Learning from Amazon Prime Now's Inventory Management

Amazon’s Prime Now service offers one-hour delivery on tens of thousands of groceries and household items, within 27 cities in the US.  Whether this is something that will expand beyond Amazon’s initial launch in the US, or even across to the UK and Europe is still to be seen.  But whether or not Prime Now becomes the next eCommerce trend that the rest of us have to live up to, the way in which Amazon handles its inventory management reveals some interesting ideas and tactics that can apply to you and your business.

Watch the Tech Insider video below which takes us inside Amazon’s facility in Manhattan and then read on for our take on why this is useful to you.

As a rapidly growing retailer it can sometimes be difficult to take ideas and processes that work for a behemoth like Amazon and consider how they could be applied to your business. Cloud Inventory Management can be one of those processes.  As you’ve grown you will have gone from knowing what you’ve ordered, to checking supplier invoices, to tracking stuff on spreadsheets.

Putting an actual system in place that actually allows you to manage your inventory, rather than just keeping a record of it, drives efficiency and improvement and allows you – as a retailer – to deliver the best experience possible.  Which is exactly what Amazon are doing with Prime Now.

In terms of their service and the video, there are three key points that you can take away and apply to your business today:

1.      Warehouse Journey

Having an inventory management system in place allows you to build up a map of your individual warehouse locations.  At its most basic level this means that whenever you perform an activity that impacts a stock item, you can tell your system which location was involved, and you will not just know how many items you have of a product overall, but you will also know how many are in each location.

Prime Now are taking this a step further – as do most major picking operations – by ordering their picking journeys based on warehouse location.  Alphanumeric sorting, the use of sites and zones and location ordering are all ways of ensuring that your system is able to suggest the optimal route for your pickers to take.  The less time they spend re-tracing their steps in the warehouse, the quicker they’ll be and the more orders you will be able to handle every day.

2.      Having a dedicated Pick Zone

You will have noticed that there weren’t any pallets in the video.  Or fork-lifts taking stock down from high locations.  This is because Prime Now are picking from a dedicated area of their operation that they are replenishing their bulk stock into.

If you can afford the space, having a dedicated picking area in your operation will provide benefits on a number of levels:

This does, of course, depend on what you are picking.  Some goods simply have to be stored in bulk due to their size, shape or weight.  But where you have small items that can be picked in this manner, it is good to do so.

3.      Random Stocking

This is the heart of Tech Insider’s video and is really cool to see.  However, I would like to emphasise a benefit that the video doesn’t explicitly pick up on.  Yes, using locations and barcode technology means that it’s simple to put anything anywhere.  However, from my perspective, the real benefit that comes from working like this and the thing I found most exciting about the way in which Amazon were working, was the impact this will have on pick accuracy.

By storing completely unrelated items within the same location, it becomes incredibly difficult to mis-pick.  If you have four different DVDs in the same location, for example, it’s relatively easy to pick the wrong one – especially if you’re not yet using barcodes.

But if you’ve got – as in the video’s example – a DVD, a jar of pickles and some moisturiser in the same location, picking the DVD is that much easier and quicker to do and the chances of a mis-pick are practically zero.

I realise that finding this cool probably says a lot about me!  But having worked with stock control solutions for 15 years and knowing the benefits they can bring, it’s brilliant to see how Amazon are applying this technology.

Cloud Inventory Management And How It Will Help

I hope that the video and my points have convinced you that taking the next step with your inventory management is something that can help your business grow and develop.

The Cloud, and specifically Khaos Control Cloud, provides you with an inventory management solution that is available 24/7 on desktop and mobile devices.

This makes it easier than ever before to implement and maintain class-leading controls and processes for your business, whilst not burdening you with expensive initial costs for software and hardware.

Our cloud inventory management software allows you to learn from and compete with the retail giants.  If you haven’t already done so, click through and sign up for a free demo today.

Please Note: This article was edited on 21/02/2018 to reflect Khaos Control Cloud's updated process re: trials.


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