Kiva warehouse robots

Clever ads that emphasize ROI, presentations that show production benefits, new robot sales records, capital expenditure for warehousing systems and increased attendance at trade shows are all focusing attention on the business case for robotics.

The Robotics Industries Association (RIA) reports that North American robot sales set new records for the first half of 2015: 14,232 robots, valued at $840m, were ordered during that period. Sales in the semiconductor sector (30%), automotive components (23%) and life sciences (8%) increased strongly. In contrast, orders to automotive OEMs were down 18% from their record highs in 2014. In March,  RIA offered an in-depth return on investment calculator and tutorial by Tanya Anandan. Anandan also produced a more recent article about how new robots are using various sensors and cameras to raise their IQ. Bottom line: as sensors, cameras and CPUs get cheaper and more capable, they are enabling robots to sense, see and do more at less cost.

The Robot Report’s monthly recap of fundings, IPOs and acquisitions has confirmed the broadening interest by business and finance. Funding in the first six months of 2015 was greater than for all of 2014 and the number of strategic acquisitions has grown as well.

One of the presentations at the recent Automation World Conference described a recently built facility in the sweet potato business. Utilizing camera-aided sorting systems, automated case erection, weighing and filling stations, and robotic palletizing and shrink wrapping systems, the new facility now only requires about 40 people to ship 50,000 lbs/hr where it used to need 75 people to ship 20,000 lbs/hour. The control software also allows the firm to put unique codes at the item level that enables complete track and trace details from farm to warehouse to packaging to consumer.

In a recent advertisement, Universal Robots (UR) describes how a medical device maker freed up 11 full-time workers to handle more complex tasks when they deployed three UR robots. The ROI on those robots was less than six months. “We were looking at cost, accuracy, ease of implementation and ease of use. The Universal Robots nailed it in all those areas,” said their Director of Engineering.

Three industrial robot trade shows this year — Automate, Promat and CIROS — have all drawn record crowds, had greater floor space and more exhibitors. At Promat, which focused on material handling, warehousing and distribution center automation and robotics, the consensus was that the show produced more orders than any previous event.

All of these disparate items, when combined, imply a serious business case – and growing momentum – for the deployment of robots.

Driving the expansion and change in DCs are (1) online sales and consumer expectations of speedy delivery, (2) enhanced data manipulation capabilities, multidimensional processing and integration of new-tech mobile robotics into material handling, (3) proof that goods-to-man methods saves money, reduces labor and increases productivity, and (4) a current need to develop more cost-efficient centers (caused by delays and skittishness to make capital investments during the economic crisis). E-commerce sales are growing at an annual compounded growth rate of 8.5% – double that of supercenters, club and dollar stores. Supermarkets and convenience stores are growing as well. The quantity of materials that are moved daily through DCs is staggering as are the streams of data and algorithm considerations. [Source: Nielsen TDLinx & Nielsen Analytics] 

The immensity and complexity of the supply process can be seen in this video showing how a Giant Eagle supermarket is resupplied from its regional distribution center:

Amazon has and continues to lead e-commerce-driven distribution with their pick-to-cart method (otherwise known as man-to-goods) and their promise of speedy economical delivery. Workers run around and fill carts and deliver them to conveyors where they are transported to packing stations where individual shipments are processed and staged for pickup by FedEx, UPS, etc.. The metrics for this are 160 picks per hour. The video below shows that process.

http://youtu.be/i6H7nfHjHtY

Kiva Systems disrupted those metrics and increased worker productivity by reversing the man-to-goods process. This method brings the goods to the packer (goods-to-man). As Kiva’s success became proven in the field, Amazon acquired Kiva for $775 million and is beginning to install Kiva systems in their new warehouses. It is estimated that the new Kiva metric for Amazon consumer goods is 600 items per hour.

These metrics translate into fewer employees and lower warehouse costs, which include not only the structure but the inside storage and material handling equipment as well. Steve Banker, a consultant at ARC Advisory Group, recently wrote in Logistics Viewpoints:

If you conduct a Google search on “Amazon distribution center,” you come across announcements over the past year for DCs in Virginia, New Jersey, and South Carolina. According to these articles, warehouses costing roughly $50-65 million will employ 1,500 to 2,000 workers.

But then I came across an article about a new Indiana DC. This DC is costing $150 million and the company is only promising 1,000 new workers. Could this be one of the new warehouses that will be using Kiva? The employment numbers seem to add up. This DC will employ at least one third fewer workers.

European DCs tend to be smaller than those in the US where massive centers for Wallmart and Amazon often exceed 1 million sq ft. Amazon has said that it will be filling its new 1 million sq ft distribution centers with Kiva robots. According to their financial reports, they are opening 12 new Kiva-equipped centers in 2012 with more planned for 2013. That is a lot of Kiva mobile robots, and this demand will surely keep them busy building and integrating those devices and their related software systems into Amazon’s distribution scheme. In fact, Kiva has already laid off most of their sales and marketing staff but has increased their support staff to assist their new owner (and biggest client). As Amazon leads the consumer products industry to same day delivery, Kiva robots help give them that flexibility. [One-day turnaround isn’t unique to Amazon; it is often a necessity. Think produce: vegetables, fruits, baked goods. These goods regularly move in and out of DCs within 24 hours.]

Kiva’s acquisition by Amazon has created a void in innovative material handling technology just at the time when companies that had put off building or improving their DCs because of the economic crisis are now ready to invest again. Kiva’s low cost for warehouse shelving and speed of installation in bare-boned facilities are far cheaper and faster than any other method offered.

However, Kiva-equipped distribution centers aren’t the only methods available for handling robotic-assisted fulfillment. There are many new technologies as well as older-style methods now augmented with various robotics to handle the myriad types of warehoused goods. Amazon, Zappos and other consumer sales companies warehouse and ship small-quantity consumer items. Food distribution and intra-company distribution centers process on the case level. One east coast DC for a chain of groceries regularly processes 20 million cases per week. DCs not only focus on getting their goods in and out of the system but also concentrate on maximizing productivity and keeping their labor costs as low as possible.

Handling, distribution, transport and delivery – and the amortization of DC setup charges – often represent more cost than raw materials and manufacturing combined.  Consequently, warehousing and material handling are a big business for hundreds of different types of companies: conveyors, rollers, racks, vision systems, hoists, shelving, electric motors, slides, barcode readers, printers, ladders, gantries, tugs, forklifts, autonomous lifts and tugs, skids, totes, carts, and software systems of all types, to name just a few. Big players in the field include Intelligrated, Egemin Automation, Fromm, Daifuku Webb, Adept, Frog AGV Systems, Seegrid, Fuji, Edict, Omega Lift, Nordock, Interlake Mecalux, Automated Packaging, Itoh Denki, etc. Most of these vendors augment the man-to-goods model.

There are three companies transitioning to offer goods-to-man functionality: Symbotic, Swisslog and Dematic. The latter two have been in the material handling business for quite some time and have introduced many new robotic solutions. Swisslog is publicly-traded (SLOG:SW); the other two are privately held. All three of these vendors emphasize maximizing warehouse density which can be seen by level upon level (multiple vertical rows) of floor to ceiling racks.

Symbotic

Symbotic’s Matrix Rover travels along shelf rows picking and restocking as required but can also operate autonomously on warehouse floors.

Symbotic, previously named CasePick Systems, is a recent spin-off from C&S Wholesale Grocers, the largest grocery supply company in the US. For the past seven years C&S has been the test bed for the development of Symbotic’s line of products which include floor to ceiling high-density shelving and racks, storage and retrieval software, hardware systems, palletizer robots and robotic rovers. Now, as a separate company, they are a provider to C&S as well as other companies.

Symbotic focuses on handling skids and cases rather than on open-box or individual items. In an automated case/pallet warehouse, utilizing available storage area, including height as efficiently as possible, is the goal. Symbotic attempts to maximize usable space by providing and/or integrating all of the shelving, conveyors, stackers, robotic systems, robotic rovers and software, often reaching 17 rows high with the number of aisles limited only by the square footage of the warehouse. It’s like multi-level chess except on 17 levels! 

Guided by extraordinarily complex software, rovers speed along their row to pick or replenish cases of goods. Once a case is grabbed, the rovers take their goods to a Symbotic-invented device which enables the transfer of cases from multiple rovers at all levels of the shelving structure simultaneously, to a device for getting them down to floor level and then to a conveyor/tug system. The material is then moved to a station where Symbotic integrates heavy-duty Fanuc robotic arms in a palletizing process which then stacks the goods for shipment.

Swisslog

Left to right: Swisslog’s AutoStore drop-down rovers, Tornado lifts and SmartCarriers.

Swisslog builds modularized conveyors, stacker cranes, row rovers (called carriers) and autonomous tugs as well as their new AutoStore robots. Swisslog can handle open-case light goods and pallet/case systems. Swisslog provides European style material handling often characterized by high capital and operating costs and lots of mechanical devices. They enjoy very high productivity and space utilization in return.

Swisslog’s new AutoStore rovers race along the top of modular aluminum storage racks which are located just below ceiling level. The rovers reach down to get bins of targeted goods which are vertically stacked on top of each other. Then they race to a lift/crane which drops the goods down and conveys them to pick and pack stations and/or pallets for shipment. Once the bins have been picked, they are returned to the stack in the same manner.

Swisslog, as its name implies, is European and as such, must always be able to handle unique existing space considerations, often having to adapt to some very unique building configurations. Swisslog claims that their methods maximizes both vertical and horizontal space enabling them to process up to 1,000 picks per hour.

Dematic

Dematic goods-to-person shuttles are located at every level in all aisles and are serviced by high-speed elevators where material is lowered down to processing stations.

Dematic, headquartered in Luxembourg, is an established European style provider and integrator of logistics and material handling solutions. They offer almost every type of storage solution imaginable and provide distribution and handling for B2B and B2C as well as grocery, apparel, food and beverage and general merchandise.

Dematic provides conveyors, tugs, sorters, lifts and a variety of software for warehouse management, order fulfillment, RFID and SAP solutions and transport maximization. They use all of the different picking methods: pick by voice, pick by light, RF picking, etc.

Their most recent product addition is their row Multishuttle, a robotic rover that travels each row in each aisle in the warehouse picking orders and delivering them to a lift which sends them onward to a packing station.

Software

As is the case in most robotics, smart software is critical to its success. Imagine the algorithms involved in resource allocation to determine which product goes in which bin; which order gets assigned to which station; which pod comes to which station; which robot should get which pod. Then compound that with the problems of integrating that solution into a SAP, IBM, Oracle, Manhattan Associates, or Red Prairie fulfillment system. Then add customized delivery optimization solutions (such as sequencing skids in a truck to delivery routes and sequencing the contents of skids to how they are offloaded in the store) to the mix and you have some really complex software packages.

All of the companies mentioned in this article (Amazon, Kiva, Symbotic, C&S, Dematic and Swisslog) blend techniques from AI, controls systems, machine learning, operations research and other software and engineering disciplines into their mobile robotic platform. All are focused on transforming fulfillment to the goods-to-man methodology because of the increased productivity gains and all are pioneering as they go because goods-to-man is new territory, software-wise.

Summary

This article originated as a profile of one company as they began to robotically augment distribution centers. But, as I gathered information, the story has morphed into a review of why Kiva Systems’ innovative methods – the goods-to-man methodology – is far superior to other older styles of fulfillment. These older style man-to-goods methods are characterized by serious labor costs, heavy turnover, high cost shelving, conveyors, lifts, and transport and other systems to get targeted materials to a picker/packer or palletizing operation. Robotics, if used at all, is used to augment the worker’s reach, mobility and lifting. The new-tech companies profiled above (Swisslog, Symbotic and Dematic) have begun to implement goods-to-mansystems incorporating old and new style racks and shelving and all seem to be doing the same thing: building multi-layer shelving upon which rovers troll the levels and aisles picking their stuff and shuttling it off to an elevator which sends it via conveyors or otherwise to pick/pack or palletizing stations, all controlled by colossally-complex proprietary software.

In the emerging world of service robotics, many markets are opening to robotics that were once only handled by industrial robot manufacturers. Safely unmanned, or working alongside human workers, in a show focused on handling materials in the factory and also in the warehouse, Modex 2012, held in Atlanta (after 16 years in Cleveland), displayed the wares and solutions offered by 560 vendors and covered all aspects of picking, packing, handling and transporting material. Unlike industrial robots from the past, the newer robots displayed at Modex are able to adapt, easy to use and intuitive to operate.

After talking with many exhibitors, my impression is that there were more buyers than in previous years and those buyers appeared to be holistic in their approach to revamping their material handling in the factories and storage and pick and pack setup in their warehouses.

Their reasoning, and the underlying economic drivers for their renewed interest appeared to be:

• a lack of qualified labor
• and higher labor costs
• fear of the effects from the forthcoming retirements of baby-boomers
• customized ordering via e-commerce requiring speedy and customized pick and pack
• the availability of new sensors and lower-cost automation and robotic devices to augment workers and enhance their productivity
• prices for these new devices and systems are holding steady or lowering
• productivity enhancing concept systems from a few years ago are now proven and available
• low interest rates make such investments even more affordable
• mid-market companies can now afford material handling automation because
• installation is easier and less costly
• software and communication methods are more intuitive and easier to use
• there is less need for costly integration assistance
• they need to automate to stay price competitive with the larger companies
• and… needed improvements have been put off because of the economic crisis and must now be renewed just to stay competitive

From left: Adept’s Transporter, Intelligrated’s bin controller, Kiva Systems’ robot, Creform’s AGV and Grenzebach’s trolleys.

Although there were not a lot of robots or robotic components shown, their presence was implicit in all but the most utilitarian booths. For example, free-form vision-guided navigation (with collision avoidance) instead of tapes, ceiling signals and other path marking methods was openly praised and thought of as finally being of sufficient robustness, safety, speed and minimal programming, to finally become a realistic choice for material handling so many vendors were showing how they were adapting.

Vendors I thought of as particularly interesting at Modex included:

• Intelligrated displayed their software integration system enabling every form of communication with the various automation devices, workers and robots involved in order fulfillment: voice, ViPR, regular barcodes, RFID and scanners, touch devices, tablets and pads, etc.
• Kiva Systems novel robots, shelving and their Mobile-Robotic Fulfillment System were not only widely viewed at the Kiva booth but discussed or compared in many of the other booths as well. One interesting tidbit: Kiva gave an iPad to visitors to their booth so that they could place an order which, seconds later, they were able to pick from the movable shelves brought to the user. Very cool.
• Egemin Automation showed how their warehouse management software system integrated with other manufacturers automation, conveyor devices, and palletizing equipment in addition to Egemin’s own line of AGVs.
• Daifuku Webb displayed their Smart-cart line of AGV tugs for pallets of materials, shelves and containers, and emphasized the flexibility and safety needs of an active warehousing center.
• Adept, which is in the process of expanding its product line from solely industrial robots to products in the service sector as well, introduced their new mobile transporter/courier. They showed how their mobile devices were integrated into Swisslog‘s hospital and healthcare product line and also how their motion controller module is the navigation and collision avoidance system within RMT Robotics’ ADAM line of mobility robots. A few other companies also offered similar vision/navigation/controller modules.
• Frog AGV Systems, like many other AGV systems providers, has improved their navigation methods and software and is selling components and modules to OEMs.
• Systems Logistics, a European full-service provider, demonstrated an automatic picking station for mixed SKU skids. This feature – mixed SKU and inverse loading – was talked about all over the show as the “new” cost-saving way to load pallets and trucks for expeditious delivery.
• Seegrid Robotic emphasized the significant cost savings and productivity enhancements of using robotic forklifts and other tugs, tractors and trolleys. Their special value-added offering was a AGV learning system where the system’s vision-guided navigation system learns the moves and layout from a human driver. Seegrid, like many others, is offering their navigation and vehicle control system as a module for other companies to incorporate into their existing systems.
• Creform had a line of modular mobile devices for moving lightweight carts, trays and platforms and their low lying robotic devices were similar to a few other vendors like Grenzebach‘s automatic trolleys and platforms and Transbotics‘ transportation robotics.

Brad Berger, editor-in-chief of SupplyChainBrain magazine, said that investing in automation for material handling is back after many years of being put off because of the economy. Buyers are creating smart warehouses where RF, voice, barcodes, tablets and software all work together seamlessly as tools in the bigger picture of moving, handling, picking and packing our materials and products.

As an aside, and with a focus on which companies will lead this new world of robotic augmentation of material handling and the workers involved, Adept Technology (NASDAQ:ADEP) appears to be moving toward bridging the gap between industrial robotics and the very real need for safer, more flexible, vision-enabled, mobile and easily trainable service robots. Today they announced a collaboration with Willow Garage to harness Willow Garage’s ROS (robotic operating system) so that new methods can be used to control, simulate and program legacy industrial robots. Through acquisitions and business acumen and software changes, they seem to be successfully entering the service robotics sector adding those extra values – along with robustness, durability, connectivity and ease of integration that the industrial robotics manufacturers presently provide.

18,000-20,000 people attended Modex 2012 – 10% were international visitors. There were 560 exhibitors in the 170,000 sq ft space. Very impressive, very busy… and very tiring.