Inventory Throughput is Key for E-Commerce Warehouses

Inventory Throughput is Key for E-Commerce Warehouses

August 1, 2020

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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Amazon Optimizes Warehouse Space

Amazon Optimizes Warehouse Space

December 22, 2019

As the holiday buying season is underway, Amazon is revising its warehousing system.

As we previously shared, in an effort to cut Prime shipping time from two days to one day the company invested heavily in 2nd quarter 2019 to improve transportation and warehousing. Part of the warehousing problem relates to independent merchants that are using Amazon for fulfillment.  Over half of Amazon sales are from these independent merchants.

Amazon has raised the fees charged to these independent merchants to encourage a reduction in inventory, trying to keep slow-moving items out of their distribution centers.  Because many of these merchants are concerned about the fees, Amazon may not have enough inventory on-hand with holiday sales looming.

Thus, Amazon is implementing Amazon Storage and Replenishment.  Merchants can now store products to replenish Amazon’s distribution centers from nearby warehouses.  The hope is to allow merchants a cheaper storage option in order to keep inventory low in Amazon’s distribution center, but yet not run-out of merchandise that might result in lost sales.


Video Spotlight: Amazon is making one-day shipping the new standard for Prime members


This post is based on the Bloomberg article, Amazon Tests Cheap Warehouses to Make Continue reading

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