Filling Amazon's Tall Orders
See how the world's largest online retailer ensures that gifts get delivered on one of the busiest shopping -- and shipping -- days of the year
It's nearly midnight on Dec. 12. But the parking lot at the massive warehouse on East Newlands Drive in Fernley, Nev., 40 miles east of Reno, is overflowing with cars. A big rig idles nearby, and a few people mill behind a gate outside for a quick smoking break in the frigid night. It's Amazon.com's westernmost fulfillment center, 1 of 11 major distribution hubs worldwide that will help determine whether the e-tailer has a good year or just a so-so one.
At this time of year, the 800,000-square-foot building (the size of 13 football fields) is a beehive of activity, from the massive receiving dock to the almost continuously running conveyor lines that traverse the facility for more than nine miles. The pace isn't quite as frantic as one might expect, though. A sign in the utilitarian lobby reads, "You Don't Have to Run to Get the Job Done." But the plant is clearly operating full-tilt, with forklifts constantly beeping as they transport merchandise from here to there and shift thousands of packages in various stages of completion.
It's during this crucial time that retailers earn a big chunk of their profit for the entire year, and Amazon is no exception. During the week of Dec. 11, Amazon's busiest all year, it's still tough to tell whether this least virtual of Amazon's operations can literally deliver the goods well enough to satisfy customers -- or investors, who since early November have bid up Amazon's stock to $48, near its 52-week high.
But several hundred permanent and 1,200 seasonal workers are giving it their best shot. Over the prior weekend, Amazon's Holiday Delight-O-Meter, which tracks how many items the company has shipped since Nov. 1, passed 100 million. This plant is one of Amazon's most highly automated, able to ship hundreds of thousands of units a day. But Jeff Wilke, Amazon's senior vice-president for operations, says success still comes down to the grinding physical details. "It's rare that you have an operating advantage that lasts through anything but hard work," he says. "You just can't let up."
It's a huge operational task, the retail equivalent of a manufacturer creating a personalized product for each customer. "The dream of manufacturers and marketers is to do custom manufacturing, but it's hard to do it economically," says H. Kent Bowen, a Harvard Business School professor of technology and operations management who toured the Fernley center last year. "Nobody else has had this challenge" of accepting orders one-by-one, combining multiple items into one box, and shipping them out to individuals, he says. "The level of coordination going on is really remarkable."
On Dec. 13, Amazon opened up the doors at Fernley to the press, providing a glimpse of the machinery behind its slick Web site. Wilke even placed an order before the tour for a digital camera and a set of headphones. With camera in hand, we followed the complex process by which Amazon fulfilled his order and, almost certainly, more than 3 million others like it worldwide, on one of the year's busiest online shopping days.