(Photo: Brent Humphreys/Redux)
The next time you order a book from Amazon, the first respondent might be a footstool-sized orange robot carrying a blue shelf. The e-commerce giant recently completed a US$775-million purchase of robot-maker Kiva Systems of Massachusetts, and is planning to put its new acquisition to work.
The Kiva bots, which zip around warehouse floors like supercharged Roomba vacuums, receive orders wirelessly and use directional bar-code stickers on the floor to deliver items to human employees who pack them for shipment. And while Kiva solutions can be 20% more expensive than the conveyor belts and forklifts they replace, they are more efficient and mercifully quiet. Rumours that Amazon would buy Kiva had been circulating since the company acquired online shoe retailer Zappos.com in 2009. At Zappos, the Kiva system reportedly doubled productivity and halved the cost of energy in less than a year. Kiva robots have also had good results at the Gap, Staples, and Crate & Barrel.
Even though Kiva is well established, the news of Amazon’s acquisition prompted a question that often accompanies robotic success: What happens to the humans? The machines, which don’t take sick days or get tired, certainly will increase efficiency. In fact, one of the touted benefits of Kiva is that the robots allow for fast cycle times and reduced labour requirements.
But while this automation might not be good for job security, it may be the solution to the rising cost of fulfilling orders. This is the company’s greatest operating expense, and Amazon shareholders have put pressure on the company to drive down costs. For Amazon, the robots aren’t just carrying orders, they’re boosting investor confidence that the company will soon reach more customers for less.