In a warehouse at the headquarters of Kiva Systems in Woburn, Massachusetts, an ottoman-shaped robot slides beneath a four-shelf storage unit holding an assortment of consumer goods, lifts it, and navigates back to Mick Mountz, the start-up’s founder and chief executive. Mountz grabs a box of Kellogg’s Frosted Mini-Wheats off of the shelf and turns to put it in a shipping box. By the time he has turned back again, the robot is carrying the 8-foot-tall shelving unit away, and he is facing another stack of goods carried by a different robot. This is Kiva’s demo space, where Mountz shows potential customers what his wireless robotic fulfillment system can do. It’s also where Kiva handles manufacturing, turning out 200 squat, orange robots—one model can hoist 1,000 pounds, while the other is strong enough for 3,000-pound pallets—every month. But you don’t have to go to this Boston suburb to see Kiva’s bots and pods, as the company calls the shelving units: They’re already fast at work in warehouses run by Staples, Walgreens, Gap.com, and online retailer Zappos. “It’s exceeded all of our expectations, doubling the productivity of our pickers and cutting our energy costs in half,” says Craig Adkins, vice president for fulfillment operations at Zappos, which began using Kiva nine months ago. Adkins won’t say how much Zappos paid for its little helpers, but the average Kiva installation costs $5 million, with setups ranging from $1 million to $25 million now in the works. 

Questions

1. How does Kiva Systems’ robotic warehousing system affect a company’s operations management process? 

2. In what ways can the use of Kiva’s robots improve a company’s operating performance?