Home » Amazon » How Amazon Triggered a Robot Arms Race

How Amazon Triggered a Robot Arms Race

29 June 2016

From Bloomberg:

An Amazon warehouse is a flurry of activity. Workers jog around a manmade cavern plopping items into yellow and black crates. Towering hydraulic arms lift heavy boxes toward the rafters. And an army of stubby orange robots slide along the floor like giant, sentient hockey pucks, piled high with towers of consumer gratification ranging from bestsellers to kitchenware.

Those are Kiva robots, once the marvel of warehouses everywhere. Amazon whipped out its wallet and threw down $775 million to purchase these robot legions in 2012. The acquisition effectively gave Jeff Bezos, its 52-year-old chief executive, command of an entire industry. He decided to use the robots for Amazon and Amazon alone, ending the sale of Kiva’s products to warehouse operators and retailers that had come to rely on them. As contracts expired, they had to find other options to keep up with an ever-increasing consumer need for speed. The only problem was that there were no other options. Kiva was pretty much it.

It’s taken four years, but a handful of startups are finally ready to replace Kiva and equip the world’s warehouses with new robotics. Amazon’s Kiva bots proved this kind of automation is more efficient than an all-human workforce. The new robots being rolled out look different, partly because the industry is still experimenting and partly because of patent issues. Some focus on picking items off shelves, others zoom around with touch screens. All are aimed at saving retailers money as they race to get their wares to your doorstep as quickly as possible.

Amazon has about 30,000 Kiva robots scuttling about its warehouses across the globe. Dave Clark, the retailer’s senior vice president of worldwide operations and customer service, estimated the addition of the bots reduced operating expenses by about 20 percent. According to an analysis by Deutsche Bank, adding them to one new warehouse saves $22 million in fulfillment expenses. Bringing the Kivas to the 100 or so distribution centers that still haven’t implemented the tech would save Amazon a further $2.5 billion.

“To be great in e-commerce, you need to be sophisticated inside the warehouse,” said Karl Siebrecht, chief executive at Flexe, which bills itself as the Airbnb for warehouse space.

. . . .

But it’s really only Amazon that has this kind of technology at scale, thanks in large part to Kiva. The world’s biggest retailers, including Wal-Mart Stores Inc., Macy’s Inc., and Target Corp., have yet to populate their warehouses with widespread robotic systems. They rely on the old method—otherwise known as humans: Hordes of pickers and packers who send boxes down conveyor belts.

. . . .

“I have as no idea if this is as far as Amazon wants to take it,” said Jason Helfstein, an analyst at Oppenheimer & Co. “Do you get into autonomous vehicles? Self-driving trucks?”

. . . .

In June, [Bezos] divulged that Amazon has been working on artificial intelligence for four years and now devotes more than 1,000 staffers to it. “It’s probably hard to overstate how big of an impact it’s going to have on society over next 20 years,” he said.

Link to the rest at Bloomberg and thanks to Matt for the tip.


11 Comments to “How Amazon Triggered a Robot Arms Race”

  1. It’s best to steal your ideas from the guy doing it the best, rather than copying the rest.

    And when they complain about Amazon, what do we tell them to do? We tell them to do it better than Amazon if they want to beat Amazon. Seems some of them want to stay in business after all.

  2. It’s utterly fascinating.

    I can see why Amazon wanted to keep the idea from other warehouses, and get a head start on the development of such robots.

    I’m even more fascinated by the last part about the future of robotics. This is SF coming alive in front of our very eyes. I can already envision fleets of robotic cars replacing taxis and cars in inner cities. Amazon might just disrupt even more industries.

    • “It’s all Amazon’s fault!” 🙁

    • Is it a matter of them wanting to keep it away from the competition, of just a matter of needing the companies output to equip the Amazon warehouses?

      Having a tight, in-house design-build-use-design_update loop can be very valuable for rapid improvement compared to having external customers who you can’t force to upgrade and you have to keep supporting the old version.

      For all the success that Amazon is having with the robots, I get the feeling that they are still in heavy experimentation mode, and they sure haven’t finished building enough to equip all of the warehouses.

      But do you really think that the same people who expose their internal APIs and sell them in the form of AWS are going to avoid selling robots to their competition forever?

      Once Amazon has all of it’s warehouses equipped, then if they still aren’t selling you may have something that’s happening to block the competition.

      • Felix J. Torres

        Probably both.

        If they wanted to, they could’ve invested in expanding Kiva production capacity so they could feed Amazon’s need while still selling to Amazon competitors. So there is a clear takeaway strategy at play.

        Of course, making Amazon Kiva’s sole customer does force them to spend 100% of their R&D solving Amazon’s logistics problems which could turn Kiva into a broader-focus company that just warehouse robotics. If Kiva develops robotic loaders and trucks they can later market those alongside their newer generation warehouse gear. “Be as efficient as Amazon!” can sell a lot of prepackaged bundles.

        I suppose we’ll know more when Amazon is done updating their fulfillment centers.

  3. And Thank God fewer workers have to work in those stifling Amazon warehouses. Who would have thought robots would be Social Justice Warriors.

  4. Robot arms!

    Danger Danger Danger WIll Robinson!

Sorry, the comment form is closed at this time.