As one of the world’s largest eCommerce technology companies, Amazon is known for innovation and delivering a customer experience that is the envy of competitors around the world. With over 175 fulfillment centers around the world, Amazon is able to deliver products with blazing speed to customers. MIBAR recently attended a tour of Amazon’s fulfillment center in Edison, NJ, to gain an understanding of the technology and processes used by this market leader to provide to our own customers.
At the start of the tour we were guided to a prep room, with Amazon values printed on the walls. One of these stood out. “Start with the customer and work your way backwards from there.” The company’s fulfillment operation followed this guiding principle throughout. The company’s goal is to provide the fastest shipping of a dizzying array of products to customers all over the world.
In fact, the company is so focused on customer satisfaction, that each of its fulfillment centers is purpose built for a specific function. The facility we toured in Edison is built specifically to handle products under a certain size and volume limitation. Our tour guide mentioned other facilities, such as one in Rhode Island, purpose built for furniture delivery. Instead of adopting best practices and applying them across its entire network individually, it views its entire network as a mechanism to deliver satisfaction to its customers. For MIBAR customers this is an interesting perspective.
Best Practices: Context
Often, our customers seek to emulate best practices for a warehouse facility. Amazon’s approach emphasizes context. The combination of size or type or geography of the product determine from where it ships, instead of narrowing in on any one specific factor. Of course, scale plays a factor in this. At Amazon’s scale, it needs to differentiate its warehouses by these criteria. For smaller customers, however, it points to understanding what the customer requires, what the context of the product mix is, and the level of scale of the operation, to determine the best approach for building out its fulfillment processes. Furthermore, these processes need to be constantly evaluated, in order to continually balance the needs of customers with the technical capabilities of the vendor.
After our briefing, we were brought out onto the facility floor. At 800,000 square feet, the facility is enormous with two levels to boot. Product is brought into the facility, and at a receiving station is put away into the pick rack pictured below. A purple light shines on the shelf not to use. The user then puts the product into any of the bins, at random, and sensors inside determine where that product is put away. The user then scans the next product and repeats the process.
The key point to make here is that product is put away at random. Instead of putting books in one section and food items in another, at this fulfillment center, Amazon simply loads product randomly into these racks since, as they say, “that is how customers order.” Again, this is an interesting takeaway and is a testament to Amazon’s scale. Our customer base often looks for correlations between products or tries to optimize the warehouse for a certain flow, and yet, Amazon puts this product away randomly. Of course they are being placed on racks that move around with robots. The orange one can be seen bellow the yellow rack in the picture below. However, for MIBAR’s customers it is important to think, does our scale within our vertical warrant a different arrangement of products in our warehouse? Just because we always put product of type A over here, is that really the best approach?
The orange robots weigh 300 lbs. and the lift racks weigh up to 1500 lbs., and they move around using barcodes on the floor as can be seen in the picture below. The track marks on the floor were absolutely perfect. The robots moved in exact straight lines and circles, as can be seen in the picture, and thus eventually left marks in perfect patterns. An astute observer asked, “Do they ever tip over?”, to which the guide responded that in the two years she has worked at the facility since it opened, she had never seen one tip over.
After receiving the product, the robot picks up its rack, and then moves into the main warehouse area which was labeled the “dance of the robots.” Thousands of the robots above, carrying the racks, shuffled around a warehouse floor, according to whatever algorithm controls them, with absolutely no discernible pattern to the humans on the tour. Product onto this “dance floor”, and, when it needs to be picked and shipped, the robot then moves itself over to a picking station located on the edge of the floor, a temporary wallflower before rejoining the shuffle.
At the picking station, the user has a monitor indicating what the item looks like, and a green light shines directly at the bin location from which the user needs to pick. The user takes the item, scans it, places it into a tote, and then the robot moves away, or changes direction if another item is on the rack. Then, another robot comes and takes its place with a different rack. When the tote is complete, which can contain one order or many orders or parts of an order, the picker puts it on a conveyor and it moves off to the packing area, and then the next tote comes to pick.
The totes roll down the conveyors, with some rolling down conveyors that move from the top floor to the bottom floor, and then into packing stations. The packing facility is organized in two sections. One is for “singles”, meaning an item will be shipped in the box it came in, or will be put as the only item into a box and then shipped. These totes land at the packing station. The monitor informs the user of the box to make. He or she then folds the box, places in the item, and the tape dispenser provides just enough tape to wrap the box. The tape itself is dry when fed in, but the dispenser places a water-based adhesive that actually allows them to remove it and place it back on if required. No need to spring for more tape.
Overall, the operation was incredibly impressive. Some of the conveyors moved pretty quickly. The dance of the robots is really the heart of the fulfillment process, and certainly portends a direction that the rest of ecommerce and mid-market distributors will certainly head towards over the coming decade. My only recommendation, if you decide to take this tour yourself, is to go around the holiday season, as it would be something to see it in operation during the busiest season of the year.