Amazon: The Supply Sovereign

general 15 May 2018

The supply chain was always a malleable machine until Amazon blazed in with a set of standards higher than we could have ever imagined. Here we examine their trailblazing moves, how they’ve changed consumer habits, and what we can learn by standing on the shoulders of Giants.

Originating as the students’ outlet of choice for second hand books, Amazon has transformed itself into the world’s most dominant retailer. With it’s expansion into multi-sector selling, it’s catalysed a complete reimagining of supply chain management, with store to door speed being one of its primary disruptions. With Amazon Prime emerging in 2005, consumers had to wait no longer than 2 days to receive their coveted items; but this wasn’t enough for Amazon. As the lemmings began to jump, it blew them up in smoke by offering an eye wateringly tight one-hour delivery window, along with specific timeslot bookings. Lead times are now largely consumer driven thanks to Amazon’s rapid and flexible approach.

With one-hour lead times remaining unsatisfactory for the Amazon eggheads, along came the drones; slashing the previous optimal delivery capabilities by half. Amazon Prime Air allows customers within a certain radius of an Amazon fulfilment centre to have their less than 5lb packages air dropped in under 30 minutes and is expected to officially launch this year. Pigs might not fly, but your parcels soon will.

Robotics racing through the air was not enough; Amazon also brought their automation to ground level, founding Amazon Robotics in 2003 with automation aspirations, and acquiring Kiva Systems just shy of 10 years later, a market leader in Warehouse mechanisation. According to Business Insider UK, in 2017 ‘the e-commerce giant now has 45,000 robots across 20 fulfilment centres’ which means the practical implementation of automation has doubled year on year.

Amazon’s love of digital solutions naturally progressed to its inclusion in the rapidly evolving Internet of Things, with the launch of their Dash buttons in 2015. These buttons offer a real time replenishment with one click of a button for frequently used products; after a short amount of initial configuration time spent setting up quantities by the user, one press signals Amazon to order the programmed quantity of that specific item. An almost mindless shopping solution at the consumer fingertips. Although Dash has met with criticism in it’s infancy, with this thoughtless reordering process, it’s easy to imagine that brands will quickly jump onto Dash as a marketing tool for repurchase and brand loyalty, so incentivising the use of Dash could potentially be the next move.

Amazon key technology is also a gamechanger; by downloading a simple app linked to your car, and selecting an ‘in car’ shipping icon, Amazon can deliver packages and place them in your boot for free if you’re a prime member. Upon scanning the item when arriving at the specified vehicle, a signal is sent via cloud to unlock the doors allowing the courier to place your items safely inside. It’s another bold step towards consumer convenience lead service.

Another huge and slightly unnerving development has been the Alexa, with the gadget’s personification conjuring images from the film ‘Her’. This humanised voice recognition system cultivated from the Amazon Echo, has an immeasurable and expanding set of skills that range from being able to tell you the weather forecast, to narrating your ingredients for dinner, or ordering it for you if that’s your preference. All you have to do is ask.

“We see the big picture, and imagine a better one” a quote taken from Amazon themselves, is a prefect precis of a massive yet simplistic vision that’s enabled improbable progress. The future is Amazon, and that future is now. What’re you doing to keep up?

AKW Global Logistics are honoured to be a nominated freight carrier for Amazon as part of the Palletline network, handling all booking arrangements for the UK fulfilment centres via our dedicated Amazon team, and ensuring end to end visibility for their suppliers by managing the traceability of our deliveries through an online portal. AKW Birmingham is the main distribution centre for both the Rugeley and Birmingham Amazon sites, delivering circa. 200 pallets per night; we see first-hand the challenges and benefits of serving a giant and are delighted to be part of the solution.

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