What started out as an online bookstore has today taken on truly Amazonian qualities to become the largest Internet retailer in the world as measured by revenue.
If there is one thing Amazon knows how to do well, its logistics. The capacity to process and ship millions of articles a day in record speed. Amazon is so fast in some places that it can ship you your ice cream before it melts.
On March 13th VDA participants had the unique chance to visit an Amazon Fulfillment Center (FC) near Orléans. With us we had the VP of Amazon Business International who flew in from Seattle, Director Amazon Business EU, Head Amazon Business France and the FC Manager who accompanied us on the FC tour.
One word to summarize the FC: wow.
The entire end to end process is computerized with little marge for error. Although the FC in Orléans is manual, in the USA most are almost completely automated using robots. The beauty of the FC lies in its ‘chaotic storage’ inventory management system. When people think of an organized warehouse, they likely imagine rows and rows of meticulously managed shelves organized by type of product, alphabetical order or price. Yet the biggest retailer in the world does exactly the opposite.
At the FC items are placed seemingly at random on any available shelf space. Amazon employees scan incoming products and place them on any empty shelf place available. They then scan where the item has been placed which is registered in the computer system.
The benefits of chaotic storage are numerous.
- Optimize storage space: Empty storage space is filled up immediately since goods are placed wherever there is room. This allowed the Orléans FC to be at 98% capacity during the Christmas peak.
- Simplicity: Employees dont need to learn where the “toy section” or “electronic sections” are. Everything is everywhere.
- Speed: Imagine how big an Amazon FC is. Instead of having employees go from one end to another to fulfill an order with varied contents, the system can compute an optimized fulfillment route based on articles randomly stocked close to one another
- Human element: Amazon inherently trusts its employees to use common sense in stocking and picking (order fulfillment) of items