Tag: warehouse automation

OM in the News: Amazon’s AI-Robotics Warehouse Revolution

 

Amazon is rapidly transforming its e-commerce fulfillment operations through a bold integration of artificial intelligence (AI) and robotics, reports The Wall Street Journal (Oct. 23, 2025). The company’s vision is clear: make human workers more efficient while automating repetitive, menial tasks. At the heart of this shift is Amazon’s Shreveport, Louisiana facility, which now boasts ten times as many robots as a typical warehouse. This leap in automation enables packages to move through the system 25% faster, with anticipated cost savings passed on to customers.

Safety and efficiency are top priorities. Robots now handle tasks such as sorting packages, transporting carts, and retrieving out-of-reach items. Amazon is also investing in its workforce, offering apprenticeships to train employees in managing these advanced systems. The company’s latest innovations include Blue Jay, a robot arm designed for sorting in tight spaces, and Eluna, an AI agent that helps managers optimize staffing and avoid bottlenecks. Blue Jay’s rapid development—just over a year, compared to 3 years for previous models—was made possible by generative AI, which allowed for virtual prototyping.

The company aims to deploy Blue Jay robots in urban, space-constrained warehouses, enabling same-day delivery networks that are both faster and more cost-effective.

These advances could save Amazon billions annually. By the end of next year, nearly 40 fulfillment centers will be equipped with robots, with an estimated to $4 billion in yearly cost reductions. This automation trend is expected to reduce the need for both warehouse and white-collar workers. In fact, the average number of workers per facility dropped to around 670 in 2024, the lowest in 16 years.

Amazon is testing augmented-reality glasses 

Amazon’s automation push extends beyond warehouses. Augmented-reality glasses are being tested for delivery drivers, helping them identify packages and navigate routes more efficiently.

Amazon’s journey began with its $775 million acquisition of Kiva Systems in 2012. Today, three-quarters of its deliveries involve some form of robotic assistance. The company’s latest announcements—Blue Jay, Eluna, and AR glasses—signal a new era where AI and robotics are supercharging logistics, reshaping the future of retail fulfillment.

Classroom discussion questions:

  1. How does Eluna work?
  2. Why is Amazon trying to eliminate warehouse jobs?

OM in the News: Amazon’s Robotics Ambitions

In the Amazon warehouse outside of Boston, a yellow-plated, gooseneck-like mechanical arm stretched and plucked a plastic jar holding a powdered drink mix out of a yellow box. The new device rose up, spun around with a loud whirring sound and gently placed the jar a few feet away into a gray bin. It twisted again toward the yellow box and soon after grabbed a DVD case, a very different shape, before pivoting quickly again to drop the item into an adjacent bin.

The Amazon Sparrow robot

These actions are executed rapidly and smoothly, just like the countless movements that workers undertake to pick and pack millions of online orders each day in warehouses across the world.

But the robotic device, known as Sparrow, is outfitted with suction cups and artificial intelligence software rather than the eyes and hands of humans. It is Amazon’s attempt to automate more of its warehousing operations by turning some of the most physically challenging and repetitive tasks over to robots, reports The Wall Street Journal (Nov. 20, 2022).

Warehouse workers pick items up, sort them and put them down millions of times a day. But Amazon is trying to get Sparrow to do something that robots have long struggled with—picking up a variety of objects as easily as humans can, as well as identifying them by characteristics such as color, shape and size.

Amazon has been criticized for the tough requirements it imposes on workers in the name of efficiency. Warehouse workers there risk of developing repetitive-stress injuries and musculoskeletal disorders (a topic in Chapter 10). Sparrow is meant to be the next step in that safety process. The robot “is going to help really transform our network in those repetitive motion challenges we have,” said Amazon’s VP.

If Sparrow can eventually on a large scale handle items as varied as vitamins, Apple watchbands and packaged board games, it could carry Amazon’s stalling logistics operations forward during a period of cost-cutting across the company. Sparrow can handle millions of items that represent about 65% of Amazon’s total inventory. The process of picking orders accounts for roughly half the labor costs at warehouses. “That really is the kind of Holy Grail and the last final frontier of automation,” said an industry expert.

Classroom discussion questions:

  1. What other robotic advances has Amazon conducted in the past decade? (Hint: see the Chapter 12 Global Company Profile that features Amazon)
  2. Will robots replace workers at Amazon centers? Why or why not?

OM in the News: Microfulfillment Uses Robots to Shrink Warehouses

Smaller is proving bigger in fulfillment centers thanks to increasingly sophisticated robotics technology. Companies looking to get goods to online consumers faster are turning more attention to microfulfillment, writes The Wall Street Journal (Nov. 9, 2020). This strategy puts robots and specialized technology to work in tight space spaces close to where e-commerce shoppers live.

A Brooklyn site fitted out with an automated system from Israeli robotics provider Fabric (formerly CommonSense Robotics) highlights the process in action. The 7,500 sq. ft. warehouse hosts chunky metal machines that shuttle goods from storage racks to the warehouse floor for mobile robots to ferry them along in an intricate dance choreographed by software. The automation allows users to pack goods in narrow aisles that human workers can’t reach, getting more use out of urban real estate that’s too costly for many larger logistics operations. Those economics have companies such as Nordstrom, Albertsons, Walmart, HEB, and FreshDirect, installing microfulfillment facilities.

Bins are stored at a microfulfillment center in Brooklyn, operated by Fabric.

By squeezing those operations into urban warehouses and the backs of stores, businesses pare delivery times so online orders reach their destinations in hours, not days. Fabric’s CEO said companies should be able to get orders picked and packed in 5 minutes or less with only a handful of workers.

For grocers coping with surging online demand during the pandemic, the technology offers a faster ROI than larger robotics-equipped warehouses while allowing retailers to fill orders more quickly than they can with human workers walking store aisles. The microfulfillment sites are becoming a new focus for retailers adjusting to the dizzying changes in consumer markets. Some merchants had been testing such sites in recent years, but the rush to online shopping during the coronavirus pandemic is accelerating moves toward space-saving, automation-powered warehouses.

Classroom discussion questions:

  1. How do these warehouses differ from the typical Amazon distribution centers?
  2. What are the advantages and disadvantages of microfulfillment centers?

OM in the News and Video Tip: FedEx Recruits Robots

Robotic arms manufactured by Yaskawa America

Sue, Randall, Colin and Bobby are 4 of the most reliable FedEx workers in Memphis. Each clocks 8 hours a day, sorting 1,300 packages an hour. They almost never take breaks, as they are actually 260-pound industrial robot arms.

They work only about half as fast as skilled humans, but they are quickly becoming an important part of the chain that keeps packages flowing. These robots, getting both “eyes” and “brains” that allow them to sense and respond, typify an important and growing trend in automation, writes The Wall Street Journal (Aug. 8-9, 2020). They have cameras which perceive visible light and sensors to perceive depth, and their “brains” are built with machine-learning AI. This gives them a level of adaptability not before seen. (There is an excellent 6 min. video that opens this WSJ article).

But the robots are not about to steal all the jobs in these industries. For now, they’re mostly filling vacancies created by surging demand. The explosion of e-commerce means an explosion in the volume of packages shipped to homes. Some 87 billion parcels were shipped worldwide in 2018—that’s 40 a year to every person in the U.S.—and this volume will more than double by 2025.

The need for social distancing within warehouses means robots can play a role in helping workers do their jobs without being directly adjacent to one another. And logistics companies are still finding it hard to hire people fast enough. (FedEx’s air hub in Memphis currently has 500 job openings).  FedEx estimates one human could tend up to 8 robots.

The overwhelming majority of industrial robot arms in the world are still the “dumb” kind: They repeat the same action over and over again—for example welding the same parts together repeatedly on an auto production line. The holy grail of picking technology—a robot that can handle the same variety as a human—will remain out of reach for a long time, in the same way we have yet to create an autonomous vehicle that can handle the same variety of road situations a human can.

Classroom discussion questions:

  1. Why is it so hard for robots to replace warehouse workers?
  2. Why are firms like FedEx more driven to automate?