Original Link: https://www.anandtech.com/show/2531



For years I'd been visiting Newegg's facilities and I'd always commented, especially in the early days, on how I'd really wanted to take pictures of the facilities and do an article on them. Back when Newegg was much younger, a good portion of its success was due to the efficiencies of its warehouse in filling orders. As many companies in our industry tend to be, Newegg was quite shy and wouldn't let me so much as take a picture the first couple of times I visited them.

Finally in 2006, they opened up to the idea of documenting one of their warehouses. Armed with camera and notepad I toured Newegg's facilitiy in Los Angeles just around the time that it opened its first warehouse servicing the east coast in Tennessee. Fast forward to 2008 and Newegg had just recently unveiled its second east coast facility, this time in New Jersey.

With revenues well over $1B a year, Newegg is no longer the seemingly small operation it once was and the company is much less shy. While the brains behind the original warehouse design has since left the company, the New Jersey facility is an improved, more up-to-date version of what I saw back in LA in 2006.

There are far fewer actual people at the warehouse now thanks to even further automation and, yes, the goal is still to get your order to you within two days of leaving the facility regardless of shipping method. That's actually the whole purpose of building the NJ facility, so that customers on the east coast can actually get their orders within that two day target - even with ground shipping.

For those of you who remember the first article, not much has changed - everything i just a lot newer (and the warehouse is a lot quieter too). I told Newegg that if we were going to do another tour we had to do it exactly like last time, which meant that they needed to give away something special to AnandTech readers. The first time Newegg let me tour their facilities and setup a giveaway it was a very kind gesture, now it has become tradition. I'll get to exactly what you get to win and how in a little bit.



The Warehouse

The NJ warehouse, just like the one I toured in LA, has product segregated into three areas: high value items, large items and everything else. Items like CPUs and memory, expensive products that can easily grow feet and walk away are kept inside "the cage" and only certain employees are allowed to work in there:


Tons of AMD and Intel CPUs line these shelves, I managed to secure a few for you all...

The large items (things like TVs and cases) are kept in the back of the warehouse:

Despite the quantity of TVs, monitors and cases, even Newegg employees must order from the website. No product is allowed to leave the warehouse without an order attached to it, and even then it must be delivered by UPS or FedEx, it can't be hand-carried out.

All the rest of the products line shelves of the warehouse, snaked through by conveyor belts that are used to fill orders.



How a Bill Becomes a L...err, How an Order Becomes a Tote

If Newegg's warehouse had a pulse it'd be a scary thing, as the system is unbelievably self-aware. The warehouse holds around 20,000 unique products and it is aware of the location and quantities of each and every one of them.


This tote is someone's order, I didn't tinker with it


Totes galore

There are tons of red totes that are constantly traveling through the warehouse on automated conveyor belts. They will keep circling until one of them is needed. When an order comes in from the website and is cleared for processing it is assigned to a tote; the order and the tote are married and are only separated once the order is boxed and ready to be shipped.


The totes run by these barcode scanners constantly, they monitor the contents of the tote and the order, if the order isn't complete it keeps getting routed through the warehouse until every last item is in there.

The tote is routed to various locations in the warehouse and filled by hand before being sent back out the conveyor system. The actual filling of the tote is done manually, but tracking the tote and deciding where it has to go is entirely automated. The warehouse knows where to send the totes and it can even detect traffic jams and slow totes down if need be.


Speedy totes

The entire system is optimized so that if the product is in stock in the warehouse closest to you, and your order is placed by 2PM EST, it will ship out that same day. Thanks to careful placement of these warehouses, you should be able to get what you ordered within a couple of days without having to pay for more expensive shipping. It's good to see that Newegg's goal of optimizing for ground shipping is still top priority.



The Picker

Your tote makes its way around the Newegg warehouse via conveyor belt and since the system knows the location of every last product in the warehouse, it can drop off your tote whenever it's near product that you've ordered.

Once the tote arrives, a Newegg staffer will scan the barcode on its side:

Once scanned, lights near the products you've ordered will illuminate telling the employee what and how many items need to be placed inside the tote:


The lower half of the Ok button is illuminated, the display indicates that our tote needs one ASUS P5VD2-VM SE


The rest of the displays remain shut off to help point out what products need to be placed in the tote

Once the system indicates that the tote is full, you simply hit ok and place the tote back on the conveyor belt. The system will continue cycling the tote around the warehouse until the order is complete, at which point it'll be sent off to packing/shipping.



The Box Maker

One of the coolest parts of Newegg's automated warehouse continues to be the box maker. The one in NJ is a lot like the one in LA, just a little bigger:

The box maker takes collapsed boxes and automatically turns them into fully folded boxes, ready for all sorts of computer goodness:

The machine takes a stack of collapsed boxes and grabs each one individually using a set of four plungers:

The machine then opens the collapsed box:

And the box is formed:

Once one box is formed it's time to move onto the next one:

The arm to the right pushes the newly made box out of the way and gets the machine ready for the next box.



The Peanut Gun

If you're going to have an automated box maker, you absolutely need to also have a packaging peanut delivery system to go along with it. When you enter the warehouse on the far right you'll see two large vats:


The peanut vats are to the left

In these two massive vats are about a tractor trailer's worth of packaging peanuts. They are piped to the packing area using metal ducting that you see in the picture above. The peanuts are sent to mini-vats in the actual packing area and from there they are sent to the peanut guns:

As the order is completed, the tote is sent to the label station where each item is scanned individually and a label is generated to make sure what you ordered is what goes in the box.


The label station


Label printed

The peanut guns dispense packaging peanuts into boxes as they are readied for shipping:

If the Newegg staffer filling the box gets a little too excited and shoots peanuts everywhere, never fear: the system is self-recycling.

Any peanuts that miss their target get sucked back into the system, minimizing waste and maximizing peanut-fun. Newegg insists that packaging peanuts are still the most economical form of packaging, although within the next few years we may see some more eco-friendly solutions arise.


Delicate items are individually wrapped in bubblewrap


Newegg has a bit of bubblewrap on hand


Some things must be done by hand

Once full of peanuts, the box is pushed through the automatic taping machine and sent off to shipping:



Off to See the Wizard

Once your order is packed, taped and labeled it's sent via conveyor belt to the shipping area:


Empty boxes and full totes come in on the right and leave as taped packages on the left


These things move pretty quickly


Up they go

As the boxes make their way to the shipping area they are scanned and directed to the appropriate shipping lane automatically:


The label is read and the system figures out whether to send the package to a FedEx or UPS lane


The vast majority of these lanes are for UPS, Newegg's preferred shipping partner. The first lane is reserved for FedEx.

UPS actually staffs Newegg's warehouse with its own employees. The folks you see in the picture above actually work for UPS, not Newegg. Your package is scanned at Newegg and your tracking number/status is actually generated on the spot, so the truck doesn't have to return to the UPS depot before your tracking information becomes active.


The UPS folks hard at work


UPS trucks are loaded and shipped off multiple times during the day


The FedEx ailes move much slower

Newegg's goal is to be able to ship via UPS ground to its customers within 1 - 2 days, hence the creation of these warehouses across the US. The New Jersey warehouse is able to reach customers in NY within a day and most other places on the East Coast within two via UPS ground.



Final Words - The Contest

Now we get to the fun part.

While touring the facility I ran into a stack of Core 2 Extreme QX9650s, I pointed at them and told my tour guides that you guys would like it if we could give away a few of them. Newegg said ok and set aside five for just that purpose. Newegg's legal team had to clear everything and unfortunately the sweepstakes is open only to legal US residents except those in Rhode Island, Florida, NY and the District of Columbia (no clue why).

 

All you have to do to enter is head over here and you've got until June 1st 2008 to enter. Good luck and I hope you enjoyed the tour :)

 

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