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

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

The company started adding technology to a handful of warehouses in recent years, which brought them back to the market.

Amazon has considered installing two machines at dozens These facilities typically employ more than 2,000 people.

That would amount to more than 1,300 cuts across 55 U.S. fulfillment centers for standard-sized inventory. Amazon would expect to recover the costs in under two years, at $ 1 million per machine plus operational expenses, they said.

The plan, previously unreported, shows how Amazon is pushing to reduce labor and boost profits as the most common warehouse task – picking up an item – is still beyond its reach. The changes are not finalized because of a major deployment can take a long time.

For a graphic on Amazon's warehouse expansion, click: tmsnrt.rs/2WwuOKW

Amazon is famous for its drive to automate as many parts of its business as possible, whether pricing goods or transporting items in its warehouses. But the company is in a precarious position and it has replaced it with goodwill.

"We are piloting this new technology with the goal of increasing safety, speeding up delivery times and adding efficiency across our network," said Amazon spokeswoman said in a statement. "We expect the efficiency savings will be re-invested in new services for customers, where new jobs will continue to be created."

Amazon last month Baltimore fulfillment center, saying a complete robotic future was far off. Its employee base has grown to be one of the largest in the United States, as the company has opened up new warehouses and raised wages to a tight labor market.

A key to its goal of a leaner workforce is attrition, one of the sources said. Rather than lay off workers, the person said, the world's largest online retailer will one day refrain from refilling packing roles. Those have high turnover because of multiple boxing orders per minute over 10 hours is taxing work. At the same time, employees can stay with the company.

The new machines, known as the CartonWrap from Italian firm CMC Srl, pack much faster than humans. They crank out 600 to 700 boxes per hour, the sources said. The machine requires one person to load customer orders, another to stock cardboard and glue and a technician to fix jams on occasion.

CMC declined to comment.

Amazon has announced it's intention to seek out its loyalty program, this latest round of automation is not focused on speed. "It's truly about efficiency and savings," one of the people said.

Including other machines known as "SmartPac," which the company rolled out recently, Amazon's technology suite will be able to automate a majority of its human packers. Five rows of workers at a facility, two CMC machines and one SmartPac, the person said.

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

It could not be learned where roles might be very different and what incentives, if any, are linked to those specific jobs.

But the hiring deals that Amazon has with governments are often generous. For the 1,500 jobs Amazon announced last year in Alabama, for instance, the state promised the company $ 48.7 million over 10 years, its department of commerce said.

PICKING CHALLENGE

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

Walmart started 3.5 years ago U.S. Locations, the person said. The company declined to comment.

Interest in boxing technology sheds light on the e-commerce behemoths are approaching one of the major problems in the logistic industry today: finding a robotic hand that can grasp various items without breaking them.

Amazon employees countless workers at each fulfillment center who do variations of this same task. Some stow inventory, while others pick up customer orders and still others grab those orders, placing them in the right box and taping them up.

Many venture-backed companies and university researchers are racing to automate this work. While advances in artificial intelligence are improving accuracy, there is still no guarantee that robotic hands can prevent a marmalade from slipping and breaking, or switch seamlessly from picking up an eraser to grabbing a vacuum cleaner.

Amazon has tested different vendors' technology that it's a day for picking, including from Soft Robotics, a Boston-area startup that drew inspiration from octopus to make it more versatile, one person familiar with Amazon's experimentation said. Soft Robotics with a wide variety of products.

Believing that fatping technology is not ready for prime time. Humans still place items on a conveyor, but machines then build boxes around them and take care of sealing and labeling. This saves money not just by reducing labor but by reducing wasted packing materials as well.

These machines are not without flaws. CMC can only produce so many per year. They need a technician on site who can not wait, they have a need. The super-hot glue closing the boxes can stack up and halt a machine.

Other types of automation, like the robotic grocery assembly system of Ocado Group PLC, are the focus of much interest.

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

The machines have the potential to automate more than 24 jobs per facility, one of the sources said. The company is also one of the world's largest centers for the supply of small and medium-sized goods, which is based on MWPVL International, which could be used for machinery.

This is just a harbinger of automation to come.

"A 'lights out' warehouse is ultimately the goal," one of the people said.