01 Mar 2012
Robots to the Rescue
Mick Mountz / Kiva Systemsby Deborah BlaggTopics:
Those who know Mick Mountz (MBA 1996) well were not overly surprised when he started a business based on robots. “My mom recently sent me an essay I wrote in third grade about wanting to make a machine that would do all my homework,” recalls Mountz, the affable founder and CEO of Kiva Systems, a Massachusetts-based company that is revolutionizing the way e-commerce retailers such as Staples, Gap, Saks 5th Avenue, Walgreens, and Gilt Groupe process customers’ orders.
An MIT-trained mechanical engineer, Mountz first encountered the inefficiencies of traditional order fulfillment in 2000 while working at Webvan, an Internet-based grocery home-delivery service. “The company went bankrupt because we couldn’t get the orders picked, packed, and shipped cost-effectively,” he explains. Mountz moved on to another job, but found himself still pondering the challenge almost two years later in an brainstorming session with some former MIT classmates.
“We decided products that could walk and talk on their own would be the best way to solve the problem,” he laughs. Developing a real-world version of that solution—mobile robots that can be directed to retrieve products—required a little technical help from Mountz’s MIT contacts as well as some HBS networking to gain traction on the business side. Describing his plunge into entrepreneurship, Mountz says, “I was still young and single, and I had a business problem I was passionate about. For the first couple of years I worked out of my own checkbook and slept on a lot of friends’ couches.”
Kiva Systems is named after a Hopi word that relates to ant colonies. Its time- and money-saving approach to order fulfillment is based on the disarming efficiency of small, battery-powered, orange mobile robots. When orders are received, the robots are directed by a complex software application to find and retrieve the desired items, which are stored on mobile shelving units throughout the warehouse. The bots rely on a Wi-Fi network and a grid of 2-D barcodes on the floor to navigate. Products are delivered to the human operators, who pick and pack the items and send them to shipping.
“When I started out, companies were interested but skeptical that the idea could work,” Mountz notes. Since the concept requires investment in a specialized infrastructure, a pivotal moment came in 2004, when Mountz convinced Staples to run a paid pilot in a small zone of one of its warehouses. “We had a prototype by that point,” he recalls, “and we used it to show that the technology was worth the investment.” Once Staples embraced the Kiva approach with positive bottom-line results, other retailers followed.
Kiva’s robots today are processing millions of orders a year in retailers’ warehouses across the United States, the UK, and Europe, quietly driving Kiva’s startling 80 percent annual growth. On the distant horizon is a plan to bring Kiva’s approach to the manufacturing sector. Notes Mountz, “We’ve got a lot of smart people who are constantly thinking about fun and friendly ways to solve problems.”
Class of MBA 1996, Section H