If you remember back a decade ago, the e-grocery firm Webvan outfitted warehouses with 4.5 mile long mazes of conveyor belts and carousels meant to sort, box, and deliver groceries. The idea and company was a bust, going belly up in 2001. But its founder, Mick Mountz, decided that what was missing was robots. So in 2003, he founded Kiva Systems to provide warehouses so automated that any e-commerce firm could compete with Amazon. “Now you can get Amazon in a bottle”, says Mountz. “Everyone can have what Amazon has”.
According to this week’s Businessweek (Nov.10,2010),Kiva’s technology provides the backbone of Diapers.com, Zappos.com, and a dozen other retailers. Its squat orange robots scurry around warehouses and bring shelves of clothes, car parts, electronics, or whatever the product, to packing stations. There, humans pack and ship. The cheapest system ($1 million), comes with 30 robots and 2 packing stations. Most systems cost $4-6 million.
Kiva integrates with existing inventory management software and is smart enough to continuously reorganize inventory based on order flow. If there is an uptick for one SKU, the robots place that item closer to workers.
Here is an entertaining 4 minute video of the robots at work.
Discussion questions:
1. Why did Webvan fail?
2. What did Kiva do to change warehouse management?
3. What other kinds of firms could benefit from this approach?
Great video! This is a very easy visual way to demonstrate the wave of the future: robots. I’m putting this in my Chapter 9 (Layout Strategies)lecture right away.
Thanks!