Amazon operates a massive 46,450 square meter distribution center in Marston Gate, England where thousands of items are picked, packed, and shipped each hour. The warehouse utilizes over 5,000 meters of conveyor belts and a four story "picking tower" to efficiently retrieve customer orders. While much of the product movement is automated, the warehouse employs many people from all backgrounds to select, package, and deliver products to customers. Amazon aims to continue growing its selection of products and lowering prices to maintain its position as a leading online retailer.

1. Amazon warehouse
Amazon adventure: what strange sights lie at the heart of the operation
known as Amazon.co.uk? We sent our intrepid reporter up the M1 to bring
us back a full report. Internet Magazine, Sept, 2003, by Kim Gilmour
Five thousand metres of well-oiled conveyor belts roll constantly up and
down at Amazon.co.uk's distribution centre.
At 46,450 square metres, the Marston Gate warehouse is the largest e-
commerce distribution centre in Europe. Walk the length of it and you'll see
masses of empty space for Amazon to take on even more product lines, or
extra stock during frantic holiday periods.
This hotbed of picking, packing and dispatching, which lies just off junction
13 on the M1, handles thousands of items every hour.
But Amazon.co.uk's distribution centre is far from being a faceless, fully-
automated operation. You won't see chrome-plated machines or space-age
robots picking goods off the shelves.
And there are no funky twenty-somethings riding Segway scooters around
the warehouse floor, as we discovered when we visited in June. People from
every walk of life are working here. Skilful hands deftly stuff books into
pigeon holes. Amiable grannies expertly wrap odd-shaped gifts. Young men
stack books and CDs onto shelves and move kitchen appliances around the
floor to a soundtrack of inoffensive pop music.
A huge banner above the workers' heads reads: 'Safety protects people.
Quality protects customers'.
The odd forklift whizzes by, loaded with packing crates. Huge trolleys of air-
filled packaging wait to be stuffed in boxes. Then the lunch whistle blows,

2. and everyone flows out into the company cafeteria for a quick coffee and a
chat.
"The idea is to keep a constant flow," says Mark Mastandrea, the distribution
centre's manager, his voice competing against the strangely comforting
chug-chug-chug of activity behind him. "We keep the cycle time as quick as
possible from the moment deliveries come in through the door."
Amazon has hundreds of suppliers, so every day is different for its receivers.
It's busy but not chaotic, and there's method behind this quasi-madness.
Whatever comes in is sorted and placed into special orange 'totes' - plastic
crates which travel by conveyor belt up to the four storey 'picking tower'.
The candy-store action begins here.
At the tower, Amazon's 'putaway' staff are assigned to a group of aisles,
where they allocate space to whatever they're shelving, Using portable
scanners, staff scan the barcodes on the items and the labels assigned to
each location. This lets Amazon's system recognise where items are
physically located.
You won't find any kind of Dewey Decimal System at the tower. Without the
aid of a computer printout, none of the pickers would find anything. It's a
place that your old librarian from school would find absolutely exasperating.
So, if you'd ordered The Muppet Movie on VHS, Amazon's system would
send a picker to the spot where it was shelved. A single item order is
straightforward enough--the pickers actually use your invoice to select your
item before it gets conveyed by tote to the packing area.
"The multi-item orders are a little more complicated," Mastandrea says. "If
you were to order two, three or four items, they might be in different parts
of the warehouse."

3. The sophistication of Amazon's system is such that it generates optimised
pick lists for multi-item orders, finding the shortest possible route picking
staff need to take to gather parts of people's orders. Items are then put on
trollies before being sent to a 'pre-sort' stage.
Mastandrea points to one of the trollies. "There are items from many orders
on this trolley, and they'll go through a sortation process to get your items
into your box."
The trollies are filled with anonymous everyday people's orders--the only
thing these items have in common is that they happen to be neighbours on
the nearby shelf. There's Turtles and Tortoises for Dummies, a book on
making wedding speeches, Victoria Beckham's autobiography, a tattoo
pictorial, and Lonely Planet guides for Spain and Sydney.
The view from the picking tower seems somehow voyeuristic, as if we're
taking a glimpse into the minds and habits of ordinary people. "At the same
time, on all the different levels, there are many trolleys containing many,
many items from these orders," Mastandrea says. "All these trolleys go to
one place, and somebody will sort them all out."
During the pre-sort process--also located in the picking tower-- items are
batched up into the orange totes. There'll be perhaps two or three orders to
one tote, before they're sent to the sorting line.
Pallets of bulkier items, like kitchen appliances, are stored outside the
picking tower. Popular items that don't fit onto the shelves are also put here.
Predictably, Amazon's most popular item has been Harry Potter's latest
instalment. In the UK alone, pre-order figures stood at 350,000 one month
before the book went on sale.

4. Rather than hitching a ride in one of the orange totes--that would violate
health and safety regulations--we walk across the warehouse and up a steel
frame, which overlooks the sorting and packing operation.
The view is amazing. The totes containing the multi-item orders arrive from
the picking tower. They're sorted into slots like pigeonholes, with each slot
representing one order.
A woman places several copies of French for Beginners into one of the slots.
Perhaps they were ordered by a teacher. "When she's done sorting the items
for this set of orders, they get moved to the other side where the packers
pack them up," Mastandrea explains.
Packages then get conveyed to a whizz-bang postal sorting operation, where
they're automatically weighed and franked. It's slick, clean and fun to watch
the brown packages glide on by endlessly. Although Amazon doesn't release
regular shipping figures, its busiest day was in Christmas 2002, when a
whopping 200,000 orders went through the fulfilment centre in a day. More
than 6.2 million items were ordered from 1 November 2002 to Christmas.
Various chutes shift the packages around and sort them out for the Royal
Mail, which remains on site to handle the constant dispatches.
Then it's off to the gift-wrapping area. It's occupied by two middle-aged
ladies working opposite each other. These two have wrapping targets to
meet, of course, and appear to be wrapping at least 20 gifts an hour before
sending them on to be labelled.
Extra staff are always employed to pack gifts at Christmas time, when even
staff from Amazon's main office in Slough get involved. Amazon.co.uk's MD
Robin Terrell says he quite enjoys being at the Marston Gate warehouse
during Christmas, where he does picking or gift wrapping. "When we go up

5. to help, we always joke about whether productivity increases or decreases!"
he says. "You get a real feel for the product, and the sheer scale of the
operation. Getting in there and doing it is all part of the fun."
Terrell knows people have preconceived ideas about what Amazon's
warehouse must be like. I tell him I didn't realise so many people were
involved. Apparently, that's a common reaction when people see the reality
of the operation in action.
"There's a massive number of people involved. The facility we had in Slough
was tiny in comparison," he says. "It was entirely manual, and you always
saw a lot of people running around pushing trolleys of books and CDs. At
Marston Gate, you don't see that so much. You go to the picking tower and
see lots of people, but most of the product moves on conveyors. In a way, it
looks less busy at the new warehouse."
But there's no room for tardiness or slacking off here. Amazon's system
regularly monitors productivity by area as well as by individual. Most people
tend to stick to their areas of expertise.
Our tour is over all too soon, but at least the drizzle outside has subsided.
I'm left thinking about all the people who'll process my next order at
Amazon. Who'll be picking my bulky copy of Martin Parr photographs (30 per
cent off!) next week?
I peer through the window at the man sitting in the cafeteria drinking coffee,
the group of ladies outside having a laugh, and the guy retrieving something
from his locker.
Founder Jeff Bezos' motto is: 'work hard, have fun, make history'. After all,
it's hard work, not bleeding edge technology, that will play the greatest role

6. in ensuring that the biggest consumer e-commerce operation the world has
ever seen continues to grow even bigger.
WHERE DOES AMAZON GROW FROM HERE?
Let's get Amazon's sales figures straight. The e-commerce behemoth
generated more than $1 billion in net sales in the first quarter of 2003.
International segment sales, which include the UK, German, French and
Japanese sites, accounted for $379 million of this. But if you thought
Amazon.co.uk was big enough already, think again.
"It sounds glib," says Amazon.co.uk MD Robin Terrell, "but we seriously
want to be the place where you can go and buy anything online."
Although Amazon made a $10 million loss during this quarter, that's a vast
improvement on the $23 million Amazon lost in the first quarter of 2002. A
couple of years ago, Amazon's US headquarters set an ambitious goal -- for
Amazon International to generate 50 per cent of total sales by 2005. "In the
most recent quarter, it was 44 per cent," Terrell says. "The fact that
International is still growing by 68 per cent year on years shows that while
we can maintain that sort of growth. International will very quickly become
as big, if not bigger, than the US... It's just a matter of time."
Most of Amazon's initiatives are still clearly driven from the US. Quite a few
have yet to reach our stores -- there's a much higher level of personalisation
on the US site, which offers a gold box feature to provide shoppers with cut-
price goods for a limited time, for example. In-store pickup is also available
stateside -- people can collect their goods from their local Borders, Circuit
City of Office Depot stores. This boosts Amazon's revenue during the
precious last-minute Christmas shopping period, when posted goods may

7. not arrive in time. Ultimately, Amazon hopes to provide the same product
lines and technological platforms across all its global sites.
Amazon's aggressiveness on pricing has paid off well. In the UK, many of its
goods -- including books sell at 30 per cent off -- and its free delivery on
orders over [pounds sterling]39 has been a huge success.
"We never pre-announce new services, but you'll see more of the same,"
Terrell says. "We'll continue to execute on our existing strategy of increasing
selection and lowering prices."
Amazon's been in the news recently after speculation that it was in talks
with Apple to licence its popular iTunes digital music store. Whether it teams
up with Apple or not, digital music downloads are something Amazon's
founder and CEO Jeff Bezos has been thinking about for years. Terrell says.
"Inevitably, online retailers are going to be best placed when it comes to
selling digital downloads of music. Until a year ago, I don't think anyone had
really got it right."
Although Amazon argues that it's the most popular e-commerce site in the
UK, recent figures from Nielsen//NetRatings suggest that eBay overtook
Amazon.co.uk in the popularity stakes for the first time in March 2003,
increasing its audience to 6.8 million compared to Amazon.co.uk's 6.1
million. But the difference is negligible, and Terrell isn't worried. "We're
focused on expanding our selection," he says. Posted by kimgilmour at April 24,
2004 11:16 PM