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How Innovative Storage Solved Amazon’s Big-City Delivery Challenge

How Innovative Storage Solved Amazon’s Big-City Delivery Challenge

Everyone’s moving to the city. According to the World Bank, the global population became majority urban in 2010, and today the trend continues: Almost 55% of the global population now live in urban areas. Cities offer attractive spatial efficiencies that exurban life cannot – the grocery store around the corner, the school a few minutes away, the job that may be only as far as your home office.

However, all this urban density has been sending the price of urban land skyward, making it ever more challenging to build warehousing to serve the demands of the growing population. The traditional horizontal warehouse design requires a substantial real estate footprint. In crowded cities, the cost of land has made that design financially impractical, and warehouses have been relegated to the suburban fringe.

The growth of online shopping has created a warehousing challenge. Now that same-day delivery has skyrocketed in urban areas, warehouse fulfillment operations have to be located close to their in-town customers. But the old horizontal warehouse design can’t be wedged into the built-up city environment. There is only one way to go, and Amazon, always a fulfillment leader, has taken it.

Borrowing from other space-challenged urban enterprises (see this video about hospitals’ space-saving storage), Amazon is combining robotics and vertical storage to create surprising spatial efficiencies. The company has begun creating mini versions of its suburban warehouses, versions that use a considerably smaller real estate footprint than their massive suburban counterparts.

Its New York City warehouse, for example, is 20% smaller than its standard suburban warehouse, but it handles 50% more inventory thanks to higher-than-usual multilevel rack shelving and narrow robot-suitable aisles. The multilevel shelving system allows Amazon to store products right up to the ceiling, and because the robots’ search and retrieval time is so speedy, the warehouse employs more people than the average fulfillment operation, to perform quality control and other specialized tasks.

Efficient space utilization is the key to Amazon’s same-day delivery success, and it’s a principle that has application not just in warehousing but in many other industry sectors, from healthcare and biotech to educational and cultural institutions. High-density storage, like the high population density of cities, offers efficiencies that translate into profits. How would your business benefit from a reduced storage footprint?

 

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