Amazon has struck the deal on buying Kiva Systems Inc. for an amount of $775 million in cash to which Kiva’s stockholders have approved and will close the deal in the second quarter of 2012. This deal will bring the robotic technology of Kiva to Amazon’s e-commerce business house as they were looking to automate their warehouse jobs. Kiva is well known to produce robots that are well versed to work in such warehouses reducing the time to fulfill orders quickly and with much less man power needs. Till now there have been other handful companies like Gap Inc., Staples Inc. and Crate & Barrel who have used this technology to speed up their warehouse processes.
Kiva’s robots bring products right to the shelf rather than the workers walking to the shelf and in doing this the robots locate items corresponding to the customer’s order and move the products around in the warehouse for the final loading dock. These robots can be tailored to the specific customer’s need with the help of customized software and they wiz past the shipping centers loaded with inventory.
This is the second largest deal in Amazon’s history as the last one was $894.6 million to purchase Zappos.com in year 2009. According to Amazon’s spokeswoman they will continue to sell Kiva’s technology to other retailers as the robots cost anywhere between a few million dollars to 20 million dollars. This will surely increase productivity in Amazon’s warehouses as Kiva’s system allows fulfilling two to four times as many orders per hour as can be done by traditional means. Although Amazon has been using other means to increase productivity and reduce order fulfillment times this will surely rocket their business into top gear.
And last but not the least these robots are super cool and here is a video on how their day goes on, have a look.
