Supply chain mngt of amazon
Download as PPTX, PDF9 likes14,574 views
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.
Supply chain mngt of amazon
- 1. Segmentation in Supply Chain Management Alicia Dereza Ena Fejzagic
- 2. • What is the first thing that comes to your mind when you see this logo? • “Amazon is a black box.“ (Time Magazine, 2012)
- 3. • Amazon's warehouses have more square footage than 700 Madison Square Gardens and could hold more water than 10,000 Olympic Pools • The first book Amazon.com ever sold was from Bezos' garage in July 1995: "Fluid Concepts & Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought " • Amazon's current logo was designed to depict a smile that goes from A to Z. "This signifies that the company is willing to deliver everything to everyone, anywhere in the world."
- 4. • Amazon.com, Inc. - an American international multibillion dollar electronic commerce company • Headquarters: in Seattle, Washington, US • World's largest online retailer • Originally an online bookstore, soon diversified, selling DVDs, VHSs, CDs, video and MP3 downloads/streaming, software, video games, electronics, apparel, furniture, food, toys, and jewelry • Producer of consumer electronics – Amazon Kindle e-book reader and Kindle Fire tablet computer
- 5. • Jeff Bezos’ critical insight when he founded Amazon was that the Internet allowed a retailer to have both (effectively) infinite selection AND lower prices (because you didn’t need to maintain a limited-in-size-yet- expensive-due-to-location retail space) • Amazon was founded on the premise of there being a dominant strategy: better selection AND better prices
- 6. • Amazon‘s story: systematically taking down an entire existing industry, a story that called for strategic depth, and not technical wizardry, design brilliance or sheer energy • Vision: to offer Earth’s biggest selection and to be Earth’s most customer-centric company • Customer-centric strategy and partnership strategy • Customer preference as the operational level of business - basis for its service differentiation advantage
- 9. • Supply Chain Management Strategy: the Amazon Effect • Amazon is almost everybody’s competitor • Tipping points - intersection between business strategy and supply chain strategy
- 10. Development Of Warehouses • Ingram etc. • Space for the storage of goods did not matter External suppliers • For bestsellers only • Base for the Amazon , but it began to collapse • 0,25 % profit compared to 30% possible Few own warehouses • transportation costs • inventory carrying costs, • the taxes and a couple of • other factors to come up with a network of DCs to service customers in a set of zip codes Reducing costs • 3 markets strategy: • same day delivery in major markets • next day delivery in secondary markets • two day delivery in tertiary markets Warehousing and service
- 11. Assessment of Amazon’s Supply Chain • Items displayed online are unique to each country • Customer Service Representative localized to each country • Each country has access to different kinds of products • Repetitive Inventory at different locations. • Excellent postal services for local shipping but unreliable cross- border logistics - Higher prices - Possible competitors on second and third markets - Additional products which need different approach (electronic devices etc.)
- 12. Recommendations Adopt Centralized Operations Management Implement European Distribution Network (EDN) Centralize management office in the United Kingdom where most operations take place. Use strategic order fulfillment to minimize lead time Use strategic inventory distribution to reduce cost
- 13. Recommendations Manage Shipping Costs Continue free shipping for local products, extending the use of Postal Injection for some high demand products Full truck loads from DCs to major cities Reduce postal service charges, maintain low shipping cost and offer free shipping in some new places
- 14. Recommendations Offline shops New products need totally different distribution approach Diversification from their competitors New way of delivering orders (to the store) Saving money
- 15. Thank you for your attention Alicia Dereza Ena Fejzagic