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"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 seems in-genuine for multiple reasons:

1. Other articles I've read on the Netflix Inventory Control system indicate that there are almost _no_ DVDs in the warehouses, the vast majority are either at customers, or in shipment. So the "Several Million DVDs" is an unlikely claim.

2. Expensive mail sorting gizmos? So? Are they afraid of theft? "Mail Sorting Gizmos" neither lends themselves to easy snatch and grabs, transport, nor resale.

3. Dry-Boarded Stats on scratches, damaged, wrong sleeve. Doesn't sound like competitively useful information to me, particularly after data like # of Sleeves per hour (650-900) per employee, and interval of exercise (every 65 minutes) has been made public.

4. Drop Off DVDs at the door - This is a bad thing, why?

Nope, My guess is that NetFlix is trying to delay the inevitable, which is unionization of their workforce by trying to keep the location of their shops confidential and avoid organized labor leaders paying their sorters/packers a visit...




Warehouse with million * untraceable, easily sold, small items worth $10 each. Security costs = $$$.


> 4. Drop Off DVDs at the door - This is a bad thing, why?

Because their process is designed around 1000X as many DVDs coming in through a different entrance, probably with some "packaging" that they've optimized around.

DVDs at the door are an exception and exceptions are even more expensive in the physical world. And, that's ignoring the cost of dealing with folks who think that they can pick up new DVDs when they drop off their old ones.




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