Amazon Prime Day was last week, netting Amazon a whopping $12.7 billion dollars in revenue. It’s their second-biggest sales event after the holiday season. While this top-line number is eye-watering, Prime Day has some incredible lessons for us to learn in the operations world and how to manage bottlenecks. Read the full article below.
It’s not random that Prime Day happens on a random pair of days in the middle of July. Historically, the middle of the summer is slower for shopping. For Amazon, a slow summer is a challenge. They want to have the staffing capacity to support Black Friday and the holiday. It’s better for them to be able to employ people year-round instead of hiring and training hordes of temps for the crunch period. But if they don’t have the revenue to support maintaining year-round operations, that’s a hard cost to justify.
Enter Prime Day. Generate demand in the middle of the slow season. This allows them to have more stable cash flow in their retail operations to support their fulfillment staff year-round.
More relevant for us, Prime Day serves as a holiday season “dress rehearsal”. It gives their teams the chance to practice running at the high capacity needed in December. It forces them to maintain their high-volume systems year-round. It means that everyone on the team is familiar with the procedures required to run things at peak. (It also helps them capture back-to-school and holiday shopping early, but that’s a topic for another day.)
“Leading up to Prime Day, we spend weeks and months preparing for this day, making sure that we have the appropriate staffing in place, schedule adjustments, transportation support in place to be able to ship items downstream to Amazon Air sites and sort centers.”
~Fred McPherson, general manager of the Pontiac Fulfillment Center
Product teams also have “peak seasons”. Whether it’s annual planning or performance management, there is seasonality to the work. And when that crunch time hits, our jobs get very busy. Unlike Amazon, it’s hard for product management leaders to hire contract workers to help staff during these periods. So instead, hours get longer and fuses get shorter.
Peak work creates bottlenecks
These peak seasons are expensive. It can lead to increased employee burnout. The day-to-day can fall off the radar to support these special functions. It can reduce the quality or slow down the velocity of what we’re shipping.
In other words, it creates operational bottlenecks on your team because more work is being added to the queue without increasing capacity.
So let’s learn a lesson from Prime Day and find ways to reduce the bottlenecks during spikes in work.
Smooth out the work
Amazon does ask more of its workers on Prime Day. And it’s likely that your team will need to put in some longer hours to get through this crunch time. But how might you limit the extra work you’re asking from people as much as possible?
“We were supposed to go on mandatory overtime for two extra days. We had all hands on deck. It was no different than a Christmas holiday. Like on Black Friday, you’re on mandatory 12 hours.”
~ Nicole C
John Cutler came up with a great illustration of the value of smoothing out the extra work:
By spreading the work evenly throughout the year, you can reduce the total amount of work that needs to be done. It’s less disruptive to the system when it comes around. Sound familiar? This is a core tenet of agile development.
And remember how Prime Day becomes a dress rehearsal? The more frequently you do something, the better you get at it. If you only go through an exercise once a year, it’s always going to feel unfamiliar and awkward. Go through it once a month and it becomes routine.
Decision-Making Flowchart
I have a basic process I follow to prioritize different ways I can smooth the work on a team. After identifying those crunch periods I first look to see if we can apply basic agile principles to break it up into smaller chunks and spread it out.
If it can’t be broken down, I investigate if it can it be moved to a time that’s less chaotic. End-of-year planning often overlaps with holidays and sometimes sales and customer commitments. If the work can be moved to a slower time of year, that’s better than nothing.
If it can’t be broken down AND can’t be moved, I try to make a little more space for it to breathe. This can mean taking other tasks off the team’s plate or investing as much time as possible into simplifying the process. Alongside that, I try to find different ways to thank the team for working the extra-long shift.
Bye bye bottlenecks
While I used examples that happen only once or twice a year, such as major planning exercises and performance management, this can be used with any irregular work that creates stress on the team. A great example is how my team at SpotHero moved from monthly releases to biweekly. The same Prime Day principles applied, every two weeks.
Identifying the stress drivers is half the work. They often hide under the auspices of “we’ve always done it that way”, but they can be a major drag on your team. Identify those bottlenecks and do your best to remove them.