Amazon is an absolute power house in the world of online marketplaces, there are very few businesses that come close to the size of amazon, the breadth of products available and the speed of delivery.
Founded in 1994, amazon.com is now the world’s largest internet-based retailer by total sales and market capitalisation. In 2016, Amazon generated $525,600 revenue on average per minute and with the vast majority of this revenue coming from product sales, how does the business fulfil all of these orders so quickly?
The primary reason that amazon managed to fulfil such a huge quantity of relentless orders is due to how efficiently it automates its processes.
How does Amazon Automate?
It all starts with the fulfilment centre, this is where all of amazon’s inventory is stored. When you order a product through amazon’s website, the fulfilment centre is alerted and the packaging process begins.
In the older amazon fulfilment centres, the process is done by hand. A worker would physically retrieve the item from a shelf in the warehouse and return to the packaging area for it to be packaged, labelled and shipped.
However, in amazon’s most up to date centres, the majority of the process is automated. Instead of amazon employees travelling to the shelf to pick the product, the shelf now travels to them. Imagine the time this saves when the typical amazon fulfilment centre is over 300,000m2.
In 2012, Amazon acquired robot system manufacturer Kiva Systems as the first step towards their centre automation. In 2016, amazon deployed a total of 45,000 robots to help automate their processes.
The kiva robots are notified of an order that needs fulfilment. The robot, being only 40cm tall, drives beneath the shelving units until it reaches the shelf that holds the required item. The robot then lifts the whole shelf (able to lift up to 315kg) and travels up to 5mph towards to packing centre. At the packing centre an Amazon employee is waiting, ready to package the order, and ship to customer.
Amazon claims that this system alone has reduced their average order packaging time by 25%.
However, this isn’t the only method that Amazon uses to automate their processes.
Amazon insists that, they automate their processes not to make jobs obsolete, simply to make jobs easier. With this in mind, their custom software will automatically tell the packager which size box to place the product in, saving time and unnecessary packaging costs.
After the product has been wrapped, the shipment automatically has the shipping label applied and is manifested and directed into the correct shipping bay using automatic conveyor belt systems. From here the package is shipped like any other package.
When receiving inventory, the system is almost exactly the same, but reversed. Amazon associates take the inventory that has been delivered, place them on the shelves and the shelves are automatically stored in the warehouse.
A little automation goes a long way when it comes to business efficiency.