Supply Chain Technology Jay Bidokwu SCM:Technology

Company Overview Founded in 1994 in Seattle, USA 132,600 employees Global leader in e-commerce Wide range of products Worldwide network of fulfilment Mass customisation Customer experience Innovation Top 3 Supply Chain Leader Founded in 1994, and originally only sold books Today as a global leader in Ecommerce they offer a wide range of over 200 million Different products witrh a revenue of almost 75 biillion Amazon currently employing over 132.600 employees Amazon operates a customer centric business model, focusing on mass customisation to ensure the highest value customer experince There is also Fulfilment is a service offered by amazon, where individuals and business can sell items on amazon making use of amazons delivery logistics, Amazon is regarded as one of the top 3 supply chains in the world Innovation is a core value of amazon, Last year amazon operated at a slight loss in the last quarted due to its heavy focus on investesments especially in technology

Amazon SWOT analysis Strengths Weaknesses Cost leadership strategy Superior quality services and products Strategic acquisitions Efficient distribution chain and logistics Economies of scope Only online presence Selling at zero margins Negative publicity Opportunities Threats Release more its own brand products and services Increase services and product portfolio through acquisitions Open more online stores in other countries Physical presence Online security Lawsuits Strategic alliances Legislation against tax avoidance From the swot analysis its clear to see amazons stenghts outweight its weaknesses It has a cost leadership stagey which focuses on providing quality products and services In terms of the oppurunies amazon can relaease more of its own brand products Expand the number of countries with online stores they currently operating 14 online stores The threats Amazon handles a lot of sensitive data, breach of any of this information can be disastrous to customer perception of security of amazon Lawsuits from incorrect product descripions

Three Customer Sets Consumers Sellers Developers Who want to buy products on Amazon (B2C) Consumers Who want to sell products on Amazon B2B Who want to use Amazon developing services Sellers Amazon have adapted the E-Business model, Amazon started off by focusing on Business-to-Consumer relationships between itself and its customers, and Business-to-Business relationships between itself and its suppliers but it then moved to incorporate Customer-to-Business transactions as it realized the value of customer reviews as part of the product descriptions. It now also facilitates customer to customer with the provision of the Amazon marketplace which act as an intermediary to facilitate consumer to consumer transactions. The company lets almost anyone sell almost anything using its platform Developers

E-Fufillment Personalization Easy Navigation Speed & Delivery This slide shows the basic layout of an amazon transaction, Amazon is Multi level E-Commerce To improve customer experience Amazon utilise Web Cookies to enable their E commerce systems to recognise your device and to provide features such as 1-Click purchasing, Recommended for you, interest-based advertisements on other Web sites. Amazon also utilise EDI technology integration to compute real time stock levels, Business can use amazons integrated marketplace to list a prouduct across multiple marketplaces without the headache of managing stock levels. When a product is sold on one marketplace, Amazon will quickly and automatically update stock stock levels on all marketplaces. This ensures inventory has maximum exposure whilst minimising the risk of overselling. Utilising technology amazon has transformed the publishing market with the advent of its own product kindle. It has created a market with virtually no supply chain making it perfect supply chain Digital distribution leads to better profit margins for Amazon. Keeping 65% of the revenue from all eBook sales for Kindle Speed & Delivery

Core Technology Data management is a supply chain challenge faced at amazon Amazon core technology is entirely Linux-based. The central Amazon data warehouse is made up of 28 HP servers, running Oracle database software. The data warehouse is roughly divided into three functions: query, historical data and ETL Amazon employs the Netscape Secure Commerce Server using the SSL (secure socket layer) protocol. The core technology of amazon is the backbone of its supply chain. Data management is a supply chain challenged faced at amazon, Amazon's technology architecture handles millions of back-end operations every day as well as queries from more than half a million third-party sellers. The massive technology core that keeps Amazon running is entirely Linux-based. Amazon has the world's three largest Linux databases, with a total capacity of 7.8 terabytes (TB), 18.5 TB and 24.7 TB respectively The central Amazon data warehouse is made up of 28 HP servers, running Oracle database software. The data warehouse is roughly divided into three functions: query,historical data and ETL Extract, Transform, Load (EDI) In order to keep transactions secure Amazon employs the Netscape Secure Commerce Server using the SSL (secure socket layer) protocol. It also stores all credit card numbers in a separate database that isn’t internet accessible

Amazon Logistics technologies Traditional e-commerce warehouses are technological dinosaurs e-commerce needed to take advantage of technological advances Amazon has over 1,400 robots working in various warehouses Robots developed by Kiva Systems, a startup firm acquired by Amazon in 2012 for $775 million Integrated Kiva’s warehouse management software Projected cost savings of $450-900 million each year by deploying the robots across all amazon fulfilment canters Traditional e-commerce warehouses are technological dinosaurs - they rely on fixed shelving, bad placement algorithms and (lots of) error-prone humans.  The result is an expensive operation.  Also they tend to scale linearly - the more you want to ship, the more you need. technological advances that have come around - advanced algorithms, robotics and sophisticated software to tie it all together. Amazon recognised this innovation and now has over 1,400 robots working in three warehouses. The machines are made by Kiva Systems, a startup firm acquired by Amazon in 2012 for $775 million. The robot workers didn’t replace current workers but aid them in becoming more effiencent The robots robots job in the warehouse is to deliver shelves of items to Amazon workers, effectively reversing the typical “picker” job. Instead of walking across the warehouse all day to retrieve different items, workers can be given fixed stations and let the shelves come to them. When a shelf arrives, they select the appropriate item off it, box it, and place it on the exit conveyor belt and the shelf is returned to an appropriate position The efficiency of this integration stems from Kiva’s warehouse management software, which tracks almost everything taking place within the fulfillment center. While the actual robots are the most visible part of the operation, they’re only able make A-to-B trips as directed. It’s the management software that’s pulling all the strings. It can prioritize rush orders, slow down or speed up item pacing based on employee performance, and even route high-value items to more experienced workers. Projected cost savings of $450-900 million each year by deploying the robots across all their fulfillment centers

The Future Drones to deliver packages in under 30 minutes in cities! Unmanned, Battery powered, and uses GPS Expected to be in use by 2015. Large marketing factor Reduced Shipping costs The Future of amazon logisitcs looks very promising, amazon announced plans to use drones to deliver packages within 30 mins in densly poputed cities Advantages include Battery powered, reduces gas emissions with less standard vehicle deliveries. Buyers would get their product in 30 minutes or less 30 Minute policy would be a large marketing factor leading to profits for Amazon. Once the technology and supply is available, it would cost Amazon around a dollar to ship reducing shipping costs associated with UPS and FedEx Disadavanteges Security risk associated with Drones in terms of hacking Drones will have to fly above 300 feet to prevent being shot down Batteries only last 30 minutes. Not yet cleared by the FAA Cannot fly in unfavorable weather conditions so useless in england.

Recommendation & Conclusion Evolution Logical path Resources & Channels B2C, B2B,C2C Expansion New markets Strength of Brand “Earth’s biggest selection” Technology Transaction security Trust Customer Experience rather than limiting to create conventional logistics infrastructure of a typical ecommerce, Amazon developed a logistics services platform complete with technology, hardware, and operations management that gives them the advantage of scale as they manage fulfillment services for thousands of merchants, as well as enables them to create a large warehouse-network to enabley the most optimal shipping for their own merchandise.

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