A look at how online DVD rental company Netflix gets your movies to your mailbox so fast.By Christopher Borrelli
CAROL STREAM, Ill. —The Netflix warehouse in Carol Stream does not appear on any map. Your odds of finding it are only slightly better than your odds of stumbling upon a rare insect in a field of weeds. The warehouse is, after all, one of those mythical New Economy temples. You know it must exist somewhere, because a P.O. box on every Netflix envelope suggests it does. You imagine this place processing your Netflix queue with magical efficiency, possibly with Oompa Loompas in matching jumpsuits of Netflix red dancing about.
The truth is stranger.
After a period of begging Netflix to let me poke around its clandestine Chicago-area hub, and see how its ubiquitous red-enveloped packages are processed, I was given an address and a time to arrive and asked not to blab about it.
There are 58 Netflix warehouses nationwide, serving 10.6 million subscribers, and only one for greater Chicago; it was Netflix's 19th warehouse, opened in 2003. To get there, I was told to go to Carol Stream, to be there around sunrise. I imagined it was like coming upon Narnia — one stares at it awhile until the entrance becomes evident, which turned out to be sort of true.
Big on stealth
The warehouse is indeed in a random office park, resplendent in shades of gray and cream. (In exchange for a visit, I agreed not to divulge the precise spot or let slip a few trade secrets, none of which struck me as remarkable.)
If you work at this warehouse, you have signed a confidentiality agreement that you will not divulge its location. You can tell people where you work, just not exactly where.
Netflix, based in Los Gatos, Calif., is big on stealth — and has been since launching 11 years ago. But as vice president of communications Steve Swasey explained, the company is so far ahead of its competition in the DVD-by-mail market, that guarding secrets has been less of a concern these days. (According to the company's quarterly financial report, it saw a 21 percent jump in revenue, one of the few major companies that appear recession-proof.)
Its biggest secret remains the warehouses themselves — for two reasons. No. 1, each holds several million DVDs, not to mention expensive mail-sorting gizmos and dry-board posted statistics on how many discs were recently returned damaged, placed in the wrong sleeve or scratched.
And No. 2, Netflix has grown leery of what happens when customers learn the location of a warehouse — they drop off DVDs at the door. This will not help get your next disc out faster — and neither will dropping a disc in the mail early in the morning.
Before I explain why, a bit more on the warehouse itself: Despite having an address, I drove past it a few times. The building is intentionally disguised, dumpy and drab, the warehouse tucked behind another office building closer to the street. There is also not a single identifiable piece of Netflix signage on anything out front — not a nameplate or a flash of Netflix red, and certainly not any corporate logos. Unmarked trucks roll up, then roll out. Employees (called "associates," in Netflix-ese) enter through a less-than-obvious door.
Indeed, one of the few things about the building that suggested it was not a meth lab was that, at sunrise, the parking lot was full — shifts begin at 3 a.m. The busiest time is around 7 a.m., but as I entered, the first thing I noticed was how silent it was. No one was chatting.
The second thing I noticed was how, for a Web-based business, there were few computers — maybe seven in the building, which has towering white walls and a concrete floor. Every Netflix warehouse looks like every other Netflix warehouse, down to the same flat, bright wattage of its light bulbs.
Fast and accurate
Forty-two people work here, nearly every one in a red Netflix T-shirt, nearly every one in constant motion. Indeed, I was asked not to disturb their groove and hit them up with questions. The busiest sat in wide rows, flanked with post office cartons stuffed with Netflix envelopes.
Six nights a week, a truck leaves for the post office and picks up cartons full of these return-address envelopes; pickup is at 3 a.m. (It's also the reason that the time of day you mail your DVD back has no effect on when you receive your next one.)
Back at the 28,500-square-foot warehouse, from which more than 60,000 discs are shipped daily in the Chicago area alone, cartons are placed at the feet of employees, who glance in two directions — down (to pick up an envelope) and up (to look at the disc), and that's about it. This is the first, and least automated, stage of the process, performed mainly by women; they have full medical benefits and a 40-hour workweek.
They inspect each returned disc. They rip open each envelope, toss it, pull the disc from its sleeve, check that the title matches the sleeve, inspect the disc for cracks or scratches, inspect the sleeve for stains or marks, clean the disc with a quick circular motion on a towel pulled tight across a square block of wood, insert the disc into its sleeve, and file the disc in one of two bins. The bin to the right is for acceptable discs, the bin to the left is for damaged discs or discs not in the proper sleeve.
To a casual observer, this all seems to happen in a single motion, a flurry of fingers. Employees are expected to perform this a minimum of 650 times an hour. Also, customers stuff things into the envelopes. Scribbled movie reviews, complaints, pictures of dogs and kids. That needs sorting, too.
After 65 minutes of inspection, a bell rings. Everyone stands up.
The team leader leans back, and everyone leans back. The team leader leans sideways. Everyone leans sideways. And so on. This pattern of inspection and exercise repeats every 65 minutes, until rental-return inspection is complete.
Swasey, who drove in from Columbus, Ohio, where there is an even larger hub, pointed to a photocopy taped to the wall — a picture of Disc 4 of "Rescue Me" Season 4 alongside a sleeve that promised Disc 4 of "Rescue Me" Season 3. It's a kind of Netflix perp walk. Some diligent associate caught the mistake before it shipped. "To me, I see it as a goose-bump moment," Swasey said.
Machines in motion
From there, action shifts to long machines that go ffft. This, right here, is how you get discs as fast as you do. Inspected discs are scanned into the inventory by a machine that reads 30,000 bar codes an hour — ffft, ffft, ffft. The moment this machine reads the bar code, you receive an e-mail letting you know that your disc arrived.
Then discs are scanned a second time — if a title is requested, and around 95 percent of titles get rented at least once every 90 days, the machine separates it and sorts it out by ZIP code. (The entire inventory of the building is run through this daily, a process that alerts other warehouses of the location of every one of the 89 million discs owned by Netflix.)
After that, separated discs are taken to a machine called a Stuffer — which goes ssssht-click, ssssht-click — and stuffed in an envelope, which is sealed and labeled by a laser that goes zzzt.
After 5 p.m., trucks are loaded with cartons of mailers and return to the post office — indeed, Netflix has become the fastest-growing source of first-class mail for the Postal Service, a department official says.
How accurate is Carol Stream? Swasey won't say, but I saw a statistic posted on the wall, and, if it's accurate, the percentage of mistakenly shipped discs is negligible — far less than a quarter of 1 percent. Not that it matters. Netflix is already streaming movies online and through TiVo and Xbox 360s, and the service is looking toward the day when discs are outmoded and warehouses like this one redundant.
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