Amazon’s Thousand Suburban Warehouses

Amazon’s Thousand Suburban Warehouses

November 3, 2020
Ross L. Fink, Ph.D.

Amazon plans to open 1,000 small delivery hubs across the United States, with plans to increase this number to approximately 1,500.

The move is to further the company’s goal of same day delivery to customers.  Walmart and Target have been using their network of stores to provide same day delivery, with Walmart implementing Walmart+, its own version of Amazon Prime.

Amazon’s small delivery hubs are planned to be about 200,000 square feet, one-quarter the size of the company’s fulfillment centers.  Moreover, these suburban hubs will provide parking lot space for hub workers, Amazon delivery vans, and the gig workers who make Amazon deliveries.

Overall, it is expected that each small delivery hub will generate around 1,000 vehicle trips per day.

Video Spotlight: 

This post is based on the Yahoo Finance article, Amazon Plans to Put 1,000 Warehouses in Suburban Neighborhoods, by Spencer Soper, September 16, 2020, and the YouTube video in the Spotlight. Image source: jeremyiswild/Getty Images

Discussion Questions:

1. What advantage does the small delivery hub offer?

Guidance: These small hubs allow inventory to be Continue reading →

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Toys R Us Shifts To Fulfillment By Amazon

Toys R Us Shifts To Fulfillment By Amazon

September 14, 2020
Anita Lee-Post, Ph.D.

Toys R Us went through bankruptcy in 2017, and closed its stores in 2018, but online orders have continued.

Toys R Us has recently replaced Target with Amazon as its e-commerce partner.  Customers shopping at the ToysRUs.com site will be redirected to Amazon for order fulfillment.

Video Spotlight: 

This post is based on the Chicago Business Journal article, Target is out, Amazon in as Toys R Us fulfillment partner, by Anne Stych, August 21, 2020, and the YouTube video in the Spotlight. Image source: BK666/Shutterstock

Discussion Questions:

1.   Is Toys R Us’ e-commerce partnership with Amazon a sound operations strategy?  Explain.

Guidance: Yes.  By partnering with Amazon, Toys R Us can build on Amazon’s e-commerce prowess to handle customer-business transactions online.  This way Toys R Us can focus on providing customers with a large toy assortment to choose from and leave Amazon to handle the order fulfillment.

2. Comment on Toys R Us’ digital strategy from an operations management perspective.

Guidance: Toys R Us attempted to rebuild its brand by opening two physical Continue reading →

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Inventory Throughput is Key for E-Commerce Warehouses

Inventory Throughput is Key for E-Commerce Warehouses

August 1, 2020
David Little, Ph.D.

The rise in e-commerce has been accelerated by the COVID-19 pandemic.

E-commerce requires three times the warehouse space over brick-and-mortar retail operations.  A real key to managing a warehouse efficiently is inventory throughput.  Wayfair, for example, focuses on throughput and uses a chase demand strategy to staff warehouse operations to obtain efficiency.

Video Spotlight:

This post is based on the Supply Chain Dive article, Prologis: Demand for warehouse space will rise alongside e-commerce growth, by Matt Leonard, June 18, 2020, and  the YouTube videos in the Spotlight. Image source: vitpho/123RF

Discussion Questions:

1.  Wayfair uses a chase demand strategy to staff the warehouse operations.  What other aggregate planning strategies could Wayfair employ?  Is the chase demand strategy the better option?  Why or why not?

Guidance: Students should consider all the aggregate planning strategies in the textbook.  Lead the discussion by Continue reading →

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