The Amazon Robots Changing the Fulfillment Game

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Dec. 19 (Bloomberg) –- Bain Capital Managing Director Ajay Agarwal discusses Amazon’s purchase of Kiva Systems and the robots that are helping increase production at Amazon’s fulfillment centers. He speaks to Cory Johnson on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

About this.

What do you think amazon saw in kiva?

The beauty of kiva systems was that nick had seen that in a traditional e-commerce warehouse, the typical worker spends 75%, almost 90% of their time walking in the warehouse, trying to find a particular item you're looking for.

You think about something like amazon, with 150 million individual items in their warehouse that they are carrying on their website.

A consumer may order any combination of those items.

The insight with kiva is, instead of having the work or go to the shelf, which could be a 10 minute walk, a 20 minute walk, why not use robots to bring the shelving directly to the worker, remove that 80% to 90% time walking, and make the individual worker three times more productive than they would ordinarily be?

I have spent time at those amazon fulfillment centers, with the pickers and stowers.

They think they walk 10 to 12 miles a day at that job.

It's incredible.

You think about the issues that amazon has at this time of year with the holiday season, when they are probably doing 50% of their revenue, and the number of workers say have to hire to fulfill that peak demand -- now with something like kiva, those workers can fulfill three times as many orders.

That allows amazon to be more efficient, and allows them to manage the peak demand during the holidays.

Let me ask you a question.

What is a robot?

How do you define what a robot is?

The way i did find a robot is, it is a combination of hardware and software -- define a robot is, it is a combination of hardware and software.

If you think about the kiva robot, these are robots that maneuver on the warehouse floor.

They're intelligent enough to follow particular grid patterns.

The software all the rhythms would control an early a fleet of these -- algorithms would control a fleet of these robots.

If there's something about technology now that is allowing robots -- there are certain innovations or hardware, software making this more possible now than it was in the past?

Absolutely.

Some of the trends we're seeing across technology have affected robots.

You now have cloud-based computing, massive amounts of power.

You have things like lower-cost manufacturing that can bring down the cost of these individual components.

As you are seeing with some of the acquisitions google has made, particular robotic tasks and problems in robotic skills are now getting solved.

You think about the company that google recently bought.

They are really solving this idea of, how do you have a robot operating in a terrain that is unpredictable.

It is one thing to have a robot operating in a warehouse.

Two now have a robot that can walk across and uneven pavement, climb up the hill, scaly snowing mountain -- that is an incredibly -- scale up a snowy mountain, that is incredible.

Is a drone a robot?

A form of robot, absolutely.

Are you looking at investments in the drone arena?

We have evaluated investments in the drone arena.

You do have elements around the airspace which is regulated.

You have safety considerations.

You have tremendous limitations right now in terms of the range of these drones, how far they can travel, given certain size and safety requirements.

From a venture investor standpoint, in the robotics field, leveraging robots -- whether manufacturing, logistics -- that is where we see more opportunities.

I think drones will come in the commercial arena, but for the short term, it's going to be much more in the military arena and more humanitarian situations.

Bet on robots, not drones.

Good advice.

Thank you.

We will be right back.

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This text has been automatically generated. It may not be 100% accurate.

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