com Inc or is famously known as Amazon, is an electronic commerce company founded at Seattle, Washington, U.S at July 5th 1994 by Jeff Bezos, the founder and the current chairmen of Amazon. At the beginning of the company, Amazon didn’t start as a online retailer but Amazon started as a online bookstore and when Jeff Bezos created Amazon and based on the research from Britannic ( Britannic, 2018 ) , Jeff Bezos done a research and at that time at 1994, Jeff Bezos decides that books is the most logical product to sell online and fast forward few years, Amazon quickly grow and diversified by adding many type of items such as electronics, games and clothing Amazon over the years has rapidly growth from a low-key online bookstore to become one of the biggest online retailer in the world. Most of the success that Amazon have through the years that come highly to their high effective supply chain management and heavily investing to improve the experience of the customer and reducing the delivery timeFor many years, Amazon has invested heavily to reduce the delivery time of the products and delivering the product in the same day as when the customer order it. At the year of 2005, according to thebalancesmb ( thebalancesmb, 2018 ), Amazon has launched Amazon Prime service which where customer can pay an annual membership fee and its guaranteed delivery of the products within two-days on thousands of products. Besides that, it’s has established Amazon as one of the biggest online retailer in the world and major competitors struggled to keep up with Amazon from the result of the innovative strategies by Amazon.
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Besides that, the introduction of Amazon Prime, Amazon has offer delivery option to the consumer where Amazon have different warehouse for customer preferences and different goods. Amazon Prime offer various benefit in shipping, entertainment and many more. In shipping, the few benefit if you subscribe to Amazon Prime is that it has a two day free shipping on eligible items and free delivery in the same day in a eligible ZIP codes, by Amazon ( Amazon, 2018) if want a free delivery in the same day, first the order must be at least $35 with the free same-day icon and making sure the address can be receive Amazon Prime same-day.
In 2013, the CEO of Amazon Jeff Bezos has introduced Amazon Prime Air which is using a drone delivering system to deliver a product that is under 5 pounds or 2.26kilogram and the location of the deliver must be within 10 miles or 16 kilometer. It’s show that Amazon is always continue working harder to make product delivery as shortest time as possible and trying to find better ways to improving the current delivery system and it’s also showed that the other competitors is struggling to keep up with Amazon According from thebalancesmb ( thebalancesmb, 2018 ) Amazon supply chain is mostly on outsourcing of its inventory and Amazon focus mostly on products that are not often purchase or ordered regular. In 2016, 82 percent of Amazon sales is consists of third-party sellers. But those not mean that selling third-party products did not mean that it will used third-party to deliver the products to the consumer, Amazon know that if you heavily depend on third party logistics it could cause the delivery of the product to delay and the delivery of the product will be lengthen. This is one of the reason why Amazon used its own delivery vehicles to ensure the lead time of the delivery will be shorten.
In Amazon warehousing system, according from skuvault ( skuvault, 2018) Amazon used a system called Chaotic storage which means it’s a system products are stored randomly on an available space on the shelve in a warehouse with not given any attention for itemized locations. In doing so, it’s actually help to increase the warehouse efficiency and streamlines process. For an example, the items is stored with purposely without any logically order and an worker will come and scan the item that have a barcode with a hand held device to the system so that the system can know every item is located and if a order has come, the computer finds the fastest way to pick up all the required item for the order and the worker will be notified of every item location for the specific order on an special hand held device to the work. The one key factor we can learn is that Amazon has working hard to minimize the lead time from the warehouse to the consumer and the system has been implement has many benefit and according from skuvault ( skuvault, 2018) some are the benefits are flexibility ,space, accuracy and simplicity. Flexibility where every empty storage space will be well utilized and it’s will save more money by not wasting any valuable space. Space where having an system called chaotic storage have organize the inventory of item more efficiently where it has enable to store more product in a better way. Thirdly, Accuracy helps the workers avoid to making mistake to fulfill an order like mix-ups of goods like wrong color of item.
Lastly, Simplicity help Amazon to employee and train the new hired more easy because for the new employees, it can really be very difficult to learn where everything is in the warehouse or every item stored in a warehouse but Amazon current inventory system and management, the employees scan the item where was randomly placed and been tell where the item located for an order. According from thebalancesmb ( thebalancesmb, 2018 ), In 2012, Amazon has acquired an automated and robotic warehousing company called Kiva Systems and now currently called as Amazon Robotics. The robots of Amazon Robotics since 2014 according fromClassic ( Classic, 2018), there are more than 100,000 Amazon Robotics in 25 Amazon warehouse worldwide and these robot is one of the main elements to Amazon great warehousing system.
The use of the robots is that is almost the same strategy as non-robotics warehouse but the different is that in Amazon non-robotic warehouse is that the workers need to bring the goods to available storage space to be store but in Amazon robotics warehouse, the workers used the robots to bring the goods to them and store at the available storage space without bring the item along and in a non robotic warehouse the workers need to scan the item where is located so that the system know where the specific item is located but in a robotic warehouse, the robots has a small box to pick up the item from the shelves and shuffled with the other shelves to make more available space for when the system says has contains any available space. This method has being one of the key to having a fast delivery and making it more efficient as possible by placing an item when have available space.