Jeff Bezos’s Mindset, Amazon Secrets, Logistics & Business Growth | Abhinav Singh |FO390 Raj Shamani

0:00The best lesson you have learned Jeff Bezos. The ability to simplify, that is his biggest ability. When the customer orders the order to the final delivery? Buy now the buyer. Where are the real-time calls made? Where are you? And what is the fastest way to get it to you? I started from one train. There are 120 trains. Have you heard of carding? No. Carding is a type of fraud. There are many groups in Telegram. People share cards.

0:55What is the difference?

1:00Can anyone do this station? How many returns can you expect? Do you know when you click on Amazon, what happens after that? In a few seconds, how do you decide where your product will ship, who will take it, and how much time will it be delivered? After a single order delivery, After 30 people work more than 30 and 40 steps are more than 40. And then the error rate is less than 1 % of Amazon. Today's guest is Abhinav Singh, Vice President Operations, Amazon India & Australia. Today we will know what steps are the steps after delivery, how does the packaging of each product decide, how does the mode of transportation choose, how much of Amazon has returned, Amazon uses which Japanese techniques and what they learned about Jeff Bezos about leadership.

2:02You have to watch this episode and tell me what you learned from this episode.

2:12Tell me the best lesson you learned from Jeff Bezos. So I have had the opportunity to meet him only a couple of times. Okay. And he is obviously now in a role which is not direct day-to-day with Amazon that much. But what I've learned through reading what he writes, and by the way, if you haven't read it, the shareholder letters that Jeff wrote, Andy wrote, they are very informative, they are educational in many, many ways. As an observer of those writings, and as someone who has had the opportunity to meet him those couple of times and observe the way he makes decisions, my biggest lesson is, he was a very good simplifier.

3:02That is a given. The intelligence is a given. But the ability to simplify and provide a very firm direction in which to proceed. Leader ka role of discerning signal from noise and focusing on the signal. That was, I think, his or is his biggest ability. Identify the vital few things that you have to focus on to make a difference. You know, from my, the way I visualize this, right? I'm a very visual person. so the way I visualize this from my shipping days you can see a ship and see a lot of levers and if you have all the levers open position then the levers cannot be a leader is to identify that the levers where are because I can pull which I can get to get result that is the wrong जलत धारना है कि वो एक intelligence से या wisdom से आ जाता है उसके लिए आप में एक बहुत एक शाप intellect की जरुवत है बट ability to operate at all levels की जरुवत है आपको ये ability होनी चाहिए कि आप strategic direction में भी सोच सकें और जरुवत पढ़ने पर you can roll up your sleeves and get into the weeds on the data to get clarity कि what is the needle moving initiative.

4:46And he had that. His ability to context switch, and he has that. I don't know why I said had. He has that. That his ability to context switch and simplify it, focus on the signal and identify those vital few levers is phenomenal. And that to me was my biggest lesson. that as a leader, or as anyone, but certainly as a leader, my role is to provide that clarity on what are the vital few things to focus on. One of the things that he used to say for himself, and I think he's written it in one of his shareholder letters, is I feel my role and that of my senior leadership team is to make a few decisions right.

5:38So I measure my work based on the number of right decisions I make. So in the sense that he was saying more in terms of the fact that I start binding down because my ability to make those decisions reduces. And I feel my job is not to deliver a volume of work, but make a few high impact decisions and make them right. True. and then later on at one more conference where he was saying something like this he said he added one thing and if as a leader my job is decision then my job is to sleep and in my entire life of building amazon i've compromised on sleep which is the wrong thing to do yeah and where he said that if any leader or CEO can make a decision then you need to sleep better I completely agree I think your by the way sleep better and find the right balance between your work and your life at home your work find the right balance in your life because or harmony is the way I would put it.

7:00Find the right harmony in your life because you are a part of, like you're composed of everything about you, right? Your family, your children, your parents and your friends and your work. If you have balance and harmony at home, you're just going to be a better leader at work and vice versa. So yeah, sleep, focus on family, prioritize them. I feel all of those are important. When the customer order is here, I have sent you to buy now. What is now? Step by step is order to final delivery to order to warehouse or delivery. What is the process? It's a fascinating journey. Fascinating from the point of view of the interplay of technology and the physical world.

7:54When you press that buy now So between the time That you have Buy now And that Check out screen That screen changed Real time calls Where is the Where is the And what is the Fastest way To get it to you And find the Closest building Because fastest Closest Is also Lower cost And it's better To get it from The closest building from a speed point of view so a real time call and between just a few seconds exactly you just made this graph and when you go screen on the screen you can see this date you can choose this slot choose or that slot choose today we have 10 ,000 ,000 product same day deliver so you can same day maybe slots you can you can business personal business personal business personal you can choose you can choose 11-1 you can choose you can choose 10-1 product you can choose so that's real time which is system we call internally promise we call delivery estimate we call promise what it's accurate hoonna chahyyeh woh joh promise humnne kiya hai ki humusse meet kar payen.

9:26Or jep hum measure kertate hain apne aapko bad mein, hum yeh bolta hai, humnne kitnì bár promise meet kiya, kitnì bár nahi kiya, baut high percentage hai woh, mtlalab it's like close to six sigma game, itnì bár promise meet kertate hain. To kyunki humusse promise kehetate hain, is liye that calculation has to be so accurate ki woh inventory exactly kis building mein hai, aap kaha ho, uska joh route hai, woh kya hai, abhi transit time kya chal raha hai hoa pere, where you have no obstruction. That you calculate that promise and give it to the customer. Nice. Customer has chosen that promise. Now, the basis of the customer's promise selection, then the fulfillment center or the building, we call it order drop, but basically the building, the order assigns.

10:11Okay. The building in real time, people pick up. If they are going to work, So if you have a place in the first place, you have a place in the house. Your location is in the warehouse. You can map the inventory and you can allocate it. You can't know that you can pick up the order or you can pick up the order. You can assign it. You can assign it. You can assign it. And the closes it. of course lane right and of course if you have an English per case you buy 2違 cases order you and you and European can you order then you shouldие get 2 parties

11:01because when one when he would be then you a

11:11is shelf se u'thaya, aap nne usko 6 side se check kia ki yye sab sahih hai ki nahi item match ho raha hai color match ho raha hai, uska koji damage toh nahi hai, uske box me damage toh nahi hai and phir aap nne usko eck conveyor pere ndal dya to send to, hum jose boolta hai pack station pack station ke oopar eck usko scan kertai hai, waha pere joh bhi associate hai, lady hai, gent hai and phir eck real time call hota hai ki to determine what is the right box size so our

11:53machine learning algorithm which determines when it comes to FC so it's a three dimensional scan which is a length length, height, weight record then if it's a FC in India, Bombay in India, Bombay in India, it's the world of FCs in update. That's the world of product. This dimension is then. When it comes to pack station, it's pack station. It's the best package profile recommend. It's the best package profile. It's the package. This package is the best package profile. This size is the package. Exactly. Three ply, five ply. This box is the box. This box is the box. This paper bag. Then, Then after that, we can say, we have a station, which is basically ship, label and manifest.

12:46That's the time, which is your name and address. So, the time of label, there is a real time call. That if we had a promise, it was valid. it or not for driving Depending on that path, or truck or plane, there's a lot of percentage of Indian Railways. The first e-commerce company was in 2019, when we partnered with them. Very proud moment for me as an Indian, and also from a company point of view, when we were in parcel carriage, we were in 120 trains, and we had one train. It depends on which mode is best. There's a sort center, can we pause here little bit that my product is two different people this is so big this is two different people someone has X or someone has X or someone has added these two mix because when I went to the center that I had seen that it was yellow color tray like that which I have added that I have added and then where I pack go rata box me, who is yellow wale me so u'tha ke pack kira deta hai, correct, to us ko kaisa bata ki koon sa hi box me kis ka dala unga, to, jose tote me aise item hai, jose do item same order ke hai, right, ya, usi customer ne do alag-alag order within a certain time window order ki hai, wo tote ki routing alag hote hai, wo eek alag jaga jata hai, to, jis se mei nne aapka cup pick kiya, aapne aapki kettle pick ki and we both have a different place where we go and we have a ribbon called process so it's a bookshelf so it's a bookshelf where we go and it's a shelf in kettle but it's a cup so when I scan my kettle then I'll tell you that it's a cup of stuff so this is matching pack station so that's where we go and matching So this bookshelf will go to a new tote which will go to the packing station.

15:32No, the packing station will be a bookshelf. So you have to put two tote and put it in the bookshelf. I have to scan the kettle or cup, both of them scan the same thing, so you can put it in the other item. Put it in the box and put it in the box.

15:48And then, coming back to there, then you have to a place, logistics in a thing, is called SOT Center. SOT Center, think of it as Air India, Delhi hub is or ISBT is basically consolidation points are called if you go to New York to your direct flight Delhi will be to Bangalore and the flight will be New York so SOT Center is a big truck we can get here we have SOT Center are, Tadoo in our X-Hot Center, Sony Pat's in our X-Hot Center. So, we'll be able to get a truck and get a truck. Then, we'll be able to get a truck to get a delivery station. Or, you'll be able to get a flight, or bikes, or you'll be able to get a bike?

16:40Or, you'll be able to get a truck? Correct. Then, we'll get a delivery station. Delivery station, we'll call it a channel. So, our 4 main channel is, one of them is a unique channel, again, deep, 20-30 s. I have space. Is that youик定 people win

17:16have have have in fact, we already deliveries we already deliveries do not have to do in the afternoon of our packages deliver do not have to do in fact, there are 28 ,000 stores in our side Kirana store Kirana store in India and for you the customer you can see the difference that you can see that the delivery is done in the store or the delivery DA because the same training training, applications, electronic training, for you on the doorstep the experience is seamless. Nice. But we work with the Kirana store. So there is one channel. The next channel is what you call the DSP channel which is basically a delivery service provider.

18:10Small entrepreneurs, micro businesses. These don't have to be from the logistics domain. They can be from any domain. In fact, we have veterans, we have war widows, we have people with disabilities who are delivering deliveries. And they bring delivery drivers with them and then they have package allocated. Our third channel is Amflex, which is basically work on demand. In which case they are college students, house rides, Amazon Flex. So they come and do part-time deliveries for us. And finally, our channel is extended DSP, which is basically you are a delivery service provider, but you want to run the station.

19:00So we will give you technology, training, processes, governance mechanism. and then we will be able to deliver from the delivery station. So, this whole network, it is at every level an aggregation of hundreds and thousands of entrepreneurs and hundreds and thousands of independent contractors. So, it's a massive network of small and medium businesses. Wow. so that's that's the whole journey of a package from buy to doorstep and and this is like kirana store channel is it US in India or India? India has started and then we launched it in Japan then Europe then US so the idea which is seed and technology based was made in India Wow.

19:57And then this idea, because it's so powerful idea, it's been exported in the world. It's been very good in the US. So now it's everywhere, but it's been in India. The information on the front line, it's not product managers or technology leaders or corporate leaders. Because they are the ones who are, and I always say this, and actually I said this at the station, when I was addressing everyone, And at the end of the visit, you address people. You saw that picture of Special 26. There is a dialogue that people are doing the real work, the rest of them are like this. And I said that the real work is you guys are doing.

20:39And I truly believe that. That the real value is added by people who are picking, packing, shipping, delivering. Rest everyone is a overhead, a very important overhead. I mean, the business won't run without them. but the real value addition وہ ہوتا ہے and اس کا ایک word ہے جیسے ہم use کرتے ہیں Amazon میں Japanese word lean کا concept Gemba بولتے ہیں Gemba تو Gemba کا English میں کوئی word ہے نہیں Gemba کا یہ Japanese word ہے اس کا literal translation ہے to observe the place where value is created تو آپ جا کے وہاں دیکھئے اور وہاں پہ they don't eat anymore but observe them. if you had a fulfillment center in a place where I was looking at a pack station, there was a lady working on it.

21:37And when one of the packages was packed, the invoice was in the package. Then he had a printer, he had a rule adjust, a rule stop. Then I asked him, how many times do this? is the day. So, he said that it's 2-3 times. So, now you know that you have to know that the records are saying that all the printers are doing right and the maintenance is doing it. But when you observe that you see that if the day is 3 times stuck, then you have a problem. So, we have to think of a correction of error. We have to think of 5 why. Then you go to the next level. So, you ask 5 why to get to the final root cause.

22:22So, you ask root cause analysis then you can solve the root cause so Gemba or going where the value is getting added is really important in any operations so I really value that time and for me it's about talking to associates seeing what's happening on the floor delivering packages understanding that package delivery time issue comes from delivery associate customers how are customers reacting so yeah I mean I really enjoy that time what we are really proud of and especially like me personally having been part of this journey for the last so many years has been the fact that a lot of what we've invented here has been adopted globally globally India then now made in India for the world India needs Indian solutions right so talking about this is it an opportunity for entrepreneurs?

23:21Yes. Like I'm indoor. I'm a little entrepreneur. Indoor. Entrepreneurs are who are running stations. So, like I'm today, I'm going to hear who is listening. Can we do opportunities that we can build stations? There is enough room. Demand is enough. 100%. So, what can people do like you and say, I want to run stations. It's a website. If you permit them, then you can do that. In the description of the website that you can do. if you have to open station, if you have to open station, if you have to open station, khaaya jate hai, kishe business chalana hai, sikhaaya jata hai. There's a full team which works on this whole process.

24:26100%. So, kisiko eğer ye kholna ho, station, to kitna investment lagta hoon on average? Less than a few lakhs. Maitlab, 10 lakhs se kam? Haa, hath kam. And returns kitnay expect kar saktay hai lo? 5, 10, 12%, 4, 2%. Typically, the promise is between 10 and 15 % returns. Pretty interesting. Jee. it's a very good business it's done right it's certainly one which can really help people build large sustainable businesses of their own and we have a lot of partners who have grown with us for many many years now if you have told one order from your journey from I clicked here to delivery how many systems, how many tech how many people involved are in one order fulfill close to 40 odd steps 40 steps yeah when I have been to to the time it reaches your doorstep from the different tools and technology transitions which would happen from a people point of view the people the physical aspect of the business starts in the warehouse so pick associates pack associates joh johan pe slam ho raha hai vohan pe jaake sortation hoota hai vohan pe associate lagtay hai pher loading hooti hai truck mein load hoota hai ya plane mein load hoota hai pher sort center jata hai pher delivery station jata hai toh kem se kem 25 se 30 loog toh involve with touch points 25 se 30 loog 40 steps and my click karta ho my promise pao jata hai error rate if you have to put it up it's a very small rate if you have to how many deliveries time pin will not reach compared to percentage level becomes of not much use because error doesn't happen what will say how many are .00100 so you normalize it to a million orders how many are so a million will become let's say 500 so there is a defect rate of 500 million dollars so the metric becomes more real and manageable कौन -कौन competition होंगे आप लोगे आज अब कौन कौन का बात करें जो भी e-commerce में या कोई कौनर्स में हैं वो competitors है पर उन पे हम ज़्यादा time spend नहीं करते हैं ये पता होना चाहिए कि कौन क्या कर रहा है क्योंकि आप कोई यह पता होना चाहिए कि aware होने सोने चाहिए competition क्या कर रहा है but at the end of the day वो जो simplifying framework कहना कि price convenience selection अब उस पर focus करो क्यों?

27:23क्योंकि आपको जब micro decisions लेने होते हैं आपका business कैसे shape होता है आप यह decide करोगे कि मैं कितना auto stock रह सकता हूँ If you say that I can be reliable You can choose a network You can choose a metric You can choose a competitor What do you think is that I can choose a competitor You can choose a competitor You can choose something You can choose a quality I can compromise So I can't do that I can do that I can maintain my temperature But I can maintain my cold chain Integrity Doorstep When I Fresh Grocery network grocery delivery. We have 2 hours of delivery. We have our thermal bags, ice packs, our 4-5 temperature of cold rooms.

28:19We have our food that we have our cold chain security right up till the customer doorstep. We do not know anything. But we cannot compromise. Regardless of price. competition. Correct. If I have to do food compliance in my business, I need to have an air curtain. Because if there is no air curtain, there are flies in my building. I have to put an air curtain. Whether I have the cost structure of my business. Awareness of competition is important, but that should not define the way you approach building your business. Sometimes I feel like a major conglomerate or player enters, does it scare? No.

29:05You're scared. You're anxious. Do you have a strategy that maybe XYZ big player, country largest player, you're mentoring. You're not going to fail. You're not going to succeed. You're going to succeed. By the way, there are companies. I don't have to know that I've worked in life in two companies. in the companies that have been very different sectors. But there are companies that are competitors focused. We are not. And we do that. And we do that. And we do that. And we just do that. We do that. And we do that. And we do that.

29:52And we do that. You don't say that you don't know logistics. I'm sure you'll be able to. No, I won't be able to. And at least you can't speak in front of yourself. I'll give you another words. How do you tackle frauds? Because a big part of operations is India is a creative country. There are a lot of frauds. And I'm sure worldwide will be. So how do you handle frauds? Like I'll tell you three major frauds which I've heard from delivery. First is carding. Have you heard of carding? No. So carding is a type of fraud. there are a lot of groups that flow and people share cards they are moving with the card details so there are some tricks themselves to exit them the order gets confirmed and the big money from them and they are hiding and it is a gold account after the third time and then it is a new account the whole groups those people do how does it tackle?

30:53deswegen we ordered and order bhi a gya और पैसे भी नहीं इन्हें अपने modus operandi पताया वो different teams हैं जो उसके साथ deal करती होंगी ऐसी delivery side में fraud होते हैं कि लोगों ने delivery ले ली फिर बोला कि मेरे को मिला नहीं और फिर refund ले लिया या delivery ले ली बोला समान ठीक नहीं मिला refund ले लिया ये

31:28small as your think it easier this ends is there enough put there it has upfront that got or

31:53which had we have genuinely some damage. So we have our policies good customers for the way. And the fraud is that we have machine learning and other ways to detect our customers. We have to try to ground and input. Our delivery associates have a lot of information. We have to say type of customer or we have to do investigations and last mile جو ہمارے ہیں وہاں پہ ہم investigations کرتے ہیں یا ہم centrally investigate کرتے ہیں ہم data machine learning اور AI کا بہت use کرتے ہیں تو figure out کہ کہاں یہ network میں fraud ہو رہا ہے but the policy has to be designed customer backwards تو اس میں بھی same principles apply کرتے ہیں that you use technology to establish fraud you take the right corrective action to preempt fraud.

32:55You take action to correct fraud, which is like account closures and where required. By the way, we give law enforcement action too. We partner with the police and the relevant law enforcement agencies across the country to take the right actions. So, just as I give you an example, if you order us from here, then you have a tamper-proof bag. in the phone. In the temper-proof bag, there is a unique ID. There is an ID interlocked with the delivery associate's app. So, if you try to open that temper-proof bag, you can try to open it and you will change the color. And if you have doorstep on the doorstep, you have said, I have to change the whole bag.

33:40Doorstep on the unique ID, if you scan not to do it, the delivery associate will not be able to deliver. So, that's how you establish the chain of custody. So, in some cases we do that where it's required. So, there are different technology-enabled solutions to establish a chain of custody and identify where the fraud happened so that you can take corrective action. But again, rescuing the customer is the most important thing. If the customer has been our fault or our network has been our fault, then the customer has not to give the penalty. So, that's our priority. Got it. so that the refund is fast.

34:19If a product is return, then Amazon has a loss. If you look at the loss, there are 2-3 things. The one is the cost. Which is the cost. The cost is the return. Then, if it comes back to the return. Because many customers don't have packaging. They don't have original packaging. They don't have original packaging. They don't have original packaging. They don't have original packaging. So if you have a product, then the sellability yield will be reduced. So those things are happening. But if you say that the loss is a loss, it is the return logistics cost. You have to pick up, pick up after you go to the station, then the sort center, then the fulfillment center, then the inventory will go.

35:11So it's a cost. Every associate touch, every transportation leg. prime के जो ops होते है versus normal ops होते है उसमें भी exact same होगा क्योंकि जिस पे prime tick है what is the difference क्योंकि prime tick वाले जल्दी पहुच जाएंगे without prime tick वाले नहीं पहुचते ने ने वो अगर आप prime है तो आपको fast shipping free मिलती है अगर आप non prime है अगर आप prime member नहीं है तो आप speed choose but we will pay for it. It's not free. But like order, if I put a filter on the prime products then some products are not in the prime. What is the difference? The seller is not prime eligible. Now, you don't have a fulfillment center in a seller.

36:07where house is. That seller also has a guardrail meet processing, backlog, delivery speed so that customer experience is not bad. If you are prime eligible seller your own bar of operations which you can't get below. End to end your transit time which is not possible. Without that your prime badge will not get to. Prime badge will high bar operations के लिए भी और seller के लिए भी तो seller अगर time पे inventory नहीं दे रहा manage नहीं कर रहा तो then prime नहीं देखेगा, that's the only difference. This DNA right, I keep saying this to my team आपको Amazon में किसी से भी मिल ली जाए आप चाहें वो associate हो या वो manager हो चाहें किसी भी part में हो India में हो, बाहर हो उसको आपको customer obsession, safety, the fact that you need to take care of yourself and the person standing next to you.