Amazon New Acquisition Puts Robots To Work
March 20, 2012 6 Comments
Amazon.com Inc said on Monday it agreed to buy Kiva Systems Inc for $775 million in cash, a deal that will bring more robotic technology to the e-commerce company’s giant network of warehouses.
The acquisition, which has been approved by Kiva’s stockholders, is expected to close in the second quarter of 2012, Amazon added in a statement.
Kiva develops robots that zip around warehouses, grabbing and moving shelves and crates full of products. The technology helps retailers fulfill online orders quickly and with fewer workers. Companies including Gap Inc, Staples Inc and Crate & Barrel, have used the technology.
Amazon has traditionally used more employees in its warehouses, or fulfillment centers as they are known. However, Kiva’s robots have been used by other e-commerce companies acquired by Amazon in recent years, such as Quidsi and Zappos.
“This is a way to improve efficiency,” said Scott Tilghman, an analyst at Caris & Company. “Given the scale of Amazon’s operations, it makes sense to have this capability in house.”
Fulfillment centers are crucial to Amazon’s main online retail business. But the company also offers fulfillment services to other merchants, making the warehouses even more important.
“Amazon has long used automation in its fulfillment centers, and Kiva’s technology is another way to improve productivity by bringing the products directly to employees to pick, pack and stow,” said Dave Clark, vice president, global customer fulfillment, at Amazon.com.
Amazon has been spending more on fulfillment in recent years as the company opened lots of new warehouses to handle the rapid growth of its business.
Fulfillment costs as a percentage of revenue rose to more than 9 percent in 2011, from just over 8 percent in 2010, according to Aaron Kessler, an analyst at Raymond James.
“That’s been a big focus for investors recently,” Kessler said. “It’s a big cost. They are shipping so much and increasing volume so they need to figure out how to get more leverage out of these fulfillment centers.”
I guess that’s supposed to be good, but with so many jobs going robotic, pretty soon these companies are going to see dips in sales. People can’t buy anything when they don’t have a job.
those are some expensive robots
Employment numbers are never going back up. Jobs are running at full speed away from humans and away from the US. Good Luck America, you are going to need it.
What’s wrong with taking advantage of technology to decrease human exposure to risk and injury? This should be another wake up call to invest in education… Americans should be leading the wave of INVENTING this technology, repairing and maintaining it, not grumbling that their skill set is so rudimentary that a machine can do it. But that workforce transformation is impossible without the training and education needed to get an entire generation there.
need to invest in the economy and bring back human jobs. Robots are killing this country. Remember when you use to call customer service and actually had a human PICKUP the phone now u talk to an “automated system” for 15 minutes to speak to a real live person smh
robots are taking over the world