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Amazon Case Study

3392 words - 14 pages

Case study: Amazon improvement of customer service by improving Inventory managementProject ReportSulaman MuhammadEm123009Submitted to: Dr. Mujtaba AghaDepartment of Engineering ManagementMuhammad Ali Jinnah University, IslamabadJune 12, 2013Introduction:Amazon.com, Inc. is a multinational electronic commerce company founded by Jeff Bezos in 1995. The headquarter of the company is situated in Washington, USA. Amazon.com initially start an online bookstore and sell books in united states and all over the world, but when their business grows and their customers increase, they diversify their business and also start selling DVD's, CD's, MP3 downloads, video games, software, toys, jewelry, furniture, electronics and many more items on their website.Now amazon.com is the world largest e-commerce company having 51,300 employees, 152 million active customers, annual revenue of $48 billion which is 27% more than Google and their website www.amazon.com ranked 16th all over the world by internet traffic.Amazon has offices, ware houses, fulfillment centers and customer service centers across the globe in six continents. Amazon.com ship their products to more than 200 countries. They have the world largest database with total capacity of 7.8 terabytes, 18.5 terabytes and 24.7 terabytes respectively.Amazon has separate websites for United Kingdom, Canada, France, Unites states, Italy, Germany, Spain, china, Brazil, Japan and India. They are also planning to launch website in Sweden, Poland and Netherlands.Fig 1.0: Shows the performance of Amazon in 2012 (Source: [amazon.com Alexa, Brandz, market capitalization as of the 5th November 2012])Inventory Management:Inventory management is one of the important area of supply chain, it plays an important role to achieve customer service goals. Amazon.com focus on all the areas of supply chain including inventory management to improve their customer services by decreasing response time and quick shipment of product to their customers.Inventory management is one of the three important area of supply chain, which leads to customer satisfaction [Ballou & Srivastava, 5th Ed].Fig 2.1: shows the supply chain triangle [Ballou & Srivastava, 5th Ed].The founder of amazon.com "Jeff Bezos" said,"The logistics of distributions are the iceberg below the water line of online bookselling".From his statement it is clear that the management of logistics and inventory is not an easy job. Especially in e-commerce business the main issue is the shipment of product from manufacturer to customer.How amazon warehouse works:The work in amazon warehouse continue round the clock 24 hours. On average amazon receives 42 orders per second. In 2011 on average amazon fulfill 13 million orders in 24 hours and in 2012 amazon fulfill 17 million orders in 24 hours, amazon run the process very efficiently and they have same work process in warehouses all over the world. Following is the brake down of amazon process in a warehouse:As the product...

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