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    Back in 2016, Amazon Launched Amazon Prime Service

    Uploaded by

    Neha Smriti
    This document discusses Amazon's supply chain and logistics network. It explains that Amazon launched Prime in 2016, which established its dominance in online retail through two-day delivery. It has since introduced faster delivery options like one-hour Prime Now delivery. Amazon's efficient supply chain is enabled by sophisticated IT, extensive warehouse networks, multi-tier inventory management, and excellent transportation. It uses both outsourcing of inventory and insourcing of logistics. Fulfillment options for sellers include FBA, where Amazon handles shipping, and FBM, where sellers ship directly to customers. Amazon aims to balance high inventory of fast-selling items with purchasing of low-demand items on demand to manage fluctuating needs.

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    © All Rights Reserved
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    Back in 2016, Amazon Launched Amazon Prime Service

    Uploaded by

    Neha Smriti
    171 views4 pages
    This document discusses Amazon's supply chain and logistics network. It explains that Amazon launched Prime in 2016, which established its dominance in online retail through two-day delivery. It has since introduced faster delivery options like one-hour Prime Now delivery. Amazon's efficient supply chain is enabled by sophisticated IT, extensive warehouse networks, multi-tier inventory management, and excellent transportation. It uses both outsourcing of inventory and insourcing of logistics. Fulfillment options for sellers include FBA, where Amazon handles shipping, and FBM, where sellers ship directly to customers. Amazon aims to balance high inventory of fast-selling items with purchasing of low-demand items on demand to manage fluctuating needs.

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    This document discusses Amazon's supply chain and logistics network. It explains that Amazon launched Prime in 2016, which established its dominance in online retail through two-day delivery. It has since introduced faster delivery options like one-hour Prime Now delivery. Amazon's efficient supply chain is enabled by sophisticated IT, extensive warehouse networks, multi-tier inventory management, and excellent transportation. It uses both outsourcing of inventory and insourcing of logistics. Fulfillment options for sellers include FBA, where Amazon handles shipping, and FBM, where sellers ship directly to customers. Amazon aims to balance high inventory of fast-selling items with purchasing of low-demand items on demand to manage fluctuating needs.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    171 views4 pages

    Back in 2016, Amazon Launched Amazon Prime Service

    Uploaded by

    Neha Smriti
    This document discusses Amazon's supply chain and logistics network. It explains that Amazon launched Prime in 2016, which established its dominance in online retail through two-day delivery. It has since introduced faster delivery options like one-hour Prime Now delivery. Amazon's efficient supply chain is enabled by sophisticated IT, extensive warehouse networks, multi-tier inventory management, and excellent transportation. It uses both outsourcing of inventory and insourcing of logistics. Fulfillment options for sellers include FBA, where Amazon handles shipping, and FBM, where sellers ship directly to customers. Amazon aims to balance high inventory of fast-selling items with purchasing of low-demand items on demand to manage fluctuating needs.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    Back in 2016, Amazon launched Amazon Prime service –

    • The two-day delivery was the game-changer that established the dominance of Amazon in the online retail industry.
    • Introduced one-hour delivery with its Amazon Prime Now service
    • Two hour delivery service
    This is possible due to its dependence on its own logistics

    What makes amazon’s Supply chain the most efficient?

    • Sophisticated information technology


    • Extensive network of warehouses
    • Multi-tier inventory management
    • Excellent transportation

    Outsourcing Inventory Management and Insourcing Logistics


    • Keeping a stock of frequently purchased/ popular items.
    • Acted as a trans-shipment centre between distributors to the customer.

    Push-Pull Strategy
    The Two Main Amazon Fulfilment Channels: FBA vs. FBM

    FBA (Fulfillment by Amazon) - allows sellers to store products at Amazon fulfillment


    centers.
    Amazon handles
    • packing,
    • shipping, and
    • major customer service inquiries
    Advantages of selling with Amazon FBA –
    It gives access to Prime shipping for sellers products.
    FBA is effective for:
    Sellers with fast product turnover
    Sellers with small/light products
    Sellers who don’t have the resources to constantly be storing and shipping themselves

    FBM (Fulfillment by Merchant) – seller ship products to each customer.


    Seller handles
    • packing, and
    • shipping,
    FBM is effective for:
    Sellers with a slower turnover
    Sellers with larger/heavier products
    Sellers who can store their products (and ideally save money doing so!)
    Amazon supply chain process
    Warehouse:
    Amazon warehouses are located with growing demand in mind – many of them are placed near large metropolitan areas.
    Delivery :
    Amazon delivers in three ways
    By Ground (Truck)
    By Air (Plane)
    By Amazon Delivery Service Partners

    How Amazon deals the supply chain with fluctuating demand? 


    Amazon carries high-demand title in inventory, whereas it purchases low-demand titles from distributor in response to a
    customer orders
    Having less inventory might make some of the customers disappointed
    Stocking too many will reduce the profit margins

    So Amazon Inventory management aimed at following strategies:


    Maintain inventory of millions of items
    Shipment within one week
    Have a clear understanding of customer’s delivery needs
    Coordinate with wholesale suppliers and independent producers to make available to customers both current and the soon
    to be released books
    Provide two day delivery on most orders
    Allow customers to query the status of their purchases and track their own shipments
    Product/Info
    rm ation

    Vendor/Supplier Amazon DC Tier 1


    ation
    Inform

    Product/Information
    t Product/Information
    uc
    Wholesaler DC Pr
    od
    Publisher/
    Manufacturer Product

    Product/Information Amazon Other Sellers


    Partner DC Information

    Information
    Third Party

    Product
    Product/Information Product
    Information
    Tier 3 Tier 2
    Customers

    Amazon Multitier Inventory Model

    Amazon uses Multi-Tier Inventory model where information flow takes place from tier-1(Amazon Distribution centre) to tier-
    3(vendors, manufacturers etc) and physical flow takes place from Tier-3 to Tier-1.

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