- Amazon announced its HQ2 locations on November 13 – Long Island City, a neighbourhood of Queens, New York, and the Crystal City area of Arlington, Virginia.
- The megacompany also said it will open an Operations Center of Excellence in Nashville, Tennessee.
- The center will create 5,000 white collar jobs in tech and operations.
Supply chain gurus and techies with a logistics bent have a new potential workplace: Amazon’s Center of Excellence for Operations.
It’s a flowery name for a serious endeavour. The center will create some 5,000 white-collar jobs with a median salary of $US158,000, according to the State of Tennessee. These employees will help optimise Amazon’s ultra-complex supply chain, which powered the shipment of five billion packages last year through Prime alone.
Amazon announced the center on November 13, when the megacompany also announced its HQ2 locations – Long Island City, a neighbourhood of Queens, New York, and the Crystal City area of Arlington, Virginia.
Experts told Business Insider they weren’t surprised by the Nashville pick.
The Middle Tennessee city has the right mix of amenities and talent for the center, said BethDavis-Sramek, who is an associate professor in supply chain management at Auburn University’s Harbert College of Business.
There are dozens of higher education institutions in the city, and art, food, and entertainment are flourishing. The city is already a hub for the health care industry, with some 270,000 health care workers.
The number of jobs in Nashville grew by 19% from 2012 to 2017 – the third-largest jump in the country. More white Millennials moved to Nashville from 2010 to 2015 than to New York City, and nearly as many moved to Nashville as they did to San Francisco.
“Nashville is a great place to live in terms of acquiring and retaining talent, and that seems [to be] what Amazon was looking for,” Davis-Sramek told Business Insider. “The city has really rebranded itself over time into a place that’s up-and-coming.”
That livability makes Nashville an ideal place to lure in white-collar folks. And plenty of supply chain gurus are already living there.
Companies like Dollar General and Tractor Supply, which have industry-lauded supply chain operations, are based in the Nashville area. And schools with leading logistics programs, like Auburn University and the University of Tennessee, are nearby.
“The reality is that you do have plenty of experts in the region already,” David Marcotte, senior vice president of strategic advisory service in operations at Kantar Consulting, told Business Insider.
Don’t expect blue-collar Amazon employment to be popping up around Nashville
However, Nashville isn’t as strategic a location when it comes to the company’s 125,000 full-time fulfillment center workers. Comprising around 20% of Amazon’s 613,300 total employees, these warehouse employees pick, sort, pack, and load/unload goods to head to consumers’ homes.
Finding the location for a mega-warehouse is, in some ways, more complicated than figuring out where to put a corporate office. It’s crucial to consider where the warehouse sits in the larger transportation network, like if it’s accessible by seaport, multiple highway routes, railways, cargo airlines, and so on.
Take the 80-acre Amazon warehouse that’s opening next year in Tucson, Arizona. Marcotte said Tucson is “ideal” for such a warehouse, which will employ 1,500 people, because it’s on a variety of rail junctions. Freight there can be easily moved between trucks and trains.
Could such a mega-warehouse open in Nashville? “It would not quite fit my absolute ideal, but it’s pretty good,” Marcotte said.
Bryan Ball, supply chain management research director for market intelligence firm Aberdeen, added that it would be “a bit unusual.”
On the plus side, Nashville is close to the seaports in Savannah, Georgia, and Charleston, South Carolina. (However, these seaports are relatively small.) It’s also within a day’s drive of major metropolises like Miami, Dallas, New York City, and Washington D.C.
Plenty of companies have distribution centres in the area, Ball said. Amazon alone has four in or around Nashville, according to supply chain consultancy MWPVL International.
Still, the convergence of highways and railways in the city isn’t quite as appealing as, say, Charlotte, North Carolina, Reno, Nevada, or the area between Oklahoma and Texas, Ball said. Louisville, Kentucky would also be an ideal choice, Davis-Sramek said.
Experts kept pointing to a city about 200 miles west of Nashville as an ideal place for an Amazon mega-warehouse: Memphis, Tennessee. That’s the city of the largest cargo airport in North America, with 11,000 FedEx employees alone.
But Nashville wins out for white collar over Memphis or other typical freight cities because, well, it’s cooler.
“If I’m recruiting from outside of the region, Nashville has somewhat more of a caché,” Marcotte said. “That’s just how it’s perceived.”