Amazon.com VP compares e-commerce and manufacturing


Jeff Wilke, senior vice president of operations at Amazon.com and an MIT alumnus, spoke last Thursday with first-year students in the Leaders for Manufacturing (LFM) program, first at an informal lunch and later in an LFM proseminar, where he addressed the similarities of e-commerce and manufacturing.

Mr. Wilke earned SM degrees in 1993 in management and in chemical engineering through the LFM program.

Though the essence of the LFM program is to provide its students with an education in the management of "making things," Mr. Wilke acknowledged that Amazon.com doesn't create any of its products. So how is the manufacturing industry similar to that of e-commerce, and how are fundamental practices transferable from one to the other? To Mr. Wilke, the answer is simple.

"Both e-commerce and manufacturing are concerned with the principles that LFM is all about: leadership, reducing variation, managing constraints and making the right economic choice when you're in a supply chain -- whether you're the person making something or the person supplying something," he said.

Mr. Wilke has been able to take the traditional manufacturing principles he learned as an LFM student and adapt them to Amazon.com's business model.

"The same techniques and leadership skills that apply to problems in a manufacturing setting clearly work in our environment in e-commerce," he said. "What I'm doing in e-commerce, at first glance, could be completely different than manufacturing, but the underlying mathematics make those [elements] incredibly similar to those that are faced by [manufacturing] companies."

The real challenge, Mr. Wilke said, is not so much in applying manufacturing principles to Amazon.com, but to convey his way of thinking so others grasp the same concepts. "The hard part has been to teach others, particularly those who come from traditional retailing, why what we do is so similar to manufacturing," he said. "Our folks are learning fast, but our desired pace of change is even faster."

This is one of the reasons why he maintains strong ties with MIT and LFM. "There are other programs that focus on the same issues as LFM, but I have not found the caliber, breadth and expertise that rivals LFM's anywhere else," said Mr. Wilke. "I've been in roles where success is always focused on process improvement and understanding the needs of the customer. I've found the training at LFM has uniquely prepared people for roles where those things matter."

Mr. Wilke has recruited six LFM graduates as well as several Sloan students to work at Amazon.com. But his relationship with MIT and LFM goes beyond recruitment; he also wants to use his experience with Amazon.com to help the Institute, the LFM program and the manufacturing industry evolve to greater heights.

"The legacy I want to leave is that we showed everyone that the geeky principles that we learned at MIT can change a 100-year-old industry," he said.

"To us at LFM and MIT, Jeff has been a very loyal and active alum and has never hesitated to help us in any way he can, including making regular visits to meet with our students, interviewing LFM applicants, and speaking at LFM alumni conferences," said Don Rosenfield, senior lecturer and director of the LFM Fellows Program. "What he and Amazon.com are doing has created a paradigm shift in how business is being conducted, and we are grateful that he is willing to share his experience and insights with us."

A version of this article appeared in MIT Tech Talk on May 9, 2001.


Topics: Business and management

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