Amazon is investing heavily in automation to optimize its fulfillment process. The company is making decisions around automation based on the process optimization and proximity to customers. High-volume and small items can be automated easily, but bigger items like Instapots and luggage cannot. Amazon is investing $1.2 billion in upskilling associates who work in robotic and automated fulfillment centers, with a goal of upskilling 300,000 associates by 2025. The mechatronics program is teaching associates the necessary skill set for the highly automated fulfillment centers. Additionally, Amazon is launching new fulfillment centers in rural areas, where the company has never had operations before. These regions offer higher volume and more throughput, making it sensible for Amazon to invest in these areas.
Amazon’s vp of North American fulfillment, Melissa Nick, recently discussed the company’s plans for its fulfillment centers and technology investments. In light of the pandemic, Amazon had to adjust quickly to meet the surge in demand for essentials. Now, with the e-commerce growth rate stabilizing, the company is looking at new ways to optimize the fulfillment process.
One such investment is in robotics centers to increase automation in the process. However, the robotics centers require a significant amount of human labor to maintain and operate the machines. As part of its commitment to upskilling employees, Amazon has set a goal to train 300,000 associates in technology by 2025.
Nick emphasized the importance of resiliency in the supply chain during a recent appearance at Shoptalk in Las Vegas. She also spoke with Modern Retail about her focus on launching new fulfillment centers in rural areas and staffing the robotics centers.
In terms of the fulfillment network, Amazon is prioritizing speed and accuracy of delivery. The company plans to invest in more fulfillment centers and increase its capacity. Amazon will launch its 100th robotic building this year, and will continue to automate its fulfillment systems. Additionally, Amazon is investing in additional inventory to reduce transportation times for middle-mile and last-mile delivery.
To meet customers’ delivery expectations, Amazon has adjusted its target delivery times. It offers same-day delivery in 90 metro areas for 600,000 items every day. The company also strives to provide next-day delivery for customers who want it, while reducing transportation time as much as possible. Two-day delivery is the minimum speed the company is aiming for.
Amazon’s fulfillment business has experienced significant change in the past three years. With the surge in demand for essentials during the pandemic, Amazon had to make changes quickly to optimize the fulfillment process. However, with the e-commerce growth rate stabilizing, the company is now investing in robotics centers to increase automation in the process.
When choosing which fulfillment center would be a good candidate for a robotics fulfillment center, Amazon considers the process optimization from a flow perspective. High-volume and small items can be automated easily, but bigger items like Instapots and luggage cannot. Thus, the company makes decisions around automation based on the process optimization and the proximity to customers.
Amazon is investing $1.2 billion in upskilling associates who work in robotic and automated fulfillment centers. The goal is to upskill 300,000 associates by 2025, up from the initial goal of 100,000 in 2019. The mechatronics program teaches associates to work on robotics and automation systems to ensure the necessary skill set under the roof of Amazon’s fulfillment centers.
Additionally, Amazon is investing in launching new fulfillment centers in rural areas where the company has never had operations before. These regions offer higher volume and more throughput, making it sensible for Amazon to invest in these areas. This move brings Amazon closer to its customers and optimizes the fulfillment process.
In summary, Amazon is investing heavily in automation to optimize the fulfillment process. The company is focused on process optimization from a flow perspective and proximity to customers when choosing which fulfillment center would be a good candidate for robotics fulfillment center. The mechatronics program is teaching associates the necessary skill set for the highly automated fulfillment centers. Furthermore, Amazon is investing in launching new fulfillment centers in rural areas, which brings the company closer to its customers and optimizes the fulfillment process.
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