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KIVA SYSTEMS TECHNOLOGY TO INCREASE DISTRIBUTION CENTER PRODUCTIVITY OVER 200 %

Breakthrough Material Handling System for Order Fulfillment Exceeds Expectations in Two Pilot Deployments

Woburn, MA - December 5, 2005 - Kiva Systems, Inc., today announced that its breakthrough material handling system for the order fulfillment and warehousing industry has increased distribution center productivity by more than 200 percent in two pilot deployments. Kiva has developed a revolutionary approach involving hundreds of low-cost mobile robots that bring inventory shelving pods directly to operators resulting in triple the number of orders per hour per person.

During 2005, Kiva completed two pilot deployments of the technology in fulfillment centers located in Texas and Pennsylvania, demonstrating over 200% increases in productivity at both sites.  The company serves distribution centers in support of direct-to-consumer, business-to-business, and retail store restocking operations across a wide range of vertical markets including office supplies, apparel, books, music, video, drugstore, grocery, medical, sporting goods and others.  The first full-scale commercial installation of a Kiva Mobile Fulfillment Solution is scheduled for deployment in early 2006.

The growing team at Kiva Systems is backed by Bain Capital Ventures of Boston.  We jumped at the opportunity to work with Mick and the talented team at Kiva, said Ajay Agarwal of Bain who is now on the Kiva Board of Directors.  The Kiva solution generates dramatic value for the customer and promises to change the game in logistics and supply chain management.

Reinventing Order Fulfillment
The inspiration for this new technology stems from the Founder and CEO Mick Mountz experiences at internet grocer Webvan.  The complexity of existing equipment and processes and the resulting high cost of filling orders ultimately was the downfall of Webvan.  It occurred to me that there must be a better way to accomplish pick, pack and ship, said Mick, and then I asked the simple question, what if all the products in the warehouse could walk and talk on their own, couldn't they just come to me when I need to fill an order?

That vision is now a reality as Kiva Systems has developed a complete solution for the storage, movement and sortation of inventory.  The technology is based on real-time parallel processing methodologies with adaptive systems principles.  The Kiva technology team includes Prof. of Computer Science Peter Wurman of North Carolina State, a noted researcher in agent-based algorithms, who developed Kiva's software architecture and inventory algorithms, and Cornell University Prof. of Engineering Raffaello D'Andrea, a recognized leader in the control of complex multi-vehicle systems, who developed Kiva's hardware architecture and control algorithms.  Our engineers have combined powerful software with intelligent hardware to create an integrated solution that turns atoms into bits, said Mick Mountz.  The Kiva system can move inventory around a warehouse like computers move data around in memory, thus freeing logistics professionals to focus on the business of filling orders not managing locations and searching for product.

About Kiva Systems

Kiva Systems, Inc. provides a breakthrough mobile solution for the dynamic storage, movement and sortation of inventory, enabling unprecedented productivity and flexibility in fulfillment operations. An innovative combination of mobile hardware and powerful software, Kiva’s modular systems deliver any item to any operator at any time.  The results are higher productivity and shorter cycle times with a system that is easy to install and expand.  For more information on Kiva Systems and its solutions, please visit www.kivasystems.com

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