Makalah Case Study 5 - Supply Chain Management Oleh:...

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Supply Chain Management Oleh: 0806318050 Danny Pardamean 0806391221 Anton Tri Laksono 0806350051 Febri Alamsyah 0806350846 Zilqi Chairon Djasmy Fakultas Ekonomi Universitas Indonesia
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Case Study 5: E-Commerce at Amazon.com Amazon started as an e-commerce book site and has now added music, toys, electronics, software, and home improvement equipment to its list of product offerings. The Amazon supply chain is longer than that of a bookstore chain such as Borders or Barnes and Noble because of the presence of an additional intermediary— the distributor. The distributor margins in the Amazon supply chain can also be viewed as an increase in cost. However, Amazon has exploited several opportunities on the Internet to attract customers and increase revenues. Amazon uses the Internet to attract customers by offering a huge resource of millions of books. A large physical bookstore, in contrast, carries fewer than 100,000 titles. Amazon also uses the Internet to customize service to the individual. Amazon's software allows it to develop and maintain customer relations by recommending books based on customer purchase history, sending reminders at holiday time, and permitting customers to review and comment on books. New titles are quickly introduced and made available online, whereas a brick- and-mortar bookstore chain must distribute and stock the titles prior to sale. Amazon takes advantage of other Internet attributes: online ordering and 24-hour-a-day, 7-day- a-week availability. To this Amazon adds delivery to the customer's door. Amazon uses e-commerce to lower inventory and facility costs, but processing costs and transportation costs increase. Amazon is able to decrease inventories by consolidating them in a few locations. A bookstore chain, on the other hand, must carry the title at every store. Amazon carries high-volume titles in inventory, but purchases low-volume titles from distributors in response to a customer order. This also tends to lower costs because the distributor is aggregating (consolidating) orders across bookstores in addition to Amazon. E-commerce allows Amazon to lower facility costs because it does not need the retail infrastructure that a bookstore chain must have. Initially, Amazon did not have a warehouse and purchased all books from distributors. When demand volumes were
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low, the distributor was a more economical source. However, as demand grew, Amazon opened its own warehouses for high-volume books. Thus, Amazon's facility costs are growing but still remain lower than for a bookstore chain. Amazon does, however, incur higher order-processing costs than a bookstore chain. At a bookstore, the customer selects the books, and only cashiers are needed to receive payment. At Amazon, no cashiers are needed, but every order is picked from the warehouse and packed for delivery. For books that are received from distributors, additional handling at Amazon adds to the cost of processing orders. Amazon's distribution incurs higher transportation costs than a retail store. Local
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Makalah Case Study 5 - Supply Chain Management Oleh:...

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