The
LFM-Amazon.com Connection
By
Amy
MacMillan, LFM-SDM Communications
Assistant – May 3, 2006
As
of Day One, Amazon.com has been all
about its customers, and according
to Jeff Wilke, LFM '93, it's still
Day One at the Fortune 500 Company,
11 years later after it opened its
virtual doors. Today, the company
tries to carry just about everything
except tobacco, firearms, and automobiles.
LFM
Program Director Don Rosenfield
(R), with Jeff Wilke, LFM ’93,
Senior Vice President of Worldwide
Operations at Amazon.com. |
Wilke,
who has been Senior Vice President
of Worldwide Operations at Amazon
since 2000, spoke as part of the LFM-SDM
Speaker series on April 25 at Wong
Auditorium. The Leaders for Manufacturing
program has had a dramatic effect
at "Earth's most customer-centric
company," but MIT still has more
to contribute, he says. Amazon needs
more technical people such as those
skilled in Operations Research, and
computer science, and continual leadership
from technical MBAs to help lead operations.
"We also need Sloan and LFM to
keep producing leaders," he adds.
Wilke
says LFM is now an integral part of
Amazon.com, where the LFM Handbook
and principles have been widely used.
LFM graduates hold many chief positions
at Amazon, including Director of Operations,
Senior Operations Manager, Senior
Manager of Buying, and Director of
Supply Chain in Europe. More than
20 LFM graduates have been hired over
the years, Wilke says. "LFM has
indeed, changed our company."
There are five LFM graduates at the
Seattle headquarters, but most are
in the field at many of the 30 worldwide
Amazon sites, including Nevada, Kansas,
Kentucky, Delaware, Germany, and Scotland,
just to name a few.
Some
of Amazon's successes can be attributed
in part to LFM, according to Wilke.
Fulfillment went from 17 percent to
8 percent and during this time Amazon
has increased operating margin and
lowered prices to the customers.
Wilke
listed four LFM tenets that have contributed
to Amazon's growth:
Constraint
Management: Several years
ago, a plant in Kentucky had some
major problems, which Wilke and his
team could not solve from Seattle.
So, he and the whole team flew out
there, and spent a week working alongside
the area manager in the plant. "Instead
of an even flow, a bottleneck had
developed, which was exacerbated by
variation. We started to reduce the
variation in each step, without spending
money on mechanical things. "At
the end of the week, they had a new
plan, and new sense of hope at the
plant.
Quality
Tools: In early 2000, Amazon
took the first ambitious steps in
the quality journey, with TQM and
Lean Support Six Sigma. Wilke himself
pushed for Six Sigma, and today, the
company has 80 Black Belts, 256 Green
Belts and successful projects in every
plant. "We have now begun to
heavily influence other parts of the
company."
Supply
Chain: Improving the supply
chain has been the hardest LFM principle
to implement, Wilke admits. "But,
variation is everywhere in our supply
chain," he says. Some factors
include poor carrier performance,
weather disruptions, seasonal worker
availability and attrition, and processing
equipment failures. The ultimate measure
of control is really safety stock,
he adds.
Plant
Managers Matter: Wilke came
to this conclusion while a student
in LFM. Plant managers heavily influence
morale and typically have an influence
in the local community, he says. You
need the right leaders in these roles.
Amazon's customer service centers
are also comparable to large plants,
where representatives handle over
100,000 contacts worldwide each day.
MIT
can continue to help Amazon grow and
prosper, Wilke says. Specifically,
the company needs Operations Research
Scientists who are skilled in software
technology. Computer scientists also
need better math skills. "There
is an alarming lack of understanding
of statistics by junior engineers,"
he says. He says MIT must continue
graduating LFMs. "We don't have
enough of the best and brightest,"
he says.
|
