translator: bob prottasreviewer: nhu pham for the next few minutesi want to talk to you about... or share with you abreakthrough new approach for managing items ofinventory inside of a warehouse. we're talking about a pick,pack and ship setting here. so as a hint, this solution involveshundreds of mobile robots, sometimes thousandsof mobile robots, moving around a warehouse.and i'll get to the solution.
but for a moment, just think about the last time you ordered something online. you were sittingon your couch and you decided that youabsolutely had to have this red t-shirt. so click you put itinto your shopping cart. and then you decidedthat green pair of pants looks pretty good too, click. and maybe a bluepair of shoes, click. so at this point you'veassembled your order.
you didn't stop to think for a moment that that might not be a great outfit. but you hitsubmit order. and two days later, this packageshows up on your doorstep. and you open the box and likewow, there's my goo. did you ever stop to think abouthow those items of inventory actually found their way insidethat box in the warehouse? so i'm here to tell you it's that guy right there. so deep in themiddle of that picture
you see a classicpick pack worker in a distribution ororder fulfillments setting. classically these pick workerswill spend 60 to 70% of their day wandering aroundthe warehouse. they'll often walkas much as 5, 10 miles in pursuit ofthose items of inventory. not only is this anunproductive way to fill orders, it also turns out to be anunfulfilling way to fill orders. so let me tell you where ifirst bumped into this problem.
i was out in the bay area in 1999-2000, the dot com boom. i worked for a fabulouslyspectacular flame out called webvan. (laughter) this company raised hundreds ofmillions of dollars with the notion that we will delivergrocery orders online. and it really came down to the factthat we couldn't do it cost effectively. turns out e-commerce was somethingthat was very hard and very costly. in this particular instance we were tryingto assemble 30 items of inventory into a few totes, onto a vanto deliver to the home.
and when you think about it,it was costing us $30. imagine, we had an89-cent can of soup that was costing us $1 topick and pack into that tote. and that's before we actuallytried to deliver it to the home. so long story short,during my 1-year at webvan, what i realized by talking to all the material-handling providers was that there was no solution designedspecifically to solve each base picking. red item, green, blue, gettingthose 3 things in a box. so we said, you know, there's justgot to be a better way to do this.
existing material handlingwas setup to pump pallets and cases ofgoo to retail stores. of course webvan went out of businessand about a year and a half later, i was still noodling on this problem.it was still nagging at me. and i startedthinking about it again. and i said "let me just focus brieflyon what i wanted as a pick worker." what my vision forhow it should work. i said "let's focuson the problem." i have an order here and whati want to do is i want to put
red, green and bluein this box right here. what i need is a system where i put outmy hand and poof! the product shows up and i pack it into the order, and now we're thinking, "this would be a very operator-centricapproach to solving the problem. this is what i need. what technologyis available to solve this problem?" but as you can see, orders can comeand go, product can come and go. it allows us to focus on making thepick worker the center of the problem, and providing them the tools to makethem as productive as possible.
so how did iarrive at this notion? well, actually it came froma brainstorming exercise, probably a techniquethat many of you use, it's this notion oftesting your ideas. take a blank sheet of course, but then test your ideasat the limits. infinity, zero... in this particular case, wechallenged ourselves with the idea: wwhat if we had to build adistribution center in china, where it's a very,very low cost market?
and say, labor is cheap,land is cheap. and we said specificall: "what if it was zero dollarsan hour for direct labor and we could build a millionsquare foot distribution center?" so naturally thatled to ideas that said: "let's put lots of peoplein the warehouse." and i said: "hold on,zero dollars per hour, what i would do is "hire" 10,000 workers to come to thewarehouse every morning at 8:00 am,
walk into the warehouse andpickup 1 item of inventory and then just stand there. so you hold captain crunch,you hold the mountain dew, you hold the diet coke. if i need it, i'll call you,otherwise just stand there. but when i need diet coke and i callyou guys talk amongst yourselves, diet coke walks up to the front,pick it, put it in the tote, away it goes." like wow, what if the productscould walk and talk on their own? that's a very interestingvery powerful way
that we could potentiallyorganize this warehouse. so of course,labor isn't free, on that practicalversus awesome spectrum. so we said mobile shelving.we'll put them on mobile shelving. we'll use mobile robots andwe'll move the inventory around. and so we got underway on that andthen i'm sitting on my couch in 2008. did any of you see the beijingolympics, the opening ceremonies? i about fell out of mycouch when i saw this. i'm like, that was the idea!
(laughter and applause) we'll put thousands of people onthe warehouse floor, the stadium floor. but interesting enough, thisactually relates to the idea in that these guys were creating someincredibly powerful impressive digital art, all without computers,i'm told, it was all peer-to-peercoordination and communication. you stand up,i'll squat down. and they madesome fabulous art. it speaks to thepower of emergence
in systems when you let thingsstart to talk with each other. so that was a littlebit of the journey. so of course, now what becameof the practical reality of this idea? here is a warehouse. it's a pick, pack and ship centerthat has about 10,000 different sku's. we'll call them red pens,green pens, yellow post-it notes. we send the little orange robotsout to pick up the blue shelving pods. and we deliver themto the side of the building. so all the pick workers nowget to stay on the perimeter.
and the game here isto pick up the shelves, take them down the highway anddeliver them straight to the pick worker. this pick worker's lifeis completely different. rather than wandering aroundthe warehouse, she gets to stay still in a pick station like this and every product in thebuilding can now come to her. so the processis very productive. reach in, pick an item,scan the bar code, pack it out. by the timeyou turn around,
there's another product thereready to be picked and packed. so what we've done is takeout all of the non-value added walking, searching,wasting, waited time, and we've developed a very high-fidelity way to pick these orders, where you point at it witha laser, scan upc barcode, and then indicate with a lightwhich box it needs to go into. so more productive, moreaccurate and it turns out it's a more interesting officeenvironment for these pick workers. they actually completethe whole order.
so they do red, green and bluenot just a part of the order. and they feel a little bit morein control of their environment. so the side effectsof this approach are what really surprised us. we knew it was going to be more productive. but we didn't realize just howpervasive this way of thinking extended to otherfunctions in the warehouse. but what effectively this approachis doing inside of the dc is turning it into a massivelyparallel processing engine.
so this is again across fertilization of ideas. here's a warehouseand we're thinking about parallel processingsupercomputer architectures. the notion here is that you have 10 workers on the right side of the screen that are now all independentautonomous pick workers. if the worker in station 3 decidesto leave and go to the bathroom, it has no impact on theproductivity of the other 9 workers. contrast that, for a moment, with thetraditional method of using a conveyor.
when one personpasses the order to you, you put something inand pass it downstream. everyone has to be in placefor that serial process to work. this becomes a more robustway to think about the warehouse. and underneath the hoods getsinteresting in that we're tracking the popularityof the products. and we're using dynamicand adaptive algorithms to tune the floorof the warehouse. so what you see here potentiallythe week leading up to valentines' day.
all that pink chalky candy hasmoved to the front on the building and is now being picked into alot of orders in those pick stations. come in two days after valentine's dayand that candy, the leftover candy, has all drifted to theback of the warehouse and is occupying the coolerzone on the thermo map there. one other side effect of thisapproach using the parallel processing is these things canscale to ginormous. so whether you(re doing2 pick stations, 20 pick stations, or 200 pick stations, thepath planning algorithms
and all of the inventoryalgorithms just work. in this example yousee that the inventory has now occupied all theperimeter of the building because that's wherethe pick stations were. they sorted itout for themselves. so i'll conclude withjust one final video that shows howthis comes to bear on the pick worker's actualkind of day in the life of. so as we mentioned, the process isto move inventory along the highway
and then find your wayinto these pick stations. and our software in the background understands what's going on in each station, we direct depositacross the highway and we're attempting toget into a queuing system to present the workto the pick worker. what's interesting is we can evenadapt the speed of the pick workers. the faster pickers get more podsand the slower pickers get few. but this pick worker now isliterally having that experience
that we described before. she puts out her hand.the product jumps into it. or she has to reach in and get it. she scans it and she puts it in the bucket. and all of the rest of the technologyis kind of behind the scenes. so she gets to now focus on thepicking and packing portion of her job. never has any idle time,never has to leave her matt. and actually we thinknot only a more productive and more accurateway to fill orders.
we think it is a morefulfilling way to fill orders. the reason we can saythat though is that workers in a lot of thesebuildings now compete for the privilege of workingin the kiva zone that day. and sometimes we'll catchthem on testimonial videos saying such things as, they have more energy after theday to play with their grandchildren, or in one case a guy said, "thekiva zone is so stress-free that i've actually stopped takingmy blood pressure medication."
that was at a pharmaceutical distributor.so they told us not to use that video. so what i wanted to leave youwith today is the notion that when you let things startto kind of think and walk and talk on their own, interestingprocesses and productivities can emerge. and now i think next timeyou go to your front step and pick up that box thatyou just ordered online, you break it open andthe goo is in there, you'll have some wondermentas to whether a robot assisted in the pickingand packing of that order.
thank you (applause)
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