The Amazon Warehousing Process

This blog entry is paraphrased from an email that is circulating on the Amazon warehousing process.  The most important element of this post is the video that shows how Amazon uses robots in one of its advanced warehouses.  The URL for that video is at the end, but its worth knowing a bit about how Amazon approaches warehousing before turning to the video — which I think many will find quite amazing.

The Amazon is the world’s largest online retailer. Moreover, it has expanded well beyond books and now has to warehouse everything from T-shirts and books to computers and groceries and lawn furnature. To do this Amazon maintains some eighty (80) giant warehouses, strategically located around the globe.  Some of Amazon's warehouses have over 1.2 million square feet of floorspace. At the heart of their global operation are people (over 65,000 of them) and a logistics system based on an approach which is known as “chaotic storage.”

Chaotic storage is like organized confusion.  It’s an random shelving system without permanent areas or sections. In effect, each item that comes in is simply assigned a number (barcode).  That means there is no area just for books, nor is there a place just for televisions (as you would find in a retail store layout.)  The product’s characteristics and attributes are irrelevant.  What’s important is the unique barcode associated with every product that enters the warehouse.

Every single shelf space inside an Amazon warehouse has a barcode.  And every incoming product that requires storage is assigned a specific barcode that matches the shelf space in which it will be stored.  This allows free space to be filled quickly and efficiently. A sophisticated database tracks and monitors every single product that enters or leaves the warehouse and keeps a tally on every single shelf space and whether it’s empty or contains a product.

There are several key advantages to the chaotic storage system.  First is flexibility with chaotic storage, freed-up space can be refilled immediately. Second is simplicity.  New employees don’t need to learn where types of products are located. They simply need to find the storage shelf within the warehouse.  You don’t need to know what the product is, just where it is. Lastly is optimization.  Amazon must handle millions and millions of orders. That means that at any given moment there is a long list of products that need to be ‘picked’ from the shelves and prepared for shipment.

Since there is a database that knows every product required for shipment and the location of each product inside the warehouse,an optimized route can be provided to employees responsible for fulfillment. Since Amazon deals with such a wide variety of products there are a few exceptions to the rule.  Really fast-moving articles do not adhere to the same storage system since they enter and leave the warehouse so quickly. Really bulky and heavy products still require separate storage areas and perishable goods are not ideal for obvious reasons.

In this storage system a wide variety of products can be found located next to each other, a necklace could be located beside a DVD and underneath a set of power tools. This arbitrary placement can even help with accuracy as it makes mix-ups less likely when picking orders for shipment.   Overall it’s a fascinating system that at its core is powered by a complex database yet run by a simple philosophy. It’s Chaotic Storage.  There’s no better way to put it.

Now that you have a basic idea of what they do and how they do it – here is a video of the system working in one warehouse where they use robots to do the picking. This video is of a talk at a conference where the speaker is describing the nature of the robotic operation. The nature of the robots and their approach is almost as interesting as the random approach to storage.

http://www.chonday.com/Videos/how-the-amazon-warehouse-works

There are so many clever ideas here – from the chaotic storage plan, and the robots designed to run under the shelves and then to bring the entire shelf (pod) to the packer, to the database that keeps track of locations (GPS) and plans routes for robots seeking items.

Hopefully some of these ideas will inspire others who are trying to design warehouse processes for the future.
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