The CEO of Amazon.com, Jeff Bezos, started the company in 1994 with the simple idea to use the internet to shift booking buying into a fast, easy and enjoyable experience. Since its inception, Amazon.com has expanded significantly and now make the claim that they have the world’s largest collection of products and services which include not only books, but, also CD’s, videos, toys, games, electronics, and the list goes on and on.
Through its logistics and supply chain management activities, Amazon.com is able to create real value to their customers. They have seven distribution centres strategically located and when an order is placed, it is processed from the centre that is closest to order location. This allows the company to process the orders quickly and efficiently, ensuring the lag time between a customer ordering and actual receipt of the product is significantly reduced. These large distribution centres effectively manage the flow of goods in from its suppliers, and the shipment of orders out for delivery to the customer’s home. In addition, the centres allow the company to stock the large range of products that are offered online. Customers are able to enjoy the convenience of shopping from home, having a large selection of products to choose from, and the benefit of delivery right to their door within a few days of placing their order.
The seamless flow of products from suppliers to the distribution centres is critical for Amazon to have successful supply chain management. To improve this flow of products, Amazon has used an administered system as well as a contractual vertical marketing system.
The company has developed software and programmable logic control (PLC) systems to aid in both the supply from manufacturers and with fulfilling customer orders. These systems also allow orders to be picked based on product ordered, rather than by an individual order. In addition, mishandling of inventory levels in the past sparked the need to...