Just finished reading Inside An Amazon Warehouse about Amazon’s warehousing systems, an 2012 article by Dave Smith. (Via Cory Doctorow.) Also worth reading is Amazon - leading the way through chaos by Torsten Reichardt.
Having Amazon so many products (probably millions), and high product rotation, organizing items by category or trying to store different lots of the same items together would need a lot of time and probably waste space. Instead, Amazon uses a ‘chaotic’ storage system.
After arriving at Amazon’s warehouses, items are barcoded and stored by warehouse’s staff in unoccupied shelf space, wherever there is room. Each shelf has its own barcode. Location and product codes are registered in Amazon’s own system. When an incoming order arrives, the computer system prepares a picking list that specifies exactly where each of the requested products are to be found.
Storing and picking is not done by robotic systems, but by staff workers. Amazon’s did several simulations of automatic storage and picking systems, and hiring warehouse staff was a more economical solution.