Operational Management Lean Management at Amazon

Ries (2011) explained that the key principles of lean operations are straight forward and easy
to understand, as it means moving towards the elimination of the waste so that more faster
and dependable operation can be developed and high quality products and services can be
produced. Womack & Jones (2013) stated that lean operations help business organisations in
utilising its resources in a most efficient manner, while examining or evaluating the
bottlenecks effectively, which further helps them in increasing their overall performance and
productivity. Moreover Lean Management helps businesses in minimising the overall defects
and waste during the production of goods.
With regards to the effective Lean Management Wilson (2009) stated that lean management
helps business organisations in reducing the amount of waste during production, along with
the reduction in the defects in products. This further leads to the production of more elastic
range of products while reducing the cost of production on the other hand (Wilson 2009).
While on the other hand Womack & Jones (2013) explained that lean management helps
businesses in increasing the productivity of workers, output rate and further minimises the
inventory at all level of production processes, while reducing the lead time during
manufacturing process.
Wison (2009) stated that lean management in the operations of an organisation leads to the
elimination of the activities that do not create value to the customers in products and its
objective is to eliminate the waste during production. Womack & Jones (2013) further states
that lean management further helps businesses in redesigning their processes on order to
attain efficiency in their processes.
Romero (2014) states that since the day he created Amazon, Jeff Bezos always had the spirit
of lean management, as he was customer centric completely. In this regard McKinsey (2014)
also explained that Amazon is a natural place that focuses on the application of lean
principles. In his article McKinsey has explained that the CEO of Amazon understands that
the customers should not pay for the waste and it is necessary for them to focus on waste
reduction as it is the key concept of lean. In regards to the lean operations of Amazon
Rodriguez (2014) stated that the organisation has always used the advanced and effective
information technology, which has been helping them in understanding the needs of their

customers and passing the right signal down. For instance at Amazon the selection of the
transportation method for delivery of the package is driven on first priority by the date
promised to the customers. In this regard Romero (2014) adds that the lower cost options
enter the equation only if there is an equal probability of in time delivery and that is basically
the lean principle.
According to McKinsey (2014) Amazon has more workers working in the customer service
centres and fulfilment centres in comparison to the workers working as computer or science
engineers. He further explained that there was a need to engage all of the employees in
continuous improvement from Gemba to attain objectives because these workers greatly
contribute to the overall processes like receiving, stowing, picking packaging and sending
them to the ultimate consumers. Rodriguez (2014) explained Gemba as the physical frontline
place of value work. As discussed above, that Amazon has evolved from a bookstore to a
store for everything and throughout its journey the company had surely reinvented the
automation, by following lean principle of automation. This principle has helped the
organisation in keeping its workforce for high value, complex and machine oriented tasks in
order to support the overall tasks.
While explaining automation McKinsey (2014) stated that it helps employees in performing
their tasks in a safe and defect free manner by just automating the repetitive, basic and low
value steps of the processes. This overall lean principle has provided Amazon an opportunity
to have a very flexible workforce being assisted by the machines that further brings the
overall process from three to six sigma. McKinsey (2014) further explained that another
major example of implication of Lean at Amazon is its enforcement of the standard work,
collectively with the elements of job into an effective sequence, while reducing the waste in
order to attain the most efficient level of production.
Rodriguez (2014) states that Amazon had considered implementation of the andon cord
principle in the customer services. Bezos was excited about it and the management team has
implemented the principle. In regards to the andon chord McKinsey (2014) stated that it is the
innovation of Toyota that is currently being used by most of the businesses these days, that
helps their front line workers to address the quality and other issues by stopping the
production immediately. At Amazon this process starts when a customer calls the service
agent and reports any defect in the product and if the defect is repetitive then the customer
service agent immediately stops the line by taking the item off the website until the issue is

resolved. The objective behind this is to satisfy the needs of the customers by resolving the
defect from the product. For this Amazon has created an entire background process for
identification, tracking and resolving the defects in the product.

References

McKinsey. (2014). When Toyota met e-commerce: Lean at Amazon, Available online at:
http://www.mckinsey.com/insights/operations/when_toyota_met_e-
commerce_lean_at_amazon [Accessed on 05/01/2019].
Ries, E. (2011). The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to
Create Radically Successful Businesses, Crown Business.
Rodriguez, L. (2014). Lean Innovation at Amazon, Available online at:
http://leansixsigmainfo.com/lean-innovation-at-amazon [Accessed on 03/01/2019].
Romero, G. (2014). Lean Innovation at Amazon, Available online at:
https://www.linkedin.com/pulse/20141004182539-54657892-lean-innovation-at-
amazon?forceNoSplash=true [Accessed on 07/01/2019].
Wilson, L. (2009). How To Implement Lean Manufacturing, McGraw Hill Professional.
Womack, J, P and Jones, D, T. (2013). Lean Thinking: Banish Waste And Create Wealth In
Your Corporation, Simon and Schuster.

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