Amazon.com's the world's largest data bank with EDS case system

Presented by: FARHAN

Thursday, April 20, 2023

1


2


3


4

1995—19981995—1998ESTABLISHING AMAZON.COMESTABLISHING AMAZON.COM

Hold modest inventories and rely on wholesalers and publishers.Both wholesalers and publishers have their good points to Amazon.


5

1995

1996~1997

1997

1998

1995—1998Establishing Amazon.com


6

Remain the “e-tailing” leader

“Get Big Fast” strategy


7

Focus on “operational excellence”Streamlining US Distribution Centers’ ProcessesInventory CostsDelivery ProcessesOther Company Initiatives to Gain Profitability


8

Amazon.com in Europe


9


10

Challenge in Europe


11


12

Challenge in Europe

Challenge in Europe


13

Postal service

Hard to decrease the shipping costs1. Cost-cutting.2. Restructuring effort to reach profitability.3. Unify the marketing and branding functions.

Challenge in Europe

EDI(Electronic Data Interchange)


14

Did Amazon need three independent distribution centers in UK , Germany ,and France or build a European Distribution Network(EDN)?


15

EDN = European Distribution NetworkDecentralized modelPossible benefit of EDN

Expand product selection through other DCs. Facilitate global sourcing at the global network.

Reduce the risk of relying on a single DC. Improve customers’ experience.

Expand into other countries from current DCs.


16

Assessing the EDN Opportunity

Marsten Gate

BadHersfeld

Orleans


17

Internal impactredesign its transportation process

stuff retraininginfrastructure cost ….and other

Educate customer to associate a different shipping price to the delivery service level chosen.

Implement “postal injection”, seek better terms from a pan-European carrier.


18

If Amazon want expand to other European country, should Amazon consider a new location for a new DC?

Impact of the implementation of the EDN


19

Procurement department would be able to centralized its purchase and extract higher volume discounts from suppliers.

Required a better coordination among departments and a clear HR plan.


20

Option1: link different sites to a single European distribution center.

Option2: keep the three DCs to fulfill orders from other country side.

Option3: keep two DCs, one serving north and other serving south.


21

Three approaches…Continue with its current strategy of holding inventory in all three DCs.Selectively share inventory among European sites.Three DCs’ inventories physically mixed based on demand patterns and inventory and transportation cost.


22

Design the EDN


23


2424

Streamlining US Distribution Centers’ Processes

Six Sigma & DMAICsimulate holiday season conditions


25

Inventory CostsImprove inventory management to decrease

carrying costsRefined the software used to forecast

customer demandEstablished buying rules

Integrated its suppliers’ management systems

Implemented a set of “cascading” buying rules

Avoid holding inventorywholesalers ” drop ship” ordersPartnering with other companies


26

Focus on “operational excellence”

Delivery Processes•To reduce shipping costs, they developed a method called “postal injection” or “zone-

skipping”•postal injection eliminated processing steps

and travel distances

Other Company Initiatives to Gain Profitability

•30% across-the-board discount•Free shipping


27

Focus on “operational excellence”

Documents

Amazon.com's the world's largest data bank with EDS case system