Project Report

On

“A STUDY ON LOGISTICS SUPPY CHAIN OF AMAZON’’

DMSR- G. S. College of Commerce & Economics, Nagpur

Affiliated to

Rashtrasant Tukadoji Maharaja Nagpur University

Nagpur

In partial fulfilment for the award of the degree of

Master of Business Administration

Submitted by

Chanchal Daigavane

Under the Guidance of

Dr. Aniruddha Akarte

Department of Management Sciences and Research,G.S. College of

Commerce & Economics, Nagpur

NAAC Re-Accredited “A” Grade Autonomous Institution

Academic Year 2021-22

 CERTIFICATE

This is to certify that CHANCHAL DAIGAVANE has submitted the project report

synopsis titled Study A Study on Logistics Supply Chain of Amazon,

towards partial fulfillment of MASTER OF BUSINESS ADMINISTRATION

degree examination. This has not been submitted for any other examination and does

not form part of any other course undergone by the candidate.

It is further certified that she has ingeniously completed her project as prescribed by

DMSR - G. S. COLLEGE OF COMMERCE & ECONOMICS, NAGPUR (NAAC

Reaccredited “A” Grade Autonomous Institution) affiliated to Rashtrasant Tukadoji

Maharaj Nagpur University, Nagpur.

Dr. Aniruddha Akarte Dr. Sonali Gadekar

(Project Guide) (Co-ordinator)

Place: Nagpur
Date: 25/07/2022
 G.S. College of Commerce & Economics,
Nagpur

DECLARATION

I here-by declare that the project with title “ A Study on Logistics Supply

Chain of Amazon” has been completed by me in partial fulfillment of MASTER OF

BUSINESS ADMINISTRATION degree examination as prescribed by DMSR -G. S.

COLLEGE OF COMMERCE & ECONOMICS, NAGPUR (NAAC Reaccredited “A” Grade

Autonomous Institution) affiliated to Rashtrasant Tukadoji Maharaj Nagpur University,

Nagpur and this has not been submitted for any other examination and does not form the part

of any other course undertaken by me.

Chanchal Daigavane
Place: Nagpur

Date:25/07/2022
 G.S. College Of Commerce & Economics, Nagpur

ACKNOWLEDGEMENT

With immense pride and sense of gratitude, I take this golden opportunity to express
my sincere regards to Dr. N.Y. Khandait, Principal, G.S. College of Commerce &
Economics, Nagpur.
I am extremely thankful to my Project Guide Prof./Dr.Aniruddha Akarte for his/her
guideline throughout the project. I tender my sincere regards to Co-ordinator, Dr.
Sonali Gadekarfor giving me guidance, suggestions and invaluable encouragement
which helped me in the completion of the project.
I will fail in my duty if I do not thank the Non-Teaching staff of the college for their
Co-operation.
I would like to thank all those who helped me in making this project complete and
successful. (mention the names with designation)

Chanchal Daigavane

Place: Nagpur

Date: 25/07/2022
 INDEX

SR. NO CONTENT PAGE NO.

1 CHAPETER 1. Introduction 4 -47

a) Objective of study
b) Scope of study

2 CHAPETER 2. 48-52
Review of Literature
a) Hypothesise
b) Research Design
c) Sources of Data

3 CHAPETER 3. 53- 64
Sources of data chapter

4 Chapter 4 65 - 74
Analysis and Interpretation of Data

5 CHAPETER 5. 75 - 76
Suggestion and conclusion

6 CHAPETER 6. 77
Bibliography
Executive Summary
"In 1994, Amazon was founded by Jeff Bezos that is currently one of the most
valuable
companies. Amazon has become a global leader by selling more than a million
products."
(Duffy, 2018) In this report, potential issues and future opportunities have identified
that
further explained with various analysis tools by considering impact analysis. Finally,
solutions
and strategies have evaluated and further demonstrated with individual
implementation plans.
Moreover, a description of strategies relating to the development of sustainability and
financial
value has illustrated. “The key supply chain challenges online retailers are lack of
authenticity of
the product and suppliers, outsourcing of third-party suppliers, increased cost of
shipping, and
disrupted quick delivery.” (SCCG, 2020)

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The issues we identified are increased shipping cost, higher dependency on other
logistics companies, Disruption in last-mile delivery, Low focus on Amazon online
retail store as
compared to Amazon Web Services, and loss of supplies due to the Covid-19
pandemic. Also,
impact analysis with a relative root-cause analysis had assessed. Also, there are
different
opportunities have identified for future opportunities that are flourishing online
grocery sales,
Amazon Prime Air delivery service, and expansion of Whole Foods to turn into
multitasking
stores.
The significant impact of these identified issues and opportunities are late deliveries,
increased cost of shipping, reduced customer satisfaction as well as overall profit. The
objective
here is to improve the supply chain by diminishing the impact that decreases the
overall
efficiency of Amazon. To solve issues, and to improve opportunity, provide pick -up
location to
the customer, improve the supplier selection process as well as last-mile delivery. To
add on,
changing business model similar to "Reliance JioMart" helps enhance quick delivery.
Also,
sustainability has primarily focused on environmental and social benefits.
To improve
environment pillar, implementation of the latest gadgets and electric vehicles increase
"the
prediction made by Amazon on carbon reduction." On the other hand, the social pillar
should

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implement by empowering employees and encouraging their talent, the company's
growth
could be increased in the situation of COVID-19. Similarly, the financial analysis and
its
improvement have explained by the installation of lockers in various locations
including
convenience stores and shopping centers to solve the short-term solution.

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 CHAPETER 1

INTRODUCTION

LOGISTICS AND SUPPLY CHAIN MANAGEMENT

Logistics is generally seen as a differentiator in terms of the final bottom line of a

typical “hard and tangible goods” organization; enabling either a lower cost or
providing higher value.

While a lower cost is mostly a one-time feel good factor and has been the traditional
focus area in logistics, high value comes into the picture much later and may be
tangible or intangible in a good’s initial stages.

So while an organization like Zappos may look costly at a first glance, the
extraordinary customer service due to robust policies is a value which more than
offsets the slightly higher cost.

Logistics is concerned with both materials flow and information flow. While the
materials flow from the supplier to consumer, the information flows the other way
round. It is not only concerned with inventory and resource utilization, customer
response also falls under the ambit of logistics.

In simple terms, logistics can be seen as a link between the manufacturing and
marketing operations of a company. The traditional organizations used to think of
them separately, but there is a definite value addition in integrating the two due to the
interdependence and feedback channel between the two.

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The level of coordination required to minimize the overall cost for the end consumer
gets tougher to achieve as the number of participants in a supply chain increase, as an
extremely efficient flow of material and information is required for optimization.

Logistics cover the following broad functional areas: network design,

transportation and inventory management.

Manufacturing plants, warehouses, stores etc. are all facilities which form key
components in the network design. Transportation: the cost and consistency
(reliability) required out of the transportation network determines the type and mode
of the movement of goods and also affects the inventory.

Buffer (or safety) stock is the reserve stock held to safeguard against shortages or
unexpected surge in demand, to avoid “stock-outs”. Fewer inventories with negligible
stock-outs — the hallmark of an efficient logistical system.

Basic concepts of Logistics and SCM

Inventory Planning

Organizations want to minimize the inventory levels due to its almost linear
relationship with the cost. Yet if the demand is forecasted accurately, there would
ideally be no need for inventory and the goods will move seamlessly from
warehouses to customers.

o That would have been awesome, but it is deep into the ideal world zone. In the real
world, the forecasted numbers can only take you so far and some inventory has to be

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maintained to satiate any surges in demand; the cost of unhappy consumers who are
not serviced is often huge, and is immeasurable in most cases.

o Yet overstocks lead to increase in working capital requirements, insurance costs

and blocked resources which could have been productive someplace else.

o Making a business forecast has largely been a gut-based process, but is changing
rapidly in the era of data-based decision making. The forecast depends on the
historical baseline for sales, seasonality (soft drinks have higher sales volume in
May), recent trends (Samsung is losing out to competitors when it comes to phones, a
declining trend), business cycles (economies go through expansion and contraction
every few years), promotional offers (up to 50% off can drive the average fashionista
mad) etc.

Transportation

The kind of transportation employed by an organization is a strategic decision (it

usually accounts for around 1/3 rd of the total logistics cost) based on the required
level of risk exposure, customer service profiles, geographic area covered etc. Truck
shipments take more time for delivery compared to air transport (customers with
relaxed turnaround times); is cheaper but necessitates maintenance of higher
inventory levels.

o Transportation serves the purpose of not just product movement, but storage as
well (not very intuitive). Time spent for delivery means saved time for warehousing,
and many times the cost to offload and reload shipments can be greater than the cost
of letting the goods stay in the transportation vehicles itself.

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o Two basic thumb rules apply for transportation decisions: truck load (TL)
shipments are better than less-than-truckload (LTL) shipments as storage space is a
perishable commodity (just like a commercial airline does not want to fly with empty
seats), and the cost per kilometer decreases as the distance increases (two 500 km
shipments is usually more expensive than a single 1000 km shipment).

o The factors which determine the economies of transportation decisions include but
are not limited to: distance between the starting and destination points, and density
(higher density products take less space — space constraints outweigh weight
constraints by a huge margin), stow ability (spherical packaging will lead to more
empty spaces compared to cubical) and volume of the goods. Different modes of
transport serve different strategic ends (rail, road, air, water etc).

o FlipKart has eKart for its logistical operations and warehousing, whereas smaller
e-commerce players generally outsource their operations to specialized logistics
players such BlueDart, DHL and now Delhivery.

Packaging

The end goals differ: can either be done for end consumers or for logistical
considerations. The packaging will then depend on the end goal; form factor plays the
lead role when packaging goods for the end consumers, while function plays the lead
role in packaging for logistical operations.

Warehousing

It is the back-end building for storing goods. Based on the needs of the organization,
it can be in-house or outsourced.

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o Primary functions of a warehouse are product movement and storage. Activities
such as offloading of the goods coming from the suppliers, the intermediate
packaging (if required), and shipping to other destinations (retailers or end
consumers) are handled in the warehouse. Similarly, they can also serve as a storage
house for handing peak consumer demand to avoid stock out of items, and acts as a
buffer between the starting point (usually manufacturing plant) and ending point
(think about a typical retail outlet).

o Different distribution strategies can be adopted by an organization based on its

needs and infrastructure in place, namely:

 Cross-Docking: Relies on minimal processing at the warehouse level and

facilitate seamless connection between “incoming” and “outgoing” goods
through technologies such as bar code scanners; becoming increasingly
important due to established structured communication between retailers and
manufacturers; best for high velocity goods with predictable demand patterns.
 Milk Runs: The delivery guy is out to deliver items from a single supplier to
multiple retailers or to pick up items from multiple suppliers for a single
retailer (An Indian Doodhwala can literally teach a thing or two about this,
hence the naming we think).
 Direct Shipping: A supplier directly ships to a particular retailer without any
intermediaries. Mostly happens with big-name stores with huge good
volumes, and very frequent replenishments. Big savings on time.
 Hub and Spoke Model: Hub serves as the central node for nearby places, and
the spokes depend on the hub for their needs (think of a metropolitan and
various tier-2 cities in its proximity).
 Pooled Distribution: Region is the most important factor driving this strategy.
Delivers to every destination point in a geographical area, smart for handling
peak time loads and LTL shipments. Plus one for the planet as a bonus!

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Objectives of Logistics Management

Here are the top 10 objectives of logistics management

1. Improve Supply Chain Efficiency

Logistics management leads to greater visibility into the supply chain and fastens the
inbound and outbound activities. It is extremely beneficial to reduce the overhead
cost and allow delivery processes within the stipulated time. Managing inventory,
storage functionalities, and optimizing warehouse operations can significantly enable
businesses to better control costs and increase the overall efficiency of operations.

2. Inventory Management

Managing the inventory is an integral part of the smooth running of businesses.

Identifying which and how much stock to order is useful to maintain the inventory
levels and satisfy the end customers. Therefore, inventory management tends to limit
the risk of stockouts. Also, decreasing inventory levels efficiently eliminates
unnecessary costs and improves SCM operations.

3. Fulfill customer requirements

The main objective of logistics management is to execute proper planning on

transportation modes and inventory available to satisfy the customers. This leads to a
smooth freight moving process and timely delivery of products or goods. Logistics
management allows customers to stay informed and enhances the overall experience
by providing them with relevant information. Analyzing the customer’s wants is the
best way to build the synergic relationship and brand reputation of an organization.

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4. Mitigate product damage

It is an additional cost to logistical expenses which can be caused due to improper

logistical handling, absence of load unitizing, incorrectly designed packaging, etc. An
efficient logistics management strategy is needed to enable minimum product
damage. Therefore, proper monitoring of all product movements is essential to
fulfilling the objectives of logistics management.

5. Reduce Operational Cost

Embracing logistics management is the best way to drive up revenue and reduce the
overall cost of the supply chain operations. It allows optimum utilization of raw
materials and faster delivery of products which help companies to gain a competitive
advantage. However, streamlining a complex network of operations and management
of goods is useful in minimizing the logistics cost. Controlling and managing the
supply chain ecosystem with intelligent route planning can also enhance business
productivity.

6. Quick Response

The main objective of logistics management is customer satisfaction. Solving the

customer query and issues in the shortest time frame is an effective way to enhance
the logistics strategy. Therefore, it plays a crucial role in accomplishing timely
delivery. Companies tend to operate reactively to each order as logistics management
provides them with relevant information to intensify decision-making capability. This
leads to rapid response and accuracy in the operation process.

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7. Optimize delivery performance
Providing on-time delivery to the customers is extremely important as it helps to
build long-term relationships with them. Consistency in delivery performance through
proper planning and implementation can save a lot of time and resources. Companies
get insights into the real-time updates and the exact location of the delivery vehicles.
Getting control and visibility of the delivery processes is viable logistics strategy to
meet customer expectations better.

8. Efficient Flow of Information

The integral part of logistics management is to strengthen the communication flow of
internal business functions and external partners. Maintaining a clear communication
network allows businesses to become agile and more responsive. One of the major
objectives of logistics management is to facilitate collaboration. Therefore,
establishing a seamless communication flow helps the companies to coordinate with
vendors, suppliers, and customers.

9. Quality Assurance
The quality should be maintained throughout all facets of the logistics industry.
Companies should take thoughtful efforts and always perform activities out of a
supervisor’s vision. Monitoring the quality of overall logistics operations by utilizing
new-age technologies can improve business growth. Quality assurance is considered
to be one of the major aspects of the objectives of logistics management.

10. Reduce Carbon Footprint

A reliable logistic system tends to introduce new-age technologies for reducing

carbon emissions. Undoubtedly, the transportation industry is considered to be the
major reason for creating a negative impact on the environment as vehicles emit
polluting gases. The objective of logistics management is to take measures for
optimizing routes, automation in workflow, and so on which help in setting a
benchmark in green and sustainable logistics.

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ABOUT AMAZON

Amazon was founded by Jeff Bezos from his garage in Bellevue, Washington, on
July 5, 1994. Amazon.com is an American tech multinational whose business
interests include e-commerce, cloud computing, digital streaming, and artificial
intelligence. Initially an online marketplace for books, it has expanded into a
multitude of product categories: a strategy that has earned it the moniker The
Everything Store.

It has multiple subsidiaries including Amazon Web Services (cloud

computing), Zoox (autonomous vehicles), Kuiper Systems (satellite Internet),
and Amazon Lab126 (computer hardware R&D). Its other subsidiaries
include Ring, Twitch, IMDb, and Whole Foods Market. Its acquisition of Whole
Foods in August 2017 for US$13.4 billion substantially increased its footprint as
a physical retailer.

Amazon has earned a reputation as a disruptor of well-established industries through

technological innovation and mass scale. As of 2021, it is the world's largest online
retailer and marketplace, smart speaker provider, cloud computing service through
AWS, live-streaming service through Twitch, and Internet company as measured
by revenue and market share In 2021, it surpassed Walmart as the world's largest
retailer outside of China, driven in large part by its paid subscription plan, Amazon
Prime, which has over 200 million subscribers worldwide. It is the second-largest
private employer in the United States.

Amazon also distributes a variety of downloadable and streaming content through

its Amazon Prime Video, Amazon Music, Twitch, and Audible units. It publishes
books through its publishing arm, Amazon Publishing, film and television content
through Amazon Studios, and has been the owner of film and television studio Metro-
Goldwyn-Mayer since March 2022. It also produces consumer electronics—most
notably, Kindle e-readers, Echo devices, Fire tablets, and Fire TVs.

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Amazon has been criticized for customer data collection practices, a toxic work
culture, tax avoidance and anti-competitive behavior.

History and Timeline of Amazon

Amazon has come a long way since it was founded by Jeff Bezos in his garage in
Bellevue, Wash., on July 5, 1994.

The following is a brief history and timeline of events that have evolved Amazon
from its humble beginnings to a multinational business empire.

The 1990s

Amazon officially opened for business as an online bookseller on July 16, 1995.
Originally, Bezos had incorporated the company as Cadabra but later changed the
name to Amazon. Bezos is said to have browsed a dictionary for a word beginning
with A for the value of alphabetic placement. He selected the name Amazon because
it was exotic and different and as a reference to his plan for the company's size to
reflect that of the Amazon River, one of the largest rivers in the world. Since its
inception, the company's motto has always been "get big fast."

The 2000s

In 2005, Amazon Prime This membership-based service for Amazon customers offers
free two-day shipping within the contiguous U.S., as well as streaming, shopping and
reading benefits. According to Amazon's website, current Amazon Prime membership
rates are $14.99 a month or $139 per year.

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Amazon Web Services

This comprehensive and evolving cloud computing platform was also born in the
2000s. The first Amazon Web Services (AWS) offerings were launched in 2006 to
provide online services for websites and client-side applications. Amazon Elastic
Compute Cloud (EC2) and Simple Storage Service (S3) are the backbones of the
company's growing collection of web services. The same year, Amazon also launched
a cloud computing and video-on-demand service known at the time as Unbox.

By changing the way people bought books, Amazon also shaped how they read them
with the launch of its first Kindle e-reader in 2007. This device helps users browse,
buy and read e-books, magazines and newspapers from the Kindle Store.

From the 2010s to present

Amazon debuted its first tablet computer, the Kindle Fire, in 2011 and the Amazon
Fire TV Stick, which is part of Amazon's extensive line of streaming media devices,
in 2014.

Amazon also started an online Amazon Art marketplace for fine arts in 2013, which
has featured original works by famous artists such as Claude Monet and Norman
Rockwell.

The popular in-home virtual assistant Amazon Alexa was rolled out to consumers in
2015 and was followed by the Alexa-equipped Echo Dot in 2016.

Amazon acquired the organic grocery store Whole Foods in 2017 and launched
Amazon Go, a chain of cashierless grocery stores in 2018.

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15
COMPANY PROFILE

Amazon India Limited is an unlisted public company incorporated on 22 December,

1994. It is classified as a public limited company and is located in East Delhi, Delhi.

It's authorized share capital is INR 2.50 cr and the total paid-up capital is INR 5.17

lac.

Amazon India Limited's operating revenues range is Under INR 1 cr for the

financial year ending on 31 March, 2021. It's EBITDA has decreased by -48.22

% over the previous year. At the same time, it's book networth has decreased by -

0.56 %. Other performance and liquidity ratios are available here.

Description: Amazon India Ltd. provides online retail services.

Products & Services: mobile phones, assericess, gadgets, kitchecn sets, clothes, toys,

etc....

Category: Service provider

The current status of Amazon India Limited is - Active.

The last reported AGM (Annual General Meeting) of Amazon India Limited, per our

records, was held on 20 November, 2021. Also, as per our records, its last balance

sheet was prepared for the period ending on 31 March, 2021.

Amazon India Limited has three directors - Atul Jain, Perinchery Vasudevanraman

Elayath, and others.

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The Corporate Identification Number (CIN) of Amazon India Limited is

U01100DL1994PLC063704. The registered office of Amazon India Limited is at

PARSVNATH TOWER NEAR SHAHDARA METRO STATION, SHAHDARA,

DELHI, East Delhi, Delhi

Amazon Mission, Vision & Values

Amazon’s Mission

For Amazon and Jeff Bezos, the mission is simple. As he himself says, “Our goal is
to be earth’s most customer-centric company”, in other words, to become the
company most focused on customer satisfaction, selling absolutely everything,
anywhere in the world.

For this purpose, Amazon addresses several types of customers and offers several
services:

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  General public: Amazon.com (books, objects, applications, films…)
 Marketplace: FBA (fulfillment by Amazon)
 Content creation (film, series)
 Service in the Cloud and Machine Learning

"Amazon is guided by four principles: customer obsession rather than competitor

focus, passion for invention, commitment to operational excellence, and long-term
thinking. Customer reviews, 1-Click shopping, personalized recommendations,
Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire tablets,
Fire TV, Amazon Echo, and Alexa are some of the products and services pioneered
by Amazon."

Amazon Vision Statement

Our vision is to be earth's most customer-centric company; to build a place where

people can come to find and discover anything they might want to buy online.

Amazon Values

 Customer Obsession
 Ownership
 Invent and Simplify
 Learn and Be Curious
 Hire the Best
 The Highest Standards
 Think Big
 Bias for Action
 Earn Trust
 Deliver Results

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Amazon Clients & Services

Amazon’s virtuous circle :

A diagram was drawn by Jeff Bezos at the very beginning of Amazon. Its goal: to sell
as many products as possible, which will increase customer experience and
satisfaction, which increases traffic because customers are happy, which increases the
number of salespeople and therefore products, which increases quantities, which
reduces structural costs, which makes products cheaper etc, etc…

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This is how Amazon keeps growing indefinitely.

An example of this virtuous circle is Amazon Prime. After paying a subscription,

you have access to all free deliveries in less than 48 hours, in addition to series, films
or books on Kindle platforms. In the long term, Amazon realized that its Prime
customers were buying 3 times more products through Amazon, which allows
the company to sell more, then according to the logic of its virtuous circle to offer
more, and finally to reduce its structural costs and logistics costs.

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DIRECTORS - AMAZON INDA LIMITED

The company has 3 directors and no reported key management personnel.

The longest serving director currently on board is Perinchery Vasudevanraman

Elayath who was appointed on 09 June, 2014. Perinchery Vasudevanraman Elayath
has been on the board for more than 8 years. The most recently appointed director is
Gautam Kumar Banswal, who was appointed on 01 June, 2022.

Perinchery Vasudevanraman Elayath has the largest number of other directorships

with a seat at a total of 20 companies. In total, the company is connected to 52 other
companies through its directors.

09 June, 2014
PERINCHERY VASUDEVANRAMAN ELAYATH
Director

02 November, 2015

ATUL JAIN
Director

01 June, 2022

GAUTAM KUMAR BANSWAL

Director

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Company information
As of 2022

Country U.S.

Headquarters Seattle

Industry Internet Services and Retailing

CEO Andrew R. Jassy

Website https://www.amazon.com

Company Type Public

Ticker AMZN

Revenues ($M) $469,822

Profits ($M) $33,364

Market Value ($M) $1,658,807.3

Employees 1,608,000

AMAZON LOGISTICS

Before starting the overview of the company’s logistics operations, it is important to

formulate a precise and comprehensive definition of the term ‘logistics.’ According to
Richardson, Castree, and Marston, logistics refers to “the process of planning,
implementing, and controlling the efficient, cost-effective, and synchronized flow and
storage of raw materials, inventory, finished goods, and related information from
point of origin to point of consumption.”

Amazon is characterized by a complex logistics system that consists of third-party

logistics and private logistics department. In some countries, the company relies on
postal services as a way of delivery. For example, despite the fact that the retailer
owns its own logistics department in China (Beijing Joy Delivery), it also utilizes

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services of China Postal Express & Logistics (Li & Fan 2014). Amazon makes an
emphasis on strengthening its e-commerce function; therefore, its logistics
infrastructure hinges on the following logistics resources: “railway, highway, civil
aviation, postal services, warehousing, and commercial networks”.

Amazon uses many different transportation services to deliver packages. Amazon-

branded services include:

 Amazon Air, a cargo airline for bulk transport, with last-mile delivery handled
either by Amazon Flex, Amazon Logistics, or the United States Postal Service.
 Amazon Flex, a smart phone app that enables individuals to act as independent
contractors, delivering packages to customers from personal vehicles without
uniforms. Deliveries include one or two hours Prime Now, same or next
day Amazon Fresh groceries, and standard Amazon.com orders, in addition to
orders from local stores that contract with Amazon.
 Amazon Logistics, in which Amazon contracts with small businesses (which it
calls "Delivery Service Partners") to perform deliveries to customers. Each
business has a fleet of approximately 20–40 Amazon-branded vans, and
employees of the contractors wear Amazon uniforms. As of December 2020, it
operates in the United States, Canada, Italy, Germany, Spain, and the United
Kingdom. Amazon Prime Air is an experimental drone delivery service.

Amazon directly employs people to work at its warehouses, bulk distribution centers,
staffed "Amazon Hub Locker+" locations, and delivery stations where drivers pick up
packages. As of December 2020, it is not hiring delivery drivers as employees.

Rakuten Intelligence estimated that in 2020 in the United States, the proportion of
last-mile deliveries was 56% by Amazon's directly contracted services (mostly in
urban areas), 30% by the United States Postal Service (mostly in rural areas), and
14% by UPS.[48] In April 2021, Amazon reported to investors it had increased its in-

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house delivery capacity by 50% in the last 12 months (which included the first year of
the COVID-19 pandemic in the United States).

In 2018, Amazon had more than 800 logistics sites counting around 20M m^2
worldwide, with half of its sites based in the US :

 Fulfillment centers (round 300 worldwide)

 Delivery stations (round 300 worldwide)
 Prime Now Hubs (small warehouses close to cities, they allow Amazon to
achieve deliveries within 2 hours and represent the future for Amazon – round
80 worldwide)
 Sortation Centers (distribution centers that allow parcels or pallets to be
sorted, they are generally located next to fulfillment centers – around 80
worldwide)
 Pantry/Fresh Food DC’s (fresh produce distribution center – round 20 mainly
in the US)
 Whole Foods Retail (12 warehouses gained after Whole Food Group
takeover)
 Airport Hub (in construction in Kentucky)

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AMAZON SUPPLY CHAIN

Amazon first launched its distribution network in 1997 with two fulfillment centers
in Seattle and New Castle, Delaware. Amazon has several types of distribution
facilities consisting of cross-dock centers, fulfillment centers, sortation centers,
delivery stations, Prime now hubs, and Prime air hubs. There are 75 fulfillment
centers and 25 sortation centers with over 125,000 employees. Employees are
responsible for five basic tasks: unpacking and inspecting incoming goods; placing
goods in storage and recording their location; picking goods from their computer
recorded locations to make up an individual shipment; sorting and packing orders;
and shipping. A computer that records the location of goods and maps out routes for
pickers plays a key role: employees carry hand-held computers which communicate
with the central computer and monitor their rate of progress. Some warehouses are
partially automated with systems built by Amazon Robotics.

In September 2006, Amazon launched a program called FBA (Fulfillment By

Amazon) whereby it could handle storage, packing and distribution of products and
services for small sellers.

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Amazon fulfillment center in Lauwin-Planque, France Amazon.de fulfillment center
in Graben, Germany

Amazon fulfillment center in Macon, Georgia, U.S Amazon.es fulfillment center in San
Fernando Henares, Spain

Amazon.co.jp fulfillment center in Ichikawa, Japan Amazon.co.uk fulfillment center in Glenrothes,

Scotland,UK

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 SWOT Analysis of Amazon

Amazon is the world’s leading online retailer and its success has spurred other
physical, brick, and mortar retailers to have an online presence. It is often referred to
as the online equivalent of Wal-Mart because of its reach and global footprint as well
as its aggressive pricing strategies.

Amazon can leverage on several opportunities in the emerging markets and can
ensure that its global supply chain of networked warehouses deliver substantial value
for itself and its stakeholders. Further, Amazon has to rethink its business model of
operating at close to zero margins and the fact that the company has not returned a
decent profit in the last five years gives it much room for improvement.

Strengths

 Being the world’s leading online retailer, Amazon derives its strengths
primarily from a three-pronged strategic thrust on cost leadership,
differentiation, and focus. This strategy has resulted in the company reaping
the gains from this course of action and has helped its shareholders derive
value from the company.
 Amazon primarily derives its competitive advantage from leveraging IT
(Information Technology) and its use of e-Commerce as a scalable and an
easy to ramp up platform that ensures that the company is well ahead of its
competitors.
 One of the key strengths of Amazon is that it enjoys top of the mind recall
from consumers globally and this recognition has helped it enter new markets,
which were hitherto out of bounds for many e-Commerce companies.

27
  Using superior logistics and distribution systems, the company has been able
to actualize better customer fulfillment and this has resulted in Amazon
deriving competitive advantage over its rivals.

Weaknesses

 In recent years, Amazon as part of its diversification strategy has been

“spreading itself too thin” meaning that it has allowed its focus to waver from
its core competence of retailing books online and allowed itself to venture into
newer focus areas. While this might be a good strategy from the risk
diversification perspective, Amazon has to be cognizant of losing its strategic
advantage as it moves away from its core competence.
 As Amazon offers free shipping to its customers, it is in the danger of losing
its margins and hence, might not be able to optimize on costs because of this
strategy.
 Considering the fact that Amazon is an online only retailer, the single-minded
focus on online retailing might “come in the way” of its expansion plans
particularly in emerging markets.
 One of the biggest weaknesses and something that has been oft commented
upon by analysts and industry experts is that Amazon operates in near zero
margin business models that have severely dented its profitability and even
though the company has high volumes and huge revenues, this has not
translated into meaningful profits for the company.

Opportunities

 By rolling out its online payment system, Amazon has the opportunity to scale
up considerably considering the fact that concerns over online shopping as far
as security and privacy are concerned are among the topmost issues on the
minds of consumers. Further, this would improve the company’s margins as it
lets it reap the advantages of using its own payment gateway.

28
  Another opportunity, which Amazon can capitalize on, relates to it rolling out
more products under its own brand instead of being a forwarding site for third
party products. In other words, it can increase the number of products under
its own brand instead of merely selling and stocking products made by its
partners.
 Amazon can increase the portfolio of its offerings wherein it stocks more
products than the norm currently which places it in a position of strength and
comfort as this can translate into higher revenues.
 The fourth opportunity, which Amazon has, is in terms of expanding its global
footprint and open more sites in the emerging markets, which would certainly
give it an edge in the uber-competitive online retailing market.

Threats

 One of the biggest threats to Amazon’s success is the increasing concern over
online shopping because of identity theft and hacking which leaves its
consumer data exposed. Therefore, Amazon has to move quickly to allay
consumer concerns over its site and ensure that online privacy and security are
guaranteed.
 Because of its aggressive pricing strategies, the company has had to face
lawsuits from publishers and rivals in the retailing industry. The obsessive
focus on cost leadership that Amazon follows has become a source of trouble
for the company because of the competitors being upset with Amazon taking
away the business from them.
 Finally, Amazon faces significant competition from local online retailers who
are more agile and nimble when compared to its behemoth type of strategy.
This means that the company cannot lose sight of its local market conditions
in the pursuit of its global strategy.

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Two main elements of the Amazon Supply Chain
When it comes to Amazon’s supply chain, there are two main elements critical to its
success – Amazon Fulfilment Centers and the Amazon Delivery Fleet.

Amazon Fulfillment Centers

With 112 million of Amazon’s customers having a Prime membership and utilizing two-
day shipping, it’s vital that Amazon has the fulfillment and logistics network to
accommodate these orders.

Currently, Amazon has more than 175 fulfillment operating centers globally in more than
150 million square feet of space. California alone has 21 fulfillment centers while Texas
is not far behind with 14. Worldwide, Amazon has an estimate of 500 warehouses located
near major metropolitan areas.

Here’s an infographic showing the distribution of Amazon Fulfillment Centers in the

United States:

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With the COVID-19 pandemic generating a boom in ecommerce, Amazon has
experienced record growth within the last year. In 10 months, Amazon has had to
hire 427,300 employees to keep up with demand. Third-party sellers experienced a 60%
annual increase in sales, with this trend expected to continue into 2021. In a bid to
respond to growing demand and a capacity crunch in its fulfillment centers, Amazon will
open around 50 new warehouses and fulfillment centers in the US and more globally.

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Amazon Delivery Fleet
While having the capacity to store inventory and fulfill orders is key, Amazon’s delivery
fleet is just as important. To deliver orders to its customers, Amazon has various
transportation and delivery partners that help keep up with demand.

To start, Amazon’s trucks help carry about 2,000 boxes or more from the fulfillment
centers to the sort centers. There, Amazon then distributes the packages according to
location and the delivery speed required. After that, the company selects the most
efficient transportation mode to transport these packages.

If you’ve always wondered how Amazon meets its one or two-day delivery window for
Prime members, Amazon has an airplane fleet that helps with delivery. These airplanes
fly from more than 20 airports around the United States and can carry about 30 or more
containers. On the ground, Amazon uses trucks, vans, bikes, and at times – even robots.
Interestingly, Amazon is now exploring the use of drones to deliver items to locations
that are near their fulfillment centers.

Recently, Amazon has also launched the Delivery Service Partners company that
provides its employees with $10,000 in start-up costs and three-months of pay to launch
their own delivery business. This not only helps with strategically expanding Amazon’s
delivery network, but it is also an awesome way to make money with Amazon.

Notable Amazon products and services

Amazon offers an ever-expanding portfolio of services and products. Following is a

list of its noteworthy offerings.

Retail

 Amazon Marketplace: Amazon's e-commerce platform enables third-party

retailers to showcase and sell their products alongside Amazon items.

 Amazon Fresh: Amazon's grocery pickup and delivery service is currently

available in nearly two dozen U.S. cities and a few international locations. A
grocery order can be placed through the Amazon Fresh website or the Amazon

32
 mobile app. Customers can either get their groceries delivered or visit the store for
pickup.

 Amazon Vine: Launched in 2007, Amazon Vine helps manufacturers and

publishers get reviews for their products to help shoppers make informed
purchases.

 Woot: Acquired by Amazon in 2010, Woot offers limited time offers and special
deals that rotate daily. This shop features refurbished items, as well as new items
that are low in stock. Prime members get free shipping.

 Zappos: Amazon bought Zappos in 2009. This online retailer of shoes and
clothing carries a wide range of brands, including Nike, Sperry, Adidas and Uggs.

 Merch by Amazon: This on-demand T-shirt printing service enables sellers to

create and upload their T-shirt designs for free and earn royalties on each sale.
Amazon does the rest -- from printing the T-shirts to delivering them to
customers.

 Amazon Handmade: This platform enables artisans to sell handcrafted products

to customers around the world.

Consumer technology

 Amazon Kindle: Amazon's first e-reader, Kindle, enables users to browse, buy
and read e-books, magazines and newspapers from the Kindle Store.

 Amazon Fire tablet: Previously known as Kindle Fire, Amazon's popular and
high-profile Fire tablet competes with Apple's iPad.

 Amazon Fire TV: This line of Amazon's streaming media players and digital
devices delivers streamed video content over the internet to a paired high-
definition television.

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 Amazon Alexa: This cloud-based, AI-powered, voice-controlled personal
assistant is designed to answer queries, interact with users, and perform other
tasks and commands.

 Amazon Echo: This is one of Amazon's smart home devices that comes equipped
with a speaker and connects to Alexa. Amazon Echo can perform several
functions, including talking about the weather, creating shopping lists and
controlling other smart products, such as lights, switches and televisions.

 Amazon Echo Dot: A smaller, puck-shaped version of the original Amazon

Echo, an Echo Dot can be placed in any room and can answer questions, play
music, and read news and other stories.

 Amazon Echo Show: As part of the Amazon Echo line of speakers, the Amazon
Echo Show works similarly through Alexa but also offers a 7-inch touchscreen
display to play videos and music and conduct video calls with other Echo users.

 Amazon Astro: This is Amazon's first home monitoring robot that works with
Alexa. It is designed to help with various household tasks, such as home
monitoring, caring for the elderly through notifications and alerts, and following
owners from room to room to play TV shows, music or podcasts.

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Subscription services

 Amazon Prime: This subscription service provides members access to exclusive

shopping and entertainment services, discounts and more. As an example, all
Amazon Prime members enjoy free one-day or two-day shipping on qualifying
orders.

 Amazon Prime Video: This is Amazon's on-demand video streaming service that
offers a selection of about 24,000 movies and over 2,100 TV shows. This service
is included with an Amazon Prime membership.

 Amazon Drive: Previously known as Amazon Cloud Drive, Amazon Drive is a

cloud storage app that offers 5 gigabytes (GB) of free and secure online storage
for photos, videos and files for Amazon customers. Amazon Prime members get
free, unlimited, full-resolution photo storage, along with 5 GB of video storage.

 Twitch Prime: A monthly subscription service, Twitch Prime is a subsidiary of

Amazon Prime. It gives members premium access to Twitch -- a video streaming
platform that offers a fun and social way to watch people play games.

 Amazon Music Prime: This is Amazon's music streaming service that is free for
Prime members.

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Digital content

 Amazon Pay: An online transaction processing platform, Amazon Pay enables

Amazon account holders to use their Amazon accounts to pay external online
merchants.

 Amazon Music Unlimited: Amazon's premium music service costs $8.99 a

month for Prime members and $9.99 for non-Prime members.

 Kindle Store: Part of Amazon's retail website, the Kindle Store can be accessed
from any Kindle device to purchase e-books.

 Amazon Appstore for Android: Amazon's app store for the Android operating
system enables users to download games and mobile apps to supported devices.

36
AWS

 S3:This is Amazon's scalable, cloud-based object storage. Files are referred to

as objects in S3 and are stored in containers called buckets.

 Amazon Simple Queue Service (SQS): SQS is a pay-per-use web service that is
designed to provide access to a waiting message queue where messages can reside
until a computer processes them.

 Amazon EC2: This web service interface provides scalability with resizable
compute capacity in the AWS cloud. Users can run virtual servers or instances,
commonly known as EC2 instances, that can be scaled up or down, depending on
the network requirements.

 Amazon S3 Glacier: Amazon S3 Glacier is a low-cost cloud storage service for

data that might be associated with longer retrieval times. It also offers data
archiving and backup of cold data.

 AWS Identity and Access Management (IAM): IAM provides secure and
controlled access to resources.

 Amazon Redshift: This data warehouse in the cloud enables users to query
petabytes of both structured and semistructured data using standard Structured
Query Language queries. For example, to address the expanding volume of
transactions, Nasdaq moved from a legacy on-premises data center to the AWS
cloud, which is powered through the Amazon Redshift cluster.

37
Amazon AI services

 Amazon SageMaker: A fully managed cloud machine

learning platform, Amazon SageMaker enables developers and data scientists to
build, train and deploy machine learning models for predictive analytics
applications.

 Amazon Lex: This service for building conversational interfaces into any
application using voice and text is powered by the same technology as Alexa.

 Amazon Polly: A text-to-speech service, Amazon Polly uses deep

learning technology to convert text into spoken audio. It includes 60 voices across
29 languages.

 Amazon Rekognition: This software-as-a-service facial recognition and analysis

platform uses a deep learning algorithm to process images and extract information
from them.

 AWS DeepLens: This programmable video camera enables developers to easily

experiment withmachine learning, AI and the internet of things.

 Alexa Voice Service: This programming interface provides developers with a set
of C++ libraries to add Amazon Alexa's speech and other capabilities into their
applications and devices.

 Amazon Transcribe: This service converts speech to text quickly and accurately
by using a deep learning process called automatic speech recognition.

 Amazon Translate: Amazon Translate is a cloud service that can convert large
amounts of text written in one language to another language.

38
Amazon privately owned brands

 AmazonBasics: This is Amazon's privately labeled, low-budget brand that

mainly sells kitchen, tech and household products.

 Amazon Elements: This line of domestic products includes health and personal
care items, as well as nutritional supplements.

 Mama Bear: This private label of Amazon sells baby wipes, newborn through
size 6 diapers, baby food, diaper pail refills and baby laundry detergent.

 Presto!: This brand started as a laundry detergent in 2016 but has added
household paper towels and toilet paper to its product line.

 Amazon Essentials: A Prime-exclusive program, this clothing line offers basic

wear for men, women, babies and kids, with additional options for family, big and
tall, and athletic activity.

 Happy Belly: This private label of Amazon was introduced in 2016 and sells
snack food items. In February 2019, the brand also began offering milk delivery
services.

 Goodthreads: This menswear apparel line is available exclusively to Amazon

Prime members. The label offers both casual and professional pieces and is
deemed a bit higher quality and more stylish than the Amazon Essentials brand.

39
40
What Happens After You Click the Buy Button
How does an Amazon Fulfillment Center work? These are the steps that take place
after a shopper has clicked the buy button.

1. Receiving Products

At Amazon Fulfillment Centers, products are either taken off trailers by forklift or
manually built into pallets. The separation of freight occurs between those that are
coming from an Amazon facility and those from third-party vendors using FBA.
Unsurprisingly, half of the items currently sold on Amazon are from small businesses
and entrepreneurs.

2. Storing of Items

Unlike other warehouses that store their items by type, Amazon stores its items
randomly. Amazon has yellow tiered bins with random items – all tracked by
computers. These bins then ferry to Amazon associates based on the product size.

3. Picking Orders

When you’ve clicked the “buy button”, and your order comes in, a robot will bring
pods full of items to Amazon associates working at pick stations. These pickers will
read the screen, retrieve the item and place it into a yellow plastic box – also known
as a tote.

4. Quality Assurance

For robots and humans to work cohesively together, there’s a great deal of quality
assurance required. There’s a need to make sure that the item’s physical location
matches what’s in the computer, and that the robots function correctly. Fine-tuning
occurs throughout the entire process as technological innovation is vital in a large-
scale supply chain business like Amazon.

41
 5. Packing Orders

Lastly, items that belong to different shipments are both organized and scanned
before being sent to the pack station. There, the system will recommend box sizes to
Amazon associates and measure out the amount of tape required. Third-party vendor
items are shipped in original boxes, but Amazon works with third-party vendors to
reduce packaging.

Pros and Cons of Amazon Logistics

Just as a coin has two sides, the Amazon Logistics program also has benefits and
drawbacks:

Pros

 The customer orders are delivered faster. In fact, options like same-day
shipping or even 2-hour delivery are also available in some geographic
locations.
 Amazon has added enhanced map tracking to help customers track their
orders. Photo confirmation option is also added to ensure the parcel is
delivered.
 Amazon Logistics also keeps up with the demand during high and seasonal
shipping volumes. This helps to prevent overcrowding at Amazon
warehouses.

42
Cons

 The seller can’t pick the delivery provider to ship his orders. So, if there has
been a negative experience with a certain service provider, it is most likely to
be repeated.
 Any late or mishandled delivery can lead to negative reviews for the seller.
This can impact his sales significantly.
 The sellers don’t have control over Amazon Logistics. Also, the sellers can’t
provide any insights or suggestions for improving the shipping process.
 Amazon is persistent in offering the best e-Commerce services to the
consumers, and with Amazon Logistics, it is creating a more extensive and
denser shipping network.

43
 4 Benefits of Studying Supply Chain and Logistics Management
The business world is quite dynamic. You need to have a comprehensive
understanding of how it operates. It’s essential to learn the process within and
between an organization. Its where supply chain and logistics management comes in.
It’s an exciting course that you can take online. Here are the top fascinating benefits
of studying supply chain and logistics management.

1. Improve the organization’s profitability

There’re numerous job opportunities within supply chain management. Supply chain
management recruitment organizations are searching for individuals who can
contribute to their financial success. They need someone who can analyze cost
efficiencies, maintain proper inventory levels as well as decrease operating expenses
Working as a supply chain manager is beneficial as you get to do what you enjoy.
You contribute to the company’s goal of increasing sales, infiltrating new markers as
well as making a difference. It’s a chance to make the company gain a competitive
advantage as well as increase shareholder value. Engaging in online management
courses is the ideal way to prepare you for the responsibilities that lie ahead.

2. Logistics as well as decision making

Businesses continue to experience significant changes, and the global supply chain
continues to become dated. Its causing businesses to keep struggling when they have
to adapt to manufacturing location changes and using cost-effective techniques

Companies keep looking for individuals who have logistic management training. Its
because these individuals can spot a complication. They then proceed to provide the
best possible solution. It’s nice to study a course that is quite relevant to business
dynamics.

44
 3. Proper system implementation

Studying supply chain and logistics management is a suitable career investment. It

enables you to work around the technology. You stand to benefit from implementing
new technology into a company’s current operations. It is because these technological
advancements minimize cost as well as streamline the processes.
Being a supply chain manager means you will be at the forefront of applying the best
possible technology. You must undertake a course that will enable you to be part of
the movers and shakers of the organization. That being said, if options are what you
need, you can try the Kanban supply chain.

4. Keep up with challenges and trends

When you choose to study supply chain and logistics management, you get to know
how to handle trends in the industry. It’s an excellent opportunity to deal with what
clients want and calculating the company’s books.

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 A. OBJECTIVE OF STUDY

 To study the impact of Logistics on supply chain performance of Amazon

 To study of cost associated with the logistics on supply chain of Amazon

 To study the current scenario of logistics supply chain

 To study the service improvement for Amazon

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 B. Scope of the Study

The study is selected to establish the effectiveness and feasibility process of logistics
management in the organization, it helps the company to learn the process involved
and taken necessary changes if needed. It provides effective information to fill the
gaps in the logistics management to have a better and the smooth control over the
logistics, therefore is great scope in this field as it can help the organization.

 To understand the efficiency of logistics administration frame work

 To analyze the all types of logistics problems of the organization

 To understand and examine the process of logistics

 To understand the importance of the organization hoe it delivers products and

services to its customers

 To analyze the speed and reliability in the distribution of products.

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 CHAPTER 2

REVIEW AND LITERATURE

LTERATURE 1

A RESEARCH STUDY ON LOGISTIC AND E-COMMERCE OF

AMAZON AND FLIP-KART

RESEARCH BY -

 M. Budi Djatmik1
 Rahul B. Chauhan
 Nalbiy Salikhovich Tuguz
 Sameer Ahmed S. Shah

DETAILS : Palarch’s Journal Of Archaeology Of Egypt/Egyptology 17(6). ISSN

1567-214x

Reverse Logistics in India is a perfect platform for the entire Reverse

Logistics ecosystem to come together to search for new partners, new ideas and learn
from the market leaders about their experiences. Mr. Gopalkrishnan V K PJAEE, 17
(6) (2020) 7864 (Member, CII-IL Advisory Council & Vice President, Genpect) on
the theme of the discussion said, “Service organizations are struggling to transform
from cost to profit centers. To enhance the service profitability, the service
organizations need to optimize cost to services, increase customer satisfaction and at
the same time also drive service revenue. “ A research paper on ‘Reverse Logistics’
was released on the occasion and among other dignitaries present were Mr. Sunil
Kumar (Director – SCM, Oracle) and Mr. Nithin Chandra (Principal, A.T.Kearney),
Mr. Bharat Malik (Head-Service, Micromax India and International) and Mr. Sushil

48
Rathi (Vice President, Mahindra Logistics). The Service Solutions was the
Knowledge Partner of the conference

Amazon is the largest internet based company in the United States. Amazon.com
started as an online bookstore, but soon diversified, selling dvds, vhss, cds, video and
mp3downloads/streaming, software, video games, electronics, apparel, furniture,
food, toys, and jewelry. The company also produces consumer electronics notably,
kindle, fire tablets, fire tv and phone and is a major provider of cloud computing
services. Amazon has separate retail websites for united states, united kingdom &
ireland, france, canada, germany, the netherlands, italy, spain, australia, brazil, japan,
china, India and mexico, with sites for sri lanka and south east asian PJAEE, 17 (6)
(2020) 7865 countries coming soon. Amazon also offers international shipping to
certain other countries for some of its products. In the year 2011, it had professed an
intention to launch its websites in poland, and sweden. In early june 2013,
Amazon.com had launched their Amazon India marketplace without any marketing
campaigns. In july, 2013, Amazon had announced to invest $2 billion (rs 12,000
crores) in India to expand business, after its largest Indian rival Flipkart too had
announced to invest$1 billion.

49
 3. RESEARCH METHODOLOGY

A. HYPOTHESIS

A null hypothesis and an alternate hypothesis have been contracted by the

researcher to analyse the referred objective.

They are –

H0: There is no significant impact of logistics supply chain management on

performance of Amazon.

H1: There is a significant impact of logistics supply chain management on

performance of Amazon.

Conclusion

I reject null hypothesis

The study shows the goal of logistics supply chain management is to steer the actors

of one or several supply chains in order to optimize their performance and thus offer

the creation of common value, especially for the customer.

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RESEARCH DESIGN

PROBLEM STATEMENT

In the current era of technology and the internet, the business has become very

complicated and complex. With the advent of globalization, the sector of business and

management has been completely revolutionized and transformed as compared to the

traditional methods of conducting business operations. It has lead to more and more

competition between a big and well-known business organization that operates its

business activities all over the world. In this context, the factor of supply chain

management remains at the center of the topic. It occupies the central position of the

overall regulation of business management because it has a major role in accelerating

the quality and sales rate of the companies. However, poor management of supply

chains has drastic implications on the business organization in terms of customer

dissatisfaction, loss of trust, poor quality of product and services, loss of reputation,

and increased market competition. Therefore, supply chain management has a central

role in achieving a high productivity rate in the competitive market, globally.

Generally, research is considered as an endeavour to arrive at the answer to

intellectual and practical problem through the application of scientific methods to the
knowledge universe. It is movement from known to unknown. Research is essentially

51
a logical and an organized enquiry seeking facts through objective verifiable methods
in order to discover the relation among them and to refer from the board principles or
laws. It is really a method of critical thinking.

Research may be defined as a systematic and objective analysis and recording of

controlled observations that may lead to the development of generalization of
principles or theories resulting in predicting and possibly ultimate control of events.

Methodology is often used in a narrow sense to refer to methods, technology or tools

employed for the collection data as well as it’s processing. This is also used
sometimes to designate data collection to arrive at the conclusion. Infects, it describes
that what should have been done. It provides answers to some of the major questions
while search like what must be done, how it will be employed, how sources of data
will be analysed to arrive at the conclusion. For systematic research scientific
approach is necessary. It is therefore essential to follow systematic methodology to
arrive at a proper conclusion.

 The procedures involved in the concept of research methodology are: -

1) Selection of subject.

2) Selection of project title.

3) Selection of time period.

4) Collection of data.

5) Reliability of data.

6) Reporting.

52
 CHAPTER 3

SOURCES OF DATA

The data collection can be grouped under two types:

 Primary Data

 Secondary Data

Primary data

The primary data are those which are collected afresh and for the first time, and thus
happens to be original in character. But this study is based on secondary data. Thus,
the primary data is not required for this study.

Secondary data

Secondary data are those which have already been collected by others. When it is not
possible to collect data in primary form, the researcher may take the help of
secondary data. They are thus which have already been collected for serving the
objectives other then what the researcher might have in his mind.

The sources of secondary data includes: -

1) Books

2) Websites

3) Journals

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1. BOOKS:

A book is a collection of paper or other material with text, pictures, or both written on
them, bound together along one edge, usually with covers. In library and information
science, a book is calling a monograph to distinguish it from serial periodicals such as
magazines journals or newspapers.

2. WEBSITE:

A website may be the work of an individual, a business or other organization and is

typically dedicated to some particular topic or purpose. Any website can content s
hyperlink to any other website, so the distinction between individual sites, as
perceived by the user, may sometimes to blur.

3. JOURNALS:

A journal may publication issued at stated intervals, such as magazines or the record
of the transactions of a society, are often called journals. In academic use, a journal
refers to a serious, scholarly publication, most often peer-reviewed. The purpose of a
journal is to provide a place for the introduction a scrutiny of new research and often
a forum for the critique of existing research.

54
Analysis

Inventory

Inventory management is a key part of supply chain management the efficiency of

which can spell a difference between success and failure of an organization.
According to an industry report issued by the US Department of Commerce, more
than $522, 000 million was held in inventory by retailers in 2013 (cited in Chaffey
2015). Therefore, the tech giant tries to carry as little inventory as possible. For
example, almost all books sold by the company are not stored in distribution centers
but supplied directly from publishers to buyers, which is an effective method of
minimizing storage costs for slow-moving items (Lau, Nakandala & Shum 2016).

The company uses a multi-tier inventory model, which is an extremely efficient

approach to managing multiple inventory locations. Figure 3 shows the directions of
physical and information flows in the model.

55
It is clear from the picture that the physical flow of products starts from third party
vendors and manufacturers (tier 3), proceeds through wholesaler and partner
distribution centers (tier 2), and ends at Amazon distribution centers. Despite the fact
that such an approach allows the company to preserve a low inventory level, it is
associated with multiple complexities such as demand forecast, redundant safety
stock, and a bullwhip effect, which creates a demand distortion (Liu 2013).

In order to facilitate its replenishment decisions, Amazon utilizes a wide range of

custom optimizing tools that analyze sales history data and increase visibility across
its demand chain (Ivanov, Tsipoulanidis & Schonberger 2017). The company
maintains an inventory of millions of products; therefore, it is a heavy user of both
private and outsourced IT solutions. Currently, the retailer’s central data warehouse
consists of 28 Hewlett Packard servers, each of which contains four CPUs (OPEP
2015).

Given that Amazon works with third-party sellers, in order to ensure that its
reputation is not damaged, the tech giant provides its partner companies with custom

56
inventory management solutions (Grundey 2015). The company’s software helps
third-party sellers to integrate their inventory data from multiple sources, thereby
reducing a rate of error occurrence and increasing customer satisfaction.

It is extremely important since accurate product availability is a key to increased sales

and revenues (Wallace & Xia 2014). Also, the system allows Amazon customers to
offer items even if they are not currently in stock, which is an attractive trend in e-
commerce (McAvoy 2016). A recent retail industry report reveals that more than 63
percent of consumers show a propensity for purchasing at online stores that support
this technology (AGC Partners 2016).

Reverse logistics is a part of Amazon’s inventory management strategy. It has to do

with the fact that from 25 to 50 percent customers return their online purchases
(Manners-Bell 2014). In order to reduce the number of returns, the company urges its
venders to add detailed descriptions of goods they sell as well as to feature high-
resolution pictures of them. Moreover, the e-retailer has strict packaging policies. For
example, those vendors that fail to polybag or properly bubble wrap items are charged
a packaging fee (AMZ Advisers n.d.).

Warehousing

Being the largest e-commerce retailer in the world, Amazon requires effective
warehousing that is capable of supporting multiple delivery options. The size of the
company’s warehousing and fulfillment centers varies greatly and averages around
62, 000 m2 (Manners-Bell 2014). The location of its warehousing/distribution
facilities is an important consideration for Amazon since state incentives and sales
taxes substantially differ across the US. As a result of such differences, the e-retailer
has been forced to strategically locate its facilities “closer to metropolitan areas in

57
which there are larger concentrations of the customer” The attempt to extend its
same-day delivery capacities is a continuation of the strategy to cut warehousing
costs.

Amazon also locates its warehouses close to major transportation hubs used by UPS
and FedEx. These companies rely on rail routes; therefore, Amazon’s major
warehousing centers are located in Tennessee, Virginia, Pennsylvania, and Ohio.
Such warehouses are filled with robotic shelves manufactured by Kiva Systems that
automate many warehousing tasks (Knight 2015). Human-machine collaboration is a
key feature of all warehouses of the company, which reduces the rate of mistake
occurrence and reduces operations costs.

Transportation

In terms of transport, the majority of deliveries are now subcontracted by Amazon.

But their objective is to develop their own service to deliver 50% of orders in
advance.

4 types of delivery exist at Amazon for the moment:

 Drop Shipping (delivery by the supplier, however, this mode is not

highlighted on the Amazon site because the customer experience is not
controlled, i.e. Amazon never sees the products and can never control their
delivery time)
 “Slow Free Delivery” (3/5 days)
 Prime: Delivery in less than 48h (for subscribers – 40€ in France)

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  Prime Now: Delivery in less than 2 hours (under certain conditions, notably
geographical). Prime Now also has only 30,000 references, mainly on so-
called “urgent” products (Beauty, Health, etc.). Once again, the strategy is to
develop these Prime Now Hub throughout metropolitan France.
The problem with these fast deliveries is the cost of transport. While the cost of
storage has remained stable for about ten years, the cost of transport has exploded.

Packaging and Handling

Packaging and handling of items sold by Amazon are automated to a great extent. All
fulfillment centers of the company work in coordinated harmony with robots that
increase the productivity of human labor (Knight 2015). The flow of products through
the centers is controlled by computer systems that track their arrival and dispatch.
Sophisticated scanners operated by the company workers help to recognize the
dimensions of each product and allocate a proper amount of packaging material.
Robotic shelves are even capable of identifying and sorting items destined for
individual customers (Knight 2015). Also, all boxes are weighted before shipment to
avoid mistakes.

In order to make unpacking easier for its customers, the company has launched two
packaging certification initiatives: frustration-free packaging and e-commerce ready
packaging (Amazon 2014). These initiatives help to ensure that Amazon’s vendors
adhere to standardized packaging requirements, thereby improving customer
experience and optimizing the handling and transformation of items. The initiatives
regulate shape, marking, labeling, and barcode requirements of vendors’ packaging
(Amazon 2014).

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Problems and Recommendations

Green Logistics
Despite the fact that the company’s e-commerce-ready packaging program, regulates
the use of recyclable materials and enhances customer experience, Amazon’s efforts
to make its logistics greener are still lacking in both scope and quality. The company
relies on three freight transfer modes: road, rail, and water. Unfortunately, the
environmental impact of these modes is quite damaging. Figure 5 shows the average
CO2 emissions per tonne-kg.

It is evident from the picture that rail freight relates to fewer environmental effects in
terms of CO2 emissions. It means that a recent company’s move to purchase delivery
trucks is not viable from a sustainability perspective. By making its delivery more
environmentally friendly, Amazon will be able to improve its logistical value
proposition, thereby making the company more attractive in the eyes of its customers
and investors. Therefore, the company has to shift its focus from delivery vans to rail
and water modes of transportation.

Swarm intelligence is an IT approach to solving complex problems that can be

effectively utilized to reduce the company’s carbon footprint. The ant colony

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optimization (ACO) is a swarm intelligence algorithm that mimics the behavior of
foraging ants (Zhang et al. 2015). The application of the algorithm can help Amazon
to find the shortest routes to distribution facilities, thereby optimizing its supply chain
design. A chaotic particle swarm optimization (CPSO) is another application of
swarm intelligence that might prove useful in making the company’s transportation
less damaging for the environment. Venkatesan and Kumanan (2012) argue that the
algorithm is capable of streamlining any supply chain network.

Amazon can also make use of SEAMO2, which is an algorithm developed by Harris
and associates. Using the mix of integer programming and aggregated data analysis,
the algorithm helps to “establish the best allocation of customers to serving facilities”
and provides “good quality trade-off solutions” (Harris, Mumford & Naim 2014, p.
19). In addition to making the company’s logistics more sustainable, this solution will
also help to reduce Amazon’s operations costs.

Aerial Package Delivery

Amazon logistics department has recently been under a lot of pressure due to the
implementation of the Amazon Prime program that relies on freelance drivers. A
scoop from the British Broadcasting Corporation (BBC) reveals that the company’s
delivery workers are regularly breaking speed limits in an attempt to stay on schedule
and deliver up to 20 packages per day (Monaghan 2016). Furthermore, the workers
are forced to spend more than 11 hours a day driving, which is against the law
(Monaghan 2016). Also, Amazon drivers in the UK receive much less than the
national minimum wage.

Finally, driven by the desire to cut the costs of the program, Amazon has allowed
independent vendors to ship directly to Prime customers. Kline (2015) argues that this
decision might leave the company “exposed to any shipping problems its partners
may have” . These problems are grounds for a lawsuit that might substantially

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damage the reputation of the company. Also, the relinquishing of control over the
delivery of its products is fraught with refunds.

Several years ago, the e-commerce giant announced its intention to start a drone
delivery program. The project is dubbed Prime Air, and its core idea is the utilization
of unmanned aerial vehicles in logistics. It can be argued that in order to ameliorate
the issues associated with its original Prime service, the e-retailer has to invest
heavily in Prime Air instead of expanding its fleet of cargo vehicles for the last mile
delivery. It will help to improve the logistics operations of the organization by
reducing legal risks and cutting its reliance on FedEx and UPS.

From the financial point of view, the operation is feasible since there would be no
shortage of people willing to receive their packages in under two days. It is projected
that despite its numerous drawbacks and inefficiencies, Amazon Prime memberships
will exceed 25 million this year (Vempati et al. 2017).

Ark Invest, a developer of innovative investment strategies, has outlined a cost-

benefit framework showing that in comparison with ground transportation, aerial
delivery with the help of unmanned vehicles is a much cheaper and effective delivery
option (Keeney 2015). The company’s publication shows that the retailer will be
capable of delivering a package in under 30 minutes while charging its customers
only $1 (Keeney 2015). There is no doubt that this analysis contains numerous gaps
due to a lack of information on Amazon’s demand intervals across different areas.
Furthermore, current regulations of the Federal Aviation Administration (FAA) pose
many restrictions on commercial drone flights. However, if the company is able to get
approval for its operations, it will get access to the untapped market of aerial delivery.

The feasibility of drone delivery has been proven in China where several companies
have started delivering goods through the air (McKinnon 2016). The country’s
experience proves that the likelihood of the emergence of such services in the US is
also predicated on their logistical trade-offs. However, in order to explore the

62
potential of air delivery, Amazon will have to reshape its current stockholding points.
It has to do with the fact that major logistical facilities of the company “serve areas
with radii of hundreds of kilometers, vastly greater than the typical catchment area of
a drone” (McKinnon 2016).

Keeney (2015) claims that the cost of a major overhaul of the company’s
infrastructure will approach $50 million. In addition to retrofitting existing
warehouses, Amazon will have to hire additional workers ($300 million), acquire a
fleet of small octocopters ($80 million), and spend up to $350 million per year in
operating expenses (Keeney 2015). However, given that numerous researchers
confirm the feasibility of aerial delivery operations, Amazon should be working on
the development of a drone fleet rather than expanding the number of its trucks.

Objective of research

The fundamental target is to discover the viability of strategic administration and

furthermore to discover how the representatives do their function in Future supply
chain.

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Questionnaire Technique

This is an imperative and extremely prominent technique for information

accumulation. This is embraced by people, associations and Government. In this
strategy a poll is arranged and sent to respondents. The poll when sent to the
respondents, a demand is made that the inquiries ought to be addressed and returned.
The achievement of this technique to a great extent relies upon the correct drafting of
inquiries. Drafting survey required a lot of aptitude and experience.

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 CHAPTER 4

Data Analysis and Interpretation

The information gathered through the overview are down on investigate about the
plaintiffs' assumptions around various specifics requested in review. The data
accumulated thru the review is refreshed into table plus the data is being interpreted.
The inquiry form for the overview contains nineteen questions including choices. The
subjects secured is decisions of working zone, representatives’ size of every
organization, cash turning zone in task, benefit region, advantage offering, definitive
adequacy, stock, zone, thing accessibility and consumer loyalty. Study of information
is exceptionally capable and skilful which ought to be done just by the researcher
himself or under his immediate supervision. It is through careful study that the hidden
features of the information are uncovered and genuine speculations are made.
Statistical data never represent themselves. Only by methods of analyzing,
investigating and interpreting the survey information, their striking characteristics,
between relationship, cause and association are brought out. Study of information
implies basic examination of the information for understanding the attributes of the
object under examination and for deciding the patterns of relationship among the
factors identifying with it utilizing both quantitative and qualitative methods.

65
  Amazon is one of the best companies in the nation-

OPTIONS RESPONSE
STRONGLY DISAGREE 0
DISAGREE 10
NEUTRAL 10
AGREE 80
STRONGLY AGREE 100
TOTAL 200

5%
5%

STRONGLY DISAGREE
DISAGREE
50% NEUTRAL
AGREE
40%
STRONGLY AGREE

INTERPRETATION

Amongst 200 respondents, 50% of total respondents think that Amazon is one of the best
company in the nation. 5% respondents totally disagree with the given statement. Also
40% agree with it and 5% are neutral about it.

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  Amazon Ltd. is an Alternative to Big Brands Like Flipkart Ltd. ,Alibaba, Wal-
Mart Etc –

OPTIONS RESPONSE
STRONGLY DISAGREE 0
DISAGREE 10
NEUTRAL 10
AGREE 50
STRONGLY AGREE 130
TOTAL 200

5%
5%

STRONGLY DISAGREE
DISAGREE
25%
NEUTRAL
AGREE
65% STRONGLY AGREE

INTERPRETATION

Amongst 200 respondents, 65% of total respondents think that Amazon is an Alternative
to Big Brands Like Flipkart Ltd., Alibaba, Wal-Mart etc. 5% respondents totally disagree
with the given statement. Also 25% agree with it and 5% are neutral about it.

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  Amazon provides consumers and retailers best quality goods and services

OPTIONS RESPONSE
STRONGLY DISAGREE 25
DISAGREE 25
NEUTRAL 30
AGREE 40
STRONGLY AGREE 80
TOTAL 200

12%

STRONGLY DISAGREE
40% 13%
DISAGREE
NEUTRAL
AGREE
15%
STRONGLY AGREE

20%

INTERPRETATION

Amongst 200 respondents, 40% of total respondents think that Amazon provides
consumers and retailers best quality goods and services. 13% respondents totally
disagree with the given statement. Also 20% agree with it and 15% are neutral about
it.

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  Amazon supply chain is one of the ideal network of supply chain-

OPTIONS RESPONSE
STRONGLY DISAGREE 20
DISAGREE 20
NEUTRAL 10
AGREE 60
STRONGLY AGREE 90
TOTAL 200

10%

10% STRONGLY DISAGREE

45% DISAGREE
5%
NEUTRAL
AGREE
STRONGLY AGREE
30%

INTERPRETATION

Amongst 200 respondents, 45% of total respondents think that Amazon supply chain
is one of the ideal network of supply chain. 10% respondents totally disagree with the
given statement. Also 30% agree with it and 5% are neutral about it.

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  Were the products you ordered and the products you received the same –

OPTIONS RESPONSE
YES 140
NO 38
NEVER 22
TOTAL 200

11%

19% YES
NO
NEVER

70%

INTERPRETATION

Amongst 200 respondents, 70% of total respondents are favour in this statement that
Amazon products you ordered and the products you received the same. 19% are not
favour in this statement.

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  Is the product delivery time same as that shown in the site –

OPTIONS RESPONSE
YES 180
NO 15
NEVER 5
TOTAL 200

YES
45%
NO
50%
NEVER
TOTAL

4%

1%

INTERPRETATION

Amongst 200 respondents, 90% of total respondents are favour in this statement that
Amazon product delivery time same as that shown in the site. 7% are not favour in
this statement

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  Are you satisfied with the ‘return the product’ procedure of Amazon –

OPTIONS RESPONSE
YES 167
NO 15
NEVER 18
TOTAL 200

9%
8%

YES
NO
NEVER

83%

INTERPRETATION

Amongst 200 respondents, 80% of total respondents are favour in this statement that
are you satisfied with the ‘return the product’ procedure of Amazon. 8% are not
favour in this statement

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  Are you satisfied with the customer care service of AMAZON –

OPTIONS RESPONSE
YES 150
NO 20
NEVER 30
TOTAL 200

RESPONSE

15%

10% YES
NO
NEVER

75%

INTERPRETATION

Amongst 200 respondents, 75% of total respondents are favour in this statement that
are you satisfied with the customer care service of AMAZON, 10% are not favour in
this statement

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Findings

 There is good rapport between management and employees and they always
work to maintain the same.
 Amazon deals with excellence and use standardized products so that it
increases the company’s profile and reputation.
 The activities and operations of 3PL logistics provider should be given
preference and compete with them.
 Operations in the organisation is well occupied with advanced technologies
 Service proposal currently has decent impact through additional organisations.
The focused ranges consist Cargo, Cross docking, also value addition through
proper methods.
 Strategic decisions are mostly followed by organisation are quite tough to
implement.
 Organisation profit and standards are good compared to other organisation.
 Cargo and cost adding is well-thought-out be the best service which the
organisation provides.
 Management is always strong to appoint efficient and skilled persons.

74
 CHAPETER 5.

Suggestion

 Company must provide orientation and training for the employees in order to
know whereabouts of the firm.
 It is perceived that Customer Relationship Management (CRM) at Amazon is
very good. They need to work on discounts and price cuts for an increase in
the number of customers also to increase customer relationship efficiency.
 The table speaks out that the effectiveness of logistics is huge. Amazon need
to work on inventory storage.
 From the pie graph we see that the level of customer satisfaction is high. They
need to improve on the consumer engagement methods.
 Employees involvement should be increased in the decision-making process.
 Tracking and live tracing of the goods for both the company and the client
order must be further enhanced.
 Delivery of goods can be further paced.

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Conclusion
We have shown that the goal of supply chain management is to steer the actors of one
or several supply chains in order to optimize their performance and thus offer the
creation of common value, especially for the customer. An evaluation of supply chain
performance can only be carried out with prior identification of value creation for the
customer, the company itself and all actors across the chain. Although all supply
chains have great disparity between their actors, often related to different maturity
levels, objectives and constraints, seeking to improve performance across the whole
supply chain is essential. The value creation approach is a key element in achieving a
high-quality supply chain for the company and the entirety of the chain. Highlighting
this element with value creation attributes is fundamental for any manager looking to
direct the various actors in a supply chain. Performance can be measured by using
indicators related to value creation attributes, which can then establish a company’s
maturity or performance level. Implementing processes within an organization and
evaluating their performance using models focused on value creation can help to
guide the company in identifying those practices that are closely related to their
performance.

 There are many hidden logistics costs that can eat up any business’s margin. If
you’re looking to keep logistics costs down and want to hand off time-
consuming tasks like order fulfillment and shipping, check out Ship Bob.

 With a network of fulfillment centers across the United States, technology that
integrates with the leading ecommerce stores and platforms, discounted
shipping rates, and a variety of services to meet your needs, Ship Bob can not
only lower logistics costs but help you drive revenue.

 Amazon.com uses Business to customer Model for its better growth. Amazon
mainly focuses on the customer satisfaction by providing the various ways to
ensure that like as personalization, user ratings and reviews, minimum
shipping charge which act as the key ingredients for success of amazon.com.
But still Amazon have to do some change on its system like as Global
Expansion, Integrating on New Technologies, Innovation of New products.

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 CHAPETER 6.

BIBLIOGRAPHY

a. Logistics and Supply Chain Management – Written by Donald Bowers ox.

b. BUSINESS LOGISTICS - BARDI
c. Abdinnour-Helm, S. (1999), ‘Network Design in Supply Chain
Management’, International Journal of Agile Management System
d. Agarwal, A., and R. Shankar (2003), ‘Online Trust Building in E-enabled
Supply Chain’, Supply Chain Management: An International Journal
e. Alvarado, U., and H. Kotzab (2001), ‘Supply Chain Management—The
Integration of Logistics in Marketing’, Industrial Marketing Management

WEBSITES:

1. www.google.com

2. www.logisticsmanagement.com

3. www.Wikipedia.com

4. www.safexpress.com

5. www.logisticsworld.com

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