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Distribution Strategy: Case Study: Abhishek Tuli Ajay Kaushik Ankit Karir Ankit Garg Md. Salman

This document discusses Amazon's expansion into Europe through its European Distribution Network (EDN). It evaluates three approaches for the EDN: continuing to hold inventory separately in each distribution center, selectively sharing inventory between sites, or fully integrating and mixing inventories based on demand. The recommended strategy is to fully integrate the three distribution center inventories to improve efficiency and reduce costs. Centralizing management and utilizing cross-docking warehouses, strategic fulfillment, and inventory distribution are also recommended to optimize Amazon's European operations through the EDN.

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Ajay Kaushik
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107 views10 pages

Distribution Strategy: Case Study: Abhishek Tuli Ajay Kaushik Ankit Karir Ankit Garg Md. Salman

This document discusses Amazon's expansion into Europe through its European Distribution Network (EDN). It evaluates three approaches for the EDN: continuing to hold inventory separately in each distribution center, selectively sharing inventory between sites, or fully integrating and mixing inventories based on demand. The recommended strategy is to fully integrate the three distribution center inventories to improve efficiency and reduce costs. Centralizing management and utilizing cross-docking warehouses, strategic fulfillment, and inventory distribution are also recommended to optimize Amazon's European operations through the EDN.

Uploaded by

Ajay Kaushik
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Amazon.

com’s European
Distribution Strategy : Case
Study
ABHISHEK TULI
AJAY KAUSHIK
ANKIT KARIR
ANKIT GARG
MD. SALMAN
Facts

 Established in the year 1998.


 Started with the acquisition of bookpages.co.uk(United Kingdom) and
Telebuch.de(Germany)
 Amazon international comprises of Amazon Europe and Amazon Japan, 35% of total
revenue.
 To sustain its growth Amazon has replicated the broad array of product line structure of U.S
into Europe.
 It is expected that Amazon Europe would exceed Amazon U.S in terms of revenue by 2004
OUTLINE

Evolution of Amazon’s Supply Chain and Distribution system in the US


 1995 – 1998 : Establishing Amazon.com
 1999 : Building additional fulfillment infrastructure.
 2000-2002 : Optimizing the customer

Amazon in Europe
• Challenge in Europe
• Assessing the EDN opportunity
• Impact of the implementation oft the EDN
• Hope on EDN
• Design the EDN
What distribution strategy would you recommend to Amazon in Europe? Explain
the alternatives evaluated & justify your recommendation.

 Dependent in part on the functions of the DCs in the EDN, with three approaches..
 Continuing with its current strategy of holding inventory in all three DCs.
 Selectively sharing inventory among European sites
 Three DC’s inventories physically mixed, based on demand patterns and inventory
and transportation costs.
Challenge in Europe

 Hard to decrease the shipping costs


 Cost cutting
 Restructuring effort to reach profitability
 Unify the marketing and branding functions

 Did Amazon need three independent distribution centers in UK, Germany and France or
build a European Distribution Network (EDN)?
Assessing the EDN opportunity

EDN = European Distribution Network Internal Impact


Decentralized model  Redesign its transportation process

Possible Benefit of EDN


 Staff retraining
 Infrastructure cost
 Expand product selection through DCs.
 Facilitate global sourcing at the global network.
Educate the customer to associate a different
 Reduce the risk of relying on a single DC. shipping price to the delivery service level
 Improve customers’ experience. Implement “ postal injection” , seek better
terms from a pan-European carrier.
 Expand into other countries from current DCs.
Recommended Strategy

 Amazon Europe should consider third choice i.e. the Amazon Europe’s operations should
be integrated fully, with three sites’ inventories physically mixed, based on demand
patterns and inventory and transport cost.
 Once implemented this design would prove very cost effective although it requires
analysis of demand patterns, cost, transportation options, IT requirements.
 It’s necessary to reduce the gap between split orders and the cost associated in fulfilling
them.
Recommendations

 Implement European distribution network(EDN).


 Centralize management office in the UK in order to perform more operations.
 Create cross-docking enabled warehouses, preferably in Southern Europe where higher
demand is observed.
 Make use of strategic order fulfillment to minimize lead time
 Utilize strategic inventory distribution to reduce cost.
 By continuing free shipping for local products, extending the use of postal injection for
some high demand products.
Recommendations Contd.

 Leveraging Amazon techniques:


1. Drop-shipping
2. Pick profiles
3. Technology Investment.
 Full truck loads from DC’s to major cities.
 Reduce postal service charges, maintain low shipping cost and offer free shipping in some
new places.
THANK YOU

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