Amazon’s logistics footprint grew a meteoric 50% during 2020, all with a pandemic going on. What is the secret to Amazon’s successful growth this past year? 1 word: Automation. People sometimes associate automation with downsizing or a way to cut costs, but Amazon took a different approach and made it an opportunity to build new business. According to Harvard Business Review, a decade long initiative called ‘Hands off the Wheel’ had been pushing to automate office work at Amazon. Neil Ackerman, an ex-Amazon general manager said, “when you have actions that can be predicted over and over again, you don’t need people doing them”. “People who were doing these mundane repeated tasks are now being freed up to do tasks that are about invention” said Jeff Wilke, Amazon’s CEO of Worldwide Consumer. Not only were processes getting more efficient, but employees now had more time to work on continuous improvement projects and tactical solutions.
With the most mature e-commerce logistics operation in the country, Amazon had quite the leg up to succeed when overall e-commerce increased by 44% in 2020 compared to 2019. But with competition still fierce, Amazon has been investing heavily in the last 12 months to keep up with same-day delivery competitors like Coupang and Instacart. According to FreightWaves, Coupang, a South Korean company, utilizes Rocket Delivery, its in-house delivery fleet, to deliver 99.3% of all orders within 24 hours. Instacart can deliver 95% of orders with 15 items or less in under 2 hours. Amazon has been losing market share in the grocery segment partly due to Instacart’s growth. But it plans to catch up by using highly automated grocery fulfillment centers to generate better margins.
Tactical technology solutions with the capabilities to monitor changes as they happen is crucial to staying ahead of changes in supply chain and material movement. StrataFlows is an automation solution with an incident command center allowing users to have end-to-end real-time visibility when a part goes missing or a supplier is late during changes in supply. We help clients stay resilient in these times by keeping production flowing by tracking suppliers, demand, and issues, and give them the tools they need to take action. The Issue Tracker module, along with its built-in reporting and dashboarding capabilities, helps our clients keep their continuous improvement goals by giving visibility and collaboration tools to stay agile in a changing market. Click here to for a free trial of StrataFlows.
