In: Operations Management
1. In what ways do Amazon’s information systems reduce errors? Why is error reduction so critical to firm performance?
Amazon, being the leader in the online shopping market, has more than 2 million orders to be shipped during any peak seasons at Amazon's warehouse. Handling such a huge quantity of packages is always very prone to errors in shipment and because of which customers will receive wrong products which will reduce the brand image of Amazon and also increases the cost of reverse logistics. Also, customer satisfaction is the important attribute of any Amazon process and if customer suffers due to Amazon's information system error, it leads to customer dissatisfaction which is not at all good for company reputation and firm performance. Hance Amazon gives atmost importance to reduce the number of errors in Amazon Information System.
So let's discuss in what ways does Amazon achieve success in reducing the errors.
1. Amazon uses advanced techonlogies to minimize the errors which includes use of robots, automated warehouse management system for picking up items from inventory.
2. One process they follow while stocking up the inventory is it doesn't keep similar items next to each other which reduces the ambiguity while picking the products. The product are not organized according to their categories while placing them on shelf, they are randomly placed in the inventory. For example, you may find a phone is placed beside Harry Potter books in the shelf.
3. In many of the manual processes, they have used one of the popular Japanese techniques, Poka-Yoke , which means reducing the mistakes in the process. Majorly they have used Poka Yoke in picking and packing process of online order management system.
4. Even in the manual picking, it is not based on the text but rather on the Barcode system. Thus a man can pick up the item manually after scanning them via proper barcode scanner which ensures that correct item is picked by that person.