Amazon 's Inventory Management

Abstract —There are some complex and compelling challenges that global manufacturing industries should face, which includes price fluctuation, supply-chain inefficiencies and increasing customer expectations. In order to meet the demand of this economic environment, manufacturers need to find innovative, smarter ways to face those challenges. Thus, the efficient inventory management becomes urgent to manufacturers and it could help improve profitability and increase customer satisfaction. This paper aims to talk about what inventory management is and its importance, what problems inventory management might have and how to improve inventory management efficiency.

This is due to Amazon being able to collect payments immediately for sales, therefore generating a large amount of working capital. Amazon made use of the partnerships and affiliation agreements to supplement its own product lines, with retailers like The Gap, Target, Eddie Bauer, Nordstrom, and Toys “R” Us. The company’s competitive market position within its industry

It can be served as a competitive advantage, which attracts more customers shifting from Amazon’s online retailer competitors into buying their products, thus increasing the market share.

As of January 2010, Amazon.com has three times the Internet sales revenue of the runner up, Staples. By offering a large amount of varied categories through its website and other international ones (Amazon.co.uk, Amazon.co.fr, and so on), it has managed to grow to a customer based company with over 30 million people. In addition, the online retail format enables the company to reduce costs of managing inventory (Amazon.com; online bookstore, 2008).

In the process of developing its network to support its services, Amazon.com has built out an infrastructure that includes 145 warehouses around the world (84 in the United States, 29 in Europe, 4 in Canada, 10 in Japan, 15 in China and seven in India) that together account for more than 40 million square feet of space. Additionally, Amazon has made significant investments in material handling systems, including the acquisition of Kiva Systems for $775 million in 2012, which is working now as an Amazon subsidiary designing robots, developing software and other hardware that has been used in the distribution facilities of companies such as The Gap, Office Depot, and Staples (Lieb, 2014).

Beyond Amazon’s core markets of electronics and media, Amazon is making a big impact in the retail market. Analyst John Blackledge believes, “Amazon will become the largest retailer of apparel and accessories in the U.S. market next year, passing Macy 's as the leader” (Deagon, 2016, para. 2). Amazon announced that they will be launching their own private label dress shirts for men and expand into dress pants, sports clothing, and sweaters. In addition to that, Amazon has plans to open small retail stores at malls to showcase their electronic devices and hardware devices (Deagon, 2016).

Every company has their own supply chain in order to sort or produce goods. However, the company needs to manage supply chain to maximize its highest benefits. By having effective supply chain management, the company can ensure that the right product or service will be available at the time to the right place and at the right price (Kamal 2007). Amazon is one of the companies that have best supply chain practices in order to respond high level of responsiveness for the customers. Thereby, this paper explains about Amazon Company, analysis of Amazon’s supply chain, recommendations and barriers to implement will be discussed.

Amazon’s core competencies are in its ability to effectively use and develop technology to drive site traffic and enhance the customer experience. Their distinctive use of website real estate coupled with their ability to leverage their brand and effectively use that leverage to deliver low prices and high quality products, makes them a leader in online retailing. Their partner brands and their ability to adapt and recognize deficiencies enable them to effectively cut out the middle man, or at the very least, partner with them.

Retailers have adapted to the online marketplace out of necessity and opportunity. The great recession placed many retail companies in financial hardship and while some failed, others innovated and became some of the largest companies in America such as Amazon. A recent trend is consumers are buying more products online than ever before. As a consumer, I enjoy shopping in the convenience of my home and having the items delivered to my doorstep in 48 hours or less. Global internet access continues to increase, with mobile devices and affordable internet for the home, consumers will continue to shift and buy products online rather than in retail brick and mortar locations. Online sales in the United States have increased over 250% in the last ten years, accomplishing $250.0 billion in 2012 (Tehrani, 2014). Therefore, Amazon is in a solid market position to capitalize on the future trends and booming ecommerce

AMZN has competed on selection with traditional retailers since its inception. AMZN is able to support this selection through its multi-tier inventory network. The following is a description of the three tiers or echelons that comprise AMZN’s inventory network. The website www.amazon.com is the consumer interface and owns the

1. What technology services does Amazon provide? What are the business advantages to Amazon and to subscribers of these services? What are the disadvantages to each? What kinds of businesses are likely to benefit from these services?

Amazon operates using a web-based platform to sell books.  The web-based model targets a global market, has reduced overhead costs and a shorter operating cycle as compared to brick and mortar businesses such as Barnes & Noble and Borders. Amazon’s online model has a superior inventory

Amazon.com is a Fortune 500 company that has revolutionized the retail industry. In recent years, Amazon has faced increased competition in the highly competitive online retail space as competitors invested heavily in their online storefronts and infrastructure. Positioned in a highly fragmented industry, Amazon must find solutions that can sustain its long term profitability and maintain its market share. To that end, Amazon should grow the Amazon Prime membership base and expand on its media and mobile offerings.

In 2000, Amazon and Toys-R-Us entered into a symbiotic agreement that would benefit both corporate entities. Both companies had recently had unimpressive fiscal years due to differing issues. Toys “R” Us struggled with poor order fulfillment. Although they were equipped with enough merchandise, other issues kept them from being able to get orders to customers in a timely manner; especially during the busy holiday season. Conversely, Amazon was forced to write off $34 million because of a miscalculation in inventory and had orders that could not be honored (Ouchi, 2004). Following these debacles, both organizations felt that joining

problems such as delays in delivery. It is notable that the use of external delivery companies has exposed