Amazon News

I work at Amazon, and I notice things that I’m not sure many people that work there in the same capacity as I do. I have a perspective of an MBA who has written algorithms in Excel that optimize throughput and operations that are conducted in the very building where I work. Trucks deliver tons of goodies from manufacturers, nearly all from China, and dump them there. Then they’re sorted, labeled, binned, and stored in bins as inventory to go out. The merchandise doesn’t sit around long at all. In some cases, just minutes or hours. It comes in, then is ordered, pulled from inventory where it sat in a bin, put in one yellow tote out of about ten billion that are in the building, and somehow make their way all over the country. But yellow totes are EVERYwhere.

Amazon Yellow Totes

So the item, when bought, goes from the bin to a tote, put on a conveyor, where it travels to packing. Depending on whether it’s a single item, or shipped as part of a multiple-item-order, they are assigned to a line that packs and sends them down to shipping. Along the way, they are scanned(they’re scanned all the time, and assigned ASINs) labeled, and has a manifest applied. Meaning a label which either is an address label or a SPOO, which is a scannable label that tells a scanner the item travels under on the conveyor what label to affix to it with the correct address. Then the packages all go down to shipping where they are loaded onto trucks and taken to the airport or spread out across the country for delivery. That’s the general plan. There are numerous things that can happen along the way, and problems that can arise, which are dealt with promptly. Everything happens at light-speed and in a blink of an eye. It’s fun to watch happen.

Conveyor belts. Miles of them.

I’m involved all throughout the process. So I notice things and patterns and anomalies and methods and systems being used to optimize the speed and accuracy of orders being processed from incoming to outgoing.

But there’s a lot more that goes on in that monstrous building. We have a giant area for photographing merchandise. Which is interesting. We also have a medical area for employees and an HR “floor.” And a bunch of other stuff.

But the HR area is going away. This was a dedicated space for all employees to deal with HR issues, of which there are many with so many workers there. What’s changing is that Amazon is switching to using a chatbot that’s part of their app that we can access via phone, computer, or one of many kiosks in the building that also are connected to an internal network. We can view certain job-related functions and features of the app that we can’t access at home.

The HR employees that are at the site will be walking around the building, intermingling with employees. I’m not sure how this is going to improve things, because the app many times doesn’t work, and finding an HR worker who’s wandering around a million square foot building isn’t efficient or easy. I’m not sure what the catalyst for this decision was. The HR “floor” was a large area where the main entrance to the building is. There is also a security area, a learning/onboarding room, a learning area, and much more. So I don’t know what’s going to replace Human Resources. But I notice that the way Amazon goes, a lot of other large employers go. So if you’re in HR, your job is tenuous and going to be replaced by a bot.

Another thing I’ve noticed is that Amazon is shipping a ton of items for L.L. Bean and J. Crew. L.L.Bean made its mark via catalog sales and selling retail through the mail. But now L.L. Bean is using Amazon to sell and ship their items. That’s a huge pivot. Same with J. Crew. But L.L. Bean doing it makes a statement about the future of retail sales. Vineyard Vines, which is a brand that those two guys really made a mountain out of a molehill, sells a lot. A study of Vineyard Vines’marketong would be a great business case to study.

Pendleton blankets are stored in inventory a lot. I love them, which is probably why I notice. But I don’t see a lot being sold. Pendleton makes their blankets in Portland, Oregon, where they’re located, but their sweaters are made in Cambodia. Go figure. Here we have China making our gear for the United States’ NASA program.

 

NASA made in China

GO U.S. SPACE PROGRAM! Made in China.

The things moving through that building en masse are what’s impressive. You can see what’s going on in America by looking at what people are buying a lot of. And the trends are sort of scary.

I see a lot of the following: home ear and body piercing kits; Earlobe hole stretching kits, North Face everything. North Face is killing it. So is Champion. Under Armour is also killing it. Addidas, Nike, Crocs, Levis jackets, and jeans somewhat, but especially shearling jackets. Burton jackets and gloves. Lilly Pulitzer. Vans t-shirts. Carhartt jackets and coveralls and socks. Carhartt is very popular. Legendary Whitetails is another brand I see a lot of selling that is new to me, but sells a lot. It seems to be made for big men.

Shrinkage

In a previous post I wrote about how it’s amazing that with what must be over a billion dollars worth of inventory in a single location, basically all out in the open, that employees, which number in the thousands, don’t rob the place blind.

inventory coming in ready to be sorted

There are cameras everywhere, but you’d need an army of security personnel watching 1000 monitors full-time to spot anything, and even if they did, there wouldn’t be a whole lot they could do, the building is so massive. There is security by the front doors, and meandering about the building, but nothing to really worry about for a robber.

The preventatives that really stop people from stealing are: the items for the most part are too big to just walk around with or out of the building. I mean, where are you going to stuff a suit or a giant coat? Even a small item would be obvious. And it isn’t worth it. It’s not like we’re shipping Faberge’ Eggs.

Another factor is that if you’re working as you should, you don’t have time to steal. You’re too busy. There are timed quotas that you try to stick to, such as picking an item from inventory, then getting to the next item. You want to be productive, right? Another way they prevent it is to stash the items in inventory all over the place in no certain order. Today I picked face masks, probably 150, and they were stashed in about 50 different bins all over the place. They do that with jewelry and just about everything, except for smaller items that go in 1 foot by 1-foot cubbies. Miles of cubbies where you can’t really see what’s in them unless you’re right on top of it. And one of the things you’ll hear said is to “not go shopping in the bins.” Meaning don’t dilly-dally looking at stuff in the bins. Keep working. Also, picking things up in the bins can damage them, or get misplaced back into the wrong bin.

small item bins

However, today while working in “picking” I saw several ways theft can run rampant, and probably does.

Something I notice is that many/most of the Indian and African employees end up working in “pick” or “Stow.” Those are jobs where they’re stowing away inventory that’s been labeled with ASINs and also going around picking items to go into totes to be placed on conveyors to be taken to packing.

Something that happens when Amazon hires lots of Africans and Eastern Indians is that they tend to congregate together. They don’t assimilate. They stay in groups at work, just as they do in society.

So I’ll see quite a few Indians huddled together that are supposed to be working in a group around open inventory, especially around the cubbies where jewelry and electronics and other small easily-concealed items are stored. Many if not most of the African and Indian workers are Muslim women. They wear a full hijab, which is basically a sheet that covers them head to ankle, with tennis shoes poking out underneath. They could stash tons of things under those hijabs and no one would notice, and no one would dare ask to look underneath. They could put on quite a bit of clothing underneath and you wouldn’t be able to tell. Amazon sells some expensive clothing. I saw a $178.00 men’s shirt today, for example. Not cheap. In fact, I would say most of the clothing Amazon sells is above average in quality and, respectably, cost. The cheapest stuff Amazon sells is its own brand. It goes by Good Wear or something like that, and I think Amazon bought the Starter brand, which we sell a lot of. It’s not really that nice. Lacoste, Coach…all the upper-middle-class brands you’d expect.

cubbies for smaller items

Same with a lot of the men. They wear loose African and Indian clothing that is great for hiding all sorts of things under. Do they do it? I have walked up on a few and given them quite a shock when they were kneeling down doing something weird. And not praying. Amazon provides praying rooms for them. I’m not trying to come across as racist or xenophobic, just pointing out some ways that I see things being taken easily. Amazon is a great place to work, but they don’t pay a lot, and when companies don’t pay much, there tends to be a lot of shrinkage. That’s taught in every business school because it’s true. It really makes a good argument for companies to pay higher wages, and reduce capital loss due to shrinkage, which also reduces insurance premiums. And the need for security and other resources are freed up.

Amazon Management

Amazon management is unique. Or at least novel to me. No one is called a “manager.” And no one really manages in the traditional sense, since it’s an operational, fulfillment center, and not a typical manufacturing or retail or office setting. So it’s unique to me, in that sense. There’s “Operations,” “Process Assistants” and “Learning Ambassadors.” And of course, “Associates.” Tier 3, and Tier 1. That’s the hierarchy. Managers, assistant managers, associate managers, and peons. And seasonal peons. Regular, hourly peons are “Blue Badge” peons.

There are several areas that are managed. Like “picking” “packing” “sorting” “HR” “maintenance” “Safety” and a couple more that are necessary. Picking, packing and sorting, loading, inbound, and so on is the main focus of the facility. Operations. So within those areas, there are lots of employees. But the “managers” don’t really manage them. Not in a traditional sense. They don’t advise employees or work with them closely to optimize their productivity, review their performance with them, or do any human managing. They are more focused on getting things moved through the building accurately and quickly. HR takes care of the nitty-gritty HR stuff like hours. So while an “Operations” manager might be over 130 people, they don’t really interact with them daily or do any hand-holding. In fact, most of the training is trial by fire. Learn on the job. You learn the basics on a day or two of o-boarding done by omnipresent “leaning ambassadors” but other than that, you’re on your own to figure it all out. Those who can, do. Those who can’t leave. There’s a lot of attrition. You might think “that must be expensive to take in so many people who just end up quitting.” But Amazon gets their money back in hours worked usually before they quit. And the ones who stick around end up being the good and best workers. Many people there have worked there for 5, 10, or more years. The facility isn’t that old.

Systems

The trick to Amazon’s success is that Jeff Bezos has broken each part of the journey(s) into fail-safe, manageable, optimizable systems. Which are all part of one giant system. There’s not any way really one thing can go wrong. At least to the point of catastrophe. The whole place is basically run by kids. You see a lot of grey hair around the place, but overall, the people running the place are 20 and 30 somethings. They don’t have any experience, but they don’t need any. They just need to follow rules. No matter how dumb or senseless they may seem. Just show up to work and follow the rules. That’s all you have to do to succeed at Amazon, really. I am rewarded for being a top performer almost weekly. That shows how easy it is to excel and stand out there. I appreciate the (very )small recognition but it shows that there are very average expectations. And just by those being met, Amazon is arguably the most successful company in the world.

My perspective of Amazon is unique. I can recognize some things most can’t. What I see is that as much as possible is taken from human hands. Only the necessary steps are left for humans to do. The rest is controlled by scanners, computers, algorithms, data analysis, and even robots in some cases. But mostly the programs are nothing but javascript. Data is kept and items and inventory and stock is monitored and tracked by scanners everywhere at important steps along the trip from inbound to outbound.

All items are assigned ASINs and everything is tracked by those numbers. When they move throughout the building, they are assigned bins when they are held in any place, which are categorized, and placed into totes, which have scannable numbers on every one of them, when they are in transit via conveyor belts. When purchased they are called out of the bin (picked), placed into a tote with other items that are rushed onto ta conveyor, sent to packing, where they are pulled out of the scanned tote, scanned individually(usually – if part of a multi shipment, they are scanned into another area and handled a little differently) packed into a box, paper mailer or plastic bag. Some items go to an area where the package is assigned a SPOO and sent to a machine to label it base don that SPOO and sent down to shipping, or in some cases sent directly to a packer that works in SLAM(Scan Label Affix Manifest) who puts an addressed label on it packed, and send it down to shipping.

Radios to contact problem solve

Help is always available. Radios are placed strategically throughout to communicate with problem solvers.

While all this is going on, the Operations and Process Assistant guys and gals are constantly bent over wheelable carts with laptops on them looking at lord knows what, but I can guess having done operations management in business school.

A picking scanner

These handheld scanners are integral for locating, picking, acquiring, toting and relinquishing the goods. It’s a mobile computer that runs on Android. There are a LOT of these in use at all times. And they’re always sanitized, cleaned and charged for our use.

They’re looking at throughput and how to maximize it. We have around 8 lines going at any one time with about 21 work stations on each line. They rarely are filled except for Peak season which is Black Friday through Christmas. Totes come down a conveyor that’s at head height and taken down, packed, and the packed items are placed on an outgoing conveyor about knee level that is scanned along the way down to a chute that goes to shipping down below. I work on a mezzanine.

inventory

The funny thing is, for all the technology and incredible computing power and IT craziness that’s going on, the conveyor will get jammed quite often, for all the packages heading down at once, with the different shapes on the belt. So it’s not uncommon for me to have to run around down to the end of the belt and get a broom or some sort of stick and unjam the mess and clear out the jam and get the paper or whatever might be causing the problem off the belt, and press a bunch of buttons which sound alarms and make the belt start up again. It’s comical, in fact. But that’s how it goes. And there’s something satisfying about physically fixing a problem and pushing a button and starting the operation going in a huge place like that. In fact, there’s one chute that always gets clogged because of static electricity that the poly mailers generate as they pass over the stainless steel plate. A shot of WD-40 would solve that, but for some reason, it remains a problem.