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Amazon

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by

Mariana de Luna

on 14 November 2013

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Transcript of Amazon

Amazon


design by Dóri Sirály for Prezi
What is Amazon?
American international e-commerce company

World's largest online retailer
Amazon's Supply Chain
What was the solution?
Amazon's advantages
Same day delivery in major markets
1-click order
Manages and ships its own inventory and other retailers as well
Price
Selection
Experience
Convenience
It’s supply chain is hard to replicate


Amazon in the future
Success in the future will depend a lot on the supply chain
Biggest rival will be Google
Customers still want to do in-store shopping
Supply chain is not sustainable

Supply Chain Management
How did it start?
Online bookstore
Opened for business in 1995
By the end of the month, books had been shipped to 50 states and 40 countries.
How has it evolved?
Diversified the products
Now selling fromDVDs, Cds, MP3 downloads, software, electronics, furniture, food to jewelry,etc.
Criteria for Amazons Competitive Strategy
Offer low price product
Big market
Wide range of products
How to decrease inventory cost?
Manage their own inventory to ensure costumers satisfaction
VS
Not wanting to deal with their own inventory
Having own inventory
Advantages
Disadvantages
Increase costumer satisfaction
Increase responsiveness
Reducing distance and delivery times
Higher costs
Supply Chain Responsiveness
a. respond to wide range of demand
b. fulfill order in short lead times
c. manage a huge variety of items
d. develop highly innovative items
e. provide a high level of service
f. manage supply uncertainty
1999
Something's wrong!
Amazon decides to have more warehouses
Inventory was supplied by distributors instead of publishers
Increasing inventory on basis of speculation
Amazon tried to increase efficiency of inventory management.
1
Reduced the number of inventory based on demand uncertainty
2
Increased range of product offering
3
Increased of efficiency of logistic by deciding which distribution center should stock particular inventory by considering demand of distribution center region.
4
Developed new software to accommodate region demand to
assist decision which distribution center should stock products.
5
Reduce split shipment by reducing order which were delivered from different warehouses and stocking several items which customer usually buy together in one point.
6
Outsourcing shipping activities
Outsourcing Inventory
Popular products were managed internally
Non popular products stocked by distributors
Partnership with firm in supply chain management
Amazon ships 10 million products and Walmart 500,000

Beats Apple in supply chain management
Agility
Collaboration
Execution


Decision of which items to store in which warehouse and how to design warehouses for different product types is a challenge
Hard to decide which products should be supplied by third-party affiliates
Finding the lowest cost solution in real-time, when multiple items on the order

Challenges
Amazon compared to other companies
Questions?
The total supply networks
http://content.time.com/time/business/article/0,8599,2004089,00.html#ixzz2jwRlyeZu
http://cmuscm.blogspot.de/2013/02/amazons-supply-networks-strategy.html
http://knowledge.wharton.upenn.edu/article/fit-for-the-holidays-amazon-is-shaping-up-and-shipping-out/
http://business.time.com/2012/07/16/will-amazon-take-over-the-world/
http://www.scmr.com/article/amazon_beats_apple_in_battle_for_supply_chain_leadership
http://www.greenbiz.com/blog/2013/08/07/amazon-turn-page-supply-chain-sustainability

Thanks!
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