When Amazon threw open the doors to their Innovation Lab outside Milan for the first time, BUSINESSiQ Editor Mike Hughes was one of the journalists invited to see inside the cutting edge ideas coming to your local Amazon warehouse soon.


Trying to get inside the head of an Amazon boss can be a tricky.

We’ve all driven past the vast warehouse - fulfilment centres – around the North East and wondered what goes on inside – but also what part they might play in the whole Amazon Universe.

But getting to ask those questions and make the whole Amazone operation more digestible for everyone isn’t easy.

I don’t have Jeff’s phone number – maybe nobody does….

So to be invited to look inside the place where all the Amazon ideas start out was a rare chance to tap into the Bezos brain – and the fact that it was a few miles from Milan made it, well, even more vital as far as I was concerned.

So the passport was requested and the words for ‘hello’, ‘thank you’ and ‘I don’t know officer – I’ve only just regained consciousness’ were Googled and rehearsed and the doors to Amazon opened a little wider.

We have previously been given exclusive access to the vast new £450million Amazon Fulfilment Centre at North Chapel Lane in Stockton. With the trademark blue smile underlining the company name, the brand is sweeping across the North East.

This was Amazon’s fourth centre in the region following the opening of centres in Darlington in May 2020, Durham in September 2020 and Gateshead in September 2021.

The centres are almost exact copies of each other, with a tried and trusted company template for every conveyor belt, robot, scanner, nut and bolt to handle a never-ending stream of inbound and outbound parcels.

And, of course, there are jobs - the 2,000 new roles created here will take Amazon’s total workforce in the North East to 6,000 full and part-time roles, and the company’s investment in the region to more than £1.7 billion since 2010.

Over in Italy, Amazon is using its Innovation Lab, home to a diverse team of scientists and engineers from all over the world, to develop and test new technologies that will be used to hone every process in those North East centres and make packaging and dispatching even more impressive.

Next-day delivery of pretty much anything is an amazing breakthrough. So what’s next?

Nestling among the centuries-old rice fields of Vercelli, in northern Italy, the lab is one of Europe’s most advanced centres for robotic innovation, an international centre of excellence for advanced robotics and AI-powered innovations.

Established in 2017, the lab serves as the hub for the global Mechatronics & Sustainable Packaging team, which was formed in 2019 and by the end of this year will have been responsible of the installation of more than 1,000 new breakthroughs, representing an investment of more €700 million and covering almost every are, from item sorters and pallet movers to packagers and automated guide vehicles.

With each technology comes different skill requirements, and in many cases the creation of new specific roles. Amazon chooses its words carefully, saying over 50,000 jobs in fulfilment centres across Europe have been ‘enhanced’ by the introduction of new technologies, ‘supporting’ employees in their roles.

While I was there the script was well rehearsed. There were a lot of smiles and excitement at what colleagues were doing and the applauded walk from behind a curtain for the senior team as they were introduced at the media briefing was very special. Amazon just needs to relax a little, puts its trainers on and chat over a beer - but there is no doubting the skills level here.

The lab also serves as a training centre for Amazon Robotics operators, as well as a testing ground for start-ups receiving funding and guidance through the Amazon Industrial Innovation Fund. Stefano La Rovere, Director, Global Robotics - Mechatronics & Sustainable Packaging, tells us: “We are proud to open the doors of our lab, not only as a hub of innovation for Amazon, but to encourage customers, schools, and start-ups to be inspired and learn about the potential for technologies to create a better and safer future of work.

“At Amazon, our commitment to thinking big runs deep – over five years to the end of 2024, we will have invested over €700 million in the deployment of more than 1,000 robotics systems across our European network. In addition, the introduction of new technologies over the last ten years has enhanced 50,000 new jobs within our operations in Europe.

“The lab is host to a diverse and international team of engineers and scientists dedicated to finding innovative ways to enhance everyday tasks for our employees, providing a safer workplace while consistently delivering for our customers.”

Unveiling a Universal Robotic Labeler for the media can be challenging, but this is an astonishing piece of kit that improves label placement and adhesion on irregular surfaces. Its innovation lies in its ability to apply different types and dimensions of labels, and on different types of irregularly shaped products. It means smaller labels can be applied, reducing packaging size and it can place labels on paper bags or directly on products, eliminating the need for additional packaging.

Amazon staff in the lab deserve their moment of theatre – their own industry is transforming to the extent that soon they will be designing and testing a Universal Robotic guide to show the press round the lab, and then a Universal Robotic waiter to serve our food and drink before the Universal Robotic bus driver takes us back to the hotel.

But their work needs to be viewed in a wider context – this isn’t only about packaging a set of screwdrivers, it’s about developing a relationship with robots and learning from each other across every industry - keeping the lead role as the supporting cast grows every stronger behind you.

With GPT-4 now rewriting the rules for AI, and Amazon designing robots that do things better than we do, it’s clear that the future is going to be…different.

Here’s what that supporting cast looked like at our Innovation Lab tour:

Universal Item Sorter

The UIS ensures that thousands of products are efficiently sorted into shipping locations every day. The system utilises advanced wireless technology to move shuttles, called iBOTs, that travel in various directions carrying the items and delivering each to a container already matched to its final destination. Amazon says the UIS minimises physical strain on employees, but it can accommodate up to 40 different containers, corresponding to 40 different destinations, in a compact footprint which allows them to reduce the dimensions of buildings and energy consumption.

Automated Tote Retriever

A shuttle connected to the UIS moves on a rail track along the full length of the UIS wall and receives notifications when a tote (or container) is full. In response, the shuttle moves towards the full tote, using a special gripper to replace it with an empty one. Once completed, the UIS resumes delivering items to this location, repeating the process seamlessly.

Bag Containerisation Matrix Sorter

The BCMS works by identifying and grouping parcels with the same end destination within fulfilment centres. The system categorises packages into transportation bags, ready for last mile delivery. This avoids unnecessary ‘double touch’ of the same parcel.

Automated Guided Cart

The AGC is a flat, autonomous robot on wheels that slides under stacks of empty totes, and automatically carts them around fulfilment centers. In so doing, it reduces the need for employees to push or carry heavy loads over long distances. Sensors on the bottom of the robot read a magnetic tape on the floor to self-navigate, while safety scanners detect if any people or obstacles are in the way so the AGC can slow down or stop until the path is clear.

Flat Sorter Robotic Induct

Robots love things to be in order, and the FSRI is a clever piece of kit that ensures packages move through at a smooth, steady, and ordered rate. With smart vision sensors, it spots packages wherever they end up on the conveyor, and a nifty robotic arm swoops in to pick them up and send them on their way. The robot's 'hand' uses suction cups to smoothly handle all sorts of packages.

Robotic Tote Palletiser

The RTP has two robotic arms working together to condense several totes into neat, double-stacked pallets. The first arm gathers three or four layers of totes on a single pallet, while the second stacks two pallets on top of each other, creating a single unit. The RTP then ties everything safely together with straps, and applies a shipping label, before an employee moves the double stack safely into a trailer destined for the shipping dock.

Automated packaging technologies

Amazon's automated packaging creates custom-fit paper bags on demand by scanning items and calculating the right amount of paper needed for quick and accurate packing. This machine packs individual items – such as video games, sports equipment, and office supplies – in made-to-measure paper bags which are durable and flexible. Using heat-sealing technology, it secures each bag, minimising empty space. By packing items in 100% recyclable light paper packaging, which is made-to-fit without the need for padding, the machines help to avoid more than 26 grams of packaging per shipment, on average. Lightweight paper bags used by Amazon are up to 90% lighter than similar-sized cardboard boxes.

Amazon Robotics Floor

The Amazon Robotics Floor is the heart of a fulfilment centre. It transforms inventory management while prioritising employee safety and comfort in space where technologies work together in harmony with people to store and pick millions of items. Thousands of AR (Amazon Robotics) drive units efficiently navigate under the yellow pods, bringing them to ergonomic workstations and back to the inventory storage area. This eliminates the need for employees to walk long distances transporting items.

One of the group’s big driving forces is sustainability – Amazon’s footprint on our planet is getting bigger every day, so they are very keen to cut things like packaging to the bare minimum.

One in two Amazon shipments in Europe are now delivered without a box, thanks to that packaging reduction innovation

Also, more than 50% of Amazon European shipments now come in reduced, recyclable delivery packaging, such as a paper bag or cardboard envelope or – in the case of 700 million shipments since 2019 – no added packaging at all

Amazon is thinking outside the box.

Instead of its iconic corrugated box with a smile logo, more than 50% of European shipments now come in reduced, recyclable delivery packaging, such as a paper bag or cardboard envelope—or with no added packaging at all through Amazon’s Ships in Product Packaging programme.

Ships in Product Packaging is used for eligible items that don’t require any additional Amazon packaging at all—the products ship in the original manufacturer’s packaging, with only a customer address label added. In addition to waste reduction, no added packaging can also mean shipments are lighter, which leads to reduced delivery emissions per package, as well as less to recycle.

For items that need additional packaging, Amazon uses paper bags and card envelopes which are up to 90% lighter than similar-sized corrugated carboard boxes, require less packaging material, and result in less empty space in each package shipped.

Pat Lindner, VP of Mechatronics and Sustainable Packaging at Amazon told us: “Customers know Amazon for our cardboard delivery boxes, but more than half of our deliveries in Europe now come in lighter packaging such as paper bags or card envelopes, or with no added packaging at all.

“We are committed to using machine learning and artificial intelligence to reduce packaging and be more sustainable for our customers, and the Operations Innovation Lab in Italy is at the forefront of those efforts.”

In February this year, Amazon started offering incentives to third-party sellers enrolled in the Fulfilment by Amazon programme to re-engineer their packaging and certify their products under the Ships in Product Packaging programme.

When additional Amazon packaging is required to ship a product, Amazon uses paper-based packaging that can be easily recycled in customers’ household recycling. In Europe, all of its delivery packaging is recyclable. This includes delivery packaging for items sold directly by Amazon, and third-party selling partners.

Over the last several years, Amazon has significantly reduced packaging using Artificial intelligence and machine learning to identify products that can be safely delivered in lighter, smaller packaging. The Packaging Decision Engine is an AI model helping to determine the most efficient packaging options to ship millions of items available to Amazon customers. Data scientists have trained the model to understand a variety of product attributes, including an item’s shape and durability, and to analyse customer feedback on how different packaging options have performed. The model is constantly learning and has helped reduce the company’s use of packaging.

Amazon is also testing a new recyclable paper-padded envelope across Europe. The envelope is made entirely from paper, with the paper padding inside the mailer providing the required protection to the products inside. When packages are the right size, Amazon can fit more of them in every van, leading to fewer van journeys, which in turn helps with its goal to be net-zero carbon across all operations by 2040.

Using an in-built sensor, Amazon’s robots scan items which were previously sent in boxes and cardboard folders—and then cuts a continious paper bag at precisely the right point, seals it and sends it on its way.

The Innovation Lab is quite a place - almost shocking in its potential, but downright impressive in its tech and foresight.

That Amazon smile is getting broader all the time.