Report :A study of Planning activities at Amazon Logistics

Table of Contents
Executive Summary...................................................................................................................................................................... 4
Introduction................................................................................................................................................................................... 5
Supply Chain Challenges.............................................................................................................................................................. 6
Project Purpose and Objectives.................................................................................................................................................. 7
Purpose........................................................................................................................................................................................... 7
Objectives.......................................................................................................................................................................................7
Deliverables & Scope.................................................................................................................................................................... 8
Methodology.................................................................................................................................................................................. 8
Project Work Plan........................................................................................................................................................................ 10
Issues and analysis..................................................................................................................................................................... 11
Increased shipping cost............................................................................................................................................................. 11
Higher Dependency on other Logistics Companies............................................................................................................... 12
Disruption in last-mile delivery................................................................................................................................................. 12
Low focus on Amazon online retail store as compared to Amazon Web Services............................................................ 13
Loss of supplies due to Covid-19.............................................................................................................................................. 14
Improvement Opportunities and Analysis............................................................................................................................... 15
Flourishing online grocery sales............................................................................................................................................... 15
Amazon Prime Air delivery service........................................................................................................................................... 15
Amazon can expand Whole Food stores and turn into multitasking stores....................................................................... 16
Recommended Solutions and Strategies with implementation plan................................................................................... 18
Short-Term solution – Provide Pick-up location to the customer........................................................................................ 18
Medium-Term Solutions............................................................................................................................................................. 19
Improve supplier selection process to improve the authenticity of products....................................................................19
Improve the efficiency of last-mile delivery............................................................................................................................ 19
Long-Term strategy- implement JioMart business strategy................................................................................................. 20
Sustainability............................................................................................................................................................................... 21
Financial value added................................................................................................................................................................. 22
Appendices................................................................................................................................................................................... 23
References................................................................................................................................................................................... 39

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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)
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
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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 Introduction

"Amazon.com Inc. was founded by Jeff Bezos in July 1994 and it’s headquartered is
located in Washington. The company is known for its online shopping service in the world along
with other services." (Duffy, 2018) "Initially, the company was launched to set to become an
online market for books but expanded its product line to electronics, households, software,
furniture, and lots more. In 2018 Amazon surpassed Microsoft as the most valuable public
company in the world." (Amazon, Who we are, 2020)
"Amazon products and services are not just limited to e-commerce but it has also
started to produce its products. Additionally, Amazon web services contribute a major role in
the company’s growth and success.” (Amazon, Who we are, 2020) The founder of the company
was declared as the world’s richest man in 2018. Amazon has crossed many horizons and since
the company has been founded it has added 30 product categories in its bag from furniture to
electronics." (Cuccinello, 2019) "Amazon's primary products and services are Amazon.com,
Amazon Fresh, Amazon Prime Video, Amazon Music, Fire Tablets, Fire TV, Echo and Alexa,
Kindle, Amazon Flex, and Amazon Web Services." (Amazon, Who we are, 2020) "Amazon Web
Services provides on-demand cloud computing services to individuals, companies, and
governments." (Amazon, Open Data on AWS, 2020) “Apart from this, the company has built
many physical store networks, delivery stations, fresh food distribution networks, fulfillment
centers, and much more.” (Duffy, 2018)
"The company has also invested and started new operations in the supply chain section
and named the venture as 'Global Supply Chain by Amazon' which has feature amazon as a
global logistic provider. It aims to automate and revolutionized the system of supply chain and
eradicate with document handling, freight booking, etc. Therefore, the middleman is no longer
required and the suppliers can directly book with amazon which will have better transparency
and get competitive pricing over others." (Duffy, 2018)
.
Supply Chain Challenges

“The difficulty with E-commerce is to implement a fail-safe web-based online

communication system with customers. They want to have real-time visibility over their orders –
track numbers are not enough. Expectations are huge, deliveries must be exactly as per
specification, on-time and, complete. According to a recent Forrester Research Inc. report,
consumers own an average of 4.5 digital devices, and they expect a smooth, consistent shopping

experience regardless of what device they’re using. E-retailers may be understaffing their
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 customer service teams, and that can lead to missteps and frustration.” (SCCG, 2020)

“Lack of expertise in e-commerce and the cost of technology tools are creating many
companies to consider outsourcing accomplishment to third-party service providers (3PLs).
Specialized 3PLs focused on e-commerce are more likely to often have material handling tools,
systems, and expertise to process online orders more efficiently. Each has its own strength based
on its delivery network and hub locations. The main issue is a contract with one dedicated logistics
company or uses two or more? There are some risks in both options; having multiple delivery
vendors may increase costs due to idle time but it means there is a backup service. According to
the Forrester report “retailers, master logistics will command a market advantage through faster,
more reliable customer delivery experiences”. (SCCG, 2020)
.

Project Purpose and Objectives

Purpose
Objectives
 Discover solutions for issues which obstructs the growth of Amazon’s logistics services.
 Devise strategies and solutions for the sustainability of the supply chain.
 Learn the utilization of various tools and procedures that aid supply chain
 Evaluate insufficiencies regarding diverse Amazon’s freight forwarding service.
 Develop and implement every recommended action related to supply chain disruption.

Deliverables & Scope

The project scope and deliverables have described in appendix 1. The project scope
statement involves the determination of the end goal by considering the project deliverables,
functions, and tasks. Here, we have determined tasks by considering them as in-scope and out-
of-scope.

In-Scope:

 outcomes of every challenge face by Amazon

 Suggest the improvements for Amazon's supply chain and Do growth analysis

Out-of-scope:

 Amazon's research and development in terms of marketing and promotions

 Statements and news regarding upcoming products and services.

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Project deliverables:

The key project deliverables are beginning from identifying the issues related to
Amazon's supply chain to the submission of the reports. In between these major deliverables,
discussion about history and growth, opportunities analysis, and solutions found have
discussed. The description of the details deliverables with described tasks can be found in
appendix 1.

Methodology

The six-sigma methodology is a measurement-based strategy that looks at process

improvement through defined projects. This project has approached to solve the supply chain
problem face by Amazon with the help of the DMAIC process. DMAIC Process is the problem-
solving approach that drives Lean Six Sigma. However, control process has not analysed here.
It features five Phases:

 Define: Design goals that are consistent with customer demands and the enterprise
strategy.
 Measure: Identify characteristics that are critical to quality, measure product capabilities,
process capability, and measure risks.
 Analyze: Analyze stage help to develop and design alternatives
 Improve: The implementation plan is drawn up of how the improved process might
introduced.
Additionally, by research and assessing every possible solution as well as findings we will
come up with the different tools which are indicated below.
Tools to be used:
o SWOT Analysis
it is a compilation of the company’s strengths, weaknesses, opportunities, and threats.
The primary objective of a SWOT analysis is to help organizations develop a full awareness of
all the factors involved in making a business decision.
o STEEPLE Analysis
STEEPLE analysis is a strategic management method that is used to examine the
external factors affecting the growth and performance of an organization.
o Product Life Cycle

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 It is a strategy that offers support to service organizations in enabling them to realize
their gross revenue potential.
o Cause & Effect Diagram and C/N/X Analysis
The tool calls for the collection of historical data, analysis of data and then
systematically eliminating causes of defects by using various problem-solving techniques.

Project Work Plan

Project Work Plan is a better way to display primary deliverables. It constitutes the
deliverables from the beginning of the report to the submission of the report. Additionally, the
deliverables have put with the Gantt Chart in appendix 2. Also, the primary and most important
deliverables are listed as follows.

 Identify and state purpose and objectives with the scope of the project.
 Identification of issues and opportunities by doing various analyses.
 Evaluate solution and strategies from identified issues & opportunity
 Draft report and presentation submission and Final submission.

Issues and analysis

1. Increased shipping costs

2. Higher dependency on other Logistics Companies
3. Disruption in last-mile delivery
4. Low focus on Amazon online retail store as compared to Amazon Web Services
5. Loss of supplies due to Covid-19 pandemic

Increased shipping cost

“Amazon Prime established in 2007, which provides a one-day delivery membership
program to Amazon Prime subscribers.” (Staff, 2020) In addition to increased shipping costs,
prime membership has a direct association with it. “In 2018, Amazon prime subscribers reached
more than 100 million that brought high demand for products to ship.” (Duffy, 2018)

Various causes affect the increased shipping cost,

 “Implemented Business-To-Business prime, free shipping on eligible orders for businesses
that creates sudden demand. Therefore, Amazon needs to request 3rd party logistics
providers to ship their products.” (Website, 2020)
 “Every product has different dimensions. Therefore, while shipping in containers it is very
difficult to manage space which ultimately affects transportation costs.” (Donnelly, 2020)
Goods handled by Amazon are ship through the distribution centers that include the cost to
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manage the distribution centers and pay wages to employees.

Impact Analysis

“Amazon’s shipping cost raised to a whopping $8.1 billion from $6 billion in the year-ago
quarter. An increase in shipping cost could reduce the marginal benefits and give short term
bearish opinion towards Amazon stock.” (Chhatwal, 2019)

“Shipping costs are higher expense contributors for Amazon, but the reasons behind high costs are also a
positive impact on the company. Amazon built various fulfillment centers inthe past years. It is now
watching to develop its delivery service by decreasing the dependencyon UPS, FedEx, and other shipping
partners. The subscription incomes have been rising quickly for the past few quarters. A good delivery
system is key to achieving and holding more subscribers. With the launch of one-day delivery, Amazon
should see another hike in sales.subscription revenues as the importance of Prime membership progress.
This should be a big boost for Amazon.” (Chhatwal, 2019)

The cause and effect analysis with C/N/X analysis can be seen in appendix 3.

Additionally, 5-Why analysis in terms of product return is done that can be seen in appendix 4.

Higher Dependency on other Logistics Companies

“Amazon is dependent on other logistics providers such as UPS and FedEx.” (Richter,
2017) “Amazon prime deliveries can not keep up with the demand for shipping in holidays.”
(Herrick, 2019) "Additionally, UPS or FedEx was unable to deliver the parcel to the customers
on Amazon’s required period. Therefore, Amazon lost millions due to delivery issues and
refunds.” (Duffy, 2018)and Amazon failed in customer satisfaction during the busy seasons.

“Amazon encroaching to 3rd party logistics providers” (Duffy, 2018) that may affect the sharing
portion of margin.

Impact Analysis

“The Amazon has been reliant on third-party logistics’ service providers for ensuring on-
time delivery to its users. Dependency on the third-party service providers has had its influence
on Amazon’s market in terms of delivery costs, the timing of delivery, and customer satisfaction.
The shipping costs of Amazon were $11.5 billion, $21.7 billion, and $30 billion in 2015, 2017,
and 2018, respectively. The constant rise in shipping costs has acted in Amazon trying to
control the end-to-end processes for the delivery of its goods.” (M, 2020) PLC analysis is
explained here and the analyzed picture can be seen in Appendix 5.

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Disruption in last-mile delivery
“Last-mile delivery explains the delivery to the customers within a day.” (Duffy, 2018)
Amazon has been struggling to find a solution for last-mile delivery utilization that includes,
utilized cost and on-time delivery. Amazon’s concept of prime membership disturbs the shipping
patten. “The only available alternative for Amazon is 3rd party services. Though they are
providing on-time delivery but take a large portion of margin from the overall profit.” (AUTHOR,

2020) Period of delivery of product from distribution center to customer determines customer
satisfaction as well as the intensity of product return.
The fishbone diagram is explained factors affecting last-mile deliveries which can be found in
the appendix 6.
Additionally, according to C/N/X analysis, there are various noises that are identified. As we
cannot remove or solved these noises, it is better to focus on experimental and constant
factors. The noises are environment conditions including, weather conditions, riskyroad,
environmental aspects, etc.

Impact Analysis

“If Amazon would not able to deliver the product on time then, it may be losing its business
because rivals such as eBay already figure it out the same day last-mile delivery option by eBay
express” (Khan, 2017)

Low focus on Amazon online retail store as compared to Amazon Web Services
“Amazon creates revenue from its Prime membership and Amazon web services. It
would be difficult for Amazon to keeping up its E-commerce growth because its rivals such as
Walmart and E-bay are aggressively entered in E-commerce business.” (Gaus, 2019) Though
Amazon is focusing on the whole e-commerce sector, the primary focus has not established
correctly. Currently, "Amazon is focusing on the development of the store with no check-out
required." (Amazon, About Amazon Go and Amazon Go Grocery, 2020) Amazon is focusing on
automation and advances retail technologies to compete with large stores like Walmart.
Moreover, “Amazon Web Services is primary source of income to Amazon that gets primary
focus because of having number of clients for cloud support. Among many customers,
Coursera, McDonald’s, Honeywell.” (Containers Customer Stories, 2020) “Amazon is more
focusing to provide the most excellent service to these clients rather than concentrating on
logistics development.” (Cuccinello, 2019) the SWOT analysis to evaluate and find an
association with a specific issue – ‘Bidirectional growth’ is set out in appendix 7.

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Impact Analysis

“E-commerce is taking a bigger share of retail sales — about 13% last year — but
Amazon continues to take a larger cut of that share for itself, accounting for almost 42% of U.S.

online sales last year, according to data discussed by Internet Retailer Editor-at-large Don Davis
Wednesday at IRCE.” (O'Shea, 2018)

If Amazon would not be focusing on its specific categories in e-commerce such as

fashion and more then it would be difficult to take more market shares again because rivals like
eBay and Walmart aggressively focus on specific sectors in e-commerce.

Loss of supplies due to Covid-19

“COVID-19 is the most important issue for every supplier all over the world because of a
shortage of supplies. Also, supplies from China stopped fulfilling products that create huge
demand for supplies.” (Matt Leonard, 2020) Currently, as a pandemic is not affecting every
logistics providers, few manufacturing facilities are yet to open. “Amazon has applied specific
restrictions on its items and quantity of purchase. i.e. in India, delivery of the non-essential
product had stopped in the beginning." (Emont, 2020) “A Shipping delay is the current issue as
supplies got disrupted. The reason for this late delivery of the product is because of the high
demand for online shopping with having fewer resources to fulfill it” (Paler, 2020) The issue
analysis is listed in the appendix 8.

Impact Analysis

“The change sent Amazon sellers many already facing other confusions caused by
Covid-19 scrambling to find new approaches to get their products to consumers. Freight times
have begun growing, from as little as 24 hours to weeks or more, according to a precipitous
decline in sales. People are not going to want to order items when they won’t ship for a
month.” (Thompson, 2020).

Improvement Opportunities and Analysis

Flourishing online grocery sales
"The impact of COVID – 19 has created an opportunity for Amazon and increased its
sales in the online grocery sector, reaching three times the figures gained last year. Also,
Amazon has more than 500 grocery stores, and it’s been increasing the grocery delivery
capability by nearly 160% with increased pick-up location during the second quarter. This
situation gives Amazon a chance to expand the online grocery sector. To add on, this immense
growth provides an opportunity to widen the business in the sector of fresh vegetables and

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fruits." (Brown, 2020)

Impact Analysis

The growth of Amazon online grocery gives freedom to every customer who wants to
shop groceries from home. Additionally, the “fast-forwarding logistics service plan for the United
Kingdom will increase customer satisfaction because of quick delivery. It will be benefited to
business as well as freight forwards that they will get the opportunity to expand their business.”
(Smithers, 2020)

“Amazon growth of online supermarket is changing the way to do grocery shopping.

Especially for United Kingdom, Amazon has plan to invest $1.5tr to capitalize the grocery
delivery to ship every shopped grocery to the doorsteps of customer. Other than that, Amazon
is focusing on specifically logistics and fast delivery. There is different type of shipping methods
with respect to hours to deliver. For instance, the cost for delivery for one-hour delivery and
two-hours delivery is £3.99($6.92) and £6.99($12.13) for order under £40($69.40).” (Smithers,
2020)Analyses of the opportunity is explained with Product Life Cycle analysis. It is explained
below and PLC analysis is explained in appendix 9.

Amazon Prime Air delivery service

"Amazon considers as an innovative company because of the latest innovation Amazon
is focusing on." (Amazon, About services, 2020) "Prime air delivery is an excellent example of
innovations. This Prime Air delivery is a shipping service made by drone delivery. Prime air is a
future delivery system that focuses on package delivery more safely with minimum time."
(Amazon Prime Air, 2020) This service reduces the intensity of late delivery faced by road
transport delivery service. Road transport has flaws in facing traffic and the worst road

conditions that are not in the case of drone delivery. "Amazon implemented drone delivery in
2016 in England by focusing delivery within 30 minutes from Prime Air fulfillment center to the
customer's desired location. Especially for drone delivery, Amazon has a Prime Air fulfillment
center which is focusing on the proper packaging of products." (Amazon Prime Air, 2020)

"Amazon develops drone that is automated and works fully automatic. There is no
requirement of a drone operator that is an immense success for Amazon Prime Air. These
drones are self-driving and only need the location of delivery. The inbuilt Global Positioning
System (GPS) and self simulation provide a location-based service to locate the customer house
and deliver the package." (Amazon Prime Air, 2020)

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Impact Analysis

Amazon Prime Air is important in the perspective of future growth of fast delivery as well
as improve last-mile delivery. Also, Amazon drones have limitations to flown into no-GPS
location. Currently, "the done service is developing in the direction of deep learning and all-
onboard computation. This technology helps to operate drones into GPS-denied areas."
(Philippe Martin Wyder, 2019).The development of drones in the direction of delivery in the
countryside without havingGPS is an advantage or Amazon. To add on, "drones are self-driven
having an accuracy of driving through the small area with higher precision than before."
(Philippe Martin Wyder, 2019)
Amazon can expand Whole Food stores and turn into multitasking stores
"Amazon acquired Whole Foods company for $13.7 billion to connect two leading brands
as both companies are a customer-focused brand." (Banker, 2019) "Partnering with Whole
Foods will allow Amazon to expand its multichannel contribution and further enhance the
customer experience. Currently, Amazon is now facing the challenge of seasonality: 33% of
annual sales are made in the fourth quarter of the calendar year." Invalid source specified.
"To stock up and maintain inventory, Prime Whole Food app does the perfect job. Additionally,
there are different two-color labels to identify the difference in groceries. i.e. telltale blue and
yellow stickers to identify between organic grocery and grass-fed beef." (Banker, 2019) These
systems are helping Amazon to grow food stores faster and deliver products accurately.
Moreover, “coloration of Prime and Wholefood provides quality food to customers on time. This
allows getting a 10 percent discount to every Amazon Prime member. To add on, Prime
customers get selected free delivery in selected ZIP codes.” (Foods, 2020)
Impact Analysis
“Amazon and Whole Foods collaboration attracts new customers by omnichannel
strategy. This brings more customers than usual Brick-And-Mortar strategy. Usually, Walmart
and other online stores use the Brick-And-Mortar strategy which is focusing on sending
groceries to customers. Whereas, Amazon uses an omnichannel strategy which is focused on
various channels. This includes delivery to various stores, customers as well as the collective
retail market.” (Stanca, 2018) This creates an opportunity for Amazon to have a strong
customer base with on-time delivery.
Whole Foods and Amazon Prime service open the doors of successful logistics as well as
customer satisfaction. They can provide better delivery to every customer including retailers,
stores, and customers because of the implementation of omnichannel. Logistics will be
improved as focused on quick delivery for everyone with a discounted price.” (Stanca, 2018)
(Foods, 2020)
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Recommended Solutions and Strategies with implementation plan

Short-Term solution – Provide Pick-up location to the customer

Possible short-term/ immediate solutions to increased shipping costs are to offer
customers to pick up their items from a designated pick up point or to impose delivery fees.
Imposing delivery fees on items will help to offset high delivery charges. If the customer agrees
to pick up the item, they can be offered a discount. “This discount can motivate customers to
utilize this option and they can use those savings towards purchasing more items.”
(M.Carpente, 2008)

The impact of these solutions includes saving money on the company’s shipping
charges, which will ultimately lead to increased profit. and reduces the dependency on third-
party logistics companies. Furthermore, by having a central pickup point for customers, amazon
is reducing its transportation cost as there is no longer need to go to each household for
delivery. The fulfillment center has to dispatch the products to only one location, reducing the
chance of sending the package to an incorrect address. The third-party vendors can also send
the packages directly to the pick-up point rather than to the fulfillment centers. This will
increase the manpower efficiency as well as productivity at the fulfillment center.

This solution is relatively easy to implement because imposing delivery fees would only
require minimal software changes and does not have any infrastructure requirements. However,
creating a central pickup point would require route changes and bringing third-party vendors
onboard. These pick-up points may be formed by partnerships with local businesses or by
building a pick-up point.

From a customer point of view, these changes may be seen as negative because it is
now costing customers more money to purchase items from Amazon and it may be
inconvenient for the customer to go to the pick-up locations. Furthermore, the creation of the
pick-up points has large initial costs for the company. It may also be difficult to bring third-party
vendors onboard. The negative impact of implementing this solution is the difficulty of achieving
the anticipated benefits within expected time frames. The implementation plan with scheduled
implementation and the responsible individual is posted in appendix 9.

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Medium-Term Solutions:
Improve supplier selection process to improve the authenticity of products
The process to satisfy customers by proving authentic products has a direct link with the
Supplier selection process. “Quality of product as well as out of stock inventory.”
(ecommercetips.org, 2020) To have a better supplier selection process, Amazon should set
proper criteria to select a supplier. Every supplier has an individual price for the product.
Moreover, the “supplier selection process needs to improve in terms of quality of product and
inventory provided. The purpose should be to satisfy the customer by fulfilling their demand
with authenticated products to build a long-term relationship.” (Garfamy, 2018) Though
Amazon is using different verification processes by the use of machine learning, sellers provide
non-reliable and unauthentic products.
The solution to improved supplier selection process brings numerous benefits from
customer satisfaction to reduced frequency of returns. The potential advantages could be,
 Increases customer satisfaction
 Reduce cost related to product returns
 Reverse logistics could be improved if fewer products have returned
 equal price for the same products sold by the different supplier could be achieved
Contradictory to the positive effect of improved supplier selection process, there are
negative effects that are also present. Period to select the best supplier could take more time
than the usual process to select suppliers. Also, the latest updates and changes in policies make
the process lengthy. To implement the selection process of the supplier, a responsible person as
well as a period to implement is necessary. However, considering every detail that helps to
implement the plan has created and have put into appendix 10.

Improve the efficiency of last-mile delivery

In Amazon, once a package left one of Amazon's huge warehouses, the organization
had limited control over the status of that last mile of service.

“Amazon carried things into its hands regarding two years ago and invested massively
and should more in future in improving its distribution flows to ensure greater position control
right to consumers' doorsteps. Those investments, involving electric-powered delivery vans,
drones, sidewalk robots, and partnerships with third parties, have met with varying levels of

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progress. Amazon should Achieve its medium-term goals by aggressively implementing its
strategies such as smart tools, electric equipment.” (Scannell, 2020)

“The demand for Amazon delivery services from its e-commerce site and Whole Foods
has skyrocketed during the COVID-19 pandemic as users explore methods to get goods without
going to their houses. It created more demand for last-mile delivery and Amazon get the
chance to implement its medium terms strategies earlier.” (Scannell, 2020)

While some distribution systems are too new to give comments on, what's certain is that
Amazon's delivery service policy is sure to have ripple outcomes across the supply chain and
transport industry. Amazon could focus on customers' doorsteps delivery as a medium-term
goal to achieve success in the long-term. The implementation plan is created for the medium-
term which can be seen in appendix 11.

“However, Amazon needs to invest billions in the functions of doorstep delivery. Amazon
already invested 31 billion North America and planning to invest more by the year 2022.
Amazon's investment to sustain its role in the last mile delivery market, however, is converting
more expensive. In its third-quarter earnings report the company said it invested $1.5 billion in
its one-day transportation lead, which company officials said they hope will replace the two-day
Amazon Prime membership business. The $1.5 billion figure is twice what the company spent in
last year's second quarter. Then, in its fourth-quarter call, Amazon said it spent another $1.5
billion on its one-day delivery initiative with plans to spend another $1 billion in this year's first
quarter on the program. The cost of giving last-mile services considered for 41% of the overall
supply chain expenses, which is twice any different section including warehousing and
parceling, according to the record.” (Scannell, 2020)

Long-Term strategy- implement JioMart business strategy

“Amazon is primarily focusing on delivering the product from warehouse to customer. This
business model is most suitable for standard shipping. People who are not using Amazon Prime
are suitable customer segments for Amazon's traditional delivery service.” (Aazon, 2020), the
Amazon Prime customer is paying for two-day delivery which should be fulfilled. Therefore,
improvement in the business model or adding a new strategy is essential for customer
satisfaction as well as reducing the complexity of last-mile delivery.

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“JioMart owned by Reliance plays a vital role to improve the efficiency of last-mile delivery.
JioMart is a virtual store that gives the experience of convenience shopping by selling to have a
wide range of products from fresh groceries to pet food to household cleaning.” (Reliance, 2020)
“Similar to Reliance’s JioMart, Amazon should implement the strategy of shipping products from
neighborhood shopping stores to house.” (Digital, 2020) Amazon should focus onneighborhood
stores, wholesale markets as well as specialty stores instead of big retailers.

The model should implement as a separate service or Amazon Prime specialty service. If
Amazon segregates various membership according to the period of delivery, it would be
benefited to them financially. For instance, except Amazon's standard shipping service and
Amazon Prime, quick delivery membership provides an additional financial profit. The detailed
implementation plan is posted in appendix 12.

Sustainability
"Amazon is developing its supply chain network to fulfill its customer’s needs and deliver
the parcels within the desired duration. Additionally, Amazon is also focusing on sustainable
business for its customers and the planet by reducing carbon emissions by 2040. To improve
sustainability, the affirmative development of Amazon Prime Air provides a positive impact."
(Amazon, Amazon Sustainability, 2020) (Philippe Martin Wyder, 2019) “In addition to it, these
gadgets help to achieve the goal of the fastest delivery. For example, Drones are part of the
strategies which will work on electric power and video recording of the delivery also possible by
a camera. Amazon is planning to purchase a million electric vehicles which can be a
revolutionary step for Amazon.” (Philippe Martin Wyder, 2019)

Secondarily, the social pillar of the sustainability of the Amazon has explained with
improvement needed. “During the COVID-19 emergency, Amazon added 175,000 new jobs to
support the customer's demand for primary commodities. Also, Amazon is helping with the
World Health Organization, providing excellent cloud technologies and technical expertise to
trace the virus, understand the disorder, and strongly hold its range." (Amazon, Amazon
Sustainability, 2020) These situations should be implemented to create an opportunity to collect
data and implement a new concept to develop logistics for the future. The STEEPLE analysis is
posted into appendix 13.

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Financial value added
"Shipping costs which include sortation, and delivery centers and transportation costs
were $27.7 billion and $ 37.9 billion in 2018 and 2019" (Amazon, Annual Report, 2019) "As the
exact break down of the transportation costs is not available from the Amazon financial results,
we can assume considering the high costs involved that the Amazon will be able to save a
considerable amount of money by implementing the short term solution of the customer picking
up their products from the pickup point. As regards to the putting up the pickup points, the
pickup hubs/lockers can range from $6000 to $20,000 depending upon the size of the lockers.
"Amazon can further reduce this installation and acquiring costs by making a strategic
partnership with the convenience stores or other chain stores as this will increase the foot
traffic to these stores where the lockers will be located.” (Lunden, 2017) It can also do the
coloration with the cities to install the pickup lockers at the train stations or bus stations as it
will give ease of picking the stuff to the citizens and reduces carbon footprint which gives
demonstrate the commitment of local cities towards the green environment.

Amazon Logistics
16
Appendices
1. Scope and Deliverables

PROJECT SCOPE STATEMENT

Project Name Amazon’s Supply Chain solution

Project Deliverables

Identify the key Group Meetings

issues with Amazon’s
supply Chain We will do the virtual group meetings with Zoom App and discuss the key issues
which disrupt the Amazon’s Supply Chain.

Brainstorming

Every group member will read the case study and note the key issues, brainstorm
various issues with each other.

Research about the Group Participation

Amazon including
history and growth In group, divide different duty between team members by using Asana App.

Each area would be researched by each member of the team.

Everyone can understand details with reference to Amazon. It includes how, what,
where, why to do the business.

E-commerce platform

Use of e-commerce by Amazon to growth its business. Identify importance of e-

commerce in Amazon.

Amazon cover almost every area in the market and all products became one touch
away.

Discuss Amazon’s
dependency on other UPS and FedEx
logistics companies
UPS and FedEx are major rivals of Amazon in the matter of providing logistics.

Amazon needs to determine and assign logistics service to UPS and FedEx to deliver
parcels to their customers. It is a million-dollar business that Amazon outsource due
to high demand of orders.

Facilities and network

UPS and FedEx have huge logistics and Supply Chain network around the globe.

They have warehouses, medium of transport, reliable name in market and more.

Amazon Logistics
17
 Discuss in group Amazon’s own supply Chain
about opportunities
Amazon expect to develop its own supply chain network, therefore, Amazon doesn’t
for Current
need to rely on other providers.
development of
Amazon’s Supply Group meeting about review
Chain Discuss in group about what are the current situation of Amazon’s supply chain
according to case study and research.

Note all the solutions

Identify the key In group meeting, note various solutions considered and evaluated by individual
possible solutions and team member.
require actions
form possible key solutions after discussion and review them with team.

Finalize the solutions

Prepare a Final Report Collect all the paperwork

Collect individual report from team members and prepare one final report by
considering format given by professor.

Asana App would provide affirmative solution to Assign the work.

Each member has to consider and revaluate final document as per responsibility
divided by Asana App.
Review the Final Report

Review the Final Report and do corrections if required in group meeting.

Submit the Final

Report Submission before Due Date
Submit the Final Report into given location before Due Date.

Presentation

Present the Final Report to the Professor.

Project Exclusions

 College Library provides the useful insight for Research work

 Professor will give the guidance in between the progress of the project.

Amazon Logistics
18
2. Project Work Plan
2.1. Project Work Plan Deliverables

Amazon Logistics
19
2.2 Project Work Plan Gantt Chart

Amazon Logistics
20
3. Increased shipping cost (Cause and effect analysis with C/N/X analysis)

3. 5-Why analysis for Increased shipping cost

Increasing shipping cost

Profit margin divided with third party logistic providers

Amazon appointed third party logistic provider to ship the products

To fulfil higher demand of two-days delivery/ Amazon Prime delivery

Non-developed logistics

Amazon Logistics
21
 4. Product Lifecycle Analysis for higher dependency on other Logistics Companies

(kfknowledgebank, 2020)

Introduction Growth Maturity Decline

“Amazon acquires the “Amazon grew Amazon allowed third- “Amazon has numerous
market as an online continuously from it party sellers to sell the resources,
bookseller company, stared as an online products on its website. technologies, and
but it added more bookseller to an E- Amazon receives sources still in busy
products continuously commerce or Tech millions of orders every seasons such as Black
on its website and company.” (Amazon: day. “Amazon has more Friday, Christmas, and
became a giant online The Making of a Giant, than 200K sellers on its more it wasn’t able to
E-commerce company.” 2019) “Amazon sales website. Amazon has deliver products on
(Amazon: The Making were rapidly increasing, competitors like time because Amazon
of a Giant, 2019) and the company was Walmart but it’s still deliver the products
Amazon continuously making good profits way behind to Amazon through UPS and FedEx
upgrades itself and from it. The company in E-commerce.” and they were not able
became popular among reached almost all (Duffy, 2018) to handle millions of
the customers. products from kitchen orders.” (Herrick, 2019)
to industry, parts to “Amazon got the
products.” (Amazon, motivation to develop
About services, 2020) its supply chain and
Amazon took help from logistics network to
other logistics firms for save its lost in these
delivery. Amazon seasons. Amazon needs
became the platform to work on it and
for a third- party seller. improve its logistics to
satisfy the customers in
busy seasons.” (Duffy,
2018)

Amazon Logistics
22
 5. Cause and effect analysis for disruption in last-mile delivery
6. SWOT analysis for bidirectional growth
STRENGTHS
 “The brand benefit of Amazon keeps back buyers due to
its wide variety ofproducts.” (Amazon, About services,
2020)
 “Amazon's choice is the option that sorts out goods with
full of inventorywith its references.” (Duffy, 2018)
 “Third-party dependency shifts inventory hazards
to third partysuppliers.” (AUTHOR, 2020)
OPPORTUNITY
 “Various payment systems help Amazon to have customer
satisfaction.”(Help & Customer Service, 2020)
 “Amazon has better advantage with privacy and security of
customers because every data is store in Amazon Web
Services cloud.” (Amazon, Open Data on AWS, 2020)
Amazon Logistics
WEAKNESS
 “Amazon doing many businesses such as Amazon Web Services as
well as Amazon Prime but for E-commerce, Amazon need to do
more focus on it because only somecategories like electronics,
baby products are more rewarding for them.” (Amazon, About
services, 2020)
 “In holidays, Amazon is lacking researchregarding forecasting of
their inventory and inventory demand.” (Duffy, 2018)
THREATS
 Other e-commerce companies are focusing on specific categories
of products, therefore they can focus on theirprovided products
better than Amazon, For example eBay, Alibaba, etc.
 “Cost reduction by other competitors createpotential competition and
Amazon loses it because of managing number of services and
products.” (Kumar, 2006)
23
 7. SWOT analysis for disruption in last-mile delivery
Strength Weakness
 Amazon is e-commerce company provides shipping of  “Amazon Prime delivery disrupted by means of late
product online thatmeans no physical contact to customer. delivery as well ashigher cost product.” (Paler, 2020)

 “Demand of products increasedsignificantly.”  Lack of inventory and supplies frommanufacturers and

(Paler, 2020) sellers.

 “Amazon have less delivery time ascompare to it’s

competitors.” (Reuters,2020)

Opportunities Threads
 “Customers are preferring to by productonline because of  “Unlike Amazon, competitors like Alibaba and eBay are
pandemic risk.” (Emont, 2020) giving suretyto provide products but with possible

 Similar to Amazon products, Amazon Prime video have delay.” (Reuters, 2020)

better opportunity togrow in lockdown.  “Customers retention would be difficult because of rivals

 “Sympathy from people as well as aid from government like Walmart who fulfil demand quickly.”(Greene, 2020)

can be gained as Amazon donated millions of dollars in the

Covid-19 vaccine research.” (Duffy,2018)

8. Product lifecycle analysis Flourishing online grocery sales

Introduction Growth Maturity Decline

“Amazon started its online
groceries in theyear 2007 it was
initially launched for prime
members in selected cities and
started from Seattle” (Page, 2020)
and “in 2017 the company
purchased Wholes Foods, and
recently itlaunched Amazon Go
convenience and currently they are
scattered in 25 different locations.”
(Yashayeva, 2020).
– Since the online grocery and another
related service that amazon is providing is
still currently in the growth stage and there
are many aspects of the industry to be
covered. “The company's success and
growth so far doubled in fulfilment of
grocery orders in Quarter 4 of the year
2019. Also, thesales of 2019 were nearly
$6.15B and also the fastest-growing
category on Amazon. And its share of
groceryis 23.7% of eCommerce sales for
the grocery category.” (Yashayeva, 2020)
Meanwhile, COVID- 19 has struck the globe
it has also been an opportunity and also an
increase in sales of online grocery. (Brown,
2020)
“As per records of 2019, only
4% online grocery sales
projections place the number
will be increasing to 10% by
the year 2025” (Brown,2020).
“Whereas 17% of users have
used the online grocery store
in 2018 and it has increased
to 37% in 2019. Hence the
maturity of the sector isfar
and the opportunity and
growth for this sector will
have a close watch by
amazon.” (Duffy, 2018)
“The potential of onlinegrocery
has always been an eye-
catching for amazon and has
also seemed profitable as the
results on the fiscal year the
online groceries has seen a big
boost and these all early results
as the sector is still in the
process to fire worldwide the
grocery orders with a
combination of both Amazon
Fresh and Whole Foods Market
doubled in the Quarter 4 year
by year.” (Redman, 2020)

9. Short-term implementation plan- Provide Pick-up location to customer

Amazon Logistics
24
 10. Medium-Term Solutions for- Improve supplier selection process to improve authenticity
of products

11. Medium-Term Solutions for- Improve the efficiency of last-mile delivery

12. Long-term implementation plan for Implementing JioMart business strategy

Amazon Logistics
25
 13. STEEPLE Analysis

• 30 plus store categories and more than 90 cloud service categories at AWS
Social • Amazon offered its one-day delivery services to more than 5000 Cities and towns.

• Dash Button Technology

Technological • Artificial Intelligence name Alexa where is features with 30,000 skills.

• Amazon Air is carrying out cargo operations and the venture is said it has a
Environment sustainable fuel of 6 Million Gallons

• Amazon has reached his highest level ever with $702 billion
Economical • that 57 million households in United States paid $99 US Dollars

Political • Initiated Public Website

Legal • Challenges in the labor sector

Ethical • Safe and healthy environment is maintained through an automated process

14. Amazon e-commerce value stream mapping (Fundamental)

15. Amazon e-commerce flow chart mapping

Amazon Logistics
26
15.Team Project Log

Responsibility Metrix

Raj Trupal Mustafa Ramnik

Compilation Tool Expert Leader Project log
Complier
Power-Point Meeting Report SWOT ANALYSIS
Lead Coordinator Lead
ASANA
Coordinator
team 1 for research team 2 for research
*research will be done in small team and than it will be with
whole team.

Name Tools
Ramnik Jain Swot Analysis
Raj Patel Cause and effect
Trupal Kumar Product Life Cycle
Mustafa Bharmal Steeple

Amazon Logistics
27
 16. Team log- weekly

Amazon Logistics
28
Team log - Daily
Member
DATE EAM MEMBER/ TEA ` CoordinatorHRS Allocated Categories
responsible
7th July Class Meeting with Professor and form team Team Professor 2 A
8th July Class Team formation and Role allocation Team Professor 1 A
Discuss in class for role allocation(Breakout
Team Team Professor 1 A
Room)
9th July Individually Case study overview reading Team - 3 R
10th July Individually Research on Project log and Team charter Team - 3
with team R
1st Meeting on zoom to create project log and
11th July Team Team Raj 1 M
team charter
Finish documentation individually (everyone's
Individually Team - 1 D
own opinion)
12th July Team Team charter begin (Informal meeting) Mustafa Raj 2 M
Project log submitted T&R Raj - S
13th July Individually Compile documentation Raj Raj 2 D
14th July Individually submit Team charter Mustafa Raj - S
Class Meeting for new learning Team Professor 2 A
15th July Class Individual group meeting with Professor Team Professor 0.25 A
Meeting on Zoom for discussion and to clarify 1
16th July Team Team Raj M
upcoming work
Discuss for queried regarding upcoming topic 2
Team Team Trupal M
(Informal work)
17th July Individually Begin individual classified work Team - 3 D
18th July Individually Documentation received T & R Raj - DR
19th July Individually Documentation received from Ramnik Ramnik Raj - DR
Proofread and Do correction document 3 D
20th July Individually received Raj Raj
Class to learn Value strim Diagram and 2
21st July Class Team Professor A
decide tool experts
Individually Team Log received and Compile Raj Raj - DR
2nd July Class Learned different tools and its uses Team Professor 2 A
Individually Received Introduction Mustafa Raj - DR
Individually Compile and submit assignment#2 Raj Raj 3 D+S
23rd July Team Meeting with Team for work distribution Team Trupal 1.5 M
24th July Individually Begin documentation Team - 3 D
25th July Individually Find and evaluate issues and finalize it T&R Raj 3 R
Submit Issues T&R Raj - DR
26th July Team Meeting for general discussion Team Trupal 1 M
27th July Individually Finish issues with analysis T&R Raj 4 R
Individually Submit Issues and analysis final document T&R Raj - S
28th July Class Learn new topics and discuss on queries Team Professor 2 A
individually Opportunity work begin Mustafa Raj 2 R
individually compile project log Ramnik Raj 3 D
meeting for project status and tools
29th July Class discussion Team Professor 2 A
individually Do correction in issues and analysis Raj Raj 1 D
Received opportunities and analysis @10.40
30th July Individually Mustafa Raj - DR
PM
Individually Submit assignment #3 Raj Raj - S
31st July Team Meeting with Team for work distribution Team Trupal 1 M
1st Aug Individually Research on solution and strategies T&R Raj 3 R
2nd Aug Team Start doing implementation plan Trupal Raj 1.5 R
3rd Aug Team Start doing implementation plan T&R Raj 3 D
4th Aug class attend regular class Team Professor 2 A
5th Aug class group meeting with professor Team Professor 0.25 A
write every problems noted by professor/ ask
Team Team Professor - DR
for extra meeting
6th Aug Team work distribution to team Raj T&R 1 R
7th Aug Individually Project Purpose and Objectives corrections Raj Raj 2 D
Individually Deliverables & Scope corrections Trupal Raj 2 D
8th Aug Individually Introduction correction Mustafa Raj 2 D
Individually Methodology correction Ramnik Raj 2 D
Individually Supply Chain Issues and Analysis corrections Raj T&R 4 D+R
9th Aug Individually Proposed Implementation Plan created Trupal T&R 4 D
Improvement Opportunities and Analysis
Individually Mustafa T&R 3 D
created
Individually solution for future opportunities Mustafa T&R 4 R
Individually Sustainability finish and received Trupal T&R 3 R + D + DR
10th Aug Team Practice presentation Team T&R 0.25 A
11th Aug Team Individual meeting with professor Team Professor 0.25 A
Team Markup every mistakes of presentation Team Professor 0.25 A
12th Aug Individually Start formatting the assignment Team Raj 4 D
Remove unnecessary and wrong portions of
13th Aug Individually T&R Raj 4
report R+D
14th Aug Individually Distribute corrections amid teammates Team Raj 3 R+D
Individually Distribute presentation work Team Raj 2 R+D
compile and correct individual part submitted
15th Aug Individually by teammates Team Raj 2 D
16th Aug Individually Final correction of assignment T&R Raj 6 D
17th Aug Individually Finalize the report and proofread it Raj Raj 4 R+D
Individually Do presentation's corrections Mustafa Raj 2 R+D
18th Aug Team Submit report as well as presentation Raj Raj 1 S
Team Final presentation (5 team) Team Professor 0.25 A
19th Aug Team Final presentation (4 teams) Team Professor 0.25 A

Amazon Logistics
29
 References
We chose the following references because it has retrieved from variouswebpages of Amazon’s
official website- Amazon.com. Therefore, there are negligible chances to have biased or manipulated
information.
1. Amazon. (2020). About Amazon Go and Amazon Go Grocery. Retrieved from
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2. Amazon. (2020, 08 08). About services. Retrieved 08 08, 2020, from www.amazon.com:
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 Wall Street Journal is USA’s reputed journal. We chose Wall Street Journal as our source because of its authenticity
and quality content. There are rare bias present to manipulate stockprice.
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Forbes is

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Investopedia

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Amazon Logistics 30

View publication stats

www.shopify.ca: https://www.shopify.ca/blog/122517253-most- common-shipping-problems
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34. Science Direct, 358-363. Retrieved 08 08, 2020

 The supply chain drive is also very famous for the market's news research. The informationwhich is many years old
can also be found in it. It a part of the Drive website.
36. Matt Leonard. (2020, 02 13). Retrieved 08 02, 2020, from www.supplychaindive.com:
https://www.supplychaindive.com/news/suppliers-outside-china-coronavirus/572287/
 The retail drive is also very famous for the market's news research. The information which ismany years old can also
be found in it.
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www.retaildive.com: https://www.retaildive.com/news/amazon-still-dominates- e-commerce-but-others-have-room-to-
grow/525177/
 CNBC is the world-famous market's website. the important information regarding Amazondefinitely found here.
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demand. Retrieved 08 01, 2020, from www.cnbc.com: https://www.cnbc.com/2020/03/15/coronavirus-amazon-says-items-
out-of-stock-deliveries-delayed.html
 Blogs are also a source of information, people share the information, knowledge which they have, or the current
scenario. As per reliable blogs, the journal is one of the choices among allwebsites.
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more information are available here. The business of retail keeps in touch, with supermarket news and as Amazon steps into
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store-sales
 The retail is the front website of The Economic Times. it published only market news about thecurrent situation of
markets, deals between companies, new adventures from any companies, and more.
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Amazon Logistics 31

View publication stats

companies-couriers-ups- 2017-6
51. TechTarget is the publisher for specifics sectors or targeted sectors. it a reliable source of anyupdated information.
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53. Retrieved from searchaws.techtarget.com: https://searchaws.techtarget.com/feature/Amazon-bets-big-on-last-mile-
delivery- service-improvements
 The supply chain consulting multinational group is an experienced company in the business world. it has many
experiences in logistics operations. the challenges of the supply chain arethe best explained by them.
55. SCCG. (2020). E-commerce supply chain challenges – who is pulling the strings? Retrieved from sccgltd.com:
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 The Guardian is a reputed international newspaper and in its articles, all the information is based on truth and reality.
All the editors have deep experience in journalism. The world cantrust the Guardian because of its continuous reliable sources.
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grocery-service
 IVEY business school allow their undergraduate student of business school to write an article ofthe current business
environment. Out of many articles they publish a few of them in public after checking all the parameters of that Article.
Students put lots of hard work behind the research and its trustworthy. Young minds can think or analyze differently so it's
valuable to take some information from it.
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everyone/#:~:text=Amazon%20has%20the%20opportunity%20to,over%20the%20collective% 20retail%20market.
 Wired is the office page for newsletters, magazines, articles of specific categories that we arelooking for. Thousands
of subscribers believe in it and its writers. They released a newsletterafter deep research about the news and explain it from
its roots so it's easy to understand it.
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 Amazon's business is the official third-party website of Amazon. Because of its Amazon'swebsite we can trust it and
get valuable information about amazon and in detail.
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 Stella Rising is the foremost marketing and media agency for active, high-growth customer brands, and service
companies. Stella is too quick for its breaking news and keeps an eye onevery movement in the market.
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 The time now is the reputed news website in India. Its business page covers all the movementsof the Indian
economy as well as the international market movement. it focuses on the ground report from the market.
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jiomart-here-s-all- the-information-you-need-about-this-e-commerce-venture/596607
 Jio-mart is the new adventure of Reliance Industries and its business model can be anopportunity for Amazon.
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