Two reasons why Bots + Human makes sense in E-commerce

In today’s age e-commerce space, if one is competing with giants such as Amazon one has focus on Bots + human workforce! Here are two good reasons:

Robots improve workers throughput and order accuracy

Robots work collaboratively with workers, helping them become more effective and efficient. Robots translates to substantially more tasks with less labor in the same workspace. Thus, less drudge work, more effective workers. Workers spend more time on task and less time walking through your warehouse. Per Deutche bank note published in June’16, “Click to ship” cycle task that took around 60–75 minutes for employees to manually sift through the stacks, pick the product, pack it, and ship it, has now reduced to 15 minutes with help of robots.

Robots drive operating expense down

Through acquisition of Massachussetts based Kiva systems in 2012 for $757M, today Amazon is adding 15,000 robots YoY, and now has army of 45,000 robots working with 230,000 employees across 20 Amazon fulfillment centers. For arguments sake assuming one robot is doing as much work as fulfillment associate, that’s at least $1.1B ($12/hour wage * 40 hours / week * 52 wk* 45K robots) in annual operating expense savings.

Beyond the warehouse, there are other aspects of business that can benefit from robots in the long run — robots that can sort and fill orders on their own, delivery of product by an automated drone, self-driving trucks to deliver trailer of products from warehouse to warehouse across the coast.

Amazon has triggered a robo arms race and everyone else is still trying to catch up.