This document analyzes Amazon's supply chain at different levels and discusses key aspects of its operations. It notes that Amazon has around 50 warehouses globally, including 20 in the US, to fulfill orders quickly. The document also discusses Amazon's multi-tier inventory model that allows for very low fixed costs. Questions and answers are provided that discuss advantages of online sales over traditional retail, how brick-and-mortar stores can benefit from online sales, and which products are better suited for online versus retail sales.

1. SARIN RAJU
CET,TRIVANDRUM
AMAZON CASE

2. LEVEL ANALYSIS
1. PRE-STRUCTURAL LEVEL
WORLD’S LARGEST ONLINE STORE
2. UNISTRUCTURAL LEVEL
WIDE GEOGRAPHICAL EXPERIENCE-5
INTERNATIONAL STORES-’WHOLE WORLD
IS MARKET PLACE’

3. 3. MULTISTRUCTURAL LEVEL
BUYER SALE APPROACH,MULTI-LEVEL E-
COMMERCE,MULTIPLE PRODUCTS AND
CUSTOMER TRAFFICKING
4. RELATIONAL LEVEL
MULTI-TIER INVENTORY MODEL-VERY LOW
FIXED COSTS
5. OUT OF BOX
LEVERAGED ON THE STRENGTHS OF BRAND
VALUE AND BUSINESS MODEL

4. QUESTIONS
AND
ANSWERS

5. 1. Why is Amazon building more warehouses as it grows? How many
warehouses should it have and where should they be located?
Answer: As it grew, the company added warehouses, allowing it to react
more quickly to consumer orders,
It is clear that when the no of warehouses increase the response time
decrease, and when the no of warehouses decrease the response time
increase. So by increasing the no of warehouses and locate them near the
customer will improve response time .
Amazon has about 50 warehouses, 20 in U.S and rest 30 in Canada,
France ,Germany , Italy , United Kingdom , China , and Japan.

6. 2. What advantages does selling books via the internet provide over a
traditional bookstore? Are there any disadvantages to selling via
internet?
Answer:
Now a days world has become global village that’s why there is a need to
start business via e-commerce as we know e- business affects customer
service elements such as product variety, availability, customer experience,
time to market, visibility, and return- ability.
Amazon offers a much larger selection of books than a typical bookstore.
Offering the same selection at a retail store would require a huge location
with correspondingly large amount of inventory.
Disadvantages:
Response time
Transportation cost

7. 3. Should Amazon stock every product it sells?
Answer: No …. It should stock those products which are in higher demand.

8. 4. What advantages can bricks-and-mortar players derive from setting
up an online channel? How should they use the two channels to gain
maximum advantage?
Answer: The performance of traditional bookstore supply chain can be
improved significantly by combining the strength of the retail and online
channels. It is important to realize that the benefits of aggregation are most
significant for low- demand books whose demand is hard to forecast.
The book supply chains should be structured so that retail outlets carry
many copies of best sellers for customer purchase and one copy of low
demand books to encourage customers to browse and make impulse
purchase. Terminals or internet kiosks should be provided so that
customers wanting to order low demand books that the bookstore can
offer.
This approach allows the supply chain to reduce inventories by
aggregating low demand books sold online while keeping transportation
costs low for best sellers sold at retail store.

9. 5. What advantages/ disadvantages does the online channel enjoy in sale
of shoes/ diapers relative to a retail store?
Answer:
Advantages:
1. Time to market
2. Flexible pricing, portfolio, promotions
3. low facility cost
Disadvantages:
1. Transportation cost
2. Response time
3. IT cost

10. 6. For what products does the online channel offer the greater advantage
relative to retail stores? What characterizes these products?
Answer:
Online channel offer the greater advantage for those products having large
product varieties.
For example; Netflix offers a much large selection of movies than any video
rental store, offering the same selection at a store would require a huge
location with correspondingly large amount of inventory.

11. AMAZON BASIC SUPPLY
CHAIN

13. Supply chain drivers
Facilities:
warehousing and order-fulfillment for third-party
sellers
49 fulfillment centers across globe
United States – 14 spread across 14 states
Canada – 2
France – 3
Germany – 7
Italy – 1
United Kingdom – 8
China – 8
Japan – 6

15. TRANSPORTATION

16. Transportation
rely primarily on national parcel couriers
UPS, FedX
Own logistics network

17. INVENTORY

18. BOOK SHELF OF AMAZON

19. Inventory

21. SOURCING

23. PRICING

24. Pricing
Amazon does make millions of price changes
daily
HIGH- LOW PRICING
HIGH PRICE FLUCTUATIONS

26. Information
Amazon web service: allow partner retailers, the
individual sellers and developers to advertise
their products through Amazon.com by building
their web based applications in a reliable,
scalable, and low cost way.
Simple storage service: designed to make web-
scale computing easier for the business partners
and developers by web service interface to keep
and receive any data, any time, from anywhere.
Smart analytic search: allow detecting and
decreasing the examples of fraud in Amazon web
site by analyzing the behavioral patterns of
fraudsters and designing the predictive scores.

27. INFORMATION:AMAZON
SERVERS

28. INFORMATION :AMAZON CLOUD
STORAGE

29. STRATEGIC FIT

30. AMAZON STRTEGY ANALYSIS

31. Strategic fit
Competitive strategy
Respond to wide range of demand
Fulfill orders in short lead time
Meet high service level
Supply chain strategy
Both cost effective and responsive

32. Facility: more towards centralization
Inventory: high
Transportation: Faster
Information: high investment

33. Cyclic view

34. THANK YOU