Business and Employment: How Amazon works

Business and Employment

E-commerce giant Amazon typically receives over 35 orders per second during the busy Christmas period. This volume of orders – many of which need to be shipped within 1 or 2 days – requires reliable, efficient, and highly scalable IT systems. This excellent video from the BBC explains the information technology behind the scenes that makes Amazon and similar online retailers work. It provides a real insight into some of the ITGS Business and Employment topics.

Like many retailers Amazon uses bar codes to identify products. However, Amazon also uses the codes to identify shelving locations in its vast warehouses. This allows it to use “random storage” or “chaotic storage”  – items are not grouped together in the warehouse (e.g. all the DVDs in the same place or all the books on one shelf) like they are in a traditional shop. Instead, a computerised system tells workers where to place stock items when they arrive, and the same system tells other workers (“pickers”) where to find them when processing an order. A big advantage of this system is that it is harder for pickers to make mistakes by confusing similar items (e.g. two external hard disks with different capacities) because they are physically separate. Similarly, popular items may be available in several locations around the warehouse, meaning many pickers are not trying to access the same small shelf space.Another interesting use of IT is the automatic weighing of packages before they are sent to determine if the weight (and therefore the contents) matches the weigh of the ordered items.

Of course, supporting the whole e-commerce operation is a vast database containing product details and linked to the Amazon web site, the workers shelving goods, the pickers who process orders, and the packers who dispatch them to customers.

The video contains many great examples of information technology being used to improve business efficiency – definitely worthwhile viewing. You can watch it here.

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