How Kiva Systems Changed Fulfillment Forever

Posted by Bruce Welty on Thu, Apr 18. 2013 @ 11:04 AM

The warehouse management business is as old as business itself (humans have ALWAYS had to move goods around). Since the roller conveyors of the early 1900s, people have improved worker productivity by off-loading tasks to machines. By the early 21st century, myriad innovations—diverters and sorters, conveyors, pick- and put-to-light systems, automated storage and retrieval systems, and carousels, allowed firms to automate parts of their operation.

There was only one problem with all of this automation: the overall system did not work very well. Determining which of these material handling solutions to use, and in what combination, is time consuming—and expensive. In the 18+ months it takes to design a facility, write RFPs and review vendor submissions, and install and modify the Warehouse Management System (WMS) software that makes the entire operation run, business requirements inevitably change. Unfortunately, by then the customer is locked into the automation solution—and all of the associated maintenance and software update fees—for years. Automated facilities are simply too expensive to retrofit every few years.

Traditional warehouse automation solutions are slow to implement and expensive. Moreover, many of these technologies are not calibrated to the “each-pick” requirements of direct-to-consumer eCommerce fulfillment, and high error rates and slow fulfillment times follow as a result.

Simply put, the traditional approach is broken.

Robotic Fulfillment, Kiva Systems and a Revolution

Kiva robotsIn 2002, a bright young engineer, Mick Mountz, educated at MIT and Harvard Business School and exposed to the technology business through the unique lens of Steve Jobs at Apple, took a step back and rethought the problem. What IS the most efficient way to put many different items in a single box and ship it to a consumer?

His answer to this question resulted in the most significant disruption in warehouse automation in the past 50 years.

His answer was the Kiva robots.

The Kiva mobile fulfillment concept brings inventory to workers in a massively parallel, automated workflow. Warehouse workers remain at fixed locations on the periphery of the inventory storage area and the human touch points are reduced to 1) the receiving process, when kitting can be done; and 2) the pick/pack/ship process at the time of order fulfillment, when value added services like order presentation and gift wrapping can be done by warehouse associates. Each human touch point with Kiva includes quality control mechanisms, and the pick/pack/ship process is directed using a pick-to-light/put-to-light system. By scanning and validating each product for type and quantity, Kiva users like Quiet Logistics can achieve nearly 100% order accuracy.

There exist other so-called “goods-to-person” picking systems but they all require large steel infrastructure that is expensive to build and difficult to move.

Fulfillment centers with Kiva robots require significantly less material handling equipment (such as pallet jacks, forklifts, conveyors, sorters) than traditional warehouses. In Kiva facilities these machines are confined to the periphery of the warehouse for receiving and shipping activities.

Moreover, the Kiva installation process is significantly faster than the traditional automation process discussed above. Instead of years, with Kiva it takes months. Quiet has built out three Kiva facilities each with a total elapsed time of less than 3 months from standing start to full production.

How is this possible? It is because of what Quiet does not have to do. Specifically, it is not necessary to design the facility, nor purchase and connect disparate parts with incompatible software architectures and logic controllers. There is no capacity analysis or judgment calls about what volumes are expected over the next five years. All of these projections are irrelevant for Kiva users, because it is necessary to only buy what is needed to handle the volume on Day 1 and expand later. Capacity is added incrementally by expanding the floor grid and purchasing more robots, pods, and stations from Kiva on an ongoing basis. This can happen with NO interruption in service.

Kiva Systems and Quiet Logistics

Kiva with Quiet’s Fulfillment Management System (Q-FMS) is less expensive to buy, less expensive to operate, more flexible, more reliable and MUCH easier to implement than other options on the market. All of Quiet’s third party fulfillment operations utilize a Kiva backbone. After four years of operating Kiva-based warehouses, no Quiet employee will ever want to go back to running a traditional automated fulfillment warehouse…..NEVER EVER.

Quiet is not the only company that thinks Kiva is better. Companies like Saks, Staples and Walgreens use Kiva. Amazon liked the capabilities of robotic fulfillment so much, it bought Kiva outright. And yes, current customers like Quiet can and do continue to buy equipment from Kiva. All companies are invited to Quiet’s facility to see firsthand how Kiva and Quiet deliver best in class fulfillment services.

If any company wants to have its own facility or is considering bringing its fulfillment operation in-house, Quiet's Managed Services offers an in-sourced approach to building a Kiva-centric operation in a client’s own warehouse. 

 By Bruce E. Welty, Chairman and CEO of Quiet Logistics

Photo: Joel Eden Photography/Kiva Systems

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Topics: Ecommerce trends, Managed Services, Third party Fulfillment