The video we saw in class about Amazon shows how Amazon is using robots in the process strategy . Amazon is using robots as part of the process of fulfilling customer orders in a short time. Completing the orders in a short time meets or exceeds customer expectations. This is one of the reasons why Amazon is a leader in the e-commerce business. While watching the video, one question that popped on my mind was: “What are the chances that these robots will run into each other?” After reading an article on how these robots work, it is not possible that these robots will run into each other or drop items from the shelves. There is a central computer system that keeps track of each robot and coordinates their position. These robots are in the right place and at the right time.
The robots that Amazon is using are produced by Kiva Systems, a company that Amazon bought it for $775 million. Why would Amazon buy Kiva Systems? Is Amazon going to produce robots to increase the number of robots in its warehouses or to sell them to other businesses? The answer is that Amazon is coming up with something even more bigger. The purchase of Kiva System was not just for the Kiva robots.
The next step in the process strategy improvement is the Amazon Air Prime delivery. Have you ever thought of having a product you ordered through Amazon being delivered to you within 30 minutes? I know when you think about this, it sounds unreal. That is the next big step Amazon is taking: delivering products in such a short time through the usage of the electric drones or as Amazon calls them octocopters. In the future we won’t have to wait for the UPS to come and deliver the package at our homes . We will have octocopters delivering products at our homes. Octopocters are electric drones, very green for the environment.
According to the CEO of Amazon Jeff Bezos, the current octocopters that are being tested can deliver products that weigh up to five pounds (which is about 86% of the products that Amazon delivers) within a 10 miles radius from the fulfillment center and within 30 minutes. These radius delivery will cover major urban areas. The drones are autonomous. You give them the instructions, the GPS coordinates where they should go to and they will fly to those assigned GPS coordinates. The challenge Amazon is facing now while working on this project is the risk of the drones landing over somebody’s head. The R&D group is working on making this plan work in the near future. Some of the questions that come up if Amazon puts this project in life are:
- How is the implementation of octocopters going to affect the shipping rates? Is Amazon still going to have free shipping for orders over $35?
- How is the society going to react towards these change? Are we going to be ok with drones flying over our heads?
- How is the usage of octocopters going to affect the other businesses(for example UPS) and the job market? The usage of octocopters means less UPS drivers delivering orders to our homes.
3 thoughts on “The big surprise”
WOW! That is so cool! i wonder what would happen if I walked through the warehouse? Would I be hit by one of these automated robots?! JAJA
Well, if Amazon bought Kiva for $775 million, I’m sure that one way or another, they have to make some changes to delivery fees. One way could be that they increase the amount you have to spend to get free shipping. Let’s say that they raise it to $50. Then, that makes a $15 gap which we all know people would fall under and they would have two options (Assuming they are not Prime members). First option is to pay the shipping fee or option two would be to increase their purchase. In the end, whichever option they go with means more revenue per purchase.
I am ready to see these drones fly around Chicago because it would look so advanced but what about the weather? I’m sure these drones will be weather resistant but can and will they be Chicago resistant? We all know that Chicago can go through all four seasons of the year in one day. I can also say that I am sure that these drones will not fall on our heads because just as the robots in the warehouse have sensors so they don’t crash, so will the octocopters.
Ups has an advantage still. These drones can’t deliver larger items. A tv, a bed, a computer, etc are not going to be flying over Chicago so UPS still has the big trucks that will make the deliveries. I think that’s great because that’s more efficient for UPS. There is no need for a UPS driver to drive miles and deliver a USB cable.
First off, that is really cool. Not only would this greatly cut down the time of shipping, but this could make it quicker to order something from Amazon than traveling to the nearest store. That’s nuts. I find very interesting your question about shipping costs. Either we will be paying separately for the shipping if we want it or the cost of shipping will be spread between all of their products. If successful enough, Amazon could maintain current price and not raise shipping because of the increased sales by these bots. It’s all really interesting and really awesome. Great post.
This really makes me think about the viability of drones flying around. To actually make money, I would think it would cost extra to get your product faster in contrast to David’s second point of spreading the cost to all their products. I think I read once that Amazon makes 1% margins, whereas Alibaba makes 50% margins. That is pretty bad for similar companies.
Society will probably be scared initially, and there might be some rock throwing to try and get the product. But I think society will adjust to it.