The Amazon Playbook for Speed and Agility

It's no secret Amazon is a customer-obsessed organization.

What's fascinating to me is how they achieve this obsession. Former Amazon executive, John Rossman, shared some of the company's secrets in a keynote address at ICMI's Contact Center Demo and Conference last week.

His presentation shared insights from his book, The Amazon Way, which highlights 14 leadership principles Amazon follows to drive its legendary customer service. Rossman called this Amazon's playbook for speed and agility.

Here are a few take-aways that really stood out for me.

Photo credit: Jeff Toister

Photo credit: Jeff Toister

Customer Obsession is #1

Rossman made an interesting distinction between a company that is merely customer-focused and an organization that is customer obsessed.

He compared employees in customer-obsessed organizations to college football fans for their insane levels of devotion and enthusiasm. This obsession goes beyond a superficial acknowledgement that service is important. According to Rossman, you must "be willing to do really hard things over a long period of time. 

This really resonated with me. A long-term commitment to continuously improving the service culture was a common trait of leaders I interviewed for The Service Culture Handbook.

One example Rossman gave was the empty chair. He described how Amazon leaders often leave a chair empty during meeting, so the chair can be figuratively occupied by the customer. 

It's a reminder to never lose focus on what is most important.

 

Reduce Friction

Rossman described how Amazon is constantly looking for ways to make things easier for customers.

One opportunity is internet connected devices. These are rapidly changing how consumers purchase common household items such as groceries.

For example, the company introduced the Dash Wand in 2014. It was a small device that customers could use to order groceries from Amazon by scanning the barcodes of products or saying the name of the product into the device.

A year later, Amazon introduced the Dash Button, which allows customers to re-order specific items like laundry detergent with a single push of a button.

Buying groceries online has been around in some form for about 20 years. Amazon is just making it easier.

 

Invent and Simplify

This is closely linked to reducing friction. Rossman described how Amazon often takes aim at the worst part of of a customer experience and tries to simplify it. He said, "Making things simple is as important and hard as inventing."

A great example of this is Amazon Go

Most consumers would agree that the checkout line is worst part of grocery shopping in a traditional supermarket. Grocers have studied different ways to make lines go faster, such as self-checkout stations, 15 items or less express lanes, and cross-training employees to serve as back-up cashiers as needed.

Amazon took another approach and simplified the process. The company has invented technology that allows customers to skip the line altogether.

This same philosophy guides the company's internal operations. 

Earlier this year, I had the opportunity to tour an Amazon fulfillment center where I was able to see first-hand how Amazon gets orders out the door so quickly and accurately. There were several things the company does differently than the typical fulfillment center that in hindsight make perfect sense.

 

Amazon's Service Philosophy

Rossman explained that "most customer interactions are the result of either a defect or an error."

So the culmination of Amazon's customer obsession, quest to reduce friction, and invent and simplify philosophy centered around avoiding contacts in the first place.

If you think about it, that's really how Amazon has cemented its reputation for outstanding customer service. You don't hear tales of Amazon employees going above and beyond like you might with some other companies.

What you experience is the ability to quickly order a product with minimal effort and have it delivered within days or even hours.


An Inside Look at Amazon's Fulfillment Center Operations

Do you ever wonder how Amazon orders arrive so fast with near-perfect accuracy?

The company's operational excellent is the backbone of Amazon's reputation for outstanding customer service. I recently toured Amazon's ONT2 fulfillment center in San Bernardino, CA to get an inside look at exactly how the company does it.

Here's a quick profile of this particular facility:

  • Specializes in small and medium-sized items
  • It's the size of 28 football fields
  • Employs more than 2,500 people full-time
  • 14 million products are shipped from here
  • Amazon's oldest fulfillment center in California

The center is called ONT2 after the nearest airport (Ontario, or ONT) with the 2 designating this as the second center in the area.

The tour revealed cutting-edge technology seamlessly blended with smart logistical management. There was even a genius operational practice that was completely counterintuitive.

Pictures weren't allowed inside, but I took good notes on the process required to pick, pack, and ship your order to you.

Photo credit: Jeff Toister

Photo credit: Jeff Toister

The Pick Process

This is where the items you order are selected from inventory, or picked, and sent via a conveyor belt to a packing station. 

The process is initially quite counterintuitive. Inventory items are stored in seemingly random locations. One inventory bin might contain a stuffed animal, a video game, a protein shake, and a few other mismatched items. Amazon actually does call this "random stow."

Amazon puts items in all these random locations so they can assign individual pickers to tight areas. This minimizes time spent wandering around the warehouse. It also ensures that each picker has roughly the same amount of work.

Computers make this process possible. Pickers are routed by computer to maximize efficiency. (More advanced warehouses eliminate the walking entirely and have robots carry shelves of products to the pickers!)

The pickers in ONT2 push around carts with tote bins and carry around hand-held scanners. The scanner tells the picker what to pick next and where to find it. A series of three bar-code scans ensures pickers select the correct item:

  1. Scan a bar code on the tote bin.
  2. Scan a bar code on the shelf where the item is located.
  3. Scan a bar code on the item itself.

The picker can't continue until these three scans are accurately completely. Once they are, the picker's handheld scanner directs the picker to the next item which may or may not be part of the same order.

 

The Pack Process

Once filled, pickers load their totes onto conveyor belts. The belts whisk the totes to packing stations where orders are packed for shipping.

Stations are separated into single-item orders and orders with multiple items.

For single-item orders, packers are prompted by computer to select the correct size box and pack the item. A series of scans ensures the correct item goes in the correct box. 

For orders with multiple items, packers first sort items from a tote onto a cart with multiple shelves so the items from each order are grouped together. An order might have items delivered via multiple tote bins if it contains items picked by different people. The computer and scanning process keeps everything organized.

Here, I was amazed at the speed at which packers operated. They selected items, assembled boxes (which are stored flat), put in protective filler, and taped each box shut in a matter of seconds. 

 

The Ship Process

Orders are routed from packing stations down a conveyor belt to something called a SLAM machine. 

SLAM stands for:

  1. Scan
  2. Label
  3. Apply
  4. Manifest

The machine scans boxes one at a time. A shipping label is then generated and applied.

The boxes are weighed as they travel down this line and the weights are compared to the expected weight for each shipment. If the weight is off, the box is automatically pushed off the shipping line into a quality control station for inspection.

I was lucky enough to see part of Amazon's rigorous quality control methods on display. Operators detected a problem with the SLAM machine where labels were being misapplied. They immediately shut down the entire line and attempted to fix the problem. 

The operators quickly isolated the issue to one of two label applicators on the line, so the disabled to problem applicator until a technician could arrive and restarted the line.

From there, boxes are automatically routed by destination and carrier (USPS, UPS, etc.). The boxes travel along conveyor belts until they reach a warehouse bay door where workers load the boxes into waiting trucks.

 

Take Your Own Tour

Cameras aren't allowed in the fulfillment center, but I did find a news story that showed behind-the-scenes video of this process.

Amazon currently offers tours of six facilities. Check here to find a center near you and book a tour!