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IP Interview
Published October 20, 2023

Amazon Robotics: Sparrow & Warehouse Cost Efficiencies

Executive Bio

Former Head of Systems and Products at Amazon Robotics

Interview Transcript

Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

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Regarding the Kiva system, which was a huge success and was acquired, how would you assess the change in the variable cost per unit that Kiva achieved over the period you observed?

Among all the robotic products and programs that Amazon has rolled out, Kiva has been the most significant. In a traditional Amazon warehouse, or any warehouse for that matter, around 60% to 70% of the costs are tied up in pick and pack operations. Roughly 50% to 60% of that cost is attributed to walking - the pickers moving from one shelf to another. Therefore, approximately 50% of your warehouse labor costs are consumed just by walking during the pick and pack operations. Kiva was able to eliminate the majority of that cost, providing a significant cost benefit for Amazon.

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