Metrics help Amazon measure short-term progress toward long-term success. Writer Brad Stone traces the pioneering company's path from startup to today in his excellent book, The Everything Store: Jeff Bezos and the Age of Amazon. In one section, he discusses how Amazon used metrics to clean up the chaos in its warehouses (aka distribution centers).
In a nutshell, Stone says that Amazon growing at an incredible, unprecedented rate as the millennium came to an end. Its warehouses could barely keep up with the diversity and volume of orders. Just in time, an Amazon exec supervised the development of new systems to tame the chaos that threatened to derail Amazon's ability to ship the right products to the right customers, on time. Among the metrics he and his managers used to manage and monitor performance in fulfillment centers were:
- Number of shipments of merchandise received
- Number of customer orders shipped
- Per-unit cost of packing and shipping each item
- How many shipments were backlogged
- How many trucks were outside each center, ready to ferry shipments to carriers
Stone also lists "Jeff's reading list," books that Bezos and his team read as they manage the sprawling Amazon business. One is Data-Driven Marketing: The 15 Metrics Everyone in Marketing Should Know. Written by Mark Jeffery, on the faculty of the Kellogg School of Management, this book covers essential metrics such as:
- Brand awareness
- Customer churn
- Internal rate of return
- Customer lifetime value
- "Bounce rate"
- Word-of-mouth social media reach