Automation Examples Amazon – Kiva Systems Brian Marler Dec. 5 2012

Overview – Current State Amazon currently has 2 types of warehouses 1. Human Packers and Pickers connected by conveyors = Serial Process - assembly line 2. Packers and AGVs (Kiva) = Parallel Process - many things happening at once and it is 3 -4 times faster

Overview – Current State Assembly Line (Serial Process)

Overview – Current State Kiva System (Parallel Process) http://www.youtube.com/watch?v=gvQKGev56qU&feature=related (History: 4 min.) http://www.youtube.com/watch?v=6KRjuuEVEZs&feature=related (Wired: 3:36 min)

Overview – Where Used Warehouse automation is only really needs for companies with high input/output of varied goods. Amazon’s Kiva System is used in warehouses to both store and fetch items from inventory. Can also be potentially used by… Aerospace, Automotive, Building materials, Electronics, Beverage, Manufacturing, Medical, Newspaper, Plastics, or Printing applications.

Overview – Who Uses, What Used For, When Used Amazon acquired Kiva Systems specifically to improve productivity ‘Saves’ workers from walking 13-15 miles a day Fulfills 3-4 more orders per hour Used also by Staples, Walgreens, Toy “R” Us, and others to triple or quadruple their productivity. Majority of Kiva customers are internet retailers. Specifically because the Kiva System is both flexible and scalable Very useful for spikes in shipping volumes due to the fact that you just add more robots and pods when you need them and then cut back after the spike Inventory and order accuracy improved Electricity savings – robots can work in the dark Quality of life – improved ergonomics, reduced noise, robot work area is separate from human work area No downtime and built in redundancy

Overview – Costs “Start-Up” Kit Typical Warehouse System 10-50 robots + setup (planning, modeling, testing) = $1 to $2 million Typical Warehouse System 50-100 robots + setup = $2 to $4 million Full Large Warehouse System 1,000 robots + setup = $15 to $20 million Very fast training times (2-3 days instead of 2-3 weeks)

Overview – Requires Supporting Technology Many components fit together to allow Kiva robots to work effectively Not a AGV – instead of following fixed tracks, these robots are fully autonomous and any item is available to be moved to any operator at any time. This requires… Wireless connection to the warehouse network Complex programs computes best route for all bots combined, as well as best storage location for totes based on items inside. Example: As Valentines day approaches… Example: quicker workers receive more bots Navigation based on a grid of two-dimensional bar code stickers 2 cameras, one to look above and one to scan the floor Charging stations Smooth floor Networked lasers and lights to indicate to workers the item placement Sensors to detect obstacles (uploaded to network so all robots know) but robots can still run within inches of each other

Overview – References http://www.theatlanticwire.com/technology/2012/03/meet-little-orange-robots-making-amazons-warehouses-more-humane/50094/ http://www.kivasystems.com/solutions/ http://www.youtube.com/watch?v=HOicZ_AgsSA&feature=related http://money.cnn.com/2011/11/09/smallbusiness/kiva_robots/ http://www.mwpvl.com/html/kiva_systems.html

Discuss Use in Industry Application Rules, Limitations Entire system takes weeks to install but months to test Many robots required to make system feasible Must recharge frequently throughout the day (5 min recharge every couple of hours) Robot must go under pod so 24” of storage space is lost Very complex software required to coordinate robots Cannot handle very large or heavy products Cannot handle large volumes of a single order effectively Example: 1000 tons of wheat

Discuss Use in Industry Primary Vendors of Technology Amazon’s Kiva Systems (Massachusetts)

Discuss Use in Industry Existing or Evolving Standards Small models can hold 1,000 lbs. Large models can hold 3,000 lbs. Travel about 3 mph Typical battery life of 1.5 – 2 years Capable of traveling within inches of each other Pods come in 2 standard sizes 39" wide x 39" deep x 6' - 8' high 49" wide x 49" deep x 6' - 8' high

Application Examples Technical Paper Summary of how Kiva Systems are revolutionizing the modern warehouse http://ieeexplore.ieee.org/stamp/stamp.jsp?tp=&arnumber=6295687&tag=1

Application Examples Video New Kiva System (0:18-1:57) http://www.youtube.com/watch?v=3UxZDJ1HiPE Main Overview (History Channel 4 min.) http://www.youtube.com/watch?v=gvQKGev56qU&feature=related (0:58-1:30) http://www.youtube.com/watch?v=kRg_1j-iWFU&feature=related

Application Examples Class Application Suppose that a total of 50 SKUs must be stored in a storage system. For each SKU, average order quantity = 100 cartons, avg. depletion rate = 2 cartons/day, and safety stock level is 10 cartons. Each carton requires one storage location in the system. Based on this data, each SKE has an inventory cycle that lasts 50 days. Since there are 50 SKUs in all, management has scheduled incoming orders so that a different SKU arrives each day. Determine the number of storage locations required in the system under two alternative strategies: (a) randomized and (b) dedicated. Given: Total SKUs = 50 Avg. order quantity = 100 cartons Avg. depletion rate = 2 cartons/day Safety stock level = 10 cartons Inventory cycle = 50 days

Application Examples Class Application Solution (Find the number of storage locations) First Calculate max inventory level and average inventory level for each SKU Max inventory level = 100 + 10 = 110 cartons Avg. inventory level = (110 + 10)/2 = 60 cartons (a) For randomized storage strategy, the number of locations required for each SKU is equal to the average inventory level times the number of SKUs (50 SKUs)(60 cartons) = 3,000 locations (b) For dedicated storage strategy, the number of locations required for each SKU is equal to the maximum inventory level times the number of SKUs (50 SKUs)(110 cartons) = 5,500 locations So clearly randomized storage strategy allows for a smaller warehouse. Amazon’s Kiva Systems is sort of a hybrid of the two storage strategies. Each item stored is evaluated on how often it is orders and its location is based on that information. All the items that are ordered less often are grouped together at the back of the warehouse.

Summary Amazon’s new little orange robots have more than doubled productivity. It requires many technologies working together, but overall it is by far the most simple system to use for the human workers. It is best used by internet retailers, not mass manufacturers.