Exclusive: Amazon rolls out machines that pack orders and replace jobs

SAN FRANCISCO (Reuters) – Amazon.com Inc rolls out machines to automate a job retained by thousands of its workers: boxing customer orders.

The company began to add technology to a handful of warehouses over the last few years, which scans goods coming down a conveyor belt and envelopes later later in boxes tailored for each item, two people working on the project, Reuters told.

Amazon has considered installing two machines on dozens of more stores, removing at least 24 roles separately, these people said. These plants typically use more than 2,000 people.

It would make more than 1,300 cuts over 55 US standard size inventory fulfillment centers. Amazon expects to recover costs in under two years, at $ 1[ads1] million per machine plus operating costs, they said.

The plan, previously reported, shows how Amazon pushes to reduce labor and increase profits as automation of the most common inventory task – picking up an item – is still out of reach. The changes have not ended because vetting technology before a large distribution can take a long time.

For a graphic on the Amazon store expansion, click: tmsnrt.rs/2WwuOKW

Amazon is known for its drive to automate as many parts of the business as possible, whether pricing goods or transporting goods in the warehouses. But the company is in an uncertain position which it considers replacing jobs that have won the subsidies and public goodwill.

"We are managing this new technology with the aim of increasing security, increasing delivery times and adding efficiency across our network," an Amazon spokesman said in a statement. "We expect the efficiency savings to be invested in new customer services, where new jobs will continue to be created."

Last month, Amazon reduced its automation efforts to push to visit its Baltimore fulfillment center and said a complete robotic future was far away. Its employees have grown to be one of the largest in the US, when the company opened new warehouses and increased wages to attract employees in a tight labor market.

A key to the goal of a slimmer workforce is wear, one of the sources said. Instead of laying off workers, the person said that the world's largest online store one day will refrain from filling packing roles. They have high sales because boxing multiple orders per minute over 10 hours is taxing work. At the same time, employees who live with the company can be trained to take up more technical roles.

The new machines, known as CartonWrap from Italian firm CMC Srl, pack much faster than humans. They turn out 600 to 700 boxes per hour, or four to five times the frequency of a human pack, said the sources. The machines require a person to load customer orders, another to stock cardboard and glue, and a technician to fix the jam slightly.

CMC refused to comment.

Although Amazon has announced its intention to speed up shipping over its Prime Loyalty Program, this latest automation round is not focused on speed. "It's about efficiency and savings," one of the people said.

Including other machines, known as "SmartPac", which the company recently rolled out to mail items in patented envelopes, Amazon's technology suite could automate a majority of its human packages. Five rows of workers on a plant can be two, supplemented by two CMC machines and one SmartPac, said the person.

The company describes this as an attempt to "re-work" "workers, said the person.

It could not be learned where roles can disappear first and which incentives, if any, are related to the specific jobs.

But the hiring agreements that Amazon has with governments are often generous. For the 1500 jobs Amazon announced last year in Alabama, for example, the state promised $ 48.7 million over 10 years, the Trade Department said.

PICKING CHALLENGE

Amazon is not alone in testing CMC's packing technology. JD.com Inc. and Shutterfly Inc have used machines as well, said the companies, which have Walmart Inc, according to a person familiar with their pilot.

Walmart started 3.5 years ago and has since installed machines in several US locations, said the person. The company refused to comment.

The interest in boxing technology sheds light on how the e-commerce business is approaching one of the biggest problems in the logistics industry today: finding a robot hand that can seize various things without breaking them.

Amazon employs countless workers at each fulfillment center that makes variations of this same task. Some stow inventory, while others choose sales orders and still others grab those orders, place them in the right size box and taping them up.

Many venture-supported companies and university researchers run to automate this work. While advances in artificial intelligence improve the accuracy of the machine, there is still no guarantee that robot hands can prevent a marmalade jar from slipping and breaking, or switch seamlessly from picking up an eraser to take a vacuum cleaner.

Amazon has tested various vendor technologies that one day can use to pick, including from Soft Robotics, a start-up from the Boston area that inspired cuttlefish tentacles to make grippers more versatile, a person familiar with Amazon's experimentation said. . Soft Robotics refused to comment on its work with Amazon, but said it has handled a wide and ever-changing range of products for several major retailers.

Believing that grabbing technology is not ready for prime time, Amazon automates that problem when packing customer orders. People still place items on a carrier, but machines then build boxes around them and take care of sealing and labeling. This saves money, not only by reducing labor, but also by reducing waste packaging.

These machines are not without errors. CMC can only produce so many per year. They need an on-site technician who can fix problems as they arise, a requirement that Amazon would rather do without, said the two sources. The super-hot glue that closes the boxes can pick up and stop a machine.

In addition to other types of automation, such as the food composition system of Ocado Group PLC, the focus is on much industrial interest.

But the boxing machines already show to Amazon. The company has installed them in busy department stores that are driving distance from Seattle, Frankfurt, Milan, Amsterdam, Manchester and elsewhere, the people said.

The machines have the potential to automate far more than 24 jobs per facility, one of the sources said. The company also creates nearly two dozen more US fulfillment centers for small and non-specialized inventory, according to logistics consultant MWPVL International, which may be mature for the machines.

This is just a harbinger of automation coming.

"A" light out "store is ultimately the target," one of the people said.