Robot Report: A Comparative Look at Automation in E-commerce and Logistics

06/02/2018

While talks of robots taking over humans’ jobs are future-oriented for some industries, for logistics and e-commerce the adoption is happening as we speak.

But this adoption isn’t globally heterogeneous. The “Made in China 2025” initiative, which promotes automation of specific industries, including “Automated Machine Tools and Robotics” helps Chinese e-commerce and logistics companies adopt automation technologies faster than their Western counterparts. For other companies, such as German Deutsche Post DHL, the adoption has been more measured and human-friendly. Let’s take a look at how major global e-commerce and logistics players are integrating robotics and automation into their order fulfillment, logistics, and supply chain.

American E-commerce leader Amazon acquired Kiva Systems in 2012 for $775 million, re-naming it Amazon Robotics. Amazon currently has over 80,000 robots at work in its distribution centers, allowing it to accelerate order fulfillment time while lowering costs. When Amazon acquired Kiva, it also made Kiva’s technology proprietary, preventing other e-commerce companies from adopting the technology and giving it a leg up in the race to automation.

Amazon’s robots are mainly used for order fulfillment within its warehouses. Instructions are sent to Amazon’s fulfillment robots over WiFi supplying them with their next order, speed, and location, directing them where to go while preventing them from colliding with other robots on the floor.

American United Parcel Service, UPS is facing lower margins from its rising e-commerce business and is also investing in technologies to keep it competitive with ever-dwindling delivery times. In 2016 it announced plans to fully automate 30 of its busiest hubs by 2020. The company is currently using robotic sorters to process hundreds of thousands of packages per hour combined with a system of conveyor belts in its behemoth warehouses.

This week, German logistics company Deutsche Post DHL announced that it has successfully completed a pilot test of robots in its warehouses. Working with the technology company, Wärtsilä, DHL plans to use a human plus machine approach in its factories to assist humans with exhausting tasks and speed up operations.

If in the West, the announcement of automation technologies is most often accompanied by a disclaimer that robots will not be taking human jobs, in China it’s robots galore. JD.com uses UAVs (Unmanned Aerial Vehicles) to ship packages through the air. Additionally, firms including S.F. Express, BEST Inc, and ZTO Express use automated sorting within their facilities – technologies that greatly helped them handle high volumes during shopping holiday, Single’s Day.

A comparative look at global shipping companies in the West verses China reveals a trend. China has undoubtedly adopted automation technologies faster, thanks to financial and policy support from the central government. Western companies face high overhead when introducing new technologies to the supply chain, and some (such as UPS) are considering raising prices in conjunction with automation to buttress falling margins.

With rapid rates of adoption, China is en route to beating out Amazon in the path to automation. The question that remains, is whether automation, costs of labor, and human employment will reach an optimal balance in our robotic present and future.

Leave a Reply

Your email address will not be published. Required fields are marked *