Supply Chain - Amazon Case Study

Topics: Supply chain management, Warehouse, Inventory Pages: 5 (1086 words) Published: December 1, 2010
Presented to Dr.Ahmed Sobhy
Prepared By: Tamer Ahmed Ragab - Merhan Salah Sherin Lowandi - Salma Saad

• 1995: debuts on the Web. • 1997: The company goes public to becomes the first Internet retailer to secure one million customers. • 1998: enters the online music and video business; companies are acquired in the United Kingdom and Germany. • 1999: The firm expands into selling toys, electronics, tools, and hardware; Bezos is named Time Magazine's "Person of the Year." • 2001: reports its first net profit during the fourth quarter.

Head Quarter


Amazon Start
In 1995, sold its first book, which shipped from Jeff Bezos' garage in Seattle.

By Now sells a lot more than books and has sites serving seven countries, with 21 fulfillment centers around the globe totaling more than 9 million square feet - (836,127 M2) - of warehouse space. 3
Amazon has innovated around warehousing and operational efficiency. Amazon is focused on warehousing and lowering costs. the company has acquired software makers specialize in processes like high efficiency inventory picking and inventory tracking. 4
Companies such as Target, Toys R Us, Old Navy, and many others have agreed to sell their items through Amazon. Although Amazon is not directly responsible for inventory through these companies, they do get part of the sales, creating a profit for all involved.

5 - FWS
Flexible Scalable Reliable Secure

Amazon, In 2006 announced it would start providing warehousing, delivery and other logistical support to small US businesses who sell on its websites. The move comes as it battles Ebay, Google and Yahoo and others over the potentially lucrative sector. Amazon reported over 1.3 million sellers sold products through Amazon's World Wide Web sites in 2007. 6

- Why Amazon Build Ware Houses as it Grows?
Amazon have a Huge choice of items, product range and variety. Amazon's supply chain is so tightly integrated that when an online customer buys a couple of books and a CD, the ordermanagement system communicates with inventory- and warehouse-management systems to find the optimal distribution center or centers for fulfilling the order. The customer knows in less than a minute how long it will take to ship the items and whether they will come in one package or separately. 7

- How many Ware Houses Should it have and where Should they be located? Ware Houses should be as much as needed to facilitate the orders response & delivery time. In all the main central areas covering local and international regions. The ware houses should be located near to the airport and the Courier Hup Centers, to Facilitate and decrease the Shipping time for Local & international orders. 8

- Should amazon stock every book it sells ?
If Amazon stocked every book it sells, it would need a warehouse the size of Nevada and It would also have gigantic inventory costs. Amazon uses three basic methods for selling books (1) standard inventory (2) "just in time" inventory (3) third party sellers. 9

- Should amazon stock every book it sells ?
Amazon has a physical inventory of the most popular books it sells. They are in a warehouse and shipped promptly when somebody orders them. Less popular books are subject to "just in time" inventory management. Amazon doesn't have the books, but has arrangements with the publishers to ship the books as soon as it receives orders. This results in a slight delay in shipping to the customer, but Amazon saves a lot of money in inventory costs; it doesn't have to store the books or pay for them until it sells them. 10

- Should amazon stock every book it sells ?
Finally, Amazon has a network of third party merchants who sell through Amazon. These third party merchants generally specialize in out-of-print books or books that deal with relatively arcane subjects. Those books are shipped to the customer...
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