According to Marc Onetto, former Senior VP of Operations at Amazon.com, Inc. (NASDAQ:AMZN), the Internet retail giant has consciously modeled its business operations on the “lean” principles first developed at Toyota Motor Corp (ADR) (NYSE:TM) (TYO:7203). Onetto has worked at Amazon since 2007 and is currently employed as a senior consultant with the company.
Bezos’ customer-centric mentality
Amazon.com, Inc. (NASDAQ:AMZN) founder and CEO Jeff Bezos has always been “totally customer-centric”, according to Onetto, and focused from day one on the primary lean principle of minimizing waste. This focus on the customer has led Amazon.com to adopt a number of lean principles in its business operations.
Amazon developing “autonomation”
Amazon.com, Inc. (NASDAQ:AMZN)’s success is about more than just automation. In fact, the ecommerce giant’s business model is actually designed around the principle of “autonomation”. Onetto explains the importance of this lean principle:
“Given the business evolution of Amazon from a bookstore to the store for everything, we had to reinvent automation, following the lean principle of “autonomation”: keep the humans for high-value, complex work and use machines to support those tasks…Autonomation helps human beings perform tasks in a defect-free and safe way by only automating the basic, repetitive, low-value steps in a process.”
Kaizen and continuous improvement
The concept of Kaizen is difficult to define in just a few words, but revolves around involving everyone in an organization (management and employees) in the process of continuous quality improvement.
Onetto points out that Bezos has consciously applied Kaizen in developing the business model at Amazon.com, Inc. (NASDAQ:AMZN). “Kaizen and the whole process of continuous improvement was, and continues to be, a powerful tool at Amazon. That’s partly because for a long time Jeff Bezos has had all of senior management work in customer service at least one day a year. This allowed executives to see events on the front line, to understand the problems that came up, and to help find solutions.”
Onetto goes on to describe a few individual examples of kaizen and the benefits derived, such as increasing efficiency by replacing batteries in warehouse employees’ scanners on a schedule or developing fair but strict policies for merchants who work with Amazon to ensure customer satisfaction.