What we learnt when we went inside Amazon!
We had the chance to look round inside an Amazon Fulfilment Center this week, and we jumped at it! What was it like? What did we see, and what did we learn? Watch this to find out!
Hi, and welcome to another episode of BaranovTV, designed to demystify the world of accounts and tax and to help your business grow.
I’m on a bit of an away day this morning, Chris and I have got an appointment to do a tour round the Amazon Fulfillment Center, that’s within a mile of our house, in Dunstable. It’s huge! It’s a very, very big local employer, relatively new to the area, but I didn’t realise that they do free tours, so we’ve booked ourselves on, and we’re hoping that it’ll be really interesting.
It’s a mammoth site here, it’s huge. But we get to do a full tour of the fulfillment center, so I will come back afterwards, and let you know how we got on.
Hi, so here we are back in the office, having done our tour of the Amazon Fulfilment Center in Dunstable. I have to say, it was absolutely fascinating, and I would thoroughly recommend it to anybody who’s even vaguely interested. It was, as I said before, a massive site, huge area, and absolutely fascinating.
- We went into a briefing room, where you’re given a high-vis jacket. You’re given a health and safety briefing: everyone has to tie their hair up above shoulder level; there’s nothing allowed to be dangling, from a health and safety perspective, and you must wear closed in shoes.
- You’re not allowed any personal belongings with you apart from keys, and mobile phone, which you’re not allowed to use. You’re certainly not allowed to take any photos!
- Anything else has to either be left in your car, or put in a locker that’s in the room that you’re getting the briefing in.
- You’re then issued with a set of headphones and a little receiver that goes round your neck, so that you can actually hear the tour guide as you go round the fulfillment center, because obviously there’s quite a level of hubbub and noise going on.
- We were with a group, I suppose, there was probably about 25 of us in the group, and the tour lasted for about an hour.
Some of the stats that they told us were just mind-boggling. Within the fulfilment center on the Dunstable site there are three floors, 20 kilometers of conveyor belts and there are 2,000 of their robots. These only stand about so high (around 45 cm), but they have a big round disk in the center, and that disk lifts their shelf units up off the floor by about 3 cm. They then move those shelf units around the factory, according to barcodes that are on the floor, and obviously a massive computer system that guides them all.
We stood and watched them for a few minutes, and it was quite amazing to see these shelf units, which were probably around about 2 and 1/2 foot square, and probably eight foot tall, being moved around on these robots. They pass within a couple inches of each other, these big stacks of shelves and they are just, it’s like watching them dance, it’s fascinating.
We saw, and we were told about goods in, goods out, how they are packed away and held in stock, and then how they’re picked and packed to go out to customers to fulfill the orders.
It was really interesting!
The staff issues:
Obviously, Amazon are doing these tours as a public relations exercise. We’re all fully aware of the negative media coverage that they’ve had over the years, about exploitation of staff and how badly they’re treated, etc. So they’re doing these tours as a PR exercise.
That said, it was just fascinating, and you could ask lots of different questions, and you could see for yourself a lot of what was going on. The staff do very long shifts and they are very active, in terms of picking from the top of these shelves, from the bottom shelf, bending, stooping, moving. There’s not a lot of lifting involved, because you’re only lifting individual items at a time, but for me it was the processes and the thought, and the research that’s gone into their processes that was really the fascinating thing for me.
We heard about their shift patterns and their health and safety focus. And we saw evidence of that in terms of their big boards as we were coming out, we could see their monitoring of health and safety and their issues that they were raising within their teams.
But the biggest thing, as I say, was the process, and their massive, massive investment in the technology. And their reliance on that too.
There were barcodes everywhere.
Everything is tracked, obviously, from the moment it arrives at the fulfillment center, the very different stages it goes, which shelf it’s put on, when it’s taken from the shelf, which box it goes in before it goes to packing.
Everything is scanned. The packing boxes themselves, the different size boxes they have to choose from to send items out, have their own barcodes on. As they scan, as the packer takes that box off, and they scan that they’re going to use that box, a separate machine actually produces just enough tape to seal that box, so there’s no wastage.
Part of that is going to be green credentials, because Amazon have come under a lot of pressure as far as that’s concerned, and we did discuss the idea of a pen going in a box this size!
But also from a cost perspective and an efficiency perspective, the tour guide that took us round was saying, “the idea of dispatching just that much tape, so that there’s no wastage, it’s already moistened for the packer to put onto the box to make it easier for them.”
The way that all of the goods within the fulfilment center are stored just blew my mind, because you would expect the logic to be the same as you see stock, as they explained it, on the shelves at Tesco’s, but it’s not.
You don’t have all of the items of one thing together, or all of the stock of one item that they hold together.
It’s randomly placed on whichever shelf has got some space, on the pod that’s put in front of the person doing the stacking. So as long as they scan, and they track it effectively, they just make the very best use of space that they can, which I just didn’t expect.
They’ve done lots of research and say, “This is the most efficient way of us to utilise the space that we have available to us.” So that was, the space side of things was really interesting.
The growth of Amazon has been fascinating.
It started in 1994 in Jeff Bezos’ garage.
- One of the things that our tour guide was saying, was when they first started, that a bell would ring every time that they got an order, and they would all look and see where that order had come from. Obviously, with the number of orders they get these days, the bell has long gone!
- Amazon has got 300 million active users, which is more than double the population, evidently, of Russia.
- The company in March of this year was valued at $841 billion, making it worth more than the whole country of Saudi Arabia, one of the biggest petrol exporters in the world.
- Online shoppers are spending more at Amazon, at the top of the top 10 of online retailers, than they are spending at the other top nine online retailers combined.
So Amazon is massive.
As a result, they have this phenomenal focus on their processes and on efficiency. And it made me think about any growing business.
As we grow, we tend to add to the same processes, and in the end those processes where we’ve added lots of little bits, can get so complicated and so complex, that they actually become massively inefficient. Sometimes it takes a new pair of eyes in a new recruit to come in and ask the question that makes us think about that and start to streamline it again.
So that was one of my thoughts, that actually I need to look at some of our processes that have got, even just in the last 18 months, have got over-complicated, and just start to make those more efficient. And potentially, look at them in a totally different perspective, like the random stocking at Amazon.
Finally, I just thought I’d let you know, if you want to see the inner workings of the fulfillment center closest to you, you can go onto Amazon’s website and you can actually do a quick search for their free tours. I would highly recommend it, as I said before. It was a great way to spend an hour, just having a really good nose, and seeing for myself how some of the things work and what they do.
I’ll leave you with that thought and I’ll see you all very soon.
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