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11.10 Solutions to Order Fulfillment Problems Along the Supply Chain 367

Same-Day Delivery is received, it is entered into a database on the computer that
controls the robots. Software on the same computer searches
We covered this topic in Chapter 3 as it related to groceries. for the bot that is closest to the pod, and directs the bot via
Also cited there is the increased competition. In addition to wifi to retrieve the pod holding the item. At this point, the bot
Amazon Fresh many other companies are active in the mar- follows a series of QR code reflectors placed on the floor
ket. Notable are Instacart, Postmates, and Google Express. (like lane markers on a road) to find the correct pod, the bot
But, same-day delivery does not only apply to groceries. slides under the pod, lifts it, and carries it back to a specified
Amazon is starting same-day delivery of everything in sev- human operator. The operator picks out the correct item and
eral large cities. Google Shopping Express is active too, and puts it in a shipment package. Hence, the moniker goods-to-
so are eBay, Uber Rush, and others (Bowman 2014). For a man. At this point the bot is ready to go again. Bots travel
discussion of one hour delivery, see Halkias (2015). about 1.3 m a second and require recharging about every
hour for 5 min.
Kiva’s approach to automated handling systems for
Partnering Efforts and Outsourcing Logistics e- fulfillment also works well with in-store re-stocking, parts
distribution, and medical device distribution operations.
An effective way to solve order fulfillment problems is for an Thus far, the system has proven to be more accurate and effi-
organization to partner with other companies. For example, cient than humans.
several EC companies have partnered with UPS or FedEx; At the time Kiva was originally purchased, it was also
others with Fulfillment by Amazon and Alibaba’s Tmall (as being used by other retailers like Walgreens, Staples, Crate
discussed in the Opening Case of this chapter). & Barrel, and The Gap. Almost immediately, Amazon ended
Logistics-related partnerships can take many forms. For Kiva support for these outside companies. In the interim a
example, marketplaces may be managed by one of many freight series of new robot competitors moved to fill the void. Some
forwarders such as A & A Contract Customs Brokers, a com- examples are Swisslog’s CarryPick (swisslog.com/carrypick),
pany that helps other companies find “forwarders.” Forwarders GrayOrange’s Butler (greyorange.com/products/butler), and
help prepare goods for shipping and work with carriers to deter- Grenzeback’s Carry AGV (grenzebach.com). While there are
mine the optimal way to ship. Forwarders can also find the least some differences in terms of speed, strength, and delivery tar-
expensive prices on air carriers, and the carriers bid to fill the gets (e.g., conveyors), almost all operate on the same goods-
space with forwarders’ goods that need to be shipped. to-man principle. See Tobe (2015) for details about these and
other systems.
Using Robots for Order Fulfillment Another area where these seems to be interest in using
robots is with make-to-order fulfillment. Robots have long
In 2012, Amazon bought a robot company called Kiva been involved in manufacturing, especially in the auto indus-
Systems for $775 million. Today, 30,000 Kiva robots have try. Most of the older versions deployed in auto factors were
been deployed to about 15 of Amazon’s larger fulfillment large, cumbersome, and dedicated to a single task like weld-
centers. The robots are used to assist workers with picking ing or painting. More recently, smaller bots are being pro-
and packing activities. There are several videos on the Web duced that are “smarter, more mobile, more collaborative,
that illustrate how they go about their work (e.g., vimeo. and more adaptable” (Hagerty 2015). Some of these have
com/113374910). been designed to handle the tricky job of assembling
They operate a bit differently than one might think consumer- electronic items from standard parts (MTO) which
(Valerio 2015). The items to be picked and packed reside in is now mostly done by hand in Asia. They are also designed
bins on moveable pallets called pods. A single pod can hold to assist humans rather than replace them. A case in point is
hundreds of items. Fully loaded the pods can weigh up to a bot product from the partnership of ABB Ltd. and Rethink
3000 lbs. At first blush, the logical thing to do would be to Robots, Inc. They are designed to handle small parts and to
use the man-to-goods method. In other words, if you need an sense when parts are being assembled incorrectly. They are
item, simply send a bot to retrieve it. In reality, Kiva works also more programmable so they can adapt very quickly to
the other way around—the goods-to-man method. new requirements and uses. To see the bot in action, go to
There are two types of bots both of which look sort of like rethinkrobotics.com.
big Roombas, the robot vacuum cleaners, except they are There is a strong belief among the proponents of these
square not round. One type, the S model, is 2 × 2.5 × 1 foot sorts of robotic applications that they enable small compa-
and can lift close to 1000 lbs. The other type, a G model, is a nies to better compete against larger companies, and for com-
bigger version and can lift up to 3000 lbs. Both of them can panies in higher wage countries to better compete against the
fit under the bottom section of the pods. When an item order likes of China and other lower wage countries.