INNOVATION ANALYSIS INNOVATION OF WAREHOUSE MOBILE ROBOTS

LA TROBE BUSINESS SCHOOL 2022-MGT5MIO(BU-2) - MANAGING INNOVATION IN BUSINESS ORGANIZATIONS ASSESSMENT 1: INNOVATION ANALYSIS INNOVATION OF WAREHOUSE MOBILE ROBOTS Lecturer: Associate Professor VANESSA RATTEN Student name: KIEU OANH VO Student ID: 21179931 Melbourne, Victoria 2022 TABLE OF CONTENTS PART A 3 I. In addition, Liang et al, (2015) emphasized that order fulfillment is a time-

LA TROBE BUSINESS SCHOOL
2022-MGT5MIO(BU-2) - MANAGING INNOVATION IN
ORGANIZATIONS
ASSESSMENT 1: INNOVATION ANALYSIS
INNOVATION OF WAREHOUSE MOBILE ROBOTS
Lecturer: Associate Professor VANESSA RATTEN
Student name: KIEU OANH VO
Student ID: 21179931
Melbourne, Victoria
2022

TABLE OF CONTENTS
PART A.........................................................................................................................3
I. INTRODUCTION................................................................................................3
II. DISCUSSIONS......................................................................................................3
2.1. Warehouse mobile robot types and uses.....................................................3
2.2. Milestones.......................................................................................................4
2.3. Impact of Autonomous mobile robot on Business......................................5
III. RECOMMENDATION AND CONCLUSION.............................................6
REFERENCES.............................................................................................................8
PART B.........................................................................................................................9
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PART A
I. INTRODUCTION
The incredible growth of e-commerce has defined the recent years of various
industries in the world (Vakulenko et al., 2019). The disruptive evolution of e-
commerce supported by advanced technologies, smartphones, and smart applications
has been further changing people’s shopping habits (Garg and Agrawal, 2020).
Customers nowadays are much more demanding and seeking instant gratification by
placing orders and expecting faster delivery by the next day shipping. In addition,
Liang et al, (2015) emphasized that order fulfillment is a time-consuming and time-
critical operation of e-commerce since each purchase order may include multiple
products of different features and customers may require same-day delivery.
Altogether, the ever-changing customer expectations have made e-commerce
fulfillment warehouses and third-party logistics providers (3PLs) turn their attention
toward innovative robotics and automation-based technology. Especially, the
innovation of warehouse mobile robots, without doubt, has become the foundation for
automated warehouse systems.
II. DISCUSSIONS
2.1. Warehouse mobile robot types and uses
In recent years, three main types of warehouse mobile robots are most commonly
used, including Automated guided vehicles (AGVs), Autonomous mobile robots
(AMRs), and Automated storage and retrieval systems (AR/RS). Automated guided
vehicle, firstly introduced in1955 (Muller, 1983), are generally defined as material
handling robots moving stock and materials around the warehouse, following along
their pre-set path, and using wires, magnetic strips, or sensors for navigation. The
traditional AGVs have minimal onboard intelligence and obey simple programming
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guidance to move to predefined points. If it detects an object in front of it, it will
simply stop until the obstacle is removed (Otto Motors, 2021). An AMR, on the other
hand, is far more independent than AGVs by their degree of autonomy. The inclusion
of onboard intelligence systems allows AMR to take new routes without human
interference, bypassing the object blocking its path (da Costa Barros et al., 2021).
Moreover, the use of AMRs is necessary for e-commerce warehouses to save time,
keep costs down as well as eliminate human-based errors (Bolu et al., 2021).
Automated storage and retrieval systems are specifically designed to place, store, and
retrieve products and inventory from storage locations on demand. This type of
mobile robot can save floor area by increasing inventory storage density, where stock
is placed vertically in a compact space. Among all, AMRs are the most intelligent,
flexible, and cost-effective option (CYNGN, 2022). Besides, the rapid e-commerce
fulfillment, along with a large assortment of unique Stock-Keeping Units (SKUs) in
variable daily schedules has been challenging warehouses to look for investment in
innovative automated solutions, particularly AMRs (Ghelichi et al., 2021).
2.2. Milestones
Back to the early 1950s, AGVs, the first mobile robots were introduced and put to
use. Originally, these vehicles were simple carts, following pre-programmed paths to
move products around the warehouse. In the 1990s, the later generations of AGVs
were improved to use laser guidance systems. Then, it took more than ten years from
the development of laser-guided AGVs for the first fully autonomous mobile robots to
be developed in 2006 (Bogue, 2021). In other words, AMRs are the latest significant
upgrade and advanced version of the processors AGVs. In 2011, Amazon was a
pioneer to kickstart the addition of AMRs called Kiva in the warehouse and
fulfillment centers (Bogue, 2016), and Kiva Robots in turn did change the game for
the use of AMRs. The idea of Kiva is simple: “by making inventory items come to the
warehouse workers rather than vice versa, you can fulfill orders faster” (Guizzo,
2008). Later in 2012, Amazon announced an agreement to pay $775 million in cash to
purchase Kiva Systems Inc. and has since renamed it Amazon Robotics. As of 2022,
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they are using around 520,000 mobile robots working inside their warehouse network
for their fulfillment operations, alongside hundreds of thousands of human operators
(Amazon, 2022). In the following part, the effects of Autonomous Mobile Robots on
the operating activities of warehouses and 3PLs will be discussed further.
2.3. Impact of Autonomous mobile robot on Business
As mentioned earlier, Amazon was the first one as well as the leader in the innovation
of warehouse management with robotic technologies. Thanks to the ability to work
continuously and more efficiently than human workers, Kiva robots are utilized to
transport ordered items located in large, heavy, or portable storage units to a location
where the items will be picked and packed manually and later return to a storage area
on demand (D'Andrea, 2012 and Guizzo, 2008). Additionally, Kiva robots ride at
about 5 miles per hour and can slide under and then lift a stack of shelves or carry up
to 720 pounds (341 kg) of merchandise. On average, the process of pulling an item
from a shelf and putting it in a box only takes 15 minutes to complete, down from an
hour and a half (Bogue, 2016). Moreover, the intelligent robot enables the
optimization of space since it can travel underneath and thereby lift the shelves
stacked closely together, which means modern warehouses can keep more inventory
than conventional ones. In a speech in 2014, Dave Clark, former CEO worldwide
consumer at Amazon said that the application of autonomous mobile robots
significantly reduced the operating cost of fulfillment centers by 20 percent. Hence,
Amazon has substantially obtained economic benefits from the addition of robots to
fulfillment centers as it transformed their entire business. In other words, the role of
innovation helps Amazon to meet their customer’s expectations along with making
human jobs safer, simpler, and more productive (Amazon, 2022). However, the labor-
saving potential of AMRs may put many people out of work, Mountz, Kiva’s co-
founder said (Rotman, 2013). He explained that several e-commerce retailers are
growing so fast that they are facing a shortage of available workers. With the addition
of robotic technology to warehouses, these retailers can survive or expand
dramatically, even during the Covid-19 pandemic. Over 10 years, Amazon still pursue
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their own vision that “never tied to a binary decision of people or technology”, it is
about the collaboration of people and technology to deliver the best shopping
experience for their customers.
DHL Supply Chain, the global and North American contract logistics leader within
Deutsche Post DHL Group is also a player in the race of automating warehouses with
robotics solutions. At the beginning of 2022, the company signed a multi-year
agreement with Boston Dynamics, one of the worldwide leaders in mobile robotics, to
further automate its fulfillment and distribution centers (DHL, 2022). In the next three
years, Boston Dynamics will provide a fleet of AMRs robots named Stretch to DHL
warehouses and this investment is viewed as a part of DHL Supply Chain's
Accelerated Digitalization agenda. To increase operational efficiency and improving
customer satisfaction, the multi-purpose mobile robot Stretch is specifically designed
to deal with challenges within warehouse space. Previously, DHL successfully
utilized another AMR Locus, which brought an 80 percent increase in “fulfillment
productivity”. The innovation positively improves their supply chain, while taking
over physically demanding tasks and keeping human workers safer.
Robert (2021) stated that the addition of Kiva to Amazon’s operating activities led to
the realization of major e-commerce companies that AMRs would be vital to enhance
competitiveness, and in turn, they brought robotic automation in-house. Ocado, for
example, a British online grocery company has deployed a fleet of 3,000 robots
operating at its high-tech customer fulfillment centers. Those mobile robots are
capable of handling an order of 50 items within five minutes, processing 65,00
purchase orders weekly for over 650,000 customers as well (Lauren Hartzenberg,
2018). Over 20 years of establishment, Ocado is now valued at $7.6 billion, which
proves that AMRs greatly enhance efficiency, improve performance as well as
support the growth of the company in general.
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III. RECOMMENDATION AND CONCLUSION
It is undeniable that the development of mobile robots keeps changing to meet the
ultimate goal of complete automation. In the future scenario, research and
development department should focus on creating self-powered mobile robots that can
run continuously. AMRs typically run using finite energy sources, in which battery is
the most common power. Human intervention is required to manually recharge and
thereby may lead to delay the work. In addition, global e-commerce retailers or 3PLs
can speed up the delivery process of local orders by applying aerial robots so that they
can meet customer’s expectations of same-day delivery or even one hour after the
receipt of an order. Also, aerial robots have to be equipped with advanced functions
like sending notice messages to customers before delivering so that it can check
whether they are available to pick up or not. Moreover, they can automatically
communicate with customers via auto-chat box to rearrange the delivery time. For
small or medium-sized companies, investment in a diverse range of autonomous
mobile robots is such a hurdle since not all companies have sufficient financial
resources. Instead of having different robots doing different tasks, it is better to have
one multi-functional robot. This type of robot can handle the whole process from the
receipt of an order to the delivery.
Overall, autonomous mobile robots are gradually reshaping the supply chain since
they are supporting the e-commerce giants and 3PLs to maximize productivity,
minimize long-term costs and eventually optimize the entire process of receiving
orders till successfully delivering them to customers. It can be believed that the future
of complete automation of warehouse activities will be soon achieved as it is one of
the fastest ways to gain a competitive edge in the market.
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REFERENCES
Alessandro Delfanti, 2021. The Warehouse: Workers and Robots at Amazon. Pluto
Press.
Bogue, R., 2016. Growth in e-commerce boosts innovation in the warehouse robot
market. Industrial Robot: An International Journal.
Bogue, R., 2021. Warehouse robot market boosted by Covid pandemic and
technological innovations. Industrial Robot: the international journal of
robotics research and application.
Bolu, A. and Korçak, Ö., 2021. Adaptive task planning for multi-robot smart
warehouse. IEEE Access, 9, pp.27346-27358.
D'Andrea R., 2012. Guest editorial: A revolution in the warehouse: A retrospective on
KIVA systems and the grand challenges ahead. IEEE Transactions on
Automation Science and Engineering, pp. 638-639, Vol.9, No.4.
da Costa Barros, Í.R. and Nascimento, T.P., 2021. Robotic mobile fulfillment
systems: A survey on recent developments and research opportunities. Robotics
and Autonomous Systems, 137, p.103729.
Garg, V. and Agrawal, R. eds., 2020. Transforming management using artificial
intelligence techniques. CRC Pres.
Ghelichi, Z. and Kilaru, S., 2021. Analytical models for collaborative autonomous
mobile robot solutions in fulfillment centers. Applied Mathematical
Modelling, 91, pp.438-457
Guizzo E., 2008. Three engineers, hundreds of robots, one warehouse”. IEEE
Spectrum, Vol. 45 No. 7, pp.26-34.
Guizzo, E., 2008. Three engineers, hundreds of robots, one warehouse. IEEE
spectrum, 45(7), pp.26-34.
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Liang, C., Chee, K.J., Zou, Y., Zhu, H., Causo, A., Vidas, S., Teng, T., Chen, I.M.,
Low, K.H. and Cheah, C.C., 2015, October. Automated robot picking system for
e-commerce fulfillment warehouse application. In The 14th IFToMM World
Congress.
Muller, T., 1983. Automated guided vehicles.
Rotman, D., 2013. How technology is destroying jobs. Technology Review, 16(4),
pp.28-35.
Vakulenko, Y., Shams, P., Hellström, D. and Hjort, K., 2019. Service innovation in e-
commerce last mile delivery: Mapping the e-customer journey. Journal of
Business Research, 101, pp.461-468.
Amazon, 2022. 10 years of Amazon robotics: how robots help sort packages, move
product, and improve safety. Aboutamazon.com. Retrieved from
https://www.aboutamazon.com/news/operations/10-years-of-amazon-robotics-
how-robots-help-sort-packages-move-product-and-improve-safety
CYNGN, 2022. What are the Differences Between AGVs, AS/RS, and AMRs?.
Cyngn.com. Retrieved from https://blog.cyngn.com/differences-between-agv-
asrs-and-amr
DHL, 2022. DHL Supply Chain to Invest $15 Million To Further Automate
Warehousing in North America Via Boston Dynamics Collaboration. Dhl.com.
Retrieved from https://www.dhl.com/us-en/home/press/press-archive/2022/dhl-
supply-chain-to-invest-usd15-million-to-further-automate-warehousing-via-
boston-dynamics-collaboration.html
Lauren Hartzenberg, 2018. Watch robots pack groceries in Ocado's automated
warehouse. Bizcommunity.com. Retrieved from
https://www.bizcommunity.com/Article/196/394/178450.html
Otto Motors D.A.M.A., 2021. A comparison of automated material transport.
Ottomotors.com. Retrieved from https://ottomotors.com/blog/amr-vs-agv-a-
comparison-of-automated-material-transport
PART B
Please refer to the link below for the 3-minute presentation:
https://www.youtube.com/watch?v=7NMZt52_SyY
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