Jeff Bezos and his organization have transformed the supply chain network of Amazon, right from warehousing and inventory management to delivery lead times and pricing. As per the American Global Research from 2014, 60 billion dollars has been invested in building fulfillment warehouses, buying delivery vans, and leasing airplanes. The retailer delivers half of its packages to U.S. and it become a major competitor for the fulfillment business compared to other e-retailers in the coming future. In 2017, Amazon shipped more than 5 billion prime packages, and the retail giant’s e-commerce market contribution in the states exceeded 50%. At present, Amazon owns 500 logistic facilities in the U.S., occupying an area of about 173 million square feet. By 2025, Amazon would be able to deliver around 7.5 billion and 9.7 billion packages in the states, inclusive of its order placements and those of other retailers.
Cross dock Facility Centers â€“ The containers from the international vendors can be held at the cross-dock center until more stock is required at the fulfillment center.
Fulfillment Facility Centers â€“ It is one of the common facility types in the Amazon distribution system but serves various purposes. Amazon started to develop its distribution system in 1997, starting with two fulfillment facilities in Seattle and Delaware. The two spaces are smaller relative to todayâ€™s standard at 93,000 and 2,02,000 square feet. Sortation Facility Centers are those facilities which are responsible for sorting packages by postal (zip) codes and delivered to U.S. postal sites. It was introduced in 2014, sortation facilities have allowed Amazon to accelerate the delivery process and monitor the same until the last mile.
Delivery Facility Centers â€“ In urban cities, delivery points are often the last stage before packages are delivered to the customers. Courier companies and Amazon Flex drivers manage these short-range deliveries. Mostly, such stations are located near airports.
Prime Now Hubs â€“ These smaller hubs are specifically developed for speed. â€˜Prime Now Hubsâ€™ carrying limited and selective goods (such as whole foods products) that are dispersed within two hours of clicking buy.
Prime Air Hubs â€“ Amazon air hubs support air operations that speedy and free package delivery to prime customers. Amazon hubs and gateways form the fulfillment centers, upload and depart aircraft, arrive and unload aircraft, process and depart the quantities on line haul for last-mile dispatching.
Key Components of the Amazon Distribution Center
Several components have contributed to the success of the e-commerce giant. However, its ultra-modern frame-work of the supply chain is a significant contributor to Amazonâ€™s huge success. The components of the Amazon Distribution Center are as follows:
Large Warehouse and Supply Chain Network â€“ Amazonâ€™s prime delivery is the key component of the companyâ€™s large and loyal customer base. The international presence and location near prime metropolitan areas put inventory control and logistics in Amazonâ€™s control, facilitating the company to complete customer orders efficiently.
Varied Delivery Fleet â€“ To dispatch customer orders at the doorstep, Amazon leverages challenging logistic processes and shipping partners to meet customer demands and expediency. To attain a 2-day dispatch window for Amazon prime members, the company uses its fleet of airplanes to fly across more than 20 airports across the states. Each airplane can ship more than 30 containers stocked with thousands of boxes. By road, the company uses van fleets, bikes, trucks, and even robots for last-mile shipping.
An Amalgamation of Humans and Automation â€“ The expansive employee and partnerships network allows Amazon to complete speedy dispatches across the globe. However, the use of advanced technology and automated solutions assure streamlined processes and efficiency. Amazon uses robotics to receive and pack orders. It also allows to filling up the inventories. Thus, enabling the company to speed up its dispersal processes beyond human speed, eradicating the need for a workforce. Thus, saving on time and funds to be allotted for other functions and business goals.
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