Tuesday, March 20, 2012

Amazon Buys Kiva Robotic Systems

Bloomberg has reported that "Amazon.com Inc. is making its biggest acquisition since the 2009 purchase of Zappos.com, agreeing to pay $775 million for Kiva Systems Inc., a maker of robots that move items around warehouses."

"The all-cash deal for closely-held Kiva will close in the second quarter," notes Bloomberg. Using Kiva robots should help to lower fulfillment costs, which account for "the company’s largest operating expense at 9.5 percent of sales." Bloomberg points out that "Amazon’s operating margin is predicted to narrow to 1.6 percent in 2012 after falling 2.3 percentage points last year, putting stress on the company to bolster profits. In January, Chief Financial Officer Thomas Szkutak said operating results this quarter will range from a loss of $200 million to a gain of $100 million."
And of course, since the Kiva robots that move inventory or shelf stacks or many other materials management tasks are already orange and very similar in color to the orange in Amazon's logo, the new owner won't have to repaint any inventory they acquire!

1 comment:

Ernie Schell said...

StoreFront BackTalk points out that Kiva robots are in use at Walgreens, Saks, Gap, Crate & Barrel, Staples, Dillard’s, Toys’R'Us and Office Depot, and suggests that this may cause some angst among Amazon's competitors, since there is "intelligence" that drives the robots. SFBT doesn't say Amazon will use any of that data...just that there is the potential to do so.

Read more: http://storefrontbacktalk.com/supply-chain/should-retailers-be-worried-about-amazons-kiva-deal/#ixzz1qEHIItnY

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