Adding value to Amazon fulfillment process by means of supply chain partners’ integration. Implementation of standard packaging for e-commerce. Business Process Redesign (BPR) for Amazon Fulfillment Center.

Abstract

Disruptive technologies based on new Internet communication approaches changed the way in which information about products is exchanged. E-Commerce transformed traditional retail Industry and has become a global trend expected to accelerate in the next several years, building scale, brand equity and penetrating new markets. Fulfillment execution will remain a key indicator in overall performance of e-commerce companies. Amazon supply base is characterized by a high number of small, medium and large suppliers, high degree of product variability, and inefficient levels of interrelationships between supply chain partners. Amazon fulfillment centers are often inflexible due to a large amount and high variability of processed items complicated by inefficient prep and inbound delivery performance, which cause product buffers, long waiting time on conveyer lines, and requires rework and repackaging activities. Company’s policy considers each individual Supplier as an expert in e-commerce packaging. Suppliers are provided with DIY instructions in prep of the products, and Internet links where they can purchase necessary materials and equipment to make products e-commerce ready for further fulfillment and shipment to the customers. However, fulfillment centers use a lot of time, labor and materials for sortation, and rework of received packages. In Amazon fulfillment center, problem solving accounts for 6 – 10% of labor, 25 hours of average extra time, and extra materials for additional handling and repackaging. This Thesis provides a conceptual framework for adding value to fulfillment process in Amazon Distribution Centers. It is an indicator of the direction in development of e-commerce Industry, and a decision-making tool that can help businesses to access costs and benefits from implementation of proposed initiatives. The research is based on assumption that Supply Chain partners’ integration and implementation of standard packaging for e-commerce can add value to prep and fulfillment process. The research was carried out to fulfill the demands of a business organization in e-commerce Industry. Investigated key areas of the research are the cause and consequences of existing prep and fulfillment problems in Amazon supply chain, and the premises for process improvement. Discussed topics are concerned with the premises for adding value to customer order fulfillment process.Discussions feature business process reengineering, orientation and optimization, supply chain partners’ integration, concepts of modularization and postponement in the context of new product development, process waste minimization and decision-making support.