Amazon: What really happens when you click the Buy button?

Market Insights

How thankful are you that Amazon can deliver your dog food, groceries and diapers in a matter of days if not hours? Today I was fortunate enough to participate in a distribution center site tour of Amazon’s main fulfillment center in Southern California thanks to the Warehousing Education and Research Council (WERC). We were guided by a warm host, a half dozen top employees and introduced to all of the safety measures necessary to ensure a safe and successful site tour.

Fun facts:

  • Location: 1910 E. Central Ave, San Bernardino, CA
  • Size: 1,200,000 SF, equivalent to +28 football fields
  • Products: 17,000,000-21,000,000 SKU’s at any given point in time
  • Employees: 3,000 on average up to 6,000 during the holidays. It takes upwards of 760 pizzas to feed everyone on Pizza Day.
  • Guiding Principle: Customer Obsession

Let’s start with how products come into the warehouse to begin our journey. Products are either purchased from a vendor directly (60%) or sent by a seller (40%) who wishes to have Amazon holds its products. Every single item that comes in the door is inspected on all 6 sides for quality, measured, weighed, labeled and inputted into the system.

From there, high volume products are palletized and stored in easily accessible areas whereas one-off products are put into shelves randomly. While their location is randomly selected, there is nothing random about it. Each item is identified by a letter, number and bar code, no two similar items are placed within the same area of a shelf, and all items are mapped within their own internal technology system. When you order a tube of toothpaste, water balloons, and ankle socks, your order is sent to a picker who is given an optimal path to go to in order to find and assemble your order.

All items in an order go in a yellow tote (plastic bin) of which there are 60,000 in this warehouse alone. For sports fans, rumor has it that 60,000 bins are enough to fill up Dodger Stadium and then part of Staples Center. Totes are all put on conveyor belts that weave throughout the entire property. Imagine 9 miles of conveyor belts all wrapped up into 28 football fields of this warehouse. Seeing is believing. The amount of attention to detail is amazing. How do you replace an item that has fallen on the floor? What if it is misplaced? What about damaged items? Everything that could happen has an optimized process when you are working at scale. This is the process in an Amazon 7th generation distribution center. In an 8th generation distribution center there are picking robots thanks to the acquisition of Kiva Systems which is now known as Amazon Robotics. Here robots deliver all of the picked items to the picker who then assembles them in the totes.

Now your items are in a tote whizzing along a conveyor belt up two stories of steel mezzanine to an upper deck. On that upper deck are the packers. Now packing is more precise then your family packs presents during your birthday or holidays. At a packing station, a packer and their computer identify the exact size box, packing material, quantity of tape and label necessary to pack each product to perfection. Packer’s stations, just like the rest of the warehouse, have gone through countless lean process and Kaizen improvements to make sure their workflow is efficient. If you run out of supplies, a grocery checker style light turns blue and a supplier brings you what you need, if you have an issue, your light turns red and someone comes over to help you through it.

Now time for the SLAM machine, an acronym for Scan, Label, Apply and Manifest. The SLAM machine is far different than the label maker in your office. Here the label machine looks like a press. The press “magically” restocked labels, prints them, lowers down within two inches of the package and then a burst of air shoots the label onto the package, and 360 degree scans it, all in a blink of an eye. And let’s not forget about measuring the package and weighing it. Your hypothetical order of toothpaste, water balloons and ankle socks should fit in a specific size box and weigh a specific amount since it has all been inputted into the system. Any deviation any the box is sorted off the conveyor for inspection. The level of precision is unparalleled.

Your package is now ready to go, but where? On a 25 mph conveyor belt is where, as packages still need to be sorted and sent to the right shipping dock to be loaded in a truck along with hundreds of other packages. Imagine hundreds of varieties of shoe boxes in the back of a truck. Someone has to ensure they are all stacked in a manner that is not only safe but efficient. If you have ever moved your house before, you know what I’m talking about. Trucks then go to a different sortation center where they are redistributed to the outgoing shipping services that bring them the last mile to your door.

We didn’t even get into detail on the inner workings of Amazon Fresh, the new drone delivery system that is in beta and Amazon Publishing whereby Amazon will print, bind and ship books directly for aspiring authors. All in a day’s work at an Amazon Fulfillment Center in the middle of Southern California.