Friday, July 13, 2012

Tomorrow is Too Late!

Sit back and relax. No need to dress up, no need to find your car keys, no need to get into the car, spend on gas, search the endless aisles of your local big-box retailer, no need to worry about whether your size or color will finally be in stock or not! Have a computer on the web and a credit card, you are all set to go. Look for an Amazon warehouse near you enabling same day delivery on thousands of products.
Amazon has been pioneering some of the most consumer friendly retain concepts for years. Think about the product review from other buyers just like you, what others bought after seeing the product you are considering, automatic product recommendations for you, recommendations based on your history, product subscriptions, free delivery over $25, prime membership with unlimited content streaming thrown in: You get the idea.
That was all that was visible to you as a consumer.
Behind the scenes Amazon has been working on technologies to mine the data to bring you’re the magical recommendations, to better define the demand for their products, tune their assortments for you: the Consumer. They have also pioneered the Amazon web-stores, fulfillment by Amazon and checkout by Amazon for you: the Small Business Owner. And finally, they have been perfecting their supply chain operations: procurement, distribution, warehousing and order fulfillment to make the magic that is Amazon by developing technology and systems to enable their supply chain and by buying companies like Kiva Systems to further automate the physical operations of a warehouse.
Building on their successes in enabling one of the most efficient and integrated supply chain, Amazon now seems to be working on enabling “same day delivery” in most of the bigger population areas. According to news reports collated by Slate, “Some of these facilities are very close to huge swaths of the population. Amazon is investing $130 million in new facilities in New Jersey that will bring it into the backyard of New York City; another $135 million to build two centers in Virginia that will allow it to service much of the mid-Atlantic; $200 million in Texas; and more than $150 million in Tennessee and $150 million in Indiana to serve the middle of the country. Its plans for California are the grandest of all. This year, Amazon will open two huge distribution centers near Los Angeles and the San Francisco Bay Area, and over the next three years it might open as many as 10 more in the state. In total, Amazon will spend $500 million and hire 10,000 people at its new California warehouses.”
Though building warehouses near the biggest metros is no recipe for “same day delivery” success, this may quite be a possibility that Amazon can pull off. Amazon has shown unmatched ability to understand the complexity of the retail operations and automate these processes through systems and technology custom built for the purpose. Therefore, if someone can pull this off, it will be Amazon.
Welcome to the new phase of “agility” in online retail! Online consumers, raise your expectations once again!  
Related Articles: Other Resources: Want to know more about supply chain processes and supply chain strategy? Check out my books on Supply Chain Management at Amazon.
© Vivek Sehgal, 2012, All Rights Reserved.

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