Amazon The algorithms of the largest retailer in the world

    Amazon is the largest online trading platform in the world and one of the most popular internet sites. 3 million sellers work through it, 350 million different goods are placed here. Amazon is responsible for 4 million deliveries per day. To cope with such a stream of applications, the company - mainly in warehouses - employs 270 thousand employees. This is four times more than all of Google.



    So that no one worker wastes time, the company has developed a huge control system, subject to strict algorithms. At the head of all - computer systems, calculating what everyone should do. Amazon was fined several times for excessive rigidity towards its employees, it’s work for wear and tear (well, or for those who want to lose weight very sharply). The company really does not like to share its secrets and disclose the algorithms by which all its 90 giant warehouses, "Executive Centers" operate. But we at Pochtoy accept hundreds of orders from them every day, and yet we found out something interesting about them.

    Supermarket warehouse


    Each Amazon executive center occupies 50-60 thousand square meters. These are approximately eight football fields. Everywhere yellow and orange colors, branded by the company. The space is well lit, but there are almost no sounds around, despite the presence of more than two thousand people. Only the buzz of conveyor belts and the buzz of the steps of employees following the next goods are heard. They silently collect orders, silently seal the boxes. Everyone is focused on his own business, there is no talk here. The system monitors the effectiveness of a person, and if he does not fit into the standard, he will immediately be fined or fired. Therefore, no one can afford to spend an extra second.

    New employees should not memorize departments with goods. They are simply not here. Each product is put where the place remains. The endless rows of shelves resemble a supermarket or library. Only everything is in complete “chaos”, without sections. The book can lie next to the plane, iPhone - next to jeans. A person cannot understand this logic.



    The system works by barcodes that are stored in the warehouse database. Each new product receives its code and is sent to the cell that is free and is as close to it as possible. And when an order arrives on the site and the goods need to be picked up, the nearest free worker on the display of his scanner, “gun”, is shown the number of the row and shelf. When an employee arrives at the site, it remains to once again read the barcode to confirm that no error has occurred. And then immediately on the scanner the next target lights up - with the address of the cell and the expected time for which it is time to take the goods. Sometimes this “target time” is 5-10 seconds. And your boss will see if you do not have time.



    The turnover is large, and the trust in employees is zero. At the entrance to the warehouse you must leave everything, including the phone, in your locker. You are given a reflective uniform without pockets and a handheld scanner “gun”. In addition to it, you can carry with you only a bottle of water and a transparent bag for money - to buy food in the dining room. In a separate room in front of the monitors, there is a security team that monitors the movements of all employees through their scanner. Such a system would probably be used by security in a high-tech prison. If a person leaves somewhere or lingers for a long time in one place, a manager goes to him to assess the situation. And at the exit - another check, like at the airport, to exclude cases of theft.

    Comfortable environment? No, this is not Google for you. Amazon is also not one of the best US employers. But the system gives a result. Conveyor belts move so fast that, for example, the Kentucky Executive Center can process 400 orders in one second. A parcel truck leaves the warehouse every two minutes. No one else has such an effective system in the world. The human factor is almost completely excluded, everything is controlled by algorithms.

    What happens with the product: the way from the order on the site to home delivery


    Manufacturers send their products to Amazon, and the company distributes them through its network of warehouses. This takes into account the previous history of orders, and if a region, say, especially likes to buy sneakers, it is more likely that a new batch of shoes will be sent there.

    The process of receiving goods is almost as important as sending it. Workers open boxes in trucks, take things out of them, put a marker on them and put them in baskets for transportation. Conveyor lines deliver these baskets to different parts of the warehouse, where other workers unload them, put them on a shelf, scan the product itself and scan the barcode of the cell in which it will be stored. From now on, the Amazon system will know where this item sits. No one else has such information. For a person there is complete chaos and confusion.



    Shelves are divided into small sections, and things are stored in them, like books in a library. Each cell has a barcode and an alphanumeric code (for example, P-1 A526 770 8: section, row, row number, cell order from the floor). The cell code does not say anything about its contents. The goods are evenly distributed throughout the warehouse so that employees do not have to go long. There is only one rule: two identical products cannot sit in adjacent cells in order to minimize the human factor here.

    When you order something on the site, the Amazon system quickly understands where such goods are located at the warehouse closest to you, and determines the employee who is now passing near this cell. His scanner lights up information where to go. A whole army of such “collectors” are working at the warehouse, moving in complete silence from object to object. For a day, each of them must find, scan and take to the conveyor a minimum of a thousand products.

    By conveyors, cargo arrives at one of the packing stations. Workers arrange goods on high shelves on casters. This is where different products from one order come together. Each slot on the shelf is a separate order. Then the shelves roll to the place of packing, and the contents of the slots are “rammed” into appropriate-sized cardboard boxes, known to anyone who has ever ordered anything from Amazon.



    At this stage, the algorithms again make people work at their peak. The computer displays the optimal box size for each order - and the time it takes to pack it. Packets of air roll out from the side, playing the role of pillows and softening delivery, and the tape with which the whole thing needs to be glued together. It usually takes thirty seconds to assemble one order. Hundreds of people work at the speed that we usually see only among the Chinese in untwisted youtube videos.

    The difference with the Chinese is that workers at factories in the Middle Kingdom are given bonuses for overfulfilling the plan, and Amazon warehouse employees are only fined for delays. Due to such a tough approach, which journalists in the USA called “paradise for a client, hell for an employee”, the company’s staff turnover is very large. On average, they stand here for 12 months. Amazon has the second (from the end) result in the Fortune 500 list in this regard. And this despite the fact that they pay 30% more than the industry average.
    Just for fun: at Microsoft, statisticians have been holding for 4 years, at Xerox - at 7.2 years. EBay and Yahoo! - only 2 years. And worst of all the well-known companies, things are with Google. From the search engine, on average, they leave after 14 months. But these are highly paid professionals who have gone up or are part of a startup. A little different people with different perspectives and a different level of remuneration leave Amazon.

    Packed boxes are sent via another conveyor to the machine, which carries the marking and mailing labels. Then, stamped, orders go down into the large concrete basement, waiting for loading. From here, they are transported by FedEx, UPS, other postal / logistics companies, and Amazon itself.


    Packing packages at the exit

    So far, the retailer has not yet come up with optimal algorithms for “ramming” parcels into the truck - and, perhaps, loses a couple of percent on this, if not all the movers in childhood loved Tetris. But the company compensates for this thanks to a powerful separate system that analyzes the best route and delivery method for each individual product. Saving gasoline per year translates into millions of dollars, and the package arrives at the buyer for several hours, or even a few days earlier. The company claims that on its three busiest days in 2016 - on Black Friday, Cyber ​​Monday and the first Monday of December, it delivered 99.9% of orders within the deadlines stated on the website.

    In the USA, shipping for many items is free. In Russia - you have to pay, and often quite serious money. Amazon itself does not do this (in fact, part of the goods is delivered, but for fabulous money), so the package usually goes through one of the intermediaries. Payment depends on the weight of the goods. The cheapest option is FastBox from $ 8.99 per 500 grams .



    To further accelerate delivery and reduce fees for itself, removing monopolies from the market, in April 2017, the company launched delivery by air. Gigantic planes with Prime Air branded livery are already flying around America. Amazon is planning to spend $ 1.5 billion on its fleet, including 767 Boeing and drones.

    Robots replace humans


    In 2009, Jeff Bezos, founder and CEO of Amazon, wrote a letter to the company's shareholders declaring war on the Muda. This is a Japanese term meaning “futility,” “loss,” or “waste,” which Toyota first used. For Amazon, this meant that everything that was possible should work as efficiently as possible. Company statistics, for example, show that accelerating page loading by 1/10 of a second leads to an increase in customer activity by 1%. For Amazon, it's billions of “bonus" dollars. Delays in delivery are also unacceptable, even if it is a couple of hours. The company can say a little fad about this.
    The use of drones for delivery in cities is not yet permitted, and there is a speed limit on roads for cars. Therefore, almost the only way to significantly speed up delivery is to continue to optimize the work of “collectors” in the warehouse.

    And there is something to optimize, even despite the fact that they find the goods with their scanner-guns in seconds. The main problem that Amazon has identified for itself is the human factor. Firstly, according to the requirements, workers should be able to lift up to 22 kg and spend 10-12 hours on their feet. During the shift, they go 12-20 kilometers between the shelves. Errors in this mode are almost guaranteed. And if someone cannot lift a load, or if a person suddenly mixes up the row / shelf / cell number, this is another slowdown.



    Therefore, the warehouses of Amazon are actively robotized. In 2012, the company bought Kiva Systems, the manufacturer of robots, for $ 775 million. Now about 40 thousand of their machines, similar to large orange rumbas, are operating in the warehouse. Ideally, such robots will themselves choose the right product and deliver it to the truck, but so far their task is simpler. A mobile shelf is placed on top of the robot. And when the product in one of the cells becomes necessary for the buyer, the robot itself delivers the shelf to the person. It turns out much more efficient: people do not have to run, they make fewer mistakes. The robot does not get tired, it can work indefinitely and move any weight. The link between the power of automation and the human brain is so far the most productive. But Amazon Robotics technology continues to improve, and maybe in the near future, two hundred thousand American “collectors” and “packers” will have to look for a new job. And Amazon's automatic drones delivering goods to their homes are set to replace truck drivers soon. Man is the only superfluous link in the ideally debugged machine of the Internet giant.

    The developed infrastructure and huge scale allow Amazon to keep the lowest prices. On some categories of goods, the retailer works at a loss, just not to concede to competitors. Prices on the site are usually one and a half to two times lower than Russian prices (no kidding). And you can deliver purchases from there to Russia using Pochtoy.com. If you register and enter the GEEKTIMES promo code, for the first shipment from the USA we will give $ 7 to your account.

    By the way, about the secrets of the Amazon IT-structure in our blog you can read here .

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