It strikes me that these sort of manual warehouse picking jobs will be completely gone in a few years as robots automate the picking process (as seen here with Diapers.com: http://www.youtube.com/watch?v=6zXOW6v0c8s)
Diapers is not a seasonal business. The problem with full automation is that your capacity has to be whatever peak load is - and peak load can be two orders of magnitude above your normal steady-state. That's a lot of robots sitting around doing nothing, whereas manual labor can be just as seasonal as the demand they are meant to fulfill.
Maybe, except presumably a lot of the "seasonal retail" stuff would require all the "spare" warehouse-picking-capable rental-robots at the same time.
Unless you can make something generalized enough to do _other_ (profitable for the rental robot owners) tasks outside the BlackFriday/Xmas shopping season, you've still got the same problem (though more power to you if you can make that problem become the robot rental industry's problem instead of yours…)
Why not go one step further and have elastic fulfillment centers? Nobody keeps inventory around for that long. Unless you're speculating on the future supply of a product you're only keeping stuff in stock for the buffer between when a whole palette comes in and when you need another one. So you can rent "fulfillment instances" as you need to order more inventory.
> "Sounds like an opportunity for a standardized, flexible industrial robot platform geared towards rentals."
This would work if different businesses have significantly different seasonalities - but on the aggregate in North America this is not true. Amazon gets the same Xmas rush as Wal-Mart, along with Target, Macy's, and whatnot. The number of businesses whose rush season is out of sync with Xmas is quite low. In fact, on the whole, retail basically rises and falls all at once throughout the year.
> "Why not go one step further and have elastic fulfillment centers?"
AFAIK Amazon already does this :) Look up "Fulfillment by Amazon".
I don't think China, India, and the US have the same 'black Friday' so if you ship them at reasonable cost you can probably do some load balancing internationally.
But with robots, you can probably get them to be cheaper even when taking into account seasonality. The real problem is that lots of manufacturers/wareshouses only keep a 3 year investment horizon. If they invested with a 10 year payoff, a lot more automation is possible. (It mirrors the problem in the economy as a whole - short termism)
> "But with robots, you can probably get them to be cheaper even when taking into account seasonality."
I can't say much without violating some NDA or another, but I'd check that assumption. Industrial robotics are anything but cheap, and remember, you're stacking them up against near-minimum wage laborers who have little to no benefits and you only pay for them when they're utilized.
Quite possible, and the hybrid approach is practiced quite widely - e.g., robot packing machines, robot sorting machines, etc. One big issue with hybrid approaches that require robots to run around warehouses is that humans are squishy and present a significant safety hazard that will also reduce efficiency. Much of a totally automated solution's appeal is the dramatic efficiency increase that comes from not having squishy humans on the playing field.
Only if everybody has their own warehouse. Why would you want that though? It would be better to rent WaaS (Warehousing as a Service - you heard it here first folks) so that specialized companies can have warehouses build right next to the harbor the goods came in from, and spread load across many completely automated warehouses are required. In December store Santa hats, in July swimming trunks. As a seller you don't even need to care about capacity.
The article mentions that many of these companies are effectively WaaS companies, though they're called "third-party logistics contractors, a.k.a. 3PLs".
From the article: "These companies often fulfill orders for more than one retailer out of a single warehouse. America's largest 3PL, Exel, has 86 million square feet of warehouse in North America..."
DHL and UPS, among others, offers this service.
People have been saying this for a long time. Automated picking has been around for years. When Amazon bought the large e-commerce place I worked for, the first thing they did was turn off the automated picking and replace it with people. When its cheaper and more simple to use robots, people will use robots.
Wow, that's truly incredible. I didn't realize anyone had reached this point. I'm excited to see this stuff progress, but I can't help but wonder what sort of social problems this might create as the unskilled jobs of an economy are slowly chipped away at. This sort of work surely creates more jobs in tech sectors and in maintenance, but skills learned in boxing are not transferable to any of the jobs that might be created by this.
Machines have been replacing jobs for over 200 years now, but I don't think there's been a huge increase in unemployment over that period. We've always managed to invent more meaningless and repetitious tasks for ourselves to do. One might say that most office jobs nowadays are like that, too. Factories replaced farms, cubicles replaced factories. But usually this happened over generations, so people had a chance to adapt.
If, at some point in the future, so many tasks get automated so quickly that there aren't enough jobs for the majority of this planet's featherless bipeds, we might finally get a chance to rethink the age-old rule that a person must work in order to survive. Work might become something that you only do because you like it, or because you want a higher income than whatever the default is. I only hope that outdated ideologies won't get in the way of such a paradigm shift.
At least on farms/agriculture, we get a chance to be outside with nature, and stay healthy/fit (even though it is much harder work). What have we got to show for modern day cubicles? :(
>At least on farms/agriculture, we get a chance to be outside with nature, and stay healthy/fit (even though it is much harder work).
At one time (just 20 years ago), your statement would have been fairly accurate. People still walked beans to get weeds, baled square bales of hay and straw (on hot summer afternoons, with indoor barn temps reaching 110+), manhandled livestock, and had to do a lot more manually with equipment.
Those days are fading, though.
The present and future of crop farming are GMO crops (with spray resistance traits, or plants producing their own pesticides/herbicides) and (near future) UAV-style robotics for tractors and combines operated from the house (or corporate HQ).
Livestock farming does remain more hands-on. However, a lot of confinement ops are automated to ensure proper and timely weight gain and less stress. And before people start complaining about confinements, many of those are popping up due to regulatory requirements based upon head count.
"we might finally get a chance to rethink the age-old rule that a person must work in order to survive."
i m a stern believer that people has to produce value. And until a person can produce value merely by living, people will have to work to survive. Value right now is measured by money, and money has a limited capability in measuring things that are very subjective (how do you measure the value a nice person brings to a community?).
But i dont believe there ever will be a day when a person can live without outputting an iota of value as measured by the standards of the day. At least, not until we have a source of free, and unlimitd energy.
1) Will there ever come a day when people can produce value merely by living? That really depends on what "value" is, and as you said, the standards of the day may differ from ours. Under some circumstances, merely being a consumer might be enough to contribute to some overall good. If energy becomes cheap enough, even a tiny benefit might be enough to offset a person's energy consumption.
2) Should we let a human being's survival be taken hostage to whether or not he or she produces what other people perceive as value, provided that there is leftover capacity to give them a free ride? This is more of a moral question, and your answer may vary according to your ideological commitments.
1) I dont believe being a "consumer" can by itself have any value
2) The real question is, whether the left over capacity could be put to better use, instead of keeping alive those not pulling their weight (when they could've). Would science and tech be that much more advanced because there'd be money to put into research and development? Would infrastructure be better because money isn't "wasted" on people who otherwise make no contributions? Sure, morally, you gotta help those in need. But a line ought to be drawn - people who could otherwise have worked, shouldn't be given free handouts just because the enocomy of the country _could support them_.
As for #2, the thing with social policies that they have long-term effects on a much larger scale. For example, one could plausibly argue that a robust "safety net" encourages people to take adventures, making it easier for kids from poor families to innovate even if they know that 90% of startups fail. This allows the society as a whole to benefit from the small number of startups that actually do succeed. Handouts, in that case, would be a sort of investment.
Also, this thread is about a hypothetical future society where there is a surplus of human labor due to automation. If you're going to pay people to carry out meaningless tasks that are not necessary in the first place, what's the difference between that and just giving them a handout?
Or so goes the argument. It's harder to prove that in reality. Also, if you care deeply about fairness between individuals, as in your other comment, I can understand why you might object to certain types of handouts.
Also I would have to say that number 2 bakes in a position which imposes a morality and value system onto others, and singularly undervalues the complexity and edge cases(sets/groups/communities) present in the human condition.
Also its worth keeping in mind that social safety nets (i assume thats what you are referring to) may keep some people who don't pull their weight, but also keep alive people who would never had a chance to do so.
This, of course, is where the buck always stops. You find yourself at the divide between people who believe all humans deserve to be fed and sheltered by right of existing, and those who believe they need to feed themselves.
1) I dont believe being a "consumer" can by itself have any value
How can you have a capitalist economy without consumers to signal prices? I think I just don't understand your point here. Consumers obviously create value to my mind, because the knowledge of what they're willing to consume is itself valuable. How do you understand differently?
Speaking in purely economic terms (i.e., inherent human value aside), a consumer is only valuable for what they have to offer in trade. If you're a producer but I don't have anything you could want (you already have it or the tech to create it effortlessly), the price signal I'm sending as a consumer is $0.00 for anything you'd sell.
Interesting read. My point was that a 'pure' consumer, who consumes at least as much as they produce, is at best worthless in economic terms. Nevertheless, I agree there is prosperity in the application of even humble means.
1) Broadcast TV and Gmail muddle the issue, if you have resources to trade your attention has value. At the most basic level Voting has value so in a democratic society people do have inherent value.
Children, old people, disabled people, unemployed people, many politicians, many lawyers, criminals, spammers, many landowners, trust fundies, members of royal families, many librarians, many teachers, many policeman etc. etc. We already have people who don't actually provide value to society. In Germany, about 60 per cent of people derive most of their income from government handouts. The trend will only increase and is actually a good thing (200 years ago, almost everyone had to produce value to survive - where would most people choose, today or 200 years ago).
I think you are right. Over a certain period our society will Star Trek-like be able to provide for everyone without them doing any actual work. The biggest problem is the shifting time until then. How do you treat the 70% of people that won't find jobs because there ARE none that aren't done better by a robot or an algorithm. What is fair compared to those who are still required to work?
Should (mostly creative people i guess) they be compensated as they would today?
Is there a point where we can safely assume that everyone that has work is glad about it to a point where they won't need more than what the government provides for free?
People talk here about people pulling their weight, but from all of my customers the only people won't be so easily replaced are the creative designers, songwriters, etc.
The rest, law firms, translation specialists, server admins, myself(web developer)... are in jobs that i imagine to have atleast digital competition if not completly replaced in the next 100 years.
So what do we do when suddenly the majority is out of work? There will be a point when creating major patentlawsuits won't keep lawyers busy anymore, where feeding everyone won't keep farmers and production workers busy...
What does pulling your own weight mean, if all the necessary jobs for keeping society running are gone or done by robots? Not everyone can be a waiter for people that are into restaurants with human waiters. Not everyone can be a cutting edge scientist.
My best prediction is that we'll become a very inward faced society, taking care of each others emotional needs will be our main task in such a future. To say it simple, you'll finally visit your parents more often as you've promised.
only a small handful from the list you gave is actually none-contributing.
The 60% of the people that derive income from gov't handouts are leeching off those who do actually work - tell me how that is fair? Disabled people/old people are dependants, but they not a majority, and as for children, they _will_ create value when they grow up. I m talking about abled bodied people who choose to get a gov't handout instead of doing work to sustain their own life. The world would be better off if those people weren't given handouts.
There is certain fallacy in that. I've never met a person who has ever thought he would like to mooch off welfare or what have you forever, or even a short amount of time. There are barriers that are difficult to see for many middle class people to see. The choice between welfare and work for many people is not between a welfare and a cubicle writing java code, but between welfare and humiliating treatment or backbreaking work in a restaurant/factory.
Society has sent men to the moon, photographed galaxies billions of light years away, put millions of transistors inside a square inch of sand = we ought to be able to provide better opportunities for the unfortunate.
I've never met a person who has ever thought he would like to mooch off welfare or what have you forever, or even a short amount of time.
I have. I currently live in a town where, due to the recession, a large percentage of people are living on social welfare. The thing is that a shockingly large number of them (that I know personally) have no ambition to do anything else. Some of these have been on welfare for five years already. I mean, why work when the government will just give you money, right? Another shockingly large number of young couples are having children because they see the extra child benefit money - someone that I know personally who already has two children under the age of four and wants a third one recently said how much easier their life would be with the social welfare benefits of a third child... I'm not sure if they ever considered that 1) children get significantly more expensive as they get older and 2) how unfair it is to the children to bring them into a low income family. But thats besides the point: my main point is that I do, unfortunately, know people who are happy to get handouts and have no ambitions to change any time soon.
we ought to be able to provide better opportunities for the unfortunate
The trade-off of course being that the more growth we experience, the better quality-of-life gets for everybody in the future. On the one hand, everything is way better for most everybody than it was 200 years ago- on the other hand, like that did a whole lot of good for the dirt-poor of 200 years ago.
why so much sympathy for the first world poor? because they are visible? I find sympathy for "poor" people living in fantastic conditions morally repugnant. humanity has serious problems to tackle.
Still, this article disturbs me and I will be making more effort to shop locally (I am lucky to live in a massive city however, where I have access to most things a short metro ride away).
Let's assume that you would need 1000 machines to have as much throughput as 4000 people.
WAG, but I'd wager that each of those machines would cost $500k.
That means 100 million in immediate outlays. WAG 2: fuel/electricity/maintenance is $200/month, and you need a team of 20 engineers to watch over them at $10k/engineer/month. So recurring costs come to $400k.
Which brings us to: 100M/1.3M = 77 months, or between 6 and 7 years.
That, however, doesn't take into account the opportunity cost of the initial $100,000,000 outlay. That brings it up to around a decade.
Labor costs are likely double, if not more, than what i've estimated. overtime + insurance + drug testing + security + all the other crap i'm forgetting.
Well if you treat people as human machines, remove unionizing ability and what have you, then you can bring yourself to competitive levels with China, which has kinda made a very persuasive point that human robots are cheaper than mechanical ones.
The only issue with labor of course is the so called 'managing' aspect of it, which covers things like quality of life. Robots don't have and will never complain about, while being able to do tasks at a level that most humans wont ever be able to.
Re: " China, which has kinda made the point that human robots are cheaper than mechanical ones."
Not for long.
"The China Business News on Monday quoted Foxconn Chairman Terry Gou as saying the company planned to use 1 million robots within three years, up from about 10,000 robots in use now and an expected 300,000 next year."
The point still stands. It may (should) change in the future as people start asserting their rights. (I have seen the article before, its Foxconn currently, but labor prices and further opportunities haven't reached a point where you can safely bleed off the population away from manufacturing just yet.)
At the same time though, it shows that as long as you have people who have no option, you can use them to easily produce more value than robots at similar costs. Which is what the Mother Jones article is basically about.
Also, its worth remembering that those robots are also going to be used for capacity expansion, while keeping cheap tractable labour.
TLDR: Improving standards of living will make robotics more competitive, unless there are sufficient people who have no other option but to compete with machines.
Most companies don't have 4000 employees, or need 1000 robots. Like every business, you add capacity as necessary. Diapers.com started with one mom and minivan.
This article: http://money.cnn.com/2011/11/09/smallbusiness/kiva_robots/in... says that 1000 robots costs $15-20 million, not the $500 million that 500k a piece would run. Also what is there to indicate such a hefty need for engineering oversight? 20 engineers constantly overseeing the machines sounds like they are either constantly breaking down, or need a significant amount of custom programming per unit as upkeep, both of which just sounds like a quality control issue on Kiva's side. It makes sense that there's a lot of initial planning/programming for each installation, but I'd expect it to be mostly self-running after that. I would be curious about the energy needs per unit, though. They seem to be carrying around more weight per package shipped than with a human picker carrying just what goes in one package, but then again their use of energy might be more efficient than humans.
1000 robots needing just 30 minutes of preventative maintenance per week is 500 hours of PM a week. That sounds like about the amount of PM a staff of 20 engineers can supply, once you account for admin, PTO, training, travel between robots, and doing the actual work.
Engineer does not solely mean "one who creates software".
How much automation do you need and how "bulletproof" does it have to be? What's the up time? What sort of rates does it have to handle average and peak? How accurate does it have to be? Does your control and execution software have to be custom (since you business model and methods are oh so different than your competitors) or will the standard be good enough? Trust me automation and the software to drive it can be quite expensive.
I'm really curious about the robot costs. The automated shelving systems i've seen look, well, really simple. I'm pretty sure i could get a half assed DIY system working for a few hundred dollars. An industrial version can't be more than 100x the price can they? 50k per mover, on the outside?
> "I'm pretty sure i could get a half assed DIY system working for a few hundred dollars."
you think the same thing when you see an Oracle instance that cost tens of millions and think you could have done it with postgres. what these retailers are really paying for is reliability, redundancy and support - having a big brand co. to call when something goes wrong.
that isn't to say that there isn't a mysql/pgsql style opportunity within warehouse automation and supply chain management - it is just that it isn't likely that Wal-Mart and Amazon would be your customer. Similar development and deployment cycle as with mainframes and servers - what was once the territory of only large companies and governments is now an accessible technology and competitive advantage amongst small and medium businesses as well
The most interesting aspect of supply chain management to me is the concept of a completely outsourced warehouse - where it is cheaper to have a specialized company manage and run your inventory and supply chain as part of their larger infrastructure (and economies of scale etc.) rather than building your own warehouses and system. Amazon became very very good in this field because an outsource style solution didn't exist at the time and they had no choice other than to do it themselves, but you could imagine that an Amazon being started today would not have its own warehouses and would not be writing long letters to shareholders trying to justify hundreds of millions in capital expenses in order to automate warehouses and bring down margins.
The three examples often cited are Amazon, Wal-Mart and Diapers. Amazon implemented a lot of their own systems using partners, Wal-Mart has invested billions and Diapers.com implemented with Kiva Systems (amazon now own diapers).
Amazon and Diapers could automate end-to-end because they had fixed product sizes and packaging. A lot of other retailers like Wal-Mart are attempting to paletize their goods for this reason. It is very expensive to completely automate end-to-end with retailers who have a broad inventory (which is why the vertical online retailers such as Diapers and Zappos did so well, they could lower margins with an easier to manage supply chain).
I used to follow Amazon stock and filings. They spent hundreds of millions of dollars on automation in their initial warehouses. They spent so much on the servers that run software controllers that the RedHat stock got a big bump when it was announced that they were the partner implementing it (Amazon made up a double-digit percentage of RedHat revenue).
I remember headlines of Amazon investing ~$100M into updating single warehouses. A lot of time was spent analyzing the outlay and returns - it was definitely a long-term investment rather than something you can immediately identify as being more cost-effective in the short term.
So if you have varying inventory and demand cycles it is less cost-effective to automate supply chain. There is also the part where you need to integrate with backend systems - SAP, Oracle, Sage, etc. which again involves consulting time and multi-million dollar projects.
From this story, it sounds like this warehouse as a very broad inventory. For eg. one bin contains batteries mixed with DVD's etc. which isn't suitable for robotic system since all they do is grab the basket, knowing what is inside it, and bring it to the packaging conveyor. It sounds like they already do this for the most popular products, and it is the rarer products where having a dedicated area for its stock just isn't feasible. This is also why Wal-Mart went straight into investing billions into RFID rather than the barcode scanning model used by Kiva.
IIRC, just the automation robot hardware market alone is ~$3B p.a, and online commerce with goods is ~$30B p.a, so already 10% of revenue is being invested back into hardware alone, which gives you an idea of costs and limitations. It may be a market that is ripe for disruption, since the deployment model seems to be similar to how large backend enterprise systems are implemented with Oracle, IBM etc. there doesn't seem to be any solution at the low to medium end of the market, although that is part of Kiva's pitch as well (they have standardized robot and bucket sizes).
The whole area is really interesting, I have tons of bookmarks on another laptop if you want me to send them to you. I looked into it some years ago as part of just analyzing tech companies and their margins (my main takeaway was narrower inventory, vertical market = better margins and better automation, and that it gets very expensive for broader inventories). To find more, a good starting point is the companies that sell the hardware and implement the systems such as Kiva: http://en.wikipedia.org/wiki/Kiva_Systems. They must have a good PR department because their customers and implementations have been written about a lot in Wired, the WSJ, NYTimes etc. as the future of warehouse automation, for eg.
Amazon probably knows their business better than you do. If they're hiring people instead of buying robots, that's probably because people get the job done cheaper - for now.
Maybe if your product is simple. However like Amazon's warehouses those where I work do not have consistent packaging or can they. Then toss in having packages which can be broken as customers do not always need complete sets; you do want your customer's happy don't you? The stock oh, nearly a hundred thousand items in each warehouse and do you see where robots don't fit in?
What you do do is arrange inventory based on sales, size, and packaging. Looking to minimize the travel of each picker and reduce the chance of injury. You also install conveyors and similar to make moving inventory around simpler.
