Inside Amazon: Chaotic Storage System

            

Details


Case Code : CLOM019
Period : 2000-2015
Publication date : 2016
Subject : Operations
Organization : Amazon Inc.
Industry :-
Countries : USA
Length : 6 Pages

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Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

This case is about the US-based online retailer Amazon.com Inc (Amazon). It illustrates the Amazon fulfillment center’s storage system and contemplates its storage practices, which are in total contrast to the traditional practices of storing products by characteristics and attributes. The case also highlights the advantages and disadvantages of Amazon’s practices of storing its products by available shelf or storage space, though a few products are exempt from the rule. This presents a picture of ‘organized’ confusion to anyone who steps into Amazon’s warehouse. However, Amazon has been largely successful in redefining the way the products were effectively stored and retrieved in the warehouse. This case discusses the critical success factors that help operations managers to develop a decision framework for a warehouse storage system in the supply chain context..

Issues:

1) The students will get to understand the role of the warehouse storage system in the order fulfillment process.
2) They will also get to know the importance of storage or shelf space in the warehouse storage system as in any brick-and-mortar store.
3) Further, the case will help the students develop a decision framework to segment and manage the product assortments in the warehouse storage system.


Introduction

US-based Amazon.com Inc. (Amazon), one of the largest online retailers in the world, had gained popularity for its unique warehouse practices. Traditionally, companies stored similar products together based on predefined product characteristics and attributes. ..

AMAZON’S STORAGE PRACTICES

Amazon was founded by Jeff Bezos in 1994 as an online bookstore. Over the years, it expanded to several countries and was selling more than 2 billion products as of 2014. For the year ending December 2014, Amazon recorded revenues of US$ 88.99 billion. Over the years, Amazon built giant warehouses, also known as fulfillment centers, for storing the products. ...

THE WAY AHEAD

Analysts were all praise for Amazon for successfully implementing and executing the system. They pointed out that at the heart of the system, was a complex database and powerful optimization methods managed the flow of products without any interruptions inside the warehouse...

Key words:
Amazon, Storage, Warehouse, online retail

Note
* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.