Amazon Case

AMAZON CASE

1. How do Amazon.com’s logistic and supply chain management activities help the company create value for its customers?

Amazon maintains huge distribution where it keeps inventory of a number of products. Amazon manages the flow of products from its millions of suppliers to its distribution and customer service centers with the flow of customer orders from the distribution centers to individuals homes or offices. They make sure that stock levels are at the optimum level that in stock orders are processed and dispatched quickly and that out of stock products are replenished in good time.  Because they have an efficient management system, Amazon can deliver products to customers fast and accurately, which increases the satisfaction of customers.

1. What system did Amazon develop to improve the flow of products from suppliers to Amazon distribution centers? What systems improved the flow of orders from the distribution centers to customers?

Supplier to Distribution Centers: Amazon has developed a software to more accurately forecast purchasing patterns by region giving suppliers a better idea on delivery dates and volume of product.  This system helped amazon to lower mishandling rate from 12 percent to 4 percent. Also Amazon has a huge fulfillment centers that allows suppliers to easily stock and maintain their inventory in Amazon’s distribution centers.

Distribution Centers to Customers: Amazon developed their telecommunication networks, which allowed company to pass information back and forth. This enabled them to do the real-time work without wasting time. This system has helped insure all items are included in the delivery of the product.  The “fulfillment” centers allows Amazon to keep millions of products on-hand and ship them on time.