QYou work at a company that continues to enjoy historic growth year after year, with no end in sight. How do
you make sure that your supply chain keeps up?
AFirst, it is scale and innovation. You have to have scale and innovation in order to do what we do. But more
foundational than that is leadership. Amazon is run off of
14 key leadership principles. I’m not going to talk about
all of them here, but they all support what we see as our
primary mission: staying focused squarely on the customer,
or what I call our “customer obsession.” We wake up every
day, and we go to war for our customer.
When I tell you everything is about the customer and
anything outside of the customer doesn’t matter, that’s how
it is at Amazon, including the supply chain. The supply
chain has evolved, it has scaled up, and it’s all been for the
As we plan for tomorrow, we keep our eye on three basic
elements: quality, cost, and the delivery
experience for the customer. “Quality, cost,
and delivery” is the obsession we have. We
build our supply chain around that obsession. Be it planes, trains, or automobiles,
we’re going to make sure we have quality
and speed. And we’re going to make sure
we provide an exceptional delivery experience because I know our customers expect
nothing less and that’s what we are here
QLet’s talk a little bit about the tactical side. What role have enabling technologies like automation played in the evolution of Amazon’s supply chain?
AThey’ve been extremely important. Amazon’s oper- ations have obviously grown in scale since that day
23 years ago when Jeff [Bezos] put a few books in a box,
sealed it up, and took it down to his local post office. We’ve
made millions—even billions—of customers happy since
that time, but in order to continue to do that today and
tomorrow, things had to continue to evolve and change. At
Amazon, we’re never satisfied with the status quo. When it
comes to serving the customer, there’s “divine discontent”
here, meaning we’re never happy and we’re always looking
to provide a better experience.
That was the case in our fulfillment operations a few years
back. We knew there had to be a better way to fill orders.
That ultimately led to the acquisition of Kiva Systems
[a robotics company Amazon bought in 2012 and later
renamed Amazon Robotics]. We now use robots to bring
goods to human order pickers, instead of sending workers
out into the aisles in search of items. And what does that
do? It only makes quality better. It improves accuracy and
obviously boosts speed, and it’s going to improve the deliv-
ery experience for our customers.
I should note here that the robots aren’t replacing people.
When they hear about the tens of thousands of robots we’ve
introduced into Amazon’s operations, people will say,
“Wow, robots! Where are we going with this? What happens to the people element?” Well, during that same time,
we have hired over 300,000 more Amazonians. They’re just
doing different work now. Using the robots allows our people to focus more on quality.
Q It sounds like a key to Amazon’s success is there’s never, ever going to be any resting on laurels. So what we did
yesterday doesn’t matter. Only today matters. Do you think
that culture has helped to drive all of this?
AOh, that is our culture. If you go to work at Amazon, you’ll be challenged
to look at things in a whole new way.
I mean, we have a bar—a performance
bar—that you have to clear when you’re
interviewing at Amazon. We have that bar
when it comes to what we want to do in
growing out and scaling projects, but ultimately we look at the customer. We say,
“Hey, what is the next thing that we have
to do?” Think about supply chain. Think
about where things are going. Right now,
people want things faster, but tomorrow, it
will be something different.
People have choices now in the supply
chain. What are some of those choices? Well, they can
choose the day they want their product delivered. And
along with choosing when they want it delivered, they can
choose where: on this part of the porch or in this milk box
or even inside their home or car.
And tomorrow, who knows? You can be somewhere, and
we may just fly it to you in a drone. The point is, it’s about
innovating for the customer through your supply chain and
not being apologetic for being divinely discontent.
QI’m going to get a little more into the weeds here and ask about Amazon’s decision to enter the airfreight
business. What made you decide to build your own air
fleet? Private truck fleets are very common. Private air fleets
not so much. Why go this route rather than simply use the
standard commercial air carriers?