Wednesday, February 10, 2016

Amazon Hints at New Shipping Business

Recently in class, I learned about Amazon’s robotics program that has been used in their warehouses to make their shipping faster and more cost friendly. Right now, they have “autonomous mobile robots,” who look like stepping blocks with wheels underneath. The robots they have now organize Amazon’s inventory inside their warehouses, which makes the process of finding an item on an order, packing it, and shipping a lot faster.
Recently in a security filing, Amazon mentions “companies that provide fulfillment and logistical services for themselves or for third parties.” Competition in the online marketplace has been booming since the World Wide Web came to be. Obviously, Amazon is keeping a close eye on its competition and making sure their partners are satisfied. One of reasons of Amazon’s massive success has been their ability to keep their shipping costs down, and their deliveries fast. This is due to their warehouses, truck services, and their logistics department which continues to look into technology constantly. They have reportedly been developing drones to carry packages to their customers through flight instead of the traditional ground delivery.
               With Amazon viewing their competition, they would consider opening up their logistics program to third parties, especially their partners, in order to continue the efficiency of their shipping process. I believe it will help their partners stay up to the latest technology. Keeping their partners up to date and even expanding their services to other parties will help Amazon reach their goals for shipping and inventory management.
               The cons to all of this include the implementation of the technology. Amazon’s logistics services were created to improve their business practices. To put these services into another company, it might take a lot of time for that company to adapt to these new services. Another problem that might arise would be any errors that occur with the robots. Anything that is made mechanically tends to break down at some point, including smart phones, computers, and rides at an amusement park. Usually when someone experiences problems with their computer, for example, they go to a technology center like Geek Squad or a computer repair shop in order to solve the problem. These problems are usually fixed by humans, and if the services that Amazon provides breaks down, the third party company must have workers skilled in solving the error.

               It is easier said than done for any company like Amazon to expand their resources to third parties and find tremendous success. However, it is a great risk to take as Amazon continues to build out and expand their business throughout the world. They are the leader of the online retailer business, and any company would be happy to work with them. For now, they will continue to improve their business with their current partners, but the company will always look into the future and what it may look like.

1 comment:

  1. Amazon’s robotics program is an example of the technology based world that has evolved over time. The use of robots in factories and workplaces has created a major change that has caused more efficiency, but also a lot of unemployment. Since robots are starting to be able to take over many different positions in a company, many branches of companies, including Amazon, seem to be losing positions needed to be filled by real people, resulting in mass amounts of firing and unemployment. I think one of the greatest things about Amazon, especially if you are a prime member, is their ability to ship products so fast. Amazon makes it convenient to have an extremely large variety of goods shipped to your doorstep in the matter of 1-2 days or sometimes a little longer. Their shipping fees are also very reasonably priced. I think the use of robotics in warehouses to make shipping faster and more cost friendly for customers is a great idea because consumers today demand instant gratification. If Amazon is not able to deliver something fast enough and cheap enough, chances are the customer will be able to find a similar or exact product at a competitive price that can be shipped at a faster rate. The only concern I have for the use of robotics is the cost it will take to convert their entire business to robotics in factories. I think it will be extremely costly to install these robots and maintain them and because it is said to create more friendly shipping costs, I wonder if this change will be enough to cover the fees of converting to robotics. Although I know Amazon will not have to pay for the salaries of workers they will be replacing and the robots can work at a faster pace, I wonder if the faster change in deliveries will result in an increase in sales that will be beneficial if you have robots that can locate, pack, and ship products faster. If Amazon is investing so much in robots, I think it will be in their best interest to try to bring in more sales to get the most out of the robots while trying to cover the costs of converting to robotics. Another problem I could see Amazon facing is the chance of these robots not functioning properly when first installed. Also I think the maintenance on these robots could become a problem for Amazon, leading to “workers” unable to package and ship these goods for a period of time. Although Amazon might have some problems ahead of them while switching to robotics and drones, I think Amazon is smart for taking a lead with advanced technology and will definitely benefit in the long run from this change.


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