow boxes with items (called totes at Amazon) from picking to packing, and also if needed to multi-sort and gift wrap.
In order to keep adding robotics in the logistic chain, Amazon bought Dispatch in 2017, an urban delivery robot startup and in 2018, Canvas Technology, a robotic startup that specializes in autonomous carts for moving goods near humans. By January of 2019 Amazon starts Field Testing for a new, fully electric delivery system added to the well-known Drone delivery system project – The Amazon Scout – designed to safely get packages to customers using autonomous delivery devices of the size of a small cooler that rolls along sidewalks at a walking pace. For Valantine’s day in 2020 Amazon celebrate their employees with a love story featuringthe very adora-bot Amazon Scout in this cute video.
Artificial inteligence is already being used to predict what you are going to buy before you even go to the amazon website. Since 2015 deep learning AI has been predicting what is going to be bought, and getting it to the nearest fulfillment center, before it is even ordered. This means that when you shop online products are readily available, cheaper to ship and since they are waiting at a center near you they will ship to your doorstep faster. Amazon is also investing 10 billion dollars to build a satellite internet network just like Spacex’s Starlink. Amazon’ s version would require 3236 orbiting satellites and they have already received FCC certification.
In 2020 amazon acquired Zoox for 1.3 billion dollars, which is a self-driving vehicle company. This technology could be used to create self-driving delivery or workhouses vehicles, such as cars and forklifts.
Maybe one day, whole delivery chain will be run by robots, from artificial intelligence predicting what you want to buy to self-driving planes that deliver the goods to a robotic fulfillment center, where self-driving forklifts supervised by drones and driving units and robotic arms get the items packed and send delivery robots that take the packages and deliver to your personal robot at home.
The stock is over, or, at least, this is what Dropshipping pretends to do in next times. The world of logistics is changing a lot during these years, and the introduction of E-Commerce into our life has changed the way the new businesses (and those which want to improve their performance) act and deal. Probably you have not heard yet about this concept, but it exists for several years.
What is exactly Dropshipping and how it works?
Imagine that you own an E-Commerce and it runs efficiently while you don’t care about keeping a stock of your products. Or imagine that you are the owner of a little fashion shop in the middle of the city center without a store inside the shop to hold a minimum stock of your products. It sounds quite weird, but this business model or logistic strategy is contributing to set up new businesses.
Through the dropshipping, a company doesn’t need to possess stock, dealing and achieving agreements whit manufacturers or wholesalers, which receive the order too and who are in charge of preparing, sending and delivering the products offered by the retailer, who is, in this case, the e-commerce or the fashion shop. In other words, the retailer acts as a kind of intermediary in these sales.
A Win-Win deal
There are some benefits to both parts:
For the owner of the E-Commerce or shop, they can sell a huge variety of products without stock, saving inventory costs among others and earning a commission over the manufacturer’s price.
For the dropshipper is profitable too because they broaden their customer portfolio without the costs of maintaining an online shop or positioning it.
Furthermore, a lot of new businesses decide to begin the dropshipping through marketplaces like Amazon or eBay. This strategy enables them not to create an E-Commerce, generating many advantages for them and taking advantage of the image and support of large and famous companies. This type of dropshipping assures online traffic to their products and takes advantage of the good reputation of Amazon or eBay and their works in promotion and retargeting. For further information about this, you can watch the following video:
All in all, the dropshipping is presented as a key element to set up new online businesses which need to reduce their logistics costs in their early stages and offering what the costumers demand. Definitely, it is a logistic model which will be the source of much talk in the future.
You can read about the same day recovery in amazon in other post, but we want show the importance of innovation to increase the efficiency and effectiveness, for this we are going to compare the logistics center in San Fernando de Henares (Madrid) with the logistics center in Tracy, California. You can see the process in Madrid and the process in Tracy.
This new technology makes us win: more space capacity, less time to prepare the order (times are down 90minutes to 15minutes), less tired workers that previously they had to work long distances (the stock amazon has the dimension of 59 fields football).
Similarities: they continue using an ordered chaos and not classify objects by class.
Technology used in both stores: first quality control (photograph, measure and weigh), product identification barcode and very important for my machine labeled (if labeling performs poorly, the package is not sent and the company loses money and image. Many small businesses lose money to make the wrong type labeling for not having this technology).
Future technology: Sending by Drones, FAA, the federal agency responsible for regulating the airspace of the US, Amazon has given permission to use autonomous flying vehicles, although with many restrictions and an experimental license. Amazon hopes to deliver packages in less than 30 minutes, even in rural or difficult to access.
Last time we talked about the “Rodillas de Titano KaPeJu” Case in class and about the challenge that certain time lapses – for instance, the delivery time – need to be considered when ordering surgical material. This made me think about delivery time in general and how it is currently solved.
The same day delivery is an interesting and emerging topic within Logistics. Whereas 2012 50% of consumers were willing to wait a full week for free deliveries, it was only 35 % in 2014. So customers seem to get more impatient and demand short delivery times – even if they have to pay for it. The big E-Commerce retailers like Amazon or Ebay all offer same day delivery these days, even one-hour delivery services are offered. http://cerasis.com/2015/01/16/supply-chain-facts/
How can Amazon realize same day delivery?
If you order in the morning and pay the extra charge of 5.99 $ (as prime member) Amazon guarantees that you receive your package until 9 p.m. the same day (if your city is in the same day deliver offer included). https://www.youtube.com/watch?v=Cc2anPfCKFg. Amazon realizes that through investing in decentralized warehouses to establish next day delivery as standard and make same delivery an option for many.
With the Amazon Prime Now App you can even order your stuff, be updated about the status and even the location of the courier in real time (it’s delivered by bicycle in the video) and you receive your order within one hour if you pay 7.99 $. (The video in this case is nice to watch and only about 1 minute: https://www.youtube.com/watch?v=ODLp4ZGQwzk)
The complex challenge of processing, fulfilling, and delivering an order within a few hours requires new types of networks. Current processes are often too slowly, fast and flexible couriers cannot handle big parcels. So the creation of a same-day delivery network comes at a high cost. Large volumes in each delivery district need to be achieved, which is difficult in the beginning and—depending on the operating model—may require extensive upfront investment. Nonetheless, e.g. Amazon started creating networks capable of providing same-day delivery services at scale. Of course, this service is not yet available all over the country or for all items on Amazon. But the service is extending.