1. Automation Examples Amazon – Kiva Systems
Brian Marler
Dec

2. 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

3. Overview – Current State
Assembly Line (Serial Process)

4. Overview – Current State
Kiva System (Parallel Process)
(History: 4 min.)
(Wired: 3:36 min)

5. 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.

6. Overview – Who Uses, What Used For, When Used
Amazon acquired Kiva Systems specifically to improve productivity
‘Saves’ workers from walking 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

7. Overview – Costs “Start-Up” Kit Typical Warehouse System
10-50 robots + setup (planning, modeling, testing)
= $1 to $2 million
Typical Warehouse System
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)

8. 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

9. Overview – References

10. 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

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

12. 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

13. Application Examples Technical Paper
Summary of how Kiva Systems are revolutionizing the modern warehouse

14. Application Examples Video
New Kiva System (0:18-1:57)
Main Overview (History Channel 4 min.)
(0:58-1:30)

15. 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

16. 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 = = 110 cartons
Avg. inventory level = ( )/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.

17. 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.