Executive Briefings

Robots Could Cut Amazon's Fulfillment Costs by Estimated $2.5Bn

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.

Robots Could Cut Amazon’s Fulfillment Costs by Estimated $2.5Bn

According to an analysis by Deutsche Bank, adding them to one new warehouse saves $22m 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 $2.5bn.

“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. Amazon was the first company to confront the challenge of picking a virtually endless variety of goods from warehouse shelves and combining them in a single box for home delivery. Now that e-commerce is a growing part of the retail trade, more companies are paying attention. “The case for automation is building across the industry,” Siebrecht said. 

But it's really only Amazon that has this kind of technology at scale, thanks in large part to Kiva.

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According to an analysis by Deutsche Bank, adding them to one new warehouse saves $22m 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 $2.5bn.

“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. Amazon was the first company to confront the challenge of picking a virtually endless variety of goods from warehouse shelves and combining them in a single box for home delivery. Now that e-commerce is a growing part of the retail trade, more companies are paying attention. “The case for automation is building across the industry,” Siebrecht said. 

But it's really only Amazon that has this kind of technology at scale, thanks in large part to Kiva.

Read Full Article

Robots Could Cut Amazon’s Fulfillment Costs by Estimated $2.5Bn