On-line retailers staffing up for the holiday rush are testing a critical hiring decision this year: man vs. machine. Ch.13 lists the options open to firms facing capacity issues, but robots introduce a new wrinkle. The Wall Street Journal (Dec.20,2010) highlights 2 firms with totally different staffing approaches: Crate & Barrel and Amazon. Both firms face a similar holiday crunch and e-commerce sales are up 12% overall, now accounting for 8% of US retail sales.
At Crate & Barrel, which sees holiday sales quadruple, the warehouse gets by with just double the number of employees, thanks to a cadre of 35 robots from Kiva Systems, a firm we highlighted in a recent blog. The machines carry racks of company products (8,000 SKUs) to people who pick and pack—no walking around the building at all.
By contrast, Amazon takes a more human-oriented approach. There, employees walk 18-20 miles a day down aisles lined with shelves, filling shopping carts with orders and carrying them back to packing stations. Amazon also quadruples its holiday staff—hiring a massive force of 11,500 seasonal employees at $11/hour. The firm tries to remove waste from the hand-picking process with weekly “kaizen” sessions. Amazon believes that people, not robots, give flexibility to handle its wider variety o
“Which approach is better is a matter of debate in the 15-year-old e-commerce industry”‘ concludes The Journal. But Amazon does point out that it can now take orders up to Dec.19 and still guarantee Christmas delivery, a full 2 days later than last year.
Discussion questions:
1. Discuss the advantages vs. disadvantages of the human vs. robots staffing decision.
2. Where else has Kiva make progress in the fullfillment industry?