A recent press release stated that Amazon had launched a fund to invest in companies that are focused on warehouse logistics, fulfillment, and supply chain technologies according to USA Warehouse Investors. And they are financing it with a billion dollars! It will no doubt create companies, products, and / or ideas that will make the distribution process more efficient and with lower costs. And the rest of the warehouse industry and their warehouse facilities will have to follow their lead to remain competitive.
Amazon has stated that they want to improve the safety of workers in their warehouse properties and this investment fund will hopefully find ideas and technologies that can make that a reality. Some of the early ideas have workers wearing the safety technology on their bodies including a robotic arm with sensors. In addition, Amazon wants to improve on their speed of deliveries.
Amazon started as a seller and distributor of books many years ago. They then decided to sell other products such as music, electronics, toys, housewares, movies, and more. Now they sell thousands of products either directly or as the middleman between other retailers and Amazon’s customers. It has been a very profitable business model for the company.
What Technology Does Amazon Use In Warehouses?
One of the early technologies that could track products was the barcode system. Amazon has embraced the barcode system and expanded its capabilities and uses. Now barcodes and barcode scanners are ubiquitous in Amazon’s business and their warehouses are considered “fully digital”. The barcode system is also used during the distribution of Amazon’s products. It is a very efficient system.
How Does Amazon Manage Their Warehouses?
Amazon is the owner of warehouse facilities for their business. They have built corporate teams devoted to building and maintaining their warehouse management systems. Their internal management efforts include the following.
- Warehouse processes
- Inventory management and storage
- Inbound shipments
- Outbound shipments
- Item selection
- Sorting of items
- Packaging
What Technology Is Employed In Amazon Warehouses To Make Them Run More Efficiently?
The most widely known example of Amazon’s drive to make their industrial warehouse properties more efficient with lower costs is their purchase of Kiva Systems and their robot technology. The technology is now called Amazon Robotics and Amazon has stated that the robots enable their warehouses to store 50% more inventory. In addition, the company claims the robots have cut costs by up to 20%. This robot technology has proven itself in various ways and has enabled the company to deliver customer orders in one or two days. The Kiva robots have given Amazon a huge competitive advantage.
Between 2020 and early 2022 Amazon doubled its industrial warehouse space. Unfortunately the COVID pandemic occurred at the same time so Amazon did not experience the increase in customer demand that it was expecting. This led to Amazon’s first quarterly loss since 2015, and it was big – $3.8 billion. Amazon is not going to be a warehouse seller. They fully expect demand will rebound and all of these warehouse properties will be utilized.