Robotics startup Kiva Systems of Woburn, MA, and medical device giant Boston Scientific (NYSE: [[ticker:BSX]]) said today that Kiva’s robots will be used to automate order fulfillment in two Boston Scientific warehouses, one in New England and one in the Netherlands.
It’s a big win for Kiva, whose shelf-toting robots are increasingly common in the warehouses of consumer goods distributors like Zappos, Staples, and Diapers.com, but which has never before landed a customer in the health or medical sectors, where there’s less room for error.
“Accuracy in order fulfillment is important if you’re doing office supplies or T-shirts, but if you are supplying medical devices to operating rooms, it’s an imperative,” says Mick Mountz, Kiva’s CEO and founder. In Boston Scientific’s existing warehouses—as in most traditional distribution centers—human pickers roam the aisles, grabbing products from bins. Making sure that each outgoing shipment contains exactly the right products involves time-consuming double and triple checking, steps that aren’t needed in Kiva’s largely automated system. “Kiva naturally provides a more efficient way to achieve that super-high accuracy,” says Mountz.
In a Kiva-equipped warehouse, central command software sends orders wirelessly to a fleet of squat, wheeled robots. A robot’s job is to navigate to the mobile shelving unit that contains the requested product, lift up the whole shelf, and transport it to a picking station, where a human operator grabs the product and transfers it to a box for shipping. (The process, which is quite beautiful to watch, is described in more detail in this April 2008 profile.)
Such a computerized system has a special advantage when it comes to handling highly regulated products such as the stents, catheters, and myriad other medical devices that Boston Scientific manufactures by the thousands. “The FDA sends out notifications quite frequently about [devices] that need to be double-checked or put on hold, and that is very disruptive to a manual operation,” says Mountz. “What we can do, just before we present something to the operator, is ask the host system, ‘Is this still okay?'” That way, products that have been flagged for regulatory reasons never make their way into boxes for shipping.
Kiva’s robots are also adept at carrying a large assortment of product packages, from very small to very large, which, according to Mountz, makes them more flexible than the competition: “automated storage and retrieval systems” in which transportation is typically provided by a bucket sliding along a conveyor. Ken Pucel, executive vice president of operations at Boston Scientific, backs up that point. “Other material handling approaches would have required us to integrate different technologies to handle units, cases, and pallets, as well as a wide range of product sizes,” Pucel said in today’s announcement. “Kiva is able to provide us a proven solution with the flexibility and ease-of-use of a single technology for our needs.”
Kiva will be installing its system as part of a multi-year “rolling upgrade” to existing Boston Scientific warehouses in Boston and Kerkrade, the Netherlands, according to Mountz, who says the deal represents an important foothold for Kiva in the medical-device market.
“We think the message is already out there that this is the highest-fidelity way you can do order fulfillment,” says Mountz. “What we excited about now is bringing that message that we have FIFO-style [first-in, first-out] workflow and inventory management to the medical device industry, the pharmaceuticals market, and other device suppliers. That is a big and growing opportunity for us.”
