April 27: Inventory Record Accuracy

A way to measure how well Amazon knew an item’s location when it came time to pick, pack, and ship to a customer.

Source: Fact of the Day 1 interview with Jeff Wilke
Published: January 2021

Inventory Record Accuracy

Jeff Wilke was hired in 1999 to lead global operations at Amazon. Wilke believed that delightful customer experiences would lead to growth for the company. He relied on the Amazon Virtuous Cycle mental model, placing growth at the center of the flywheel.

Wilke realized that to successfully optimize for long-term free cash flow, he needed a lever. He launched his very first input metric, Inventory Record Accuracy, to measure how well Amazon knew an item’s location when it came time to pick, pack, and ship to a customer. In 2000, Wilke’s team built a mechanism that included auditing (e.g., weekly reviews of accuracy) and reporting (e.g., to Jeff Bezos’s leadership team). Measuring and reporting on the right input metric successfully decreased the picking inventory defects that led to negative customer experiences downstream.

This thinking later influenced the leadership principle Deliver Results, as is evident in the description “Leaders focus on the key inputs for their business.”

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