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Business Process

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by

Muhammad Muzhaffar

on 2 February 2013

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Transcript of Business Process

amazon.com in the limelight Warehouse Value Chain: Pull Model Customer Fulfillment Network Key
Success
Factors The Product Project 1: Question and Answer 4 Key Success Factors The Network SWOT Analysis Value Chain Resources Did you know?
The logo has an arrow pointing from A to Z. This signifies that they sell everything from A to Z. The arrow also forms a smile. many faces of amazon.com other firms owned by amazon.com major competitors Paola
Neha
Wen Jie
Muzhaffar THE POWER OF PASSION:
The business was a runaway success from day one. "It was obvious that we ever dared to hope," says Bezos. By the end of 1999, Amazon.com was a multibillion-dollar corporation selling 3.5 million titles via its pioneering website.
"Our mission is to be Earth's most customer-centric company"
- Jeff Bezos 2. Organized confusion Key Advantages of the chaotic warehousing system Has 80 fulfillment centers located around the world, each over 1.2 million square feet in size. Over 65,000 employees. Every single shelf space has a bar code and every incoming product is assigned to a bar code. Movement of goods is tracked by a database Random items can be beside each other like Necklace and power tools. A complex database run by a simple philosophy. 4. Arbitrary Placement 1. Massive fulfillment centers It has no permanent sections. Products' characteristics are unimportant compared to its bar code 3. Tracking System Flexible - Freed up space can be used immediately
Simple - Need not know where the product is, but where it is
Optimized - Tracking database can provide an optimized route for employee fulfillment Taking an inside look at Amazon's Chaotic Warehouse Little's Law I = R * T Using data from FY11,

R = COGS = $37,288
I = Inventory = $4,992
Cycle time = 4,992/37,228 = 48.9 days
No. of turns = 1/48.9 = 7.47/year Compare Amazon.com inventory turnover rate of 7.47 to.. Turnover: 4.2 Turnover: 2.9 High turnover rate due to collection of cash from customers before paying for inventory, hence high return on capital Inside a Amazon fulfillment center, Christmas season 2012 Organized confusion with an organic shelving system without permanent areas or sections Acquisition of Kiva Acquired Kiva for USD$775 million in March 2012. Kiva Warehouse System vs Amazon's Chaotic Warehouse System High overhead robot cost Cheaper human labour Implications of Acquisition The Future of Amazon Should we extend the Kiva Warehousing System to existing warehouse?
Should we build more warehouse to reach more customer? Flow Rate from Carts to Conveyors to Packing Station Inventory Turnover Rate: Measure how fast a company's inventory is sold and replaced. Workers have to walk a lot.
10-15 miles a day. Little "training needed" to transport carts
Low utility costs
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