Logistics services that deliver goods are overloaded. Online marketplace Amazon.com has warned customers that Prime Now and Amazon Fresh services are in high demand. The reason was customer fears about the coronavirus. The retailer is observing an influx of customers; thus, orders are delivered more slowly than usual. Due to congestion, the mentioned services will have limited availability. Therefore, the main goal is to improve quality, particularly diminishing human factors, errors and increase shipping speed.
First of all, for the consumer, the quality of the logistics operator’s service means the residual and full assortment, the correspondence of the availability of goods on the site and in the warehouse. Besides, it is necessary to maintain respectful and punctual customer service (Sabella, Kashou and Omran, 2014). Timely delivery and the ability to track the order’s status are also crucial (Florentino, 2016). According to Hugos (2018), increasing capacity is considered the critical source for economic performance. Therefore, an operations improvement for Amazon.com should aim at objectives of quality, speed, reliability, flexibility and production costs.
|Action Step||Responsible||Deadline||Resources||Desired Outcome|
|Improve the operation of Kiva robotic systems in Amazon warehouses by implementing the web-based central software called Warehouse Execution System (WES) (Bolu and Korçak, 2021).||Amazon Robotics||June 2021||Human resources (competent IT specialists); |
Warehouse Execution System.
|Improving finance indexation of storage, picking and packaging process |
Reducing operating costs by 20%, which in cash equivalent is $ 22 million per the warehouse.
|Open additional 90 large warehouses throughout the country||Warehouse Management team||December 2021||Additional capital investments for construction and rent||Efficient distribution of goods; |
Decreased costs for logistics, transportation of products in the long terms by 10%
|Reassess the KPI system by which the employees’ performance is evaluated by introducing an automated KPI system (Schrage, 2019).||Human Resources Department |
|July 2021||KPI system automation programs||Increasing the amount of effective workforce while reaching peak loads (Schrage, 2019). |
Collecting data on actual performance indicators from the used CRM system (Schrage, 2019).
Formation of reports on the effectiveness of individual employees and departments (Schrage, 2019).
|It is necessary to program drones so that they can fly routes without constant monitoring by program testers.||Amazon Prime Air||September 2021||Drones operating autonomously via GPS; |
Sensor technology on the vehicles so that drones can avoid collisions with other transportation means (Singireddy and Daim, 2018).
|Elimination of technical issues; |
The successful implementation of drone delivery will increase the demand, convenience and frequency of online orders in the long term (Singireddy and Daim, 2018).
Reducing costs by 3-5% (Singireddy and Daim, 2018);
The achievement of service standards that are not available to competitors (Singireddy and Daim, 2018).
Despite the successful economic performance, Amazon has shown volatility in 2020. The company has experienced delays caused by supply chain congestion or out of stock. Features of e-commerce make changes to the warehouse operation’s specifics. Optimization of business processes and implementation of software are required. Warehouse automation is essential for large online retailers. Consequently, the action plan focuses on reducing logistics costs and increasing the company’s profits, solving urgent problems. Modernizing delivery will make things much easier by allowing you to focus on the fundamentals.
Bolu, A., and Korçak, Ö. (2021) ‘Adaptive task planning for multi-robot smart warehouse’ IEEE Access, 9, pp. 27346-27358.
Fiorentino, R. (2016) ‘Operations strategy: A firm boundary-based perspective’, Business Process Management Journal, 22(6), pp. 1022-1043.
Hugos, M.H. (2018) Essentials of supply chain management. New Jersey: John Wiley & Sons.
Sabella, A., Kashou, R. and Omran, O. (2014) ‘Quality management practices and their relationship to organizational performance’, International Journal of Operations & Production Management, 34(12), pp. 1487-1505.
Schrage, M. (2019) ‘Smart strategies require smarter KPIs’, MITSloan Management Review, 16. pp. 1-9
Singireddy, S. R. R., and Daim, T. U. (2018) ‘Technology roadmap: Drone delivery–Amazon Prime Air. In Daim, T.U., Chan, L. and Estep, J. (eds.) Infrastructure and Technology Management. New York City: Springer, pp. 387-412.