Amazon integrated Kiva robots into some of its warehouses to address bottlenecks and meet increasing demand from customers. The robots carry shelves of inventory to workers, cutting order processing time from 90 minutes to 15 minutes. This allows Amazon to process 426 orders per second on busy days like Cyber Monday. The robots increase capacity by 15% and allow 37,895 items to be processed daily compared to 16,000 by human workers alone. While a large initial investment, the robots provide ongoing cost savings and efficiency gains that support Amazon's strategy of fast, low-cost delivery for customers.
1. The document discusses the supply chain of Amazon, describing how it sources products from suppliers and fulfills customer orders through a network of warehouses and delivery partners.
2. Key aspects of Amazon's supply chain include its fulfillment centers and partnerships with couriers for delivery, as well as programs like Fulfillment by Amazon that allow third-party sellers to store and ship products.
3. Amazon aims to provide customers with fast delivery of a wide selection of products through continuous improvements to its hybrid logistics model and use of technologies like machine learning and data analytics.
- Amazon launched its marketplace in India in 2013 without any marketing campaigns initially, focusing on selling books and other products.
- It now offers a wide range of products and services on its platform, including fulfillment and advertising services to help sellers. Amazon uses both digital channels like ebooks and physical warehouses to distribute products.
- It has partnerships with companies like Procter & Gamble and Future Group to help reduce costs and expand offerings. Amazon uses both ATL and online promotions to attract customers in India.
The document discusses the Kiva warehouse automation system which uses hundreds of autonomous mobile robots (drive units) to coordinate fulfilling customer orders. The Kiva system uses a multi-agent approach with different agent roles like drive unit agents that transport inventory and order pods, inventory station agents at picking stations, and a job manager agent that allocates resources and coordinates order fulfillment. The Kiva system aims to optimize productivity and efficiency through approaches like adaptive storage of inventory pods and algorithms for resource allocation and path planning of robots.
1) Amazon has experienced drastic growth in net sales by expanding its product categories, but its return on sales and profitability have declined in recent years.
2) While Amazon's North American sales have expanded, its international "other" sales, representing new business domains, have not grown for three years.
3) To address its profitability issues and limitations to expanding its existing categories, Amazon is considering horizontal and vertical integration strategies such as entering new business services and developing new markets.
This document discusses segmentation in supply chain management and provides recommendations for improving Amazon's supply chain operations in Europe. It summarizes that Amazon has expanded from an online bookstore to selling a wide variety of products worldwide through extensive warehousing and delivery networks. However, its European operations have some inefficiencies like repetitive inventory, higher prices, and unreliable cross-border logistics. The document recommends that Amazon adopt a centralized European operations management structure along with strategies like strategic order fulfillment and inventory distribution to reduce costs, managing shipping costs more effectively, and exploring offline retail options.
Same day delivery process & impact. How Operation management & six sigma use in the same-day delivery process. IIM Raipur group presentation by (group 3)
Logistics and Supply chain management involves getting goods to the right place at the right time in the right quantity and quality at the lowest cost. It covers planning, procurement, transportation, warehousing, tracking and reporting. Key aspects include time, place, cost, quality, quantity, temperature, packing and security. Major Indian logistics companies include DHL, Blue Dart and Gati. Warehousing provides storage, protection and risk bearing for goods with mechanical equipment and adequate space. Material Requirements Planning (MRP) is a computerized inventory control system that ensures materials and products availability while maintaining low inventory levels. Demand Requirements Planning (DRP) captures demand data to manage distribution facilities and match supply to demand.
Supply Chain Management in the Motor Vehicle Industry, the Example of Mini.aguesdon
The powerpoint presentation based on my dissertation. It is much less complete than the dissertation itself, as the presentation must only last 3 minutes.
Please feel free to leave any comment or suggestion !
1. The document discusses the supply chain of Amazon, describing how it sources products from suppliers and fulfills customer orders through a network of warehouses and delivery partners.
2. Key aspects of Amazon's supply chain include its fulfillment centers and partnerships with couriers for delivery, as well as programs like Fulfillment by Amazon that allow third-party sellers to store and ship products.
3. Amazon aims to provide customers with fast delivery of a wide selection of products through continuous improvements to its hybrid logistics model and use of technologies like machine learning and data analytics.
- Amazon launched its marketplace in India in 2013 without any marketing campaigns initially, focusing on selling books and other products.
- It now offers a wide range of products and services on its platform, including fulfillment and advertising services to help sellers. Amazon uses both digital channels like ebooks and physical warehouses to distribute products.
- It has partnerships with companies like Procter & Gamble and Future Group to help reduce costs and expand offerings. Amazon uses both ATL and online promotions to attract customers in India.
The document discusses the Kiva warehouse automation system which uses hundreds of autonomous mobile robots (drive units) to coordinate fulfilling customer orders. The Kiva system uses a multi-agent approach with different agent roles like drive unit agents that transport inventory and order pods, inventory station agents at picking stations, and a job manager agent that allocates resources and coordinates order fulfillment. The Kiva system aims to optimize productivity and efficiency through approaches like adaptive storage of inventory pods and algorithms for resource allocation and path planning of robots.
1) Amazon has experienced drastic growth in net sales by expanding its product categories, but its return on sales and profitability have declined in recent years.
2) While Amazon's North American sales have expanded, its international "other" sales, representing new business domains, have not grown for three years.
3) To address its profitability issues and limitations to expanding its existing categories, Amazon is considering horizontal and vertical integration strategies such as entering new business services and developing new markets.
This document discusses segmentation in supply chain management and provides recommendations for improving Amazon's supply chain operations in Europe. It summarizes that Amazon has expanded from an online bookstore to selling a wide variety of products worldwide through extensive warehousing and delivery networks. However, its European operations have some inefficiencies like repetitive inventory, higher prices, and unreliable cross-border logistics. The document recommends that Amazon adopt a centralized European operations management structure along with strategies like strategic order fulfillment and inventory distribution to reduce costs, managing shipping costs more effectively, and exploring offline retail options.
Same day delivery process & impact. How Operation management & six sigma use in the same-day delivery process. IIM Raipur group presentation by (group 3)
Logistics and Supply chain management involves getting goods to the right place at the right time in the right quantity and quality at the lowest cost. It covers planning, procurement, transportation, warehousing, tracking and reporting. Key aspects include time, place, cost, quality, quantity, temperature, packing and security. Major Indian logistics companies include DHL, Blue Dart and Gati. Warehousing provides storage, protection and risk bearing for goods with mechanical equipment and adequate space. Material Requirements Planning (MRP) is a computerized inventory control system that ensures materials and products availability while maintaining low inventory levels. Demand Requirements Planning (DRP) captures demand data to manage distribution facilities and match supply to demand.
Supply Chain Management in the Motor Vehicle Industry, the Example of Mini.aguesdon
The powerpoint presentation based on my dissertation. It is much less complete than the dissertation itself, as the presentation must only last 3 minutes.
Please feel free to leave any comment or suggestion !
Amazon has used three digital engines to reshape and dominate retail: 1) No limits on inventory through limitless categories and third-party sellers, 2) Customer care on steroids through data-driven personalization and service, 3) High margins and lowest prices through optimized logistics and supply chain that maximize cash flow. These digital advantages have allowed Amazon to outperform competitors and achieve massive growth over its history.
Amazon launched in India in 2013 and has since established itself as the second largest online retailer in the country. It utilizes a hybrid logistics model, delivering some products itself while leveraging other logistics firms. Amazon's supply chain in India includes 21 fulfillment centers across 10 states that house over 1.3 million products. It aims to win in India by expanding to tier 2/3 cities, where 65% of orders originate, and developing innovative programs like mobile carts and studios to help small businesses sell online. To further penetrate the Indian market, experts suggest Amazon could adopt a multiple hub and spoke model and invest more in developing an in-house logistics arm.
- Seven-Eleven Japan was established in 1973 and managed by Southland corporation until 1991 when it was taken over by Ito-Yokado Group.
- In 2004, convenience stores in Japan and the US contributed 48.2% of IYG's total revenue, with Seven-Eleven Japan alone contributing 87.6% of operating income from convenience stores.
- Seven-Eleven Japan had core strengths in information systems and distribution systems to support over 10,000 stores with daily sales averaging 647,000 yen compared to 484,000 yen for competitors.
This document provides information about Zara's supply chain management practices. It discusses how Zara was founded and expanded globally. It then describes Zara's fast fashion strategy and how they are able to introduce new designs quickly through vertical integration. The document outlines Zara's processes for spotting trends, designing, production, distribution, store layout, and reaping benefits from their supply chain system. It also discusses some challenges for Zara's supply chain with further expansion and potential modifications needed.
This document provides an overview of 7-Eleven Japan's supply chain strategy and operations. It discusses how 7-Eleven Japan uses a network of distribution centers to rapidly replenish its large number of convenience stores across Japan on a daily basis. This allows 7-Eleven to provide customers with fresh products when and where they need them. The document also notes some of the risks of this approach, such as high transportation and receiving costs, and the potential for obsolete inventory.
A brief Walkthrough on the tech giant which changed the face of E-Commerce through its massive Contribution and Technological Advancements.
Amazon Automated Warehouse System (Kiva Systems) explained.
Amazon operates as an online retailer without physical stores. It has around 50 warehouses globally to store inventory and fulfill customer orders quickly. Amazon uses various inventory management strategies like keeping popular items in standard inventory and fulfilling less popular items through just-in-time inventory and third-party sellers. Its supply chain focuses on high responsiveness through multi-tier inventory, efficient transportation, and information systems.
The document discusses the e-commerce industry and Amazon. It notes that the global e-commerce transaction value in 2017 was $667 billion and the major players in India are Amazon, Flipkart, and Snapdeal. Amazon is highlighted as the largest online retailer in the US, with 2017 net revenue of $178 billion. Porter's 5 forces analysis finds competitive rivalry and bargaining power of customers/substitutes to be strong forces for Amazon. The document also outlines Amazon's strategies around cost leadership, customer differentiation, and focus areas.
Zara has built a highly efficient supply chain and logistics system that allows it to bring new fashion designs from concept to stores in just 2 weeks. It uses a vertically integrated model where designs are created based on data from stores. Approved designs are quickly manufactured in nearby factories before being shipped to stores twice per week. Zara is proposing to expand this efficient model to the US by opening local distribution centers to manufacture and distribute to North American stores within 24 hours, reducing shipping costs and improving fashionability for American customers. While outsourcing logistics could improve efficiency, it risks losing control over their specialized system which is key to Zara's success.
This document discusses the logistics operations of Flipkart and Snapdeal, two major e-commerce players in India. It describes Flipkart's logistics arm called eKart, which handles over 5 million shipments per month across 150 cities in India. The document also outlines Snapdeal's logistics partnership with Bluedart and how Snapdeal serves as a technology platform while not maintaining any inventory. It provides a comparison of the delivery vehicle fleets, shipment volumes, warehouse sizes and workforce of eKart and Bluedart in Delhi.
Walmart is the largest public employer and retailer in the world. Founded in 1962 in Arkansas, Walmart has grown to have over $500 billion in valuation. The document outlines Walmart's supply chain management strategies such as price leadership, private labels, and integrating brand communication. It discusses ethics and legal issues related to human and environmental impacts. Walmart's future plans include expanding health services, efficient pickup options, automation, and delivery through services like Express, Go Local, and in-home delivery. The return policy offers full refunds and exchanges. Supply chain is enabled through patent strategies, technology like blockchain, IoT, and AR, as well as inventory management and real-time tracking.
7-Eleven Japan operates a highly efficient supply chain network to keep their convenience stores well-stocked. They use a combined distribution system where products from multiple suppliers are delivered to stores on shared trucks. This rapid replenishment policy ensures stores have a wide range of products available. 7-Eleven also uses an omni-channel strategy and IT systems like "item-by-item management" to closely match supply and demand. Their network design focuses on high population density areas for efficient distribution.
Flipkart is India's largest e-commerce retailer. The document analyzes Flipkart's inventory and supply chain management. It discusses how Flipkart maintained high stock levels in its 300+ warehouses to avoid shortages. However, this led to issues like excess storage and expired goods. Flipkart addressed this using just-in-time delivery and partnerships with 15+ couriers for timely order fulfillment. It also uses sales data to predict inventory levels and reduce waste.
A convenience store can improve responsiveness through various strategies, but each carries risks. Rapid replenishment from centralized cooking allows low inventory levels but increases transportation costs. Local capacity or inventory decentralizes production but wastes resources from poor utilization. Extensive IT use helps predict demand accurately but incurs high fixed costs. Seven-Eleven Japan's strategy of micro-matching supply and demand through rapid replenishment risks stockouts if demand patterns change, delays disrupt transportation, and failures compromise its highly IT-dependent system. Maintaining regular operations across the responsive supply chain also presents challenges.
Madura Coats implemented an Order Frequency Analysis (OFA) project to optimize its supply chain. The OFA project analyzed sales data to determine the optimal stock levels and ranges for each location based on criteria like volume, customer frequency, and spread. This resulted in a 14% reduction in finished goods, a 15% reduction in dormant stocks, and an increase from 51% to 77% in the percentage of orders completed within 48 hours after full implementation. The OFA approach analyzed historical sales data to forecast demand and establish replenishment levels, which improved inventory management and service levels across Madura Coats' supply chain.
Amazon was founded in 1994 by Jeff Bezos and launched online in 1995 as an online bookstore. The company logo represents selling from A to Z with the arrow forming a smile. Amazon expanded successfully into other product categories, established international sites, and drastically increased advertising spending from $50 million in 1998 to promote its expanding product offerings and global expansion.
This document discusses IKEA's competitive advantage through cost leadership strategies. It explains that IKEA focuses on low-cost production through standardized, high-volume manufacturing. IKEA also engages in efficient product design to control costs and maintain low prices that new competitors cannot easily match. Overall, the document analyzes how IKEA achieves cost leadership in the furniture industry to gain a competitive market position.
This is the English version of my original post in French. .ppt this time with links to the videos !
We can hear a lot currently about "New Retail" in China. It's the current favorite topic of Jack Ma !
During the recent "Single Day", ALIBABA smashed again all the records by achieving a GMV of 25 billion dollars ... According to the leaders of the group, this figure could be reached by bringing innovations and fluidity between offline and online purchases: This is what they call the "New Retail"
You will find in this presentation some concrete examples of retailers that exploit the convergence between offline and online and that propose new modes / types of distribution.
This presentation covers a wide variety of topics such as:
- Brief History of Amazon
- Product, Customers, and Competitors
- Sourcing
- Manufacturing
- Layout
- Inventory
- Operational Strategies
By reading this presentation, you can be well-prepared for any operational management session.
The document discusses Amazon's business operations and strategies for success on its marketplace platform. It provides details on Amazon's product categories and conditions, challenges faced by sellers, best practices for defining business capabilities, and methods for anticipating project benefits and costs. The key aspects covered include Amazon's marketplace platform, supply chain management, customer experience, seller engagement, cloud services, and data security.
Amazon has used three digital engines to reshape and dominate retail: 1) No limits on inventory through limitless categories and third-party sellers, 2) Customer care on steroids through data-driven personalization and service, 3) High margins and lowest prices through optimized logistics and supply chain that maximize cash flow. These digital advantages have allowed Amazon to outperform competitors and achieve massive growth over its history.
Amazon launched in India in 2013 and has since established itself as the second largest online retailer in the country. It utilizes a hybrid logistics model, delivering some products itself while leveraging other logistics firms. Amazon's supply chain in India includes 21 fulfillment centers across 10 states that house over 1.3 million products. It aims to win in India by expanding to tier 2/3 cities, where 65% of orders originate, and developing innovative programs like mobile carts and studios to help small businesses sell online. To further penetrate the Indian market, experts suggest Amazon could adopt a multiple hub and spoke model and invest more in developing an in-house logistics arm.
- Seven-Eleven Japan was established in 1973 and managed by Southland corporation until 1991 when it was taken over by Ito-Yokado Group.
- In 2004, convenience stores in Japan and the US contributed 48.2% of IYG's total revenue, with Seven-Eleven Japan alone contributing 87.6% of operating income from convenience stores.
- Seven-Eleven Japan had core strengths in information systems and distribution systems to support over 10,000 stores with daily sales averaging 647,000 yen compared to 484,000 yen for competitors.
This document provides information about Zara's supply chain management practices. It discusses how Zara was founded and expanded globally. It then describes Zara's fast fashion strategy and how they are able to introduce new designs quickly through vertical integration. The document outlines Zara's processes for spotting trends, designing, production, distribution, store layout, and reaping benefits from their supply chain system. It also discusses some challenges for Zara's supply chain with further expansion and potential modifications needed.
This document provides an overview of 7-Eleven Japan's supply chain strategy and operations. It discusses how 7-Eleven Japan uses a network of distribution centers to rapidly replenish its large number of convenience stores across Japan on a daily basis. This allows 7-Eleven to provide customers with fresh products when and where they need them. The document also notes some of the risks of this approach, such as high transportation and receiving costs, and the potential for obsolete inventory.
A brief Walkthrough on the tech giant which changed the face of E-Commerce through its massive Contribution and Technological Advancements.
Amazon Automated Warehouse System (Kiva Systems) explained.
Amazon operates as an online retailer without physical stores. It has around 50 warehouses globally to store inventory and fulfill customer orders quickly. Amazon uses various inventory management strategies like keeping popular items in standard inventory and fulfilling less popular items through just-in-time inventory and third-party sellers. Its supply chain focuses on high responsiveness through multi-tier inventory, efficient transportation, and information systems.
The document discusses the e-commerce industry and Amazon. It notes that the global e-commerce transaction value in 2017 was $667 billion and the major players in India are Amazon, Flipkart, and Snapdeal. Amazon is highlighted as the largest online retailer in the US, with 2017 net revenue of $178 billion. Porter's 5 forces analysis finds competitive rivalry and bargaining power of customers/substitutes to be strong forces for Amazon. The document also outlines Amazon's strategies around cost leadership, customer differentiation, and focus areas.
Zara has built a highly efficient supply chain and logistics system that allows it to bring new fashion designs from concept to stores in just 2 weeks. It uses a vertically integrated model where designs are created based on data from stores. Approved designs are quickly manufactured in nearby factories before being shipped to stores twice per week. Zara is proposing to expand this efficient model to the US by opening local distribution centers to manufacture and distribute to North American stores within 24 hours, reducing shipping costs and improving fashionability for American customers. While outsourcing logistics could improve efficiency, it risks losing control over their specialized system which is key to Zara's success.
This document discusses the logistics operations of Flipkart and Snapdeal, two major e-commerce players in India. It describes Flipkart's logistics arm called eKart, which handles over 5 million shipments per month across 150 cities in India. The document also outlines Snapdeal's logistics partnership with Bluedart and how Snapdeal serves as a technology platform while not maintaining any inventory. It provides a comparison of the delivery vehicle fleets, shipment volumes, warehouse sizes and workforce of eKart and Bluedart in Delhi.
Walmart is the largest public employer and retailer in the world. Founded in 1962 in Arkansas, Walmart has grown to have over $500 billion in valuation. The document outlines Walmart's supply chain management strategies such as price leadership, private labels, and integrating brand communication. It discusses ethics and legal issues related to human and environmental impacts. Walmart's future plans include expanding health services, efficient pickup options, automation, and delivery through services like Express, Go Local, and in-home delivery. The return policy offers full refunds and exchanges. Supply chain is enabled through patent strategies, technology like blockchain, IoT, and AR, as well as inventory management and real-time tracking.
7-Eleven Japan operates a highly efficient supply chain network to keep their convenience stores well-stocked. They use a combined distribution system where products from multiple suppliers are delivered to stores on shared trucks. This rapid replenishment policy ensures stores have a wide range of products available. 7-Eleven also uses an omni-channel strategy and IT systems like "item-by-item management" to closely match supply and demand. Their network design focuses on high population density areas for efficient distribution.
Flipkart is India's largest e-commerce retailer. The document analyzes Flipkart's inventory and supply chain management. It discusses how Flipkart maintained high stock levels in its 300+ warehouses to avoid shortages. However, this led to issues like excess storage and expired goods. Flipkart addressed this using just-in-time delivery and partnerships with 15+ couriers for timely order fulfillment. It also uses sales data to predict inventory levels and reduce waste.
A convenience store can improve responsiveness through various strategies, but each carries risks. Rapid replenishment from centralized cooking allows low inventory levels but increases transportation costs. Local capacity or inventory decentralizes production but wastes resources from poor utilization. Extensive IT use helps predict demand accurately but incurs high fixed costs. Seven-Eleven Japan's strategy of micro-matching supply and demand through rapid replenishment risks stockouts if demand patterns change, delays disrupt transportation, and failures compromise its highly IT-dependent system. Maintaining regular operations across the responsive supply chain also presents challenges.
Madura Coats implemented an Order Frequency Analysis (OFA) project to optimize its supply chain. The OFA project analyzed sales data to determine the optimal stock levels and ranges for each location based on criteria like volume, customer frequency, and spread. This resulted in a 14% reduction in finished goods, a 15% reduction in dormant stocks, and an increase from 51% to 77% in the percentage of orders completed within 48 hours after full implementation. The OFA approach analyzed historical sales data to forecast demand and establish replenishment levels, which improved inventory management and service levels across Madura Coats' supply chain.
Amazon was founded in 1994 by Jeff Bezos and launched online in 1995 as an online bookstore. The company logo represents selling from A to Z with the arrow forming a smile. Amazon expanded successfully into other product categories, established international sites, and drastically increased advertising spending from $50 million in 1998 to promote its expanding product offerings and global expansion.
This document discusses IKEA's competitive advantage through cost leadership strategies. It explains that IKEA focuses on low-cost production through standardized, high-volume manufacturing. IKEA also engages in efficient product design to control costs and maintain low prices that new competitors cannot easily match. Overall, the document analyzes how IKEA achieves cost leadership in the furniture industry to gain a competitive market position.
This is the English version of my original post in French. .ppt this time with links to the videos !
We can hear a lot currently about "New Retail" in China. It's the current favorite topic of Jack Ma !
During the recent "Single Day", ALIBABA smashed again all the records by achieving a GMV of 25 billion dollars ... According to the leaders of the group, this figure could be reached by bringing innovations and fluidity between offline and online purchases: This is what they call the "New Retail"
You will find in this presentation some concrete examples of retailers that exploit the convergence between offline and online and that propose new modes / types of distribution.
This presentation covers a wide variety of topics such as:
- Brief History of Amazon
- Product, Customers, and Competitors
- Sourcing
- Manufacturing
- Layout
- Inventory
- Operational Strategies
By reading this presentation, you can be well-prepared for any operational management session.
The document discusses Amazon's business operations and strategies for success on its marketplace platform. It provides details on Amazon's product categories and conditions, challenges faced by sellers, best practices for defining business capabilities, and methods for anticipating project benefits and costs. The key aspects covered include Amazon's marketplace platform, supply chain management, customer experience, seller engagement, cloud services, and data security.
Final Business Model and Strategic Plan Paper_Graded 9Michelle Broadbelt
Amazon.com has dominated online retail but faced security issues that damaged its reputation. To address this, it implemented a new strategic plan focused on increasing security through biometric authentication, monitoring transactions for fraud, and instituting new policies. The plan aims to strengthen security while retaining customers and investors by providing excellent customer service and competitive prices.
Case study: Amazon improvement of customer serviceSulaman Muhammad
Amazon has improved its customer service by improving inventory management in several ways:
1. It increased the number of warehouses to reduce delivery times and opened warehouses near customers.
2. It offered a wide range of products to improve availability and purchase directly from publishers to shorten times.
3. It used location and manufacturing postponement to centralized inventory and delay customization. It also outsourced inventory of less popular products and used drop shipping to focus on e-commerce while maintaining selection and delivery speed.
4. Amazon automated warehouses using barcodes and conveyor belts to efficiently receive, track, pack and ship high volumes of orders.
Amazon FBA inventory management at amazon warehousesLabeed Ahmad
Amazon started as an online bookstore in 1994 and has since diversified its product offerings. It operates without retail stores and relies solely on e-commerce. To manage its vast inventory, Amazon uses techniques like ABC analysis to categorize products, just-in-time delivery to receive goods as needed, and outsourcing storage of less popular items. However, it has moved away from extensive outsourcing to focus more on its own fulfillment centers to improve customer service and reduce stockouts. Amazon's inventory management has evolved over time through increasing automation in warehouses, using a multi-tiered network of facilities, and adopting strategies like location postponement.
This document presents a case study on the supply chain management practices of Amazon. It begins with an introduction to supply chain management and definitions. It then provides details on Amazon's operations, including its multi-tier inventory system and the process of how it manages orders. Key strategies are described such as analytics and private labeling. Advantages like cost savings and disadvantages like implementation costs are highlighted. Recommendations are provided such as developing Amazon's own delivery fleet. Facts about Amazon's operations like same-day delivery and drone delivery are also noted. The document concludes with references.
This document discusses a case study on Amazon Logistics and its supply chain challenges. Some key issues identified are increased shipping costs, high dependency on other logistics companies for last-mile delivery, and disruptions in delivery due to COVID-19. Potential opportunities explored are growing online grocery sales, expanding Amazon Prime Air delivery service, and transforming Whole Foods stores into multi-purpose locations. The report recommends short, medium, and long-term solutions including pickup locations, improving supplier selection and delivery efficiency, and adopting a business model similar to JioMart. It also covers strategies for improving sustainability and financial value through initiatives like installing locker systems.
See how Amazon leverages its supply chain as a critical flywheel in its success. Included in the report are value chain analysis, inventory, transportation and fulfillment, cash conversion cycle, and fulfillment space.
The document discusses the characteristics of next generation supply chains. It notes that supply chains will need to be (1) data rich by leveraging technologies to gain real-time insights, (2) agile to respond quickly to changes in demand and supply, and (3) able to provide quick delivery to meet customer expectations of fast, cheap, and reliable products and service.
1. Amazon was founded in 1994 by Jeff Bezos and launched online in 1995 originally as an online bookstore. It has since expanded into many other product categories.
2. Supply chain management is the coordination of activities from product development through logistics to maximize customer value. For Amazon, this involves coordinating physical flows through warehouses and information flows to coordinate planning and operations.
3. Amazon uses a network of warehouses and partnerships to fulfill customer orders through efficient sorting and shipping via carriers like UPS. It aims to deliver orders within a few days using strategies like anticipatory shipping.
Amazon started as an online bookstore and has since expanded into many other product categories and business lines. It uses a business model of low prices, vast selection, and convenience for customers. The report analyzes Amazon's lines of business, business models, and e-commerce strategies. It finds that Amazon utilizes various intensive growth strategies like market development, market penetration, product development, and diversification. Its overarching generic strategy is cost leadership to offer competitive prices and gain market share.
The document discusses strategies for Amazon vendors to reduce chargebacks and increase profitability. It begins with an overview of the key differences between vendor central and seller central models. It then provides tips on how to analyze chargeback data to identify root causes, including looking at chargeback types and pivoting the data. The document also discusses optimizing dispatch and receive processes, such as implementing electronic ordering and license plate scanning, to reduce errors. The main takeaways are to analyze chargeback costs thoroughly, review processes that could lead to shortages or late shipments, and consider alternatives like third-party fulfillment if individual products are unprofitable on vendor central.
Top 5 Supply Chain Leaders: What Your Competition is Doing BetterDavid Kiger
Every company should be working towards improving their supply chain. It does not matter how big or small your company is, the supply chain is one of the most important components of your revenue generation.
Amazon International assignment on Marketing Method global Adaptation and CSR...Codepace
We are a motivated and proactive team player with a passion for international business, marketing, and corporate social responsibility (CSR). My experience in the field spans over 10 years. I am currently working on an international assignment to adapt marketing methods on a global scale. This involves understanding different cultures, regulations, and requirements while ensuring that the highest standards are met.
My expertise includes being able to identify areas of improvement and provide recommendations that result in long-term growth for the organization. Additionally, my passion for CSR has enabled me to develop initiatives that align with our company’s values and goals. These projects have made an impact both locally as well as globally by promoting sustainable development practices and fostering relationships across various countries.
2 0 1 8A N N U A L R E P O R TTo our shareowners.docxlorainedeserre
2 0 1 8
A N N U A L R E P O R T
To our shareowners:
Something strange and remarkable has happened over the last 20 years. Take a look at these numbers:
1999 3%
2000 3%
2001 6%
2002 17%
2003 22%
2004 25%
2005 28%
2006 28%
2007 29%
2008 30%
2009 31%
2010 34%
2011 38%
2012 42%
2013 46%
2014 49%
2015 51%
2016 54%
2017 56%
2018 58%
The percentages represent the share of physical gross merchandise sales sold on Amazon by independent third-
party sellers – mostly small- and medium-sized businesses – as opposed to Amazon retail’s own first party sales.
Third-party sales have grown from 3% of the total to 58%. To put it bluntly:
Third-party sellers are kicking our first party butt. Badly.
And it’s a high bar too because our first-party business has grown dramatically over that period, from $1.6 billion
in 1999 to $117 billion this past year. The compound annual growth rate for our first-party business in that time
period is 25%. But in that same time, third-party sales have grown from $0.1 billion to $160 billion – a
compound annual growth rate of 52%. To provide an external benchmark, eBay’s gross merchandise sales in that
period have grown at a compound rate of 20%, from $2.8 billion to $95 billion.
Why did independent sellers do so much better selling on Amazon than they did on eBay? And why were
independent sellers able to grow so much faster than Amazon’s own highly organized first-party sales
organization? There isn’t one answer, but we do know one extremely important part of the answer:
We helped independent sellers compete against our first-party business by investing in and offering them the very
best selling tools we could imagine and build. There are many such tools, including tools that help sellers manage
inventory, process payments, track shipments, create reports, and sell across borders – and we’re inventing more
every year. But of great importance are Fulfillment by Amazon and the Prime membership program. In
combination, these two programs meaningfully improved the customer experience of buying from independent
sellers. With the success of these two programs now so well established, it’s difficult for most people to fully
appreciate today just how radical those two offerings were at the time we launched them. We invested in both of
these programs at significant financial risk and after much internal debate. We had to continue investing
significantly over time as we experimented with different ideas and iterations. We could not foresee with
certainty what those programs would eventually look like, let alone whether they would succeed, but they were
pushed forward with intuition and heart, and nourished with optimism.
Intuition, curiosity, and the power of wandering
From very early on in Amazon’s life, we knew we wanted to create a culture of builders – people who are curious,
explorers. They like to invent. Even when they’re experts, they are “fresh” with a beginner’s mind. They see the
way we do things as just the way ...
In early June 2013, Amazon launched their Amazon India marketplace without any marketing campaigns. In July 2013, Flipkart announced a funding of $ 1 Billion immediately after which, Amazon said it will invest $ 2 Billion in India to expand business. Amazon came up with a dynamic distribution system because of which they were able to deliver the products in as less as a day. This was their USP along with the wide variety of products. This is a report that sheds light on the products and services of Amazon India, discussion on the channels adopted by them, the ATL and BTL promotions and finally the evaluation of the channel effectiveness.
This document provides a feasibility study and business plan for Alibaba.com. It discusses Alibaba's business model, which involves generating revenue from advertisements and membership fees from businesses using the platform. A Five Forces analysis is presented, examining barriers to entry, buyer and supplier bargaining power, availability of substitutes, and competition. The document also outlines Alibaba's vision, mission, values, and analyzes its macro environment and key competitors like Global Sources.
Similar to SSCM_Marc_Sala_Integration of Kiva Robots in Amazon - copia (20)
SSCM_Marc_Sala_Integration of Kiva Robots in Amazon - copia
1. FULL-TIME MBA
2014-2015
INTEGRATION OF KIVA ROBOTS
IN AMAZON
Course
Sustainable Supply Chain Management
Prof Dr Behzad Samii
Marc Sala Casals
Engaging in irregularities is severely sanctioned in correspondence with article 34 of the Examination
rules.
We hereby declare that we have not engaged in any such irregularities.
2. Table of content
1. Description of the issue.................................................................................................3
2. Evaluation of the proposed solution...............................................................................3
2.1. Amazon’s strategic fit in the integration of Kiva robots ......................................4
Step 1: Understanding the customer and supply chain uncertainty..........................4
Step 2: Understanding the supply chain ....................................................................4
Step 3: Achieving strategic fit.....................................................................................5
2.2. Allevieting the bottleneck....................................................................................5
2.2.1. Numerical analysis of Kiva robots integration...................................................7
3. Propose your own solution............................................................................................7
4. Benchmark with industry peers......................................................................................8
5. Conclusion....................................................................................................................8
6. Appendices.................................................................................................................10
6.1. Appendix 1: Kiva robots....................................................................................10
6.2. Appendix 2: Evolution in the number of accounts in Amazon..........................10
6.3. Appendix 3: Evolution in the number of accounts in Amazon..........................11
6.4. Appendix 4: Data analysis of Amazon’s supply and demand w/ Kiva robots..11
3. 1. Description of the issue
Amazon -the world biggest online retailer- strategy’s is to be the number one in terms of
customer-centricity, as it can be understood from Jeffrey P. Bezos -Founder and Chief
Executive Officer Amazon.com, Inc.- who stated: “We seek to be Earth’s most customer-centric
company for four primary customer sets: consumers, sellers, enterprises, and content
creators.”1 In order to achieve this ambitious goal, not only Amazon needs to keep innovating in
the products they put into market, but also, and more importantly, in the operational excellence
that they pursued from its foundation.
Amazon projects itself in its value proposition as a convenient online retailer offering cheap and
reliable delivery anywhere in the US and they want to uphold this value proposition also during
any busy period of the year. For instance, last year Amazon received 426 orders2 per second
during the last Cyber Monday and this is expected to increase year after year.
As it can be inert from the enormous amount of orders that Amazon receives from customers
every second, the e-retailer needs to be extremely responsive, efficient and try to minimize
working capital in order to be able to fulfill this massive demand and keep prices low. As a
consequence, Amazon has come up with the implementation of Kiva robots in some of their
warehouses.
Kiva robots –which were created by Kiva systems, a company acquired by Amazon for $7753
million- are automatic machines that lift the shelves and carry them around the warehouse.
(Please see appendix 1 for a picture of Kiva robots)
Since the acquisition of Kiva Systems in 2012, Amazon has invested a considerable amount of
money in order to improve its features. After a couple of years of hard work, engineers have
been able to improve their performance, now Kiva can move 50 % more inventory4 out of the
center than its predecessor could.
Nowadays, Amazon has been able to integrate the solution in 10 out of 50 fulfillment centers,
having 15,000 Kiva robots spread over these 10 fulfillment centers. 5
2. Evaluation of the proposed solution
At this stage, an evaluation of the Kiva robots will be scrutinized.
1 http://www.ecommercetimes.com/story/75978.html
2 http://www.cnet.com/news/meet-amazons-busiest-employee-the-kiva-robot/
3 http://www.bloomberg.com/news/articles/2012-03-19/amazon-acquires-kiva-systems-in-second-
biggest-takeover
4 http://www.cnet.com/news/meet-amazons-busiest-employee-the-kiva-robot/
5 http://www.cnet.com/news/meet-amazons-busiest-employee-the-kiva-robot/
4. In any innovation implemented in supply chain, the consistency between the customer priorities
of competitive strategy and supply chain capabilities specified by the supply chain strategy is of
essential importance to make sure that it will add value to the company. An analysis of the
strategic fit of the solution is carried out below trying to asses the quality of the strategic supply
chain network design.
Besides the strategic fit, a numerical analysis of the positive impact created by the integration of
Kiva robots is executed. The main impact will be created to Amazon’s inventory and hence to
the enterprise’s working capital.
2.1. Amazon’s strategic fit in the integration of Kiva robots
In order to assess the strategic fit of this solution, the next three steps have been followed:
Step 1: Understanding the customer and supply chain uncertainty
The world biggest e-retailer has been building its reputation of being extremely reliable and with
an outstanding response time. What’s more, offering an astonishing variety of products at a
reasonably low price. As a matter of fact, Amazon’s number of customers has been
skyrocketing since 2003. (See appendix 2 for the evolution in the number of customers
accounts) In fact, customers expect an excellent service level from Amazon that includes
everything that a customer can desire; response time, service level, product variety, low price
and high innovation. Kiva robots will maximize the accomplishment of the above mentioned:
improving response time, increasing service level, allowing an enlargement in product variety,
keeping the ability of offering low prices and indeed being highly innovative.
Moreover, the e-retailer has achieved this with a mid-uncertain demand caused by the massive
variety of products offered, from convenience products like food to highly uncertain like
technology, hence one balance the other out.
Step 2: Understanding the supply chain
The American e-retailer has had some problems in meeting the demand in the past. For
instance, in 2013 it could not deliver the Christmas presents on time, however, in that case the
bottleneck was external in the last mile delivery (UBS) and problems with bad weather.
Internally, it has also been challenging for Amazon as orders in days like Cyber Monday have
been catapulting. It is important to bear in mind that the e-retailer most potentially has its
bottleneck in their picker.
Amazon -in order to meet this massive demand with high responsiveness- has actually been
breaking-through the limits several times in terms of cost-to-serve with an extremely high
response time. (See appendix 3 for graphical information of the present positioning of Amazon
against the average boundaries caused by the Kiva robots implementation) However, in a highly
competitive market like US, Amazon needs to keep innovating in order to maintain this
competitive advantage as the 1-click system (1rst Amazon breakthrough) has already been
implemented by other companies. Once more, the e-retailer is achieving this competitive
advantage through the Kiva robots.
5. Step 3: Achieving strategic fit
This primarily goal of quick response time has not undermined Amazon’s ability to keep the cost
low. Leveraging economies of scale and pushing inventory to suppliers –in the minority of the
cases though- has allowed the retailer to keep prices down while having the ability to have quite
high margins.
Analyzing the product life cycle that Amazon delivers is really challenging as, even though the
giant retailer started with books, –which is a product with an extremely long life cycle, specially
in the e-commerce where it can be leveraged the Long Tail6- now it has expanded to practically
any other good, elastic, non-elastic, long or short life cycle goods. Fact that adds complexity to
the Amazon’s supply chain as each product type requires a totally different strategy. The e-
retailer can split each reordering point per type of article being able to minimize cost in a rather
efficient way thanks to Kiva robots.
According to the above mentioned the integration of Kiva robots is deeply aligned to the
company’s strategy. However, an assessment of the value created in terms of cost savings and
increase of response time needs to be developed to further understand whether it is a good
solution.
2.2. Allevieting the bottleneck
An e-commerce like Amazon keeps receiving orders at a hugely fast pace. As it can be seen in
the below graph, the process that an order follows since it is received from a person that clicks
to a product until the shipping of the order, Kiva robots have been able to contract four steps in
the process lowering the need of human resources.
Dave Clark, vice president, global customer fulfillment, Amazon.com discussed the matter with
the following statements: "Amazon has long used automation in its fulfillment centers, and
Kiva's technology is another way to improve productivity by bringing the products directly to
employees to pick, pack and stow," "Kiva shares our passion for invention, and we look forward
to supporting their continued growth.7"
6 http://www.thelongtail.com/the_long_tail/about.html
7 http://www.sec.gov/Archives/edgar/data/1018724/000119312512122135/d318297dex991.htm
6. Amazon's previous process betw een ordering and shipping.
Amazon’s solution was to alleviate the internal bottleneck that they had in the warehouse. Did
the retailer achieve this aim by the implementation of these automatic machines?
In order to scrutinize it, the following numerical statistics needs to be understood.
Before implementing Kiva robots an order took 90 minutes to be processed whereas now it just
takes 15 minutes.
Kiva robots can move at a high geared -3, 4 miles per hour- taking into account that carry heavy
weighted shelves.
In addition, Amazon claims that a 15% more inventory can be squeezed in the same warehouse
caused by a better usage of the square meter. Kiva robots can sneak under the shelves where
men cannot access.
The retailer management team is also being proactive and setting clear rules, among them
there is one that ensures that no more than 10 robot per floor are out of commission at one
time. To do that the company claims that if a robot breaks down, Amazon’s engineers can fix it
within a couple of hours.
There are 3000 Kiva robots working at the same time in the fulfillment center of Tracy,
California, (TFC). Besides, as mentioned above, 426 items per second were demanded during
last Cyber Monday in the 50 warehouses in the US (21,000,000 items)
As it can be clearly understood from this numbers like Ken Goldberg -a robotics professor at the
University of California-, said8, "Robots are essential for meeting that kind of demand,"
“Humans just can't work as fast”
8 http://www.techinfaa.com/amazon-uses-robots-called-kiva-instead-of-employees-in-its-
warehouses/#sthash.kiDs1uzY.dpbs
7. 2.2.1. Numerical analysisofKivarobotsintegration
Amazon can meet the demand having a lot of unused capacity most of the time. If the demand
is matched with the potential in TFC, we see that Amazon is having a huge slack. Average daily
demand in Tracy = 3,486 items < Average supply at full capacity with Kiva robots = 37,895
items. This average supply would even be able to fulfill the peak in demand of Amazon with an
unused capacity of 60 %. That means that Amazon has left a huge slack for possible
unforeseen challenges in these first calculations. (Please see appendix 4 for the table of
calculations supporting the above statements)
As compared to the same fulfillment center replacing the 3,000 Kivas (1,500 picking orders and
1,500 filling shelves) to 6,000 workers (3,000 picking orders and 3,000 filling shelves) one can
see how big is the impact of this new automatic pickers. While 3,000 human pickers could take
16,000 items a day, Kiva robots can go up to 37,895 items.
In addition, Amazon can leverage the continuous review in its replenishment policies.
It is true that the investment of integrating these robots to the Amazon’s 1-click service is
immense, but it is also true that this investment is a one-off. After this extraordinary investment,
everything will be earnings for Amazon, being able to become even more responsive at an even
lower price of the products.
What’s more, Amazon is achieving a better integration of the S&OP which is widely known that
is one of the most challenging parts to achieve. It will allow them to better implement the S&OP
routine to a monthly, or even less, basis, as learned in “sales and operations planning.
Finally, when this technology will be more reliable, Amazon will be able to reduce this 60 %
unused capacity and cope with the volatility in demand at the same time, leaving this one-off
investment reduced dramatically.
3. Propose your own solution
It is widely known that Amazon is on the first places of the list of innovation in supply chain
management. To be consistent with that, the retailer has come up with the integration of this
amazing and disruptive innovation that are the Kiva robots.
Now, that Amazon has the know-how and control of Kiva-systems, the giant company should
keep on investigating in this field. My suggestion is to invent another integrated robot that will be
able to extend a sort of an arm in such a way that they would be able to pick by themselves that
would not only safe money Amazon, but also time.
Notwithstanding, Amazon should also bear in mind the impact that this replacement of human
beings would create on the media. Fortunately, Amazon is still growing an astonishing fast pace
so the company would not have to lay off any worker as did not have to do it with Kiva robot.
8. Therefore, it is now or never as Amazon does not know how long this massive expansion will
last.
4. Benchmark with industry peers
Amazon has no competitor as such, depending on the business unit, this competitor changes.
Among the competitors we can list the following in the media segment: Google, Netflix, Apple,
and Time Warner Cable. It can be clearly seen that none of those companies have the level of
automation of Amazon, though they might not need it as their solutions are quite different.
At the same time, Amazon can be compared to the following companies in the electronics and
merchandise sector: Best Buy, Family Dollar, RadioShack, Staples, Target, Wal-Mart, Sears,
Big Lots, Delia and Systemacs. Each of them has different strategies. For instance, Wal-Mart is
over pacing Amazon in terms of working capital, but not for what automation is concerned.
In addition, Amazon competes in the operations sector with: CDW, PC Connection, Insight
Enterprises, Google, Oracle; salesforce.com, Accenture and Citrix Systems. In this field we can
see that the rest of the companies are lacking behind in the automation of their supply chain.
Finally, Alibaba would be the most similar competitor of Amazon worldwide. Even in this case,
Alibaba is lacking behind Amazon in terms of automation. Therefore, Amazon has built an
extremely strong competitive advantage in their operational excellence strategy that would
potentially leave them as the world biggest e-retailer for a long time.
5. Conclusion
Amazon is growing at an enormous fast pace and so it is doing its demand. In order to fulfill that
the world biggest e-commerce retailer had to find a way to pursue his dream of customer
centricity.
The Amazon’s complex variety of products makes it extremely challenging for managers to
anticipate the reordering point. By this Kiva integration, they can split each reordering point per
type of article being able to minimize cost in a rather efficient way.
Moreover, a better usage of square meter in fulfillment centers can be achieved, fact that
becomes of essential importance taking into account the 21,000,000 items that Amazon stores
in their warehouses.
Branding will be maximized by Amazon as they will reinforce their image of the most innovative
company in the e-commerce supply chain field. What’s more, the recently acquired company
Kiva Systems will be able to sell its products to other retailers like Amazon as it has been
proved that it works.
Amazon –through the integration of the Kiva robot- is successfully reaching this goal. The future
of the company looks bright in all the aspects, specially the ones analyzed in this paper. For an
9. e-retailer like Amazon, reliability and response time are of essential importance for customer
satisfaction. Not only Amazon is leveraging both customer needs, but also it is working hard to
be able to keep the prices down by lowering its costs.
10. 6. Appendices
6.1. Appendix 1: Kiva robots
KivaSystemsrobotsat an AcumenBrandsfulfillmentcenterinFayetteville,Arkansas.
Photographer:BethHall/Bloomberg9
6.2. Appendix 2: Evolution in the number of accounts in Amazon
9 http://www.bloomberg.com/news/articles/2012-03-19/amazon-acquires-kiva-systems-in-second-
biggest-takeover
0
50
100
150
200
250
300
1997
1998
1999
2000
2001
2003
2007
2008
2009
2010
2011
2012
2013
2014
1.5 6.2
14 20 25
40
76
88
105
130
164
200
217
270
number of accounts (in millions)
number of accounts (in
millions)
11. Source: Ow n creation based on the “statistics portal data”10
6.3. Appendix 3: Evolution in the number of accounts in Amazon
Source: Handouts_session 3 Strategic supply chain network design
6.4. Appendix 4: Data analysis of Amazon’s supply and demand w/ Kiva robots
Peak demand in Amazon US
Inventory Throuhput Time Unit time
7,10 426,0011
0,02 Hour
Demand in peak times in the fulfillment center of Tracy, California12
(T. F. C) *
Inventory Throuhput Time Unit time
1,42 85,20 0,02 Hour
2.044,80 85,20 24,00 Daily
14.313,60 85,20 168,00 Weekly
Average itemsdemandeddailyworldwide Average demandin Amazon
300.000,00 13
58,10%14
** 174.300,00
63.619.500,00 Demandannual AmazonUS
1.272.390,00 Demandannual inT F.C.
3.486,00 DailyDemandinT. F.C.
435,75 HourlyDemandin T. F.C.
*Assumption: The demand is equally divided in the 50 fulfillment centers located in US
10 http://www.statista.com/statistics/237810/number-of-active-amazon-customer-accounts-worldwide/
11 http://bgr.com/2013/12/26/amazon-holiday-season-sales-2013/
12 http://www.techinfaa.com/amazon-uses-robots-called-kiva-instead-of-employees-in-its-
warehouses/#sthash.kiDs1uzY.dpbs
13 https://medium.com/@atendy/becoming-the-amazon-for-live-entertainment-dd1d5afc1fe8
14 http://www.alexa.com/siteinfo/AMAZON.COM
12. **Assumption:Demandof AmazonUSis proportional tothe % of clicks in the US as compared
to the rest of the world
Supply at full capacity in Tracy fulfillment center (T.F.C.)
# of Kiva robot in T. F. C. Item Minutes # total numberof items Unit time
1.500,00 * 1,00 19,00 15
78,95 Minute
1.500,00 16
3,16 60,00 4.736,84 Hour
37.894,74 Day
# of human pickersin T. F. C. Item Minutes # total numberof items Unit time
3.000,00 1,00 90,00 33,33 Minute
3.000,00 3,16 60,00 2.000,00 Hour
16.000,00 Day
*Assumption: Kiva robots used to load and to unload items are 50 – 50 %
15 http://www.techinfaa.com/amazon-uses-robots-called-kiva-instead-of-employees-in-its-
warehouses/#sthash.kiDs1uzY.bJobCPCj.dpbs
16 http://www.techinfaa.com/amazon-uses-robots-called-kiva-instead-of-employees-in-its-
warehouses/#sthash.kiDs1uzY.bJobCPCj.dpbs