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    Logistics Structure at Amazon

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    Module 4 - Background

    Facilities Layout/Process Improvement

    Part 1: Facilities Layout

    The following information will give you a good background on the importance of correct facilities layout and storage solutions. Read the articles below to assist you with completing the assignments for this module.

    Start by reading the article below on Continental Airlines automated storage units.

    Anonymous (2002). Continental flying high with automated storage units. Modern Materials Handling. Boston, 57(12), 45. Retrieved on December 12, 2014, from ProQuest in the Trident Online Library.


    Continental Airlines recently built a new maintenance building at its Newark hub to better serve the airline's growth. To save space, the airline installed 6 vertical lift modules that hold important parts and tools in a manner that makes them readily available and in proper condition as defined by Federal Aviation Administration requirements.

    Here is an excellent article that discusses how to design an efficient warehouse and distribution center for the beverage industry.

    Larose, N. (2001, Apr). Efficiencies within four walls. Beverage Industry, 92(4), 64. Retrieved on December 12, 2014, from ProQuest in the Trident Online Library.


    Site layout, building dimensions, column bay dimensions, lighting, dock locations and ceiling heights are all essential design elements for efficient warehousing and distribution. The greatest opportunities to reduce costs in the beverage industry are available in the distribution warehouses. To maximize these opportunities, a distributor must determine the operational plan that best fits its business and the facility in which it operates. The most common mistake made by distributor is a lack of planning, which can result in costly errors. Every facility should have a master plan.

    This article discusses how important the dock is to a warehouse.

    Freese, T. L., (2000, June). The dock: Your warehouse's most valuable real estate. Material Handling Management, 55(6), 97-101. Retrieved on December 12, 2014, from ProQuest in the Trident Online Library.


    Docks today must be much more flexible, as well as more efficient, to accommodate the increased number and types of receipts and shipments. The number of docks required is determined by a combination of factors: number of receipts and shipments, type of loading and unloading, types and sizes of vehicles, number and timing of carriers, and different areas in which materials will be utilized, stored or prepared for shipment. Today, given the move to JIT inventories and the tendency for shipments to be in close proximity to the manufacturing location, more and more facilities are being constructed with multiple shipping and receiving docks. If your operations require reverse logistics functions, these, too, must be evaluated for environmental considerations. According to OSHA, more than 10 percent of all lift truck accidents result from poor dock layout and overcrowded conditions. Without well-thought-out layouts, good safety practices and staff training, you put some of your most valuable resources at risk - your people.

    Part 2: Process Improvement

    The following information is intended to inform you about the importance of process improvement. Start by reading this article on beverage warehousing and how to improve it.

    Kibort, S. (1999, March 15). A warehouse [r]evolution. Beverage World, 118(1673), 119-122. Retrieved on December 12, 2014, from ProQuest in the Trident Online Library.


    An evolution is occurring in the beverage warehouse. The market dominance of supermarkets and mass merchandisers has increased the number of pick-to-order customers and cases. Under pick-to-order, the picker may have to travel to the same location 10 or more times per route, and because these pick-to-order stores also carry the largest variety of SKUs, the total picking time increases. To complicate matters further, most warehouses are now increasing the number of SKUs they offer to the market. The design of most warehouses compounds these problems. Operations and warehouse managers should focus their efforts on how to improve the warehouse layout, on how and where products are slotted and, on what work methods can be applied to improve the performance and cost of their warehousing operations.

    Here is an article which discusses how an organization can help its third party logistics (3PL) company become more efficient.

    Apple, J. (2002, Aug). Help your 3PL be more efficient. Modern Materials Handling. Boston, 57(9), 96. Retrieved on December 12, 2014, from ProQuest in the Trident Online Library.


    Finding and evaluating process changes that will improve cost and service levels in a warehouse seems like a fairly straightforward task. In a third-party logistics (3PL) environment, though, it is not as easy as some might think. The biggest challenge is to try to find a way to give 3PL partners an incentive to make really big improvements in cost performance.

    This article discusses how one company implemented a new WMS to improve their warehousing.

    Anonymous, (2002). Warehouse software goes live in 9 weeks. Modern Materials Handling. Boston, 57(12), 53. Retrieved on December 12, 2014, from ProQuest in the Trident Online Library.


    Gold Kist, headquartered in Atlanta, markets a complete line of chicken products to retail, institutional and fast food customers. Its warehouse was taxed with high inventory counts, challenging outbound order mixes and a growing order volume. Working closely with its warehouse management system supplier, GoldKist installed and went live with its new software in just nine weeks.

    Case Assignment Reading

    Gilmore, D. (2002, November). Achieving transportation excellence. World Trade, 13(11), 36-38. Retrieved on December 12, 2014, from ProQuest in the Trident Online Library.

    Graham, D. D. (2003, April). Warehouse of the future. Modern Materials Handling, 57(7), 13. Retrieved on December 12, 2014, from ProQuest in the Trident Online Library.

    Module 4 - SLP

    Facilities Layout/Process Improvement

    Welcome to the Module 4 SL. For this module take a look at the logistics structure of your organization; then in a 3- to 4-page paper answer the following questions:

    How can the logistics processes be improved in your organization? What, if anything, have you learned in this course that might help that improvement effort?

    SLP Assignment Expectations

    Research the organization with information you can find on the internet or other resources you find on your own. The paper should be 3-4 pages in length and have a cover sheet and a reference page. Clarity of presentation is important, as well as your ability to apply the topics to the logistics area of your selected firm. Use at least 3 different sources of information and annotate your sources of information appropriately on your references page and within the text as necessary. You will be assessed on how well you demonstrate your knowledge of the topic as it applies to your selected firm. Submit your assignment for grading by the end of this module.

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    Solution Preview

    Amazon is one of the largest e-commerce giants selling every possible product through its online platform. The rapid growth of the company can be attributed to two factors:
    1. Encouraging third party sellers to use Amazon platform
    2. Offering free-shipping to customers
    Amazon has been able to leverage both through its Fulfillment by Amazon (FBA). FBA is Amazon's fulfillment service and an incredibly powerful stimulus for the marketplace's growth, but it also offers a myriad of benefits to participating third-party sellers ("A deep dive ...", 2013). The tagline of Amazons Fulfillment by Amazon program is "You sell it, We ship it". Amazon has been expanding its capacity to fulfill by building fulfillment centers (FCs) across the country. The goal of the company is to bring products closer to customers to reduce fulfillment costs. Lesser is the ground distance between products and customers, lower would be the transportation cost.
    The structure of the program is simple with retailers opting for Amazon's FBA program and stocking their products at Amazon fulfillment centers. When there is an order for any product, it is picked from its position in the FC, packed and shipped to final destination. Hence, the process ...

    Solution Summary

    Analysis of logistics structure of Amazon, weaknesses in the same and recommendations for process improvement