Inside the logistics backbone that’s helping Amazon win in India (Quartz)

Inside the logistics backbone that’s helping Amazon win in India

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Jamalpur, India

The trucks drive down a single lane road, just off national highway 48, past lush fields and one-storied houses of Kharkari and Baslambi villages in Haryana’s Gurgaon district. They slow down at Jamalpur, some two hours away from New Delhi, where a cluster of warehouses dominate the sparse skyline. The newest among these facilities is Amazon India’s month-old, 250,000-square-feet fulfilment centre (FC), as the world’s largest online retailer calls its warehouses, that was officially opened for business on Aug. 31.

At the entrance to its cavernous interior, with more than a million cubic feet of storage space, there are full-height turnstiles, metal detectors, and close-circuit cameras. Inside, working in two shifts, a few thousand workers (the company declined to provide a more exact number) inventory, sort, store, pick, package, and despatch products from Amazon India’s marketplace for 20 hours a day. Outside, a fleet of trucks ferries in goods from sellers and takes packed, labelled parcels off to customers. It’s a compelling, almost ceaseless, concert of manpower, technology, and design—all part of Amazon India’s logistics backbone, a key ingredient in the American e-commerce giant’s success in the subcontinent.

“We started off in 2013 with one FC, that was Bhiwandi (near Mumbai),” Akhil Saxena, Amazon India’s vice-president responsible for logistics and delivery, told Quartz. “At that point of time, we had just two categories, books, and music and videos. And 100 sellers.” Since then, the company has signed up over 200,000 sellers, built 40 more FCs in 13 states with a total of 13 million cubic feet of storage space, decided to invest another $3 billion, and upended homegrown competition to become one of two main e-commerce companies in India.

This expansion hasn’t been entirely without trouble. Amazon India’s warehouses, in particular, have come under the close scrutiny of tax authorities. In Karnataka, the state government wanted it to pay taxes for goods stored in these facilities. Amazon India maintained that it was only holding these goods till they were sold. The dispute dragged on for three years, till the goods and services tax (GST) finally put an end to it. Unlike other markets where it is a retailer and maintains is own inventory, Amazon’s India unit operates as a marketplace, where it facilitates sales on behalf of the sellers. And that happens through fulfilment centres, like the one in Jamalpur.

A barcoded reception

All goods come through dozens of truck bays located around the exterior of the hulking grey-and-maroon Jamalpur warehouse. Sellers are assigned specific truck-bays when they make their delivery appointments, which the vehicles back into at the allotted time to disgorge their load. The items, which are typically labelled before they arrive here, are then placed in a staging area. These labels include a barcode and an item description. The overwhelming majority of these goods are either under the Fulfilled by Amazon programme, wherein the company stores and ships products for sellers for a fee; or Easy Ship, where sellers store their products but Amazon ships it for them, again for a fee. There’s also a much smaller, third category of sellers who store and ship their products themselves.

Back in the warehouse, the goods are carted across to receiving stations that scan the labels, identify each product’s dimension and weight and then place them in trollies, which have another set of barcodes. This pairing of barcodes—one on the product, and the other marking its location—is the basic logic through which millions of items traverse every Amazon facility.

Workers then pull these loaded trollies to the storage area, where thousands of library bookshelf-like units are arranged along orderly aisles. Of varying dimensions, these shelving units are divided into smaller compartments, each of which is assigned a specific barcode. So, when a worker drops off a consignment, he or she scans each item and the barcode of each compartment. “Anything can sit anywhere,” said Saxena, during a tour of the facility. At this point, when the warehouse computers know exact where an item is placed, the product appears on Amazon India’s website, ready to be sold. This entire process, from delivery to storage, is typically completed in under 24 hours.

Easy come, easy go

Suitably stacked, products now await an Amazon shopper’s interest.

After a customer places an order on the website or through the app, the request makes its way into a warehouse and workers are dispatched to pick the items up. Thanks to the barcode pairing process, they know exactly where to go. At the right compartment, the labels are scanned again, items picked up and placed in either grey or yellow plastic tubs. The latter are reserved for single-item orders, while the grey tubs contain multi-item orders.

But, regardless of colour, all tubs are plonked on a 1.2 kilometre-long conveyor belt—the longest of any Amazon facility in India—that winds through the Jamalpur warehouse’s storage areas down to a bunch of sorting stations. Here, each customer’s order is separated and sent off for packaging on tall trollies. More barcode scanning ensues, as workers pull out items, pack them, and send them to labelling stations. The shipping labels that are affixed here contain everything, from a customer’s name and address to when the package should reach them (same day, next day etc.), and what mode of transportation is to be used (road, or air).

The labelling stations are also the final line of defence against Amazon messing up its orders: The weighing scale here checks every package and matches it with information received during inventorying to ensure that the right item is being sent out. Finally, another conveyor-belt takes the packages to a dispatching area. A group of workers then manually sorts them out, based on the mode of transport, before dispatching.

All of this operates like clockwork, yet the lack of automation at a facility of this size is somewhat surprising. The entire sorting process, and much of the movement of goods inside the warehouse, is done entirely by hand. The army of robots that Amazon has deployed in the US, for instance, hasn’t arrived in India. “We are in year four,” in India, said Saxena, when asked about this. “The US is in year 22.”

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September 5, 2017 at 09:44PM