Amazon launched in July 1995, and every Xmas was a near death experience for the first 7 years. I joined in ‘99 and got to experience this first hand. Starting in late Nov, all corporate employees were shipped to fulfillment centers to pack boxes for 6 weeks. Here’s what I saw:
Despite efforts to plan ahead, the company literally couldn’t keep up with holiday demand. 40% of all annual orders would come through in 6 weeks from Thxgiving through New Years. Ops teams would start planning in Jan, but by Sept they were always massively behind.
As “earth’s most customer centric company,” failing to deliver presents for Xmas would have been like Santa missing his deadline. But when demand exceeds even your most aggressive forecasts, it’s a physical world problem that requires physical world solutions - ie human bodies.
Xmas ‘95, every employee including Bezos packs boxes for 6 straight weeks, then vows to never let that happen again. 1996 - corporate staff joins warehouse staff and they barely squeak through. Same story in ‘97 and ‘98. By the time I joined in ‘99, it was an annual tradition.
Picking items, packing boxes, wrapping gifts for 10 hours / day x 6 days / week is fucking hard work. I have immense appreciation for the people who do these jobs. Your legs ache, your eyes go blurry. Repeating monotonous tasks over and over again w no natural light. Exhausting.
Also extremely disruptive to the business. Imagine if every engineer, salesperson, finance and HR, etc from your company left the building for 6 weeks. All at the same time. Year after year. If you don’t do it, the business could die. If you do it, the business might die anyway.
This became an existential problem for Bezos. He hired a bunch of ops execs from Walmart to fix it, but they kept failing. Then in 1999 he hired an exec who came out of manufacturing, not retail. Jeff Wilke had 2 major insights that stopped the bleeding within a few years:
1/ Shipping individual boxes to individual homes looked more like manufacturing than retail. It required a full re-think on workflows and process engineering. This is when Amzn started referring to their warehouses as fulfillment centers (FC) rather than distribution centers (DC)
2/ When corporate employees from Seattle parachuted into FCs for 6 weeks and then disappeared for 11 months each year, it was massively de-motivating for FC workers. Wilke put on a flannel shirt and talked about growing up in a blue collar family. He empowered and inspired them.
By Xmas ‘02, not a single corporate employee was required to pack boxes. Hooray! Wilke was worried corporate employees would lose their connection to this vital part of the business, so he created a program where every employee would some spend time in the FCs or customer support
The annual fire drills ended, the existential threat was conquered, and the rest is history. Several years later, Wilke was promoted to CEO of Amazon Retail. Last month he announced he’ll be retiring in January 2021, after the company gets through one more holiday season. Legend.
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