Amazon ACE Challenge 2018 – Operations Case Breaker

Instructions
• Please use Calibri Font, size 10 for the answer document.
• Please write your answers in one document. Appendix and excel answers are to be separate.
• Your solution should not exceed 4 pages in all, refer to the expectations of each question inline. Appendix can
be extra for only providing data supporting your recommendations/solutions. Recommendations given in the
appendix will not be considered for evaluation.
• Your solution will be evaluated on 2 broad parameters- Structure & Innovative idea.
• Original ideas would be preferred over suggesting existing Amazon programs/features available or
implemented globally.
• Provide the source for every data point provided in the solution.
• Clearly state any assumptions you make while giving recommendations/solutions.
• Financial model should be an attachment in the form of excel sheet combined along with the 4 pager solution
and upload as one zip folder
• In case you have any particular question related to India Consumer Business Case, please mail your questions
to ace2018ops@amazon.com

Amazon Logistics
At Amazon Logistics (AMZL), our goal is to provide customers with an incredible order delivery experience. To
achieve this goal, we work with a network of small independent delivery businesses and the independent
contractor community to deliver customer orders. Utilizing continuous improvement initiatives and creative
thinking, our Delivery Station teams ensure that millions of packages reach their final destination as efficiently as
possible. The team consistently raises the bar in customer experience and drives lean thinking in operations, while
implementing innovative delivery solutions. Both corporate and field teams help launch new programs and
technology-based solutions on a global scale in order to meet customer demand and enable customer-focused
innovation, some of which include Prime Now.

IN Special Handling Network India:

Among all the categories serviced by Amazon, major appliances is one of the growing category. IN Special Handling
network is a specialized dedicated network that looks after the India operations of large sized products which
meets/exceeds the weight/dimensional criteria or which require special post-delivery experience such as
installation/demo (such as refrigerators, washing machines, TV and furniture). Scheduled delivery is enabled for
shipments handled by 'Special Handling' network where customers can select the date and time of delivery for
large items.

AMAZON CONFIDENTIAL 1

This case and the numbers published in this case are not representative of any Amazon businesses within India or in any other
region where Amazon has offices or operations and should not be used for any public or media consumption
IN Special Handling Services:

IN Special Handling products are delivered to the customers in the scheduled slot with an option to avail the
following services:

(i) Buyback: Buyback gives customers an option to realize value for their old appliance and get rid of it at the same
time, making the purchase of the new product more affordable. The old item will be picked up at the same time as
delivery of new item, making exchange a seamless experience.

(ii) Hand to Hand Replacement: H2H replacement allows customers to schedule a replacement in case of defective
products. Amazon will synchronize the delivery of the replacement item and the pickup of the defective item to
provide a hassle-free experience.

(iii) Open Box Delivery: In open box delivery, the delivery person (DP) will unbox the purchased item at the time of
delivery and have the customers inspect the product for (a) physical product damages, (b) missing product/ parts,
and (c) incorrect product as per a pre-defined checklist. In the event of any issue found with respect to any of the
above, the product will be taken back by the delivery agent and a replacement will be triggered.

(iv) Unified Delivery & Installation: Unified Delivery and Installation will allow customers to use their white goods
on the day of delivery. This will eliminate the 24-48 hours lag between delivery and installation and provide a
customer experience which is ‘Click-to-Use’ - customers will have their products in a usable condition at the time
of delivery.

(v) Scheduled Delivery: Customers can avail the option of scheduled delivery too, customers get scheduled delivery
within 1-2 days

Problem statement:
Due to the services offered by IN Special Handling network, customer has multiple touch points with us during the
order to delivery cycle and also post-delivery. The Customer service (CS) team is evaluating the scenario to
optimize the CPO (contacts resolved per orders served, where contact is either customer’s first time or repeat
touchpoint using call, email or chat medium) for Special Handling network. The idea is that CPO can be brought
down by 10% by putting in a specialty team and evaluating cost savings achieved by streamlining the process vs
cost incurred due to increase in customer contacts. The specialty team can build relationships with Brands who will
help them better handle contacts related to scheduling appointments for deliveries and tight looping with brands
for better customer experience overall. An initial proposal received for cost of a specialty team is 1.3X for each
contact compared to that of a normal team. (Assume the cost of handling a contact is INR 50).

One major factor that currently contribute to the increase in customer contact with CS can be customer
unavailable (CUA)/business closed (BUC). CUA is when customer is not available for residential addresses and BUC
is for commercial addresses that are closed beyond their business hours. The metric that is used to measure this
defect is called BUC&CUA DPMO (Defects per million opportunities). In countries like US where unattended
deliveries are allowed, BUC&CUA DPMO is quite less. However, in countries like India where only attended
deliveries are allowed, this defect tops the list for packages returned to station for almost all delivery stations
resulting in a customer contact with CS. Other reasons for customer contact could be product queries, delivery
status, add on services like installation and warranty

AMAZON CONFIDENTIAL 2

This case and the numbers published in this case are not representative of any Amazon businesses within India or in any other
region where Amazon has offices or operations and should not be used for any public or media consumption
Questions:
• What solutions can be devised to improve BUC&CUA DPMO metric which are tech solvable and cost
efficient for geographies like India?
• What other options can CS/IN SH team explore to reduce CPO?
• If CS Management should go ahead with specialty team, there are many dimensions that could be
looked at including (not exhaustive) competency building, increasing efficiency, outsourcing
possibilities, lean utilization and hiring an external team to evaluate and build the scenario better by
looking at various aspects. Can you help the CS team to build a cost efficient process flow to ramp up
the implementation?

AMAZON CONFIDENTIAL 3

This case and the numbers published in this case are not representative of any Amazon businesses within India or in any other
region where Amazon has offices or operations and should not be used for any public or media consumption