Robots in the Supply Chain

Amazon recently announced its second-largest acquisition in its history, this time building its infrastructure with a $775 million investment in robotics. Acquiring Kiva Systems -- a little company headquartered in North Reading, Mass., that builds mobile robotic drive units -- will help Amazon improve efficiency and productivity in its warehouses and order fulfillment centers. This in turn will drive up profitability at the company, helping it to cut its large operations expenses.

"Amazon has long used automation in its fulfillment centers, and Kiva's technology is another way to improve productivity by bringing the products directly to employees to pick, pack and stow," said Dave Clark, vice president, global customer fulfillment, for Amazon.com.

Featured in Control Design as an OEM Spotlight a couple years ago, Kiva designs robots that use distributed intelligence to locate and pick inventory. Workers become more productive as the robots eliminate the need for them to walk or drive around a facility to gather inventory. This video shows how it works:

With Amazon being the highly public company that it is, many people will undoubtedly be up in arms over what they see as robots taking over human jobs. But that misses the bigger picture -- the one where robots create improved productivity, which creates greater profitability, which leads to company growth, which leads to more hiring.

Robots have become increasingly important in manufacturing. And yet, for its order fulfillment business, Amazon is laying out nearly as much money for this one little robot manufacturer as all of North America spent last year in its record-breaking $1.17 billion in industrial robots (that’s 19,337 robots worth, the Robotic Industries Association says).

That's a big step for robotic kind.