Supply Chain weekly wrap-up: 5/10/2019 – 5/16/2019

Amazon installs robot packing system that will replace workers

E-commerce giant Amazon is rolling out robot packing machines to automate a key part of its order fulfillment process. The new machines, known as CartonWrap, are produced by Italian firm CMC Srl, which has already tested packing technology with JD.com and Walmart. The robots can reportedly pack 600-700 boxes per hour – 4 to 5 times the packing rate of a human worker.

Over recent years, Amazon has gradually started to add technology to a select number of warehouses, which scans items along the conveyor belt and envelopes them in custom-built packaging instantaneously. The company has considered installing two machines at dozens more of its warehouses, replacing at least 24 job roles at each one. It’s estimated that this would lead to more than 1,500 job cuts across 55 US fulfillment centers. At $1 million per machine, the company can expect to recover investment costs in under just two years. A spokesperson claimed that instead of laying off employees, Amazon will simply refrain from refilling these positions. Due to the taxing nature of the job, the company’s turnover for packing employees is quite high.

Click here to read more.

Investigation finds procurement “misconduct” at Kraft-Heinz

Kraft-Heinz is set to restate financial statements for 2016, 2017 and the first 9 months of 2018, after an internal investigation that revealed misconduct by “several employees in the procurement area.”

The company is currently under investigation by the Securities and Exchange Commission (SEC). A large number of misstatements were uncovered, largely relating to the “timing and recognition of supplier contracts.” According to CNBC, the misstatements can be directly linked to the company’s bonus structure, which incentivizes procurement and operations workers to show the highest possible cost savings. This culture apparently led to inexperienced workers receiving fast promotions. It was discovered that employees were accelerating the discounts and rebates negotiated with suppliers to show quicker cost-saving results. The total value of misstatements adds up to $208 million.

For a more detailed report, click here.

DHL launches its first regular fully-automated drone delivery service in China

The “world’s leading international express delivery service provider” has recently partnered with intelligent autonomous aerial vehicle company Ehang to launch a fully automated and intelligent drone delivery solution.

DHL’s new customized delivery route, made specifically for its customer, covers approximately 8 km between the customer’s facility and DHL’s service center in Liabou, Dongguan, Guangdong Province. The drones being used are from Ehang’s newly-launched Falcon series, which can complete a journey that would normally take 40 minutes in only 8 minutes, and offers cost savings of up to 80% per delivery. The drones can carry a load of up to 5kg and they will be launched from and land on intelligent cabinets, designed for autonomous loading and off-loading. The cabinets will also feature high-tech functions, such as facial recognition and ID scanning.

Click here for the press release.

Have a nice weekend.