Amazon es una bestia logística: un desmantelamiento

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Las cadenas de suministro a nivel mundial se han interrumpido debido a Covid19. Sin
embargo, los jugadores de plataformas como Amazon y Alibaba han demostrado cómo su
enfoque de la logística y la gestión de la cadena de suministro no solo es escalable sino
también receptivo y resistente a tales interrupciones.

Este problema echa un vistazo bajo el capó de las capacidades logísticas de Amazon y su
potencial en un mundo post-Covid.

En particular, algunas ideas antes de comenzar

1. El libro de jugadas de logística de Amazon incluye dos volantes que se refuerzan

mutuamente: un volante de infraestructura de activos (aumentar la base de activos y
ofrecer un servicio) y un volante de predicciones basado en datos (recopilar datos y
mejorar las predicciones).

2. Las capacidades de mapeo serán una fuente clave de ventaja competitiva en logística.
Mapeo exterior para entregas y mapeo interior para optimización de almacén.
Amazon está bien configurado para ambos.

3. La integración de Amazon en los datos del lado de la demanda, no solo como

minorista, sino como plataforma, es su fortaleza clave para administrar la utilización
de su infraestructura logística.

Hay muchas cosas buenas aquí.

Y si desea discutir más las ideas en esta publicación, únase a la discusión en LinkedIn en
este enlace.

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Además, consulte Platform Institute , una clase magistral en línea sobre plataformas que
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(Más detalles sobre los últimos 4 días de acceso con descuento al final de este boletín)
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Primero ... algo de encuadre
El enfoque de Amazon para la logística es una clase magistral en el equilibrio entre
integración vertical y apertura.

Amazon demuestra que las plataformas no tienen que ser ligeras de activos, solo tienen
que ser estratégicas sobre la propiedad de los activos. Amazon aumenta la propiedad de
los activos donde dichos activos aumentan la dependencia del ecosistema y se abre en
otras partes de la cadena de valor donde necesita que terceros incorporen capacidades de
nicho para complementar las suyas.

Amazon se encuentra entre los mayores beneficiarios del bloqueo en curso. Los pedidos
aumentaron, lo que aumentó los ingresos de la compañía en $ 800 millones adicionales por
mes. Amazon gestiona la entrega de la mayoría de este volumen de comercio electrónico sin
depender de los proveedores de servicios 3PL. Se estima una disminución de
aproximadamente $ 2- $ 4 en el costo por envío de paquetes utilizando su red interna en
lugar de utilizar operadores heredados.

Echemos un vistazo a las capacidades clave que posicionan de manera única a Amazon para
jugar en logística.

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En la era de la IA, la predicción es el rey
La integración de Amazon en la demanda es uno de sus puntos de control más fuertes en
logística.

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¿Por qué es tan importante la integración de la demanda?

Para responder eso, veamos un ejemplo más simple de otra compañía: Netflix.

Se podría argumentar que hubo muchas cosas que impulsaron el éxito de Netflix en el
negocio de alquiler de DVD. Pero lo único con lo que Blockbuster nunca pudo competir fue
con la integración de los datos de cola del lado de la demanda (los usuarios agregarían
películas que querían ver a continuación en una cola) con un sistema logístico a escala
nacional. Todos estos datos en cola agregados a escala nacional informaron a Netflix sobre
la próxima demanda de DVD en todo el país.

Blockbuster solo podía servir a los usuarios según el inventario de DVD disponible en una
tienda local. Esto resultó en:

1) baja disponibilidad de algunos títulos (demanda local> oferta local), y

2) baja utilización de otros títulos (oferta local> demanda local).

Netflix, on the other hand, could move DVDs to different parts of the US based on where
users were queueing those titles. This resulted in higher availability while also having fewer
titles idle at any point.

Queueing data improved stocking and resulted in higher utilization and higher availability. It
allowed Netflix to serve local demand using national inventory.

Traditional supply chains need to manage the trade-off between utilization and
availability. The ability to predict demand solves this trade-off and informs stocking and
logistics.

Amazon’s prediction powerhouse

Amazon is well-positioned here, with multiple weapons in its arsenal.

1. Ecommerce analytics

Amazon uses collaborative filtering and other data analytics to build deep customer profiles.
These profiles include behavior data, interest graphs, affinity scores etc. Amazon uses these
profiles to predict, suggest, and drive purchases on its platform but also uses this to inform
its stocking.

2. Anticipatory shipping

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Amazon's patented anticipatory shipping model predicts precisely where, when, and how
much of a particular SKU to be made available at any of its fulfilment centers, so they are
ready to ship when ordered. Thus, Amazon can scale operations while ensuring high
availability and high utilization.

3. Store analytics

Amazon uses in-store data to decide on product pricing, inventory management, store
layout at Whole Foods, and Amazon Go stores. Sensors placed across the store detect the
products that shoppers buy but also their interactions with the store layout. These stores
will also double up as local collection points for Amazon's delivery network, especially for
essentials in a post-Covid world.

4. Extra-fast shipping

Amazon also regularly tests what new products people might want with extra-fast shipping,
and uses this to inform its stocking better.

5. SKU optimization

Amazon constantly decides what to stock by looking at every product detail. For instance, it
would stock a shirt based on data about color, length, silhouette, sleeve length and
purchase history for similar clothing inventory.

Prediction at ecosystem scale

Here’s where this gets more interesting. Amazon doesn’t merely act as the most data-aware
store in the world. It also extends this capability to the rest of its ecosystem.

6. Seller analytics as-a-service

Amazon also packages some of these insights for its 3rd party resellers, enabling them to
anticipate and plan for customer behavior. Planning for any customer behavior provides a
significant advantage to merchants who usually rely only on post-sales data. To ensure
better delivery, Amazon collaborates with its suppliers and manufacturers and tracks their
inventory and provides recommendations on inventory management.

7. Store analytics as-a-service

Amazon has a history of doing something really well, developing scale (in assets and/or
data), and then packaging that capability as a service to third parties. It’s does this with AWS
(tech infrastructure) and with FBA (warehousing infrastructure). It could do the same thing
with store analytics by eventually offering store analytics to third party stores as-a-service.

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 8. Supply chain management as-a-service

As manufacturers are move towards leaner operations, and as supplier audits increase in a
post-pandemic world, Amazon is well positioned to provide end-to-end logistics and supply
chain management as-a-service. Such a system would potentially analyze supplier data (e.g.
delivery performance, audits, evaluations, credit scoring etc.) and create a reputation
system for suppliers, enabling manufacturers to make better supplier decisions and
reconfigure their supplier network. It would also allow suppliers and manufacturers to plug
into Amazon’s logistics and delivery infrastructure seamlessly, removing the need for
complex procurement.

All of these as-a-service models ensure that Amazon’s capabilities are used at industry scale
and all the resultant data constantly trains Amazon’s prediction models, enabling it to
develop the long tail of predictions.

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Optimizing package interactions inside the warehouse

Amazon has built a massive warehousing and fulfilment footprint across the US, which now
includes

1) Smaller warehouses closer to city centers where Prime Now promotes super-fast delivery
options

2) Whole Foods locations for faster access to groceries and essentials

Amazon constantly invests in optimizing package interactions within the warehouses. This
includes robots moving shipments inside the warehouses, gesture recognition to identify
when a worker has placed a package on a shelf, automatic scanning of items that workers
hold in their hands - all geared toward minimising the click-to-ship cycle time. Future
patents suggest the use of UAVs for warehouse management and augmented reality
enabled eyewear to increase warehouse worker's efficiency.

The rise of indoor mapping

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In its bid to maximise warehousing efficiency, Amazon has developed strong indoor
mapping capabilities. These indoor mapping capabilities may be eventually rolled out into
stores as well. Indoor mapping, as a capability, will likely become more important in a post-
Covid world, where contact tracing will require tracking of movement inside indoor spaces.

Amazon’s last mile play

Controlling the last mile is critical for control over customer experience. The last mile makes
up ~30% of overall logistics expenses.

Amazon has a host of logistics services in the last mile, including crowdsourced deliveries
from external contractors (Amazon Flex and Amazon Logistics), Fresh food delivery (Amazon
Fresh), Amazon Key to allow deliveries into your home, delivery to car trunks, remote door
access to Amazon couriers, Amazon lockers and apartment hubs (Amazon hubs), and
distribution by drone (Prime Air) ensure customer convenience.

Again, data is the reason Amazon gets this right:

Route optimization: Optimal routes for delivery drivers are derived from the data
aggregated across customers, drivers, connected vehicles, weather forecasts, traffic
monitoring systems, and digital and satellite maps.

Fleet planning: Amazon’s fleet management system calculates how many drivers are
needed at any given time. It evaluates the weight and number of packages headed to the
same destination and matches packages and destinations to fleet availability. This includes
determining the order of packing boxes into a vehicle to enable the most effective
unloading based on delivery address.

Mapping metadata: Amazon is gathering delivery metadata that puts mapping features
into context. For instance, one big challenge for Amazon Flex delivery personnel is parking.
Amazon constantly analyses late deliveries and identifies patterns and correlations with:

1) Building type (single address vs multi-address),

2) Access (Deliver at door vs at reception vs in mailroom)

3) Parking facilities (at building vs not)

By correlating delivery times and delays with these variables, Amazon is creating a new layer
of delivery intelligence on top of mapping data. This prediction capability can again be
opened as-a-service for third party logistics firms.

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Amazon’s logistics playbook
Amazon’s logistics play follows a common playbook that we’ve seen in other parts of
Amazon’s business:

1. Gain asset scale through supply-side integration

2. Gain data scale through demand-side integration

3. Leverage supply-side scale to open out asset-as-a-service to ecosystem partners

4. Leverage data across the ecosystem to constantly improve prediction models

5. The more asset-as-a-service scales, the larger the ecosystem using Amazon’s logistics
infrastructure and the greater the data capture for Amazon to constantly improve its
prediction models

This virtuous cycle constantly strengthens Amazon’s logistics play.

If you’d like to discuss the ideas in this post further, please join the discussion on LinkedIn at
this link.

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Thanks to Nishant Marskole for contributing to this strategy teardown.

Announcements: Last week of Enterprise discounted

access
Four weeks back, I announced the launch of the Platform Institute. Over the last four
weeks, we’ve offered discounted access on account of Covid19.

The discounted access for the Enterprise masterclass will end

this weekend on May 17.

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If you’re interested in getting access to the Enterprise course, you can still get discounted
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Here are the access codes again.

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