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How Lean Thinking and Practice, Grounded in Purpose, Helped Drive Amazon’s Success

by Lean Leaper
May 7, 2021

How Lean Thinking and Practice, Grounded in Purpose, Helped Drive Amazon’s Success

by Lean Leaper
May 7, 2021 | Comments (0)

Contrary to what some people think, adopting lean in a high-technology environment isn’t just possible; it’s essential. Just listen to Marc Onetto describe Amazon’s adoption of lean thinking and practice. During a recent LEI webinar, Lean at Amazon: Reconciling Lean and High-Tech, Onetto, the former SVP of Operations and Customer Service who pioneered the application of lean management in retail distribution at the company, shared the many ways lean thinking and practices improved company operations.

As with any company that has adopted the lean mindset, Amazon’s driving force was its steadfast, unyielding dedication to its purpose: Customer-Centricity, asserts Onetto in the presentation. From that foundation, he says, the company applied lean to identify and eliminate muda for the customer -- from how it built its website to how it fulfills orders and everything in between.

After sharing several examples, he concludes: "What are the lessons learned from lean at Amazon? First, I think very importantly, we learned that there is synergy between lean and high-tech to eliminate muda." Noting that early on that many of the sensei in Japan were very worried that information technology would add waste rather than eliminate waste; that it would accelerate bad processes. "At Amazon, we had good technology, which was customer-centric technology, which allowed us to really combine lean and high-tech," he adds. "Second, the major lean concepts, such as Andon call, such as stopping the line, can be extended to different businesses such as stoping the line in the customer service center of Amazon."

In this snippet, Onetto describes examples of how lean thinking and practices helped improve Amazon's customer service operations.

Find a lightly edited transcript of the webinar below. 

Value-Mapping Customer Service

Once we introduced lean into the fulfillment center, we then extend it to the customer service centers. One interesting thing we did was value-mapping. We understood that in some cases, from calls with the customer, the associate in the customer service center would have to hit the enter button 29 times in order to find the necessary information to respond to the customer question. So, of course, there was a lot of muda time here. So, we rethink all of the customer service systems from the customer’s perspective. What kind of question would come? And we brought this waste, the 29 clicks down, the first time we did a kaizen, to 8 clicks.

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So, you see, we use the same thinking of these value mapping --  what is waste for the customer -- and then eliminated that waste to improve the experience for both the customer and the employee who was responding to the customer.

Defining Customer-Centric Tenets

In fact, we extended these to define what we call the customer-centric tenets for our customer service properties. And the main one was: treat customers like friends or family. Don't worry about the crooks; the computer takes care of them. So yes, there are a few crooks that are going to try to steal money from Amazon. By the way, not many, especially in Japan, where practically there is none because it's the most honest country in the world. I won't speak too much of my native country, France. But let's say that in France, in Italy, or the United States, the percentage of people that are trying to steal from you is not that much. 

So it's worth taking the risk in order to be honest with the customer, and then, you win a lot.

One of the things that happened one day, I call it The New York Times customer Christmas miracle. When somebody called one of our associates who was located in Washington state and said, 'Wow, my package hasn't arrived, and I’m in trouble because I’m divorced and my kids will be here tomorrow night. I was slow to order, and I know it was delivered, but I think that it was stolen from in front of my porch.' The associates said, 'Oh, no problem, sir. We're going to take care of that. We are sending you the same package immediately. You are in New York, we are going to send it from the fulfillment center. It will be there by tomorrow afternoon. You will have your package for your kids.'

He then said, 'How much do I owe you?' We said, 'No, we don’t ask you for anything.' And he protested, 'It was my mistake; it was stolen.' We say, 'It's OK, it's fine. We treat you as our friend. We like our customers.'  Imagine, we didn’t know: it happened that this guy was a New York Times journalist. So we got a good article in The New York Times that day. That's what I call The New York Times customer-centric Christmas miracle.

Applying Andon to Customer Service

So then we went one step further. We took the concept of Andon call. As you know, fundamental to the Toyota production system is the ability for associates on the line to stop the line when they detect a defect. Those of you that had the chance to be trained by some Toyota people will have been to a factory where you can see 5,000 people stop working because one bluecollar on the line, somewhere, assembling whatever, the wheel or the lights of a car, stopped the line by pulling the Andon call. 

We took this concept to the customer service associate, and we gave them the authority to stop the line. What does that mean? In our case, it means that we will detect, using the computer, using technology, that the customer is calling about a defect that has already occurred. Therefore that is becoming a bit fidgety. We warn the associate that this could be a defect that is coming from us. Then the associate has the authority to stop the line, which means he will push a button on the computer, and the item will move from in-stock, buyable, to unbuyable in the quality lab. The associate doesn’t have to ask for authorization from anybody -- just do it.

Solving Problems at the Gemba

Of course, we have a process in place to restart the line. We had the weekly review with my colleague of retail and myself of all the Andon work that stopped a line for more than two weeks to see what's going on and why we can’t resolve it. An example that I remember was an SKU switch. So the customer ordered the headphone and received a hard drive, which is a bit difficult to put around your ears. It was the second time, so we stopped the line -- the associate stopped the line -- and we went to check. We took all these items out of the fulfillment center, and we realized that there was an SKU switch. The same factory was producing both hard drives and headphones, and they had put the SKU of the headphone on the hard drive. So, the associate, when they were scanning, would not know that they were sending the wrong thing.

This process of Andon call, which still exists today, has eliminated hundreds of thousands of negative customer experiences. And [Jeff] Bezos loved it, which is a big difference, because when I stopped the line the first time at GE, I remember I was wondering, you know, are they going to fire me for doing this because we're not going to produce any more until we find the defects. Jeff loved it. In fact, I had to say, 'Well, give me a little time to put the process in place', but he loved the fact that we were going to detect customer defects very quickly through this process.

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Keywords:  andon,  culture,  leadership,  Purpose,  service
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