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com has come a long way since its founder and chief executive officer, Jeff Bezos, envisioned the company as a
virtual bookstore. It has evolved into an online retail giant that generated US $74.45 billion in revenues in 2013, much of
that coming from its support of more than two million companies that used Amazon to sell their products online and
distribute them to customers. Under the company's various programs, Amazon not only provides its customers with a
means of advertising and selling their products, but also offers to store those products in its fulfillment centers; pick, pack,
and ship them; and provide customer service, including handling returns.
Amazon keeps the most popular products in inventory. This gives Amazon an advantage that its rivals find hard to replicate.
Manages and ships not only its own inventory but that of other retailers such as Eddie Bauer and Target, giving it an
economy of scale that dwarfs its rivals. As it stands, Amazon can currently ship some 10 million products, compared with
Walmart's 500,000
In the process of developing its network to support those services, Amazon has built out an infrastructure that by one recent account now includes 145
warehouses around the world (84 in the United States, four in Canada, 29 in Europe, 15 in China, 10 in Japan, and seven in India), which collectively
account for more than 40 million square feet of space. Amazon has also has made substantialINVESTMENTSin material handling systems, including
the acquisition of Kiva Systems for $775 million in 2012. 1Kiva, now a wholly owned subsidiary of Amazon, designs robots, software, workstations, and
other hardware that has been used in the distribution facilities of companies such as Staples, Office Depot, and The Gap. The systems produced by Kiva
are expected to be an integral part of the distribution network now being developed by Amazon. Amazon has also made majorINVESTMENTSin cloud
computing. At the same time, the company has been developing transportation capabilities to support its Amazon Fresh same-day grocery business.
Much of Amazon's recent growth has been fueled by its Amazon Prime program and Amazon Supply operations. Amazon Prime, which offers "free" twoday delivery to its more than 27 million subscribers for US $99 dollars per year, doesn't come close to recovering Amazon's related transportation costs,
but on average Amazon Prime customers buy twice as much merchandise per year as do other customers. 2Amazon Supply, which provides a
marketplace for thousands of industrial suppliers, represents a major move by the retailer into the business-to-business space. Amazon advertises it as
offering 750,000 "essential" products for business and industry, with free two-day shipping for orders of US $50 or more and a 365-day return policy.
Amazon's increasing presence in this industrial space poses a real threat to incumbents such as W.W. Grainger and Fastenal.
warehouse management
transportation management
inbound and outbound shipping
demand forecasts
inventory planning
Amazon.com strategy of
inventory management
In 1999, Amazon had ten warehouses after adding new six
warehouses which increased capacity became over five million
square feet.
To develop its network, Amazon has built out an infrastructure that
includes 145 warehouses around the world (84 in the United
States, four in Canada, 29 in Europe, 15 in China, 10 in Japan, and
seven in India), which collectively account for more than 40 mn
square ft of space.
very well maintained and fully computerised inventory system
which led to easiness in dealing with management inventory
In addition Newton (2001) found that product distribution from
merchant to consumers would influence consumer decision to
order next items.
by increasing the number of inventory, Amazon increased
availability to satisfy customers
The diagram above illustrates the total supply networks of the global
retail giant Amazon. Step 1 shows when the customer places an order
in wherever location he may be. The order is than assigned to the
closest of the seven major distribution centers in the United States of
America .The next step is as shown in the diagram indicates that the
order is been shown red in the person whose item is ordered in the
warehouse it than creates ride conveyors through DC, the items is
been sorted out by a bar code and than the creates arrives at the
central point and bar codes of the products matched with orders, the
items sorted are than sorted automatically into ne of the many boxes
chutes into a box. As shown in the diagram the bar code identifies
customers order and than the customer order is packed taped and
weighed. The taped and weighed boxes are shipped by the United
Parcel Services and sent to customer between seven days.