Date post: | 21-Nov-2014 |
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Business |
Upload: | alicia-dereza |
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• What is the first thing that comes to your mind when you see this logo?
• “Amazon is a black box.“ (Time Magazine, 2012)
• 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."
• 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
• 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
• 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
• Supply Chain Management Strategy: the Amazon Effect
• Amazon is almost everybody’s competitor• Tipping points - intersection between
business strategy and supply chain strategy
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
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.)
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
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
Recommendations
Offline shops
New products need totally different distribution approach
Diversification from their competitors
New way of delivering orders (to the store)
Saving money