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Amazon.coms European Distribution Strategy - Assignment Example

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"Amazon. coms European Distribution Strategy" paper explains how Amazon.com in the US used IT to impact its supply chain management. As the business of e-tailing grew, Amazon.com faced tougher challenges from competitors like buy.com and Barnesandnoble.com…
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Amazon.coms European Distribution Strategy
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Download file to see previous pages Some items were large while some very small; some had regional demand while others had nation-wide demand. Some had seasonal demand whereas others had uniform demand patterns over the year. They carried all product types at each of the DCs except for two centers. Another challenge was the material handling equipment for the warehouses to facilitate handling and picking up the items. They did employ radio-frequency technology, voice technology, and pick profiles. This system was beneficial for single-item orders but for multiple-item orders, another step was required. To group the items from the same customer, sorters had to place them into sortation slots and then the items in each slot had to be withdrawn from the slot and packaged together. To ensure efficiency they developed key metrics to measure the number of items picked per hour, inventory accuracy, and the number of hours spent from order confirmation to dispatch. All these efforts did help them to deliver 99% of the orders on schedule but Amazon lost $323 million on $676 million in revenues in the fourth quarter of 1999. They needed initiates to reduce shipping and stocking costs.

To meet the challenges they first introduced DMAIC (define, measure, analyze, improve, and control) which helped to reduce errors and improve inventory accuracy. They created a new floor manager position in each DC which redesigned the distribution process. To improve management the software was rewritten to pinpoint demand in different regions. They introduce the available-to-promise capability in which they tied the suppliers’ inventory to the customer interface which allowed Amazon to display on the website the accurate time frame for dispatch. To avoid holding inventory they tailored software to evaluate multiple fulfillment options. They used the drop-shipment method in which the wholesaler directly dispatched the order to the customer. ...Download file to see next pagesRead More
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