This One Label Rules Amazon’s Entire Outbound Process

Amazon ships approximately 1.6 million packages a day. That’s 66 thousand an hour or 18.5 per second.

They also offer lightning-fast shipping options, like 2-day free shipping or same day delivery. 

Such huge scales of packing and shipping leave no room for errors, manual processes, stops in production, or lost items. 

Therefore it’s crucial for outbound operations to run seamlessly.  

So how does Amazon manage this?

With just one simple 3×2 label.

“One label to rule them all, One label to find them, One label to…” you get the idea. 

This label, called internally by Amazon their “sp00″ label, is used to streamline their entire outbound order fulfillment process.

The information this single label holds creates a fast, accurate, and efficient operation.

The sp00 is arguably the most important label applied at an Amazon Fulfillment Center (FC). 

“SP” stands for “shipping package,” and is followed by a serial number, uniquely identifying each package it’s scanned and placed on.

This is identical to how LPN (License Plate Number) labels work. 

Also known as sequential barcodes, the numbers on these labels carry large amounts of data and information that make tasks like tracking and traceability faster.

So what does the sp00 label do that has such a powerful impact? 

Sp00 labels contain:

• Item(s) in the package
• Customer address and information
• Promised delivery date (PDD)

Everything a package needs to get to its final destination comes from one scan, like a personal ID badge. 

The sp00 label also acts as an extra layer of security.

Once it’s applied, only Amazon employees with special clearance have permission to open packages. 

This guarantees privacy with each customer’s order.

So what happens after the application of the sp00 label?

Packages are then scanned and sent to the next leg in the shipping process: the SLAM auto-machine.

The SLAM (Scan, Label, Apply, Manifest) is the next step in the packing and shipping process. 

Information from the sp00 label is used to configure, print, and apply a shipping label.

Packages make their way to the SLAM machine where several actions happen in the blink of an eye:

1. The sp00 label is scanned
2. The package is weighed
3. A shipping label is printed and auto-applied 

But how is the correct information for the shipping label determined so quickly? Through an algorithm. 

When the SLAM machine scans the sp00 label, the information embedded inside the barcode is used to calculate the appropriate shipping method. 

This includes the carrier service and delivery options.

Then the shipping label is printed and applied as packages speed along the conveyor belt, thanks to the use of print and apply machinery.

2 printers and label dispensers work in tandem to keep production moving without any stalls. 

What if an error occurs during the SLAM process? Amazon uses a kickout (KO) system to eliminate any defects while keeping the production line moving. 

The defective package is “kicked out” of the assembly line and diverted to a station where an associate manually resolves the issue.

Once through the SLAM process, packages continue their journey out of the facility, where they are sorted to designated delivery trucks and shipped out to waiting customers.

Amazon’s entire outbound process relies on these steps to run efficiently. 

It’s why they delegate so much importance to the sp00 label. Because without it, their entire system falls apart.

The amount of space inside an Amazon FC is no joke. 

At a range between 600,000 to 1 million square feet, the chances of losing a package or messing up an order should be extremely high. 

And yet their packing and shipping stations function at maximum efficiency with little to no errors.  

That’s thanks to the sp00 label automating the outbound process.

LPNs effectively cut out steps that would otherwise increase the time, costs, and handling of orders. 

To keep such a large scale of business moving so efficiently, eliminating these unnecessary steps is essential. 

A 2018 study found that “substandard” sp00 labels caused more KOs, meaning additional packages were left to be manually processed, costing time, resources, and money. 

Having a scannable LPN present accurate information at the right moment keeps production moving so orders can arrive at their designated time. 

But LPN labels are just one way to efficiently run a warehouse, distribution center, or fulfillment center like Amazon. And they don’t have to be the only facility utilizing a system like this.

Find out how you too can optimize your business like Amazon in our next article!