Robots and the Great Asian Warehouse Makeover

In the News
August 07, 2016

Is this any way to run a business?

Warehousing and distribution centers in Asia are far from being as competent, speedy, or cost-efficient as they should be. As such, they are losing out on billions of dollars of revenue and missing daily opportunities in e-commerce.

With 3.5 billion of the world’s 7 billion people living in Asia and e-commerce soaring, Asian warehouses and distribution centers will need a complete makeover, just to meet basic demands of holding inventory and then expeditiously getting it to customers.

Asia, especially East Asia, where warehouses have the most to gain or lose with e-commerce, is particularly needy.

Jeff Bezos CEO of Amazon says that two things about shipping goods from a warehouse that will never change are: people’s desire for lower prices, and faster delivery.

Bezos is accomplishing the holding inventory and delivery parts of the warehouse equation with robots. Amazon distribution centers were early adopters of robots (in 2012 Amazon acquired Kiva Systems for $775 million).

A Deutsche Bank study of Amazon’s robot-driven warehouses revealed the “’click to ship’ cycle used to be around 60-75 minutes when employees had to manually sift through the stacks, pick the product, pack it, and ship it. Now, robots handle the same job in 15 minutes.”

Prologis, a global industrial real estate investment trust, owner of 4,700 logistics and distribution facilities across the Americas, Asia and Europe, was swift in its analysis of woeful logistics operations in both Japan and Korea:

Japan

“The vast majority of Japanese warehouses that exist today are cramped, tired spaces designed for storage and ill-suited for use as fast turnaround distribution facilities.”

Korea

“It is estimated that 95 percent of the existing inventory of warehouse and distribution floor space is outdated and obsolete. South Korea’s supply chain operations and practices have...

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