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June 17, 2016 08:00 pm

Robots In Amazon's Warehouses Are Already Making a Huge Difference

Amazon acquired Kiva, a robotics company for a sum of $775 million in 2012, and started to use robots in its warehouses in late 2014. At the time, the idea was that it will make inventory management more efficient. It's actually doing an impressive job. The "clip to ship" process used to take around 60-75 minutes when human employees were taking care of things, now the robots are doing the same job in 15 minutes. From a Quartz report: These robots are not only more efficient but they also take up less space than their human counterparts. That means warehouse design can eventually be modified to have more shelf space and less wide aisles. At the end of the third quarter of 2015, Amazon was using 30,000 Kiva robots across 13 warehouses. Each Kiva-equipped warehouse can hold 50% more inventory per square foot than centers without robots. In turn, the company's operating costs have been sliced by 20% -- or almost $22 million -- per warehouse. If Kiva robots are dispatched to the rest of the 110 Amazon warehouses, the tech giant could save almost $2.5 billion, according to Deutsche Bank. However, since it takes $15-$20 million to install robots in each warehouse, the one-time savings is expected to be closer to $800 million.

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