Jeff Bezos, the chief executive officer (CEO) of Amazon.com Inc. (AMZN) announced that the company is expecting to deploy an army of nearly 10,000 robots at its warehouses worldwide by the end of 2014.
Currently, Amazon has around 1,000 robots to help fulfill customer orders. However, the increase in robot workers will not affect the number of employees already working or the rate of employment at the fulfillment centers.
The robots are built by Amazon’s subsidiary Kiva Systems, which it had acquired two years ago for $775 million, in a bid to increase the level of automation in its warehouses. The robots are tied in a composite framework. It takes months to set up the system, which includes the planning and examination process also. The robots made my Kiva comprise mobile shelving systems that automatically transport items to workers.
Amazon has been expanding its fulfillment centers around the world, with the addition of seven new centers over the past year. The increase in the level of automation can help Amazon simplify operations, save time and reduce fulfillment costs.
Amazon has been striving to beef up its delivery system in order to provide better customer services. In relation to these efforts, Amazon has plans to develop a drone-based delivery service where it will deploy airborne robotic drones to deliver packages to consumers in 30 minutes.
However, these plans involve numerous legal and technical hindrances. Other companies interested in this dynamic world of robotics include Google (GOOGL) and Facebook (FB).
Amazon holds a Zacks Rank #3 (Hold). A better-ranked stock in the same sector is Gaiam Inc. (GAIA) with a Zacks Rank #2 (Buy).
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