In 2012 online retailer Amazon.com paid $775 million for Kiva Systems, a little-known North Reading company that made robots that moved goods around in warehouses. It’s since become an even bigger deal than anyone realized, for the global warehousing industry and the economy of Massachusetts.
Credit Amazon’s decision to stop selling robots to Kiva’s traditional customers, including rival retailers Walgreens, Staples, and The Gap. That move gave birth to a new generation of robot makers scrambling to fill the vacuum.
“Amazon has created an arms race,” said Rick Faulk, chief executive of Locus Robotics, a Wilmington company founded by Quiet Logistics Inc. an eight-year-old warehouse operator in Devens that was left high and dry by the Kiva deal. And many of the key arms merchants are located in the Boston area.
Locus is among several competitors to Kiva, which has been renamed Amazon Robotics. Others include Vecna Technologies Inc. in Cambridge, a nearly 20-year-old maker of medical robots and software, which in April unveiled a suite of machines for use in warehouses. In March, 6 River Systems of Waltham, a startup founded by former Kiva engineers, introduced a roving robot that accompanies workers as they pluck items from warehouse shelves.
And in Somerville, another new company called RightHand Robotics has tackled perhaps the toughest challenge in the industry: building a robotic hand that can reach into a bin that is full of merchandise and pick individual items out for shipment.
Robotic warehouse gear has been in use for decades, but machines today use cameras, radios, and other sensors, along with a digital map of their surroundings, to find merchandise and avoid hitting people or obstacles.
“We’re able to map warehouses the same way autonomous cars can find their way through the streets,” said 6 River cofounder Rylan Hamilton.
The warehouse robot sector is another booming facet of Massachusetts’ already muscular robotics industry, which includes military and nautical robot builders, as well as iRobot Corp., with its popular Roomba automated vacuum cleaners. The industry has well more than 120 companies, about 4,700 employees, and revenues of $1.6 billion, according to an October 2016 report by the Massachusetts Technology Collaborative.
Warehouse robots may be the unglamorous cousins of the robot family — until you look at the bottom line. The market research firm Tractica estimates that in 2021, companies worldwide will spend $22.4 billion on warehouse robots.
Companies are using robots to keep up with the relentless pace of Internet retailing. Before Amazon, consumers expected to wait weeks for mail-order items.
“Amazon came in and said, no, that’s all wrong,” said Vecna founder Daniel Theobald.
Now we expect to get our items within days or even hours.
“Logistics is the key to a good customer experience,” said Theobald.
But logistics is brutally expensive. Amazon spent $16.2 billion on shipping costs last year. Robots could go a long way toward helping Amazon and its rivals slash their shipping bills.
Robots are taking on multiple roles inside warehouses. Kiva’s robots can lift and move an entire stack of shelves to a shipping station where a human worker extracts the needed items.
Vecna has new robots that resemble automated forklifts that hoist pallets of merchandise, and tractor-like vehicles that pull carts of goods.
6 River and Locus specialize in smaller robots that roam the aisles of a warehouse, working in cooperation with humans. A computer displays the order for the human worker, who puts the item into a bin on the robot and sends the machine on to the next worker, and so on until it’s ordered to the shipping area.
Meanwhile, in Somerville, RightHand Robotics is exploring the final frontier of automated warehousing — picking and packing individual items for shipping to customers.
Founded by researchers from Harvard, Yale, and the Massachusetts Institute of Technology, RightHand has created RightPick, a three-fingered mechanical hand that attaches to a standard-issue robotic arm and uses video cameras to “see” items in a warehouse storage bin. The RightPick uses its gripping fingers and a suction tube to pick up items and drop them into another bin for shipping. In one demonstration video, the hand is shown inserting items into packages for mailing. Such a system could ship small items like medicines or cosmetics from warehouse to customer with little or no human assistance.
Automation in many forms has displaced many American jobs, and the warehouse industry is a big employer: a quarter-million workers. But RightHand cofounder Yaro Tenzer argued his company’s invention won’t put people out of work, because so many pick-and-pack jobs in warehouses go unfilled.
“People cannot find enough labor to do these jobs,” said Tenzer. “They call us and say, ‘we cannot fulfill orders. Can you help us?’ ”
Indeed, Chris Elliott, a senior consultant for Blue Horseshoe, a warehousing consultancy in Westerville, Ohio, said many warehouses are built in rural areas or small towns where land is cheap, but people are scarce. And warehouse work is so tedious that worker turnover is high.
“It’s not necessarily that there is a labor shortage,” said Elliott. “It’s having the right labor in the right place.”
But with robots getting cheaper and better, Elliot predicted they will first supplement, and then eventually supplant, human labor. It won’t happen overnight, but “there’s going to be a lot of people who’ll be displaced,” said Elliott. “It’s going to be a disruption.”