Analyze Amazon and Walmart.Com Using the Value Chain and Competitive Forces Models
7755 words 32 pagesAnalyze Amazon and Walmart.com using The Value Chain and Competitive forces Models
2.1.1 Amazon’s Value Chain Analysis
22.214.171.124 Primary Activities
126.96.36.199.1 Inbound Logistics
Amazon has the advantage of avoiding the overhead and carrying large amounts of inventory because it orders the books from the distributors.
They provide money and contracts to prospective authors and decide how many copies of a book to print. Typically a first run printing for a book varies from 5, 000 to 50, 000 copies. However, best-selling authors’ first run printings are generally set at around 300, 000 copies.
Amazon.com receives products from its distributors, partners, manufacturers, and publishers. Receiving is typically at the pallet or …show more content…
Depending on the item and the volume requested, an item may be picked from library shelving, case flow racks, or pallet racks. Frazelle (2002) notes that picking accounts for 50% of operating costs in typical warehousing environments. Therefore, picking productivity is generally the highest priority initiative when companies assess warehouse productivity improvements. Picking productivity is defined as the number of units picked divided by the number of labor hours involved in picking. Among the costs associated with picking, traveling to and from picking locations accounts for 55% of labor (Frazelle, 2002). For this reason, initiatives to minimize picker travel and improve picking productivity are essential to reducing Amazon.com's fulfillment costs.
Amazon.com uses both full-path picking and zone picking to determine the scope of picker travel. Full-path picking is when a picker can travel to all locations within the pick area to pick items for orders. Zone picking confines the potential travel to a subset of locations within the picking area known as zones (Bragg, 2003). Zone picking can increase productivity through simultaneous multi-user picking, picker familiarity with locations, and increased pick density.
Pick density is a measure of how many items can be picked with a specified area. Although zone picking provides the benefits listed above,