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Focus: Distribution/Materials Handling

Feature Article from Our Distribution and Materials Handling Subject Area - See All

From SCDigest's On-Target E-Magazine

- March 3, 2015 -


Supply Chain News: Amazon Ponders Ninth Generation Fulfillment Center Design

10 Eighth Generation FCs Make Broad Use of Kiva Robots, more Automation Coming


SCDigest Editorial Staff


You know a company is a little different when it talks about what generation it is on for its distribution center design, like a Boeing aircraft or something.

But that is just what is doing, in conjunction with opening up a relatively new DC or fulfillment center (FC), as Amazon likes to call them, in the Tacoma, WA area not too far from the company's headquarters in Seattle. Amazon opened the FC for a tour by reporters and other dignitaries a few weeks ago.

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The one million square foot Dupont, WA FC is one of about 10 the company considers "eighth generation" designs, among the 109 or so FCs it currently operates worldwide. What most characterizes the eight generation FCs is the use of the famous orange Kiva System robots.

Amazon surprisingly acquired Boston-based Kiva for $775 million in early 2012. The Kiva robots are a form of automated guided vehicle (AGV) that can be said to have ushered in the "goods to picker" movement that is currently very hot in the distribution and materials handling industries.

A thousand or more Kiva robots carrying inventory move across a grid-like path inside the 10 Amazon DCs, arriving at a one of dozens of work centers staffed with Amazon associates. The associates work with a "pick-to-light" type display, which informs each picker which totes need the SKU that robot is carrying. The associate complete the picks, and the robot whisks away to another associate. All this eliminates travel time for the associates, who traditionally of course would have walked the DC floor, going location to location to make the picks.

Thus far, Amazon has declined to make the Kiva System available to others, though there were several companies such as office products retailer Staples that had deployed the technology before the acquisition. Amazon has said Kiva manufacturing and deployment resources are simply consumed with rolling out the robots within Amazon's own network, and that is probably true. It also conveniently means others, including Amazon competitors, can acquire the system.

These new generation of FCs also use a heavy-duty robot capable of lifting pallets up to 3000 pounds from the floor to an overhead conveyor system, likely to move inventory from reserve storage to the area where the Kiva robots are replenished.

Because of the way the Kiva robots store inventory, the Dupont DC can now carry about 50% more inventory than a similar DC would have had the capacity for in earlier FC design iterations, Amazon says.

The video below isn't the best, but offers some insight into how these Amazon FCs operate with the various robots.




Amazon's Mike Roth, Vice President for North American Operations, says that Amazon is now working on its ninth generation FC design, which will somehow use even more robotics and more sophisticated optimization software.

(Distribution/Materials Handling Story Continues Below )


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Will Humans in the DC Soon Go Away?

A natural question when seeing this level of automation is whether there will soon be much need for human workers as DCs get increasingly automated.

Human workers are not going away anytime soon, Amazon says. The Dupont DC employs about 500 full-time workers across multiple shifts - a sizable number, but we would say on the low side for a multi-shift, piece picking operation. Amazon doesn't offer up figures, but SCDigest assumes the throughput per employee is very high - else why invest in all that automation? The FC cost somewhere north of $100 million to construct and automate.

Amazon added another 400 or so temporary workers for the 2014 Christmas season on top of the 500 permanent employees.

"The interaction with Amazon robotics and the associates is actually something that the associates very much like," said Amazon's Roth told reporters at the inaugural tour.

"The robots take away the walking," he said. "The associates don't have to walk anymore to find products in this very large facility, but rather the product comes to the associate. They can stand there, they wait for the system to tell them which item to take. They take it out of the location, put it into one of these conveyor totes, and then it goes away."

Amazon said it is going to open yet another FC is the Seattle area next year. That will be located next to a so-called "sortation center" there, one of more than a dozen such facilities where Amazon sorts packages by ZIP codes and delivers them directly to local post offices in order to speed delivery. (See Amazon is Building a New Distribution Network - Quickly and Quietly!).

What do you think of Amazon having "generations" oif distribution centers?
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