In 2018, online retail giant Amazon already had 288 million square feet of warehouse space for its more than 12 million products sold worldwide. Imagine the early years of this industry-changing company when it had to search for every electric pallet jack for sale that can be used by its army of warehousemen and women. The sheer amount of effort in categorizing, recording, sorting, and allocating specific storage space for those products must have been quite a challenge even for the most organized site managers and stock personnel. Today, they have 175 warehouses around the world which they refer to as “fulfillment centers”. It is quite accurate to claim that Amazon’s success can be summarized in two words: Organization and Logistics.
Organization: The Orbit Where Every Amazon Product Moves
Organizational development experts have described Amazon perfectly as a smooth, coordinated ecosystem of products and services. Like the jungle that it was named after, Amazon’s warehouse is a universe of diverse products of all shapes, sizes, country of origin, price point, and target customer. Inside every warehouse, hundreds of people move as if in an orbit of boxes, packs, and crates. Every item is brought to a specific section or place, tagged accurately to avoid misplacement or errors in shipping.
The first step in this highly synchronized organization of products is the arrival of an item at the inbound dock. It is here where the boxes of products are unloaded from the cargo trucks. During the stow process, the products undergo detailed sorting. Items that cannot be categorized are placed in a pod or stack together with other un-categorized products.
Aside from the more than 300,000 staff that work at Amazon, all the workload is done with the help of thousands of robots that literally carry the burden of transporting tons of products inside these centers. Teams for inventory control and quality assurance also walk around the facility to check the entire stowing process. The packing process is where all the items are boxed, labeled with the name and address of the recipient, and then prepared for delivery.
The cycle ends when the boxed items pass through what they call a SLAM machine (which stands for Scan, Label, Apply, Manifest). The packages are weighed again and inspected for the last time before they are laid down a conveyor. These conveyors carry the packs to the shipping dock where trucks and other transport vehicles wait for their cargo. Once inside these cargo vehicles, the wheels begin to move to bring these elaborately processed items to the customers who ordered them.
The high level of organization goes beyond people and physical objects inside the warehouse. All throughout this process, various kinds of monitoring software are in place to track the movements of every products inside the center. This way, errors are prevented and efficiency in the process is measured and evaluated.
Logistics: The Long Line That Leads to Customer Satisfaction
In the United States, the carriers of Amazon products include Fedex and UPS, the companies that help physically transport the products to the customers who ordered them. These products are tracked continuously to make sure they get to the right customer at the right time and always in good condition. The product transportation challenge is all about reducing delivery times. The faster the customer gets an ordered product, the more satisfied they will be. A satisfied customer will almost always have a repeat order or purchase.
Indeed, from its humble beginnings as an online bookstore, Amazon has morphed into a global business operation that has a market value of at least $1 Trillion. Today, it offers services in other industries such as video streaming services, web auction service, publishing, and film distribution, to name a few. Today, its founder, Jeff Bezos is the wealthiest man in the entire world with a personal net worth of $196 Billion. When Bezos started the company in his garage in 1999, even he was full of doubts. He told his pioneer employees that “…there’s no guarantee that Amazon.com can be a successful company. What we’re trying to do is very complicated.” Despite the doubts, he slowly untangled the complications and organized every department, every process, and left no detail unchecked. Twenty-six years later, in 2020, it still dominates the e-commerce industry with no close rivals.
The great lesson of Amazon is about the importance of organizing the “machine” of business. Its founder understood that there were many complex, moving, and inter-related parts of the online business that had to be synchronized in terms of time and movement. It was definitely a Herculean task but their persistence paid off in the end. From the garage to the global arena of business, Amazon continues to amaze its founder, employees, and millions of customers around the world.