Robot Workers Take Over Warehouses

If you ever wonder where some of the jobs have disappeared to in the last two jobless recoveries (2000-2001 & 2009-2011), ask the robots.  It's no secret that companies must be creative when trying to reduce costs.  You can see that clearly in the past decade as the productivity rate has skyrocketed.  Quite simply companies are able to do more with less.  You and/or your neighbor may no longer have a job but the products on Amazon just keep getting cheaper and this article from CNN titled Robot Workers Take Over Warehouses is a valid test case.  Not only do companies want to reduce and eliminate waste the first on top of their list is non-value work.  The activities in which workers have no direct contact or impact on actually producing the product a.k.a warehouse associates.


Here are some highlights from the article

• As employee No. 400 at the dot-com, he knew that it simply cost too much to fulfill online orders. Labor was the killer cost: Employees had to go pick out products on shelves before they could be packed into boxes, and those minutes cost money. "That 89 cent can of soup was costing us $1 to get it into the tote," Mountz remembers.
• While working at his next job at a consumer electronics company, the "eureka moment" suddenly hit: What if products could walk and talk on their own? You could design a completely different kind of warehouse. And you could staff it with robots.
• Bain Capital Ventures wound up investing $5 million immediately in Kiva and then an additional $15 million more over the next three years. But before striking a deal, Agarwal introduced Mountz to people he knew at Staples and Walgreens. Then he watched the inventor present his plan.
• A "startup kit" of robots would cost $1 million to $2 million, and a large warehouse operation with 1,000 robots costs $15 million to $20 million. Setting up the software and grid systems inside the warehouse requires six months of planning, simulated modeling and testing. Then logistics managers must be trained before handing them the keys to the operation.
• Today, Kiva Systems is profitable. Backed by $33 million from investors, the Boston company has 240 employees, a list of prominent customers and revenue of more than $100 million, according to Mountz. He says sales grew 130% last year, and that Kiva is hiring 20 to 30 people each quarter to keep up with demand.
• Of course, the infiltration of robots translates to fewer new warehouse jobs. But it's not all bad news for workers, Mountz says: Kiva's system lets retailers double or even triple productivity, freeing up resources for other investments.
• The robots also make for a more pleasant work environment, says John Ling, logistics vice president at Crate and Barrel. The 50 people who now pack 2,000 boxes a day alongside 50 robots at Crate and Barrel's Tracy, Calif., warehouse spend their days in a better lit, cleaner operation with no noisy conveyor belts, he says. The robots eliminate much of the mundane physical labor employees once did to retrieve products off shelves.
• Customers are also benefiting: Packages can now be shipped the next day from that operation, an upgrade from a system that previously took two to three days to get an order out the door.