Here’s how Amazon achieves next-day delivery
We’ve all purchased from Amazon at one point or another in our life – perhaps a little too much over the last year as we got bored from being locked inside the house. Maybe some of us even decided to ride the wave and start selling on Amazon. In 2020, 1.3 million new sellers joined Amazon Marketplaces worldwide, driven by the strong demand as well as the simplicity of FBA, Amazon’s fulfillment services.
But what really happens inside an Amazon fulfillment center? What’s the secret behind the machine that enables online orders to be delivered in under 24 hours?
At Heroes, we acquire and operate successful FBA businesses, and part of our job is to understand how Amazon FBA works from the inside out. So in this article, we’ll take you on a virtual visit to Amazon’s El Prat Fulfilment Centre, the e-commerce giant’s main distribution platform in Southern Europe.
Whether you’re an Amazon seller looking to understand how Amazon fulfillment centers work or a curious consumer who wants to get a peek behind the scenes, keep reading!
What is Fulfillment by Amazon (FBA)?
Launched in 2006, Fulfilment by Amazon (FBA) lets third-party sellers use Amazon’s vast warehouse and distribution network, comprising more than 175 fulfillment centers around the world in more than 150 million square feet of space, to fulfill their orders. All they need to do is send their stock to an Amazon warehouse, and for a small fee, Amazon will pick, pack, and ship orders to their customers.
By using FBA, sellers benefit from the state-of-the-art infrastructure that enabled Amazon to set the industry standard in terms of 2-day delivery, next-day delivery, and more recently 2-hour delivery. They also benefit from easy returns and Amazon customer service. In short, sellers can focus on growing their business while outsourcing logistics to Amazon.
It is estimated that 92% of Amazon sellers use FBA, with more than half of sellers using FBA as their only fulfillment method.
A Look Inside Amazon’s Barcelona El Prat Fulfillment Center
Now that we know what Amazon FBA stands for, let’s have a closer look at how Amazon Fulfilment Centres work. For that, we’re going to walk you through every step of the fulfillment process inside Amazon’s El Prat Fulfilment Centre in Barcelona, Spain, from the moment a product enters the warehouse to the moment it leaves in a truck.
The El Prat Fulfilment Centre is Amazon’s main distribution platform in Southern Europe. It fulfills orders from the whole European continent but is only dedicated to small items. Bigger items are processed by Amazon’s Fulfilment Centre in Madrid.
Amazon also operates a fulfillment center in the heart of Barcelona for orders requiring 2-hour delivery.
The fulfillment center spans across 221 000 sqm and is divided into 2 areas:
an Inbound area where products are received and stored, and an Outbound area where parcels are dispatched.
At the entrance of the center, you can find an office area dedicated to the Support teams, including the Training team, the Security team, the IT team, and the HR team. The facility also houses the Spanish AWS team.
Reception & Storage
In the inbound area, incoming parcels are sorted by an Amazon Associate -that’s how Amazon employees, including warehouse workers, are called- and placed onto yellow shelves. These shelves have different compartment sizes.
The placement of the product on the shelf is at the discretion of the Associates, who have received prior training. Each time an Associate puts a product away, she scans the product, as well as the compartment in which she has placed the product, to keep the virtual inventory up to date.
The shelves are mounted on robots that look like robot vacuum cleaners. These robots were originally produced by a company called Kiva Systems, which was acquired by Amazon in 2012 and renamed Amazon Robotics. These robots automatically move the shelves to the picking stations according to instructions from the Warehouse Management System (WMS).
As a rule of thumb, Associates will divide the product batches into several different shelves to reduce the picking time. For example, if there are 3 simultaneous orders for water bottles and the water bottles are stored on 3 different shelves, these 3 shelves can simultaneously move to 3 different picking stations.
The robot-mounted shelves move around the warehouse by scanning the QR codes on the floor to locate themselves in space. There are 4 QR codes for every square meter. They are also equipped with sensors that help prevent them from bumping into each other.
When a product stored on a shelf falls on the floor, the robots are able to detect it and send an alert to the WMS. An Associate will then enter the storage area to put it back on the shelf.
The storage area is barricaded and its access is forbidden to all staff, except for a special type of Associates who are equipped with specially designed vests that inhibit radio signals. Robots within a certain radius of an Associate wearing a vest will automatically stop, thus avoiding accidents.
There are two picking zones: a zone dedicated for single-reference orders and a zone dedicated for multi-reference orders.
When a single-reference order comes in, the WMS instructs the shelves containing the item to bring it to the designated picking station. The Associate working at that picking station will read the screen, retrieve the item and pack it.
Similarly, when a multi-reference order comes in, the shelves will automatically move to the designated picking station. Associates work in teams of 2 to fulfill multi-reference orders. The 2 Associates in every team will face each other, separated by a shelf with compartments. The first Associate retrieves the items and places them onto the shelf (one order per compartment). Once all the items from an order are inside the compartment, she presses a button to notify her colleague, who then packs the order. Each compartment of the shelf is equipped with a button of this type.
There are 6 or 7 different carton sizes, and it is the computer system that recommends the size of the box to be used. When the product is smaller than the box and there is extra space, the Associates will add paper to prevent the product from moving around too much during shipping.
To protect the privacy of customers, at the packing stage the label on the package does not contain the customer’s name and address. These appear on the final label which is applied by a machine later on.
Sorting & Quality Inspection
Once packed, the parcels are placed on the conveyor belt, where they are divided into 2 categories: light parcels that can be “thrown” into the trucks, and heavy/bulky parcels that require more attention from the carriers. There is 22km of conveyor belts in the El Prat Fulfillment Center.
Abnormal parcels are automatically detected by the WMS and sent to a dedicated area, where they are examined by an Associate.
Amazon works with the largest carriers to ship parcels, such as UPS, DHL, or DPD. Each carrier serves a different geographical area. Amazon also operates its own Delivery Fleet in some cases.
When an order is placed, it only takes 2 hours for the parcel to be prepared by the fulfillment center. What takes up the most time is the shipping.
What’s it like to work inside the El Prat Fulfilment Centre
Amazon Associates work from Monday to Friday, and on Saturdays only in the afternoon. The rest of the time is dedicated to the maintenance of the infrastructure.
Associates have collective targets with regards to the number of products to be processed by the fulfillment center per day. If an associate is too slow on a process, she either receives additional training or is transferred to another process.
When an Associate starts working for Amazon, she is trained on a single process. After 3 weeks, she will learn a second process, and so on. Generally, experienced Associates will alternate between several processes every day to avoid monotony.
If you’ve ever wondered how Amazon manages to keep up with the next-day delivery deadline, now you know! The secret is a state-of-the-art, well-oiled machine made up of careful planning, breakthrough technology, and a human touch.
This fully automated fulfillment center is the closest you’ll get to understanding the Supply Chain innovations that have fuelled Amazon’s growth over the past decade. It’s also reassuring to know that your orders are in good hands.
Speaking about putting your brand in good hands, if you’re an Amazon seller and you’re considering selling your business, our team at Heroes will take up the torch and make sure it grows for years to come. Get in touch with us to get a free valuation of your business!