In May 2010, Jeff Bezos held a press conference where he fielded questions about environmental stewardship and what Amazon.com is doing about it. Here are a few key points and how Jeff Bezos and Amazon.com are using the principles of Lean thinking toward environmental stewardship.
Bezos shared several examples within the Amazon.com fulfillment network where Lean Thinking is being applied toward environmental benefit and also cost savings:
Inside Amazon, we also do a number of things. Our new campus in South Lake Union here in Seattle is a LEED certified campus. We have three years ago or so, we started doing these things called Earth Kaizens in our fulfillment center network. So our fulfillment center network is kind our — kind of our biggest footprint and we’d always done — or for many years, anyway, we had done Kaizens. It’s a Japanese process.
It’s a very formal Japanese process invented by Toyota many years ago to look for opportunities for improvement, and our Kaizen process had been focused on cost savings. So we decided a few years ago that we would tinker with that process, keep it basically the same but add — it’s kind of a new — it’s a second process — we didn’t get rid of the Kaizen process we were using to look for cost savings but we supplemented it with Earth Kaizens. And their motivation is to look for things that would be better for the environment, things we could change in our processes that would create an improvement for the environment, and we found lots of things.
The — a simple one serves as a good example is that one of these Kaizen — Earth Kaizen teams came up with the idea of taking all the light bulbs out of all the ending machines in our multitude of fulfillment centers. So these vending machines are backlit — they kind of have advertisements and they have light bulbs in the vending machines to make the advertisements stand out, but inside the fulfillment centers we certainly didn’t need those.
And if I remember the figure right, kind of globally, that saves us $20,000 worth of electricity and of course — no, the cost savings on that is small enough that it might not have been found if it were motivated by a cost savings Kaizen, one of our traditional ones, but as an Earth Kaizen, those incremental things can add up. Now, of course, it’s also a good example because one of the things that you find with the Earth Kaizens is that it’s very hard to do something environmentally effective that doesn’t actually also save you money. Most of these things, they aren’t either/or choices, they — they’re better. Most of them end up saving fuel in some way or making something more efficient, reducing packaging waste.
He goes on to share specific examples from several of the Amazon.com fulfillment network:
Amazonians in our Lexington, Kentucky, fulfillment center analyzed the type of work performed in the bulk-storage area of the facility and learned that although a large portion of this area was not used during the weekend, the power remained on. Additionally, the team took light-level readings and determined that the area had too many lights installed for the type of work that associates were doing. As a result, over 120 lights were permanently shut off, and an additional 34 lights are turned off during the weekend. Their efforts resulted in an annual reduction of over 450,000 kilowatt-hours of power usage for this one facility; that’s enough electricity to power 33 homes in Kentucky for an entire year.
At the Coffeyville, Kansas, fulfillment center, conveyor belts are used throughout the facility to route orders through the packing and shipping process. Previously, the conveyor belts operated continuously while the facility was open. An Earth Kaizen team determined that timers could be installed on the conveyor belts, so that they automatically shut down when they weren’t in use. As a result, the facility now uses 30% fewer kilowatt-hours of power usage to operate the conveyor belts.
Previously, when Amazon transferred products from its larger automated fulfillment centers to its network of smaller distribution centers, it shipped the products in single stacks of pallets loaded into trucks. Because Amazon’s smaller distribution centers didn’t normally use forklifts, they couldn’t unload double-stacked shipments. After analysis by the Kaizen team, Amazon bought forklifts for the distribution centers allowing them to accept double-stacked pallets. Now each truck can carry twice as much cargo, resulting in an overall savings of 1.1 million miles traveled and more than 175,000 gallons of fuel.
Amazon opened a new fulfillment center in Swansea, Wales in 2007. During the planning process, an Earth Kaizen team worked with the management team to determine the most efficient ways to light the facility. First, the team decided to increase the size of the skylights and windows throughout the building to improve natural lighting in the work areas. Second, the team had motion sensors installed throughout the facility so that lighting was used only when needed. As a result, the fulfillment center now uses 40% fewer kilowatt-hours of power each month than originally planned.
Milton Keynes, England
Amazon receives new inventory every day from vendors across the world. Typically, this inventory is shipped in cardboard boxes, which is recycled once the products are shelved. In 2009, an Earth Kaizen team began working with vendors to deliver the products in reusable totes, rather than cardboard boxes, in order to eliminate waste and cost for both parties. As a result, one out of ten inventory shipments to our UK fulfillment centers is now shipped without excess packaging waste.
Bad Hersfeld, Germany
The Earth Kaizen team in our Bad Hersfeld, Germany, fulfillment center determined that the high-rack and pallet area of their facility was being lit long before the first associates arrived to work. Working with the local facilities technicians, the team developed a process to turn on the 2,400 fluorescent lights in the area only when associates were working. Their efforts resulted in an annual reduction of over 10,000 kilowatt-hours of power usage in the facility.
Amazonians in our Orleans, France, fulfillment center previously disposed of all kinds of waste–from corrugate cardboard to plastics–in a single compactor. An Earth Kaizen team re-engineered the process to sort different kinds of waste into separate compactors, so that corrugates and plastics could be recycled. As a result, the facility now recovers more than 60% of its disposal costs by selling the corrugate and plastic to recycling vendors in France.
An Earth Kaizen team in our Glenrothes, Scotland, fulfillment center analyzed the heating and hot water supply systems in the facility and learned that the heating was activated at all times, even during the summer months when none was required. Additionally, they discovered that their systems were supplying hot water even when it wasn’t needed. The team updated the systems so that gas and electricity were used only when needed. As a result, the facility reduced their daily gas and electricity consumption by more than 90% per day–an annual reduction of thousands of cubic meters of gas and kilowatt-hours of power usage.
A complex system of conveyor belts is used in fulfillment centers to move products from their shelves into the boxes that are then shipped to Amazon customers. An Earth Kaizen team in our Ichikawa, Japan, fulfillment center devised a simple but effective solution to reduce conveyor power usage by creating a visual guide that shows employees how to power down the conveyor belts when not in use, saving over 20,000 kilowatt-hours of power usage per year.
Associates in the Guangzhou, China, fulfillment center receive products for Joyo Amazon customers from many vendors. Once the products were moved into the warehouse, the packaging materials were previously discarded. An Earth Kaizen team re-engineered the process for sorting packaging waste, so that cardboard boxes and packaging could be recycled. As a result, the facility now recycles more than 40,000 boxes and more than 8,000 kilograms of packing material per year.
Regarding Environmental Packaging, Jeff Bezos and the Amazon.com team are working with suppliers to determine environmentally friendly packaging. Here’s what Bezos said:
If you take some of the categories like toys, many electronics products, they get packaged — they have historically been packaged for the retail environment. So, that means typically the packages have a lot of air in them. They have to have four color packaging, which is not the — not an optimal process from the environmental point of view.
They also turn out to be frustrating for consumers. So you buy — oftentimes in the physical store you get this clam shell packaging or this very hard, impenetrable nuclear-proof packaging that you try to get scissors and knives and –. At one point, I knew the statistic for how many emergency room visits there are per year of people trying to get stuff out of clam shell packaging. It’s like 6,000 emergency room visits a year; it’s not a trivial number. And — but it’s frustrating, even if you do it without injuring yourself.
And of course, the reason that packaging exists is to make it harder for people who would shoplift in physical stores which is not a problem that Amazon has. So, all that packaging is bad for the environment, it’s bad for consumers because it’s frustrating to open. And it’s bad for Amazon because we end up shipping a lot of air around which is very expensive. When you’re using — actually both for ground and air transportation, most vehicles are constrained by their cube — by their volume capacity rather than their weight capacity.
So when you send one of those UPS trucks on a optimized route, the more packages that — really, unfortunately, you’re shipping around a lot of air, and that’s not as efficient as it could be. And so we’re working — our frustration free packaging initiative is working directly with the manufacturers to get them to build a separately packaged product for us and other e-commerce companies that is environmentally beneficial and better for consumers because it’s easy to open.
The Role of Lean Thinking
The perspective of Lean Thinking provides a different look at waste – whether it be cost, material, motion, over-effort, etc., – but with specific application toward the environment and what we can do to reduce our overall impact. What is interesting with the Amazon.com story is that the CEO, Jeff Bezos, is the champion behind this effort, leading by example, how we all ought to be thinking.