Business Information System and process Amazon

Business information systems and processes of Amazon Table of Contents I. Purpose of the research.................................................................................................................................................................2 II. Overview of Amazon ....................................................................................................................................................................2 2.1 Introduction ...............................................................................................................................................................................2 2.2 Business Model canvas of Amazon...................................................................................................................................2 III, The core business in InventoryWarehouse Monitoring activities of Amazon..................................................6 1. The core business process of Amazon................................................................................................................................6 2. The company’s functional areas involved in the order processing in warehouses.........................................7 3. The Order Processing............................................................................................................................................................ 11 IV. Information systems are being used to support Core business process............................................................. 14 1. Information System................................................................................................................................................................ 14 2. Amazon Web Service (AWS).............................................................................................................................................. 15 3. Simple Storage Service (Amazon S3).............................................................................................................................. 18 V. Reference ........................................................................................................................................................................................ 21 Group Contribution......................................................................................................................................................................... 23 It is a system that acts as an intermediary between companies and businesses with the environment and society. It is a system located at the heart of the business, helping the process of collecting, processing and providing information in the most convenient way. Information systems now act as an intermediary between brands, businesses, and the environment and society. It is a system located at the heart of the business, playing a decisive role, making the process of collecting, processing and providing information the most convenient. In this report, we will clarify the core business process of Amazon, a global ecommerce company: the order processing in the Amazon Fulfillment Centre, which gave the company its starting point as an online bookstore that has turned into a giant. The Ecommerce giant with its own distribution network, poses a threat to retailers and courier services. Moreover, our report will also analysis the Amazon information systems which play a vital role in the business processes of Amazon, especially the order processing

Business information systems and processes of Amazon

GROUP 3

Lecturer: Lê Duy Tiến Member of group 3: Nguyễn Thị Mai Lan - 19071392

Nguyễn Thị Hồng Hải - 20070158 Nguyễn Minh Sơn - 20070785 Nguyễn Thị Hải Yến - 18071274 Hoàng Thanh Hằng - 18071079

Table of Contents

I Purpose of the research 2

II Overview of Amazon 2

2.1 Introduction 2

2.2 Business Model canvas of Amazon 2

III, The core business in Inventory/Warehouse Monitoring activities of Amazon 6

1 The core business process of Amazon 6

2 The company’s functional areas involved in the order processing in warehouses. 7

3 The Order Processing 11

IV Information systems are being used to support Core business process 14

1 Information System 14

2 Amazon Web Service (AWS) 15

3 Simple Storage Service (Amazon S3) 18

V Reference 21

Group Contribution 23

I Purpose of the research

It is a system that acts as an intermediary between companies and businesses with the environment and society It is a system located at the heart of the business, helping the process

of collecting, processing and providing information in the most convenient way Information systems now act as an intermediary between brands, businesses, and the environment and society It is a system located at the heart of the business, playing a decisive role, making the process of collecting, processing and providing information the most convenient

In this report, we will clarify the core business process of Amazon, a global e-commerce company: the order processing in the Amazon Fulfillment Centre, which gave the company its starting point as an online bookstore that has turned into a giant The E-commerce giant with its own distribution network, poses a threat to retailers and courier services Moreover, our report will also analysis the Amazon information systems which play a vital role in the business

processes of Amazon, especially the order processing

II Overview of Amazon

2.1 Introduction

Amazon.com Ine (listed on NASDAQ AMZN) is an American e-commerce company located in Seattle, Washington state It is America's largest retail chain, with nearly three times its Internet sales Amazon is a company that deals in leather, multi-tasks such as books, music buying services, computer software, interior decoration, games Amazon's ads catch our eyes whenever

we click on the Internet Experts call Amazon.com one of the most potential and promising companies today With billions of dollars in revenue per year within 4 years of establishment and development, it is clear that this online retail supermarket is one of the giants of the e-commerce world

Jeffrey P Bezos is the founder of Amazon in 1994 and started an online business in 1995 Initially the company was just an online bookstore, then diversified product lines such as DVD CD, MP3 software computers, video games, electronic goods, food, games, furniture, jewelry, clothing Amazon set up its own websites in Canada, UK, Germany, France China and Japan It also exports certain types of goods to several other countries

On January 15, 2009, a study by Verdict Research found that Amazon is the most popular music and video retailer in the UK and the third largest in retail in the world

2.2 Business Model canvas of Amazon

a Key activities

● Trading in digital goods and physical goods: Most of the items are available on

amazon and the quality of the products is checked before being put on the market and delivered to customers

● Develop, design and optimize its Platform (website/app): interface and application

design, more upgraded graphics make it easier for buyers to choose

● Supply chain management and logistic: Amazon supply chain simply refers to the

entire process of product warehousing, Inventory management, pricing and

● The people who own the intellectual property that Amazon sells via the Kindle ecosystem and streaming platforms are also key partners

● Brands: Brands also cooperate with amazon to sell, promote their products

c Key resource

● Amazon's physical resources such as fulfillment centers (warehouses) and supply chain automation help support Amazon's physical resources In particular, its online sales site is important to Amazon's business model

d Value Propositions

● Jeff Bezos defines that Amazon’s business model is based on three value

propositions: low price, fast delivery, and a wide selection of products However,

looking at these three consumer benefits, we can say that Amazon’s greatest value proposition is convenience because the audience understands that, with just the help of a device connected to the internet, they have access to the product catalog

of the largest retailer in the world, with a reasonable price and an agile, safe and reliable delivery service

e Cost structure

● The cost structure of Amazon includes its complete IT structure, customer service center, software development and maintenance, information security, and marketing, as well as all expenses involved in maintaining its physical spaces, such

as fulfillment centers, sortation centers, and delivery stations

f Customer relationships

● Amazon puts customers and the Customer relationships in front and centre “We see our customers as invited guests to a party, and we are the hosts It’s our job every day to make every important aspect of the customer experience a little bit better.” (Jeff Bezos, founder and CEO of Amazon) Over the past 20 years, Amazon has consistently proven it is capable of running a world-class customer relationship management (CRM) strategy For its millions of loyal customers, Amazon has remained their preferred online shopping destination amid mass competition A well-managed and efficient CRM strategy has been a crucial aspect

of their success

g Customer segments

● Amazon offers a wide range of products and services, successfully exploiting more than one segment at the same time Specifically, the online retail giant sells more than 75 million products, appealing to the needs and wants of a wide range

of customer segments

h Channels

● Amazon spends a lot of money on advertising Advertising and other promotional expenses to market products and services cost Amazon $6.3 billion, $8.2 billion and $11.0 billion, $10.9 billion, respectively $16.9 billion in 2017, 2018 and 2019,

2020, 2021

● Amazon's business scale was originally and still focused on B2C transactions As

a retailer, Amazon increased the size of its business by diversifying its product offerings (from selling books, more selling CDs, selling toys, electronics, etc.) When there is an e-marketplace, Amazon only takes advantage of the advantages

of its brand, customer interface, and technology infrastructure, but not the amount

of information about customers, facilities or expertise in logistics again

● Amazon's marketplace is global, not limited to anywhere, anywhere with an Internet connection and no freight forwarding obstacles, where Amazon approaches and does business

● Amazon's initial business growth was based on an approach from SEO and AdWords with millions of keywords For added appeal, Amazon relies on personal information Amazon's marketing automation system will make the right recommendation for the customer From there, the marketing journey of Amazon highlights spread from person to person Besides, Amazon still strives to innovate They are constantly researching more new utility technologies to provide to customers Prominent is the Kindle online book selling application on iOS and Android platforms This is one of the very welcome apps in the market Amazon says it now sells more books on Kindle than paperbacks Amazon has earned 17%

of revenue from these ads worldwide In addition, Amazon has many channel marketing plans They attract customers through many online marketing channels such as Associates programs, paid search, advertising portals, email marketing… All are Automation systems

multi-i Revenue stream

Amazon has 10 main revenue streams: Game, AWS, book, music and video, Amazon ticket, Amazon Prime, Amazon Fire, Amazon e-commerce platform, License of invention, Advertising service

Amazon makes money in 5 distinct ways The majority of Amazon's revenue comes from sales

on the main site, either directly or through third-party commissions Other sales come from AWS, brick-and-mortar stores, and subscription services, such as Prime

○ Online Store: Includes sales of digital

media content and products Amazon

leverages its retail infrastructure to offer a

wide selection of merchandise including

media products available in both physical

and digital formats, such as books, music,

videos, games and software This product

sales include digital products, “Account

Upgrade” package

○ Direct store: where customers can buy

Amazon products directly in the store, or

they order on the app and then go to the store to pick up the goods

○ Third-party seller services: Commissions and any shipping and related fees and other services of the third-party seller

○ Subscriptions: Annual and monthly fees for Prime account upgrades Amazon's standard Prime subscription rate is

$119/year, which translates to more than

$17.8 billion in revenue, although the

company already offers membership

discounts for students and others

○ AWS: AWS includes sales of computers, storage, databases, and other services globally

○ Other: mainly includes the sale of advertising services, as well as the sale of services related

to other service

III, The core business in Inventory/Warehouse Monitoring activities of Amazon

1 The core business process of Amazon

Amazon is one of the largest e-commerce companies in the world and the largest retailer in the United States Founded in 1994, Amazon has achieved great success and has reached the top position today The key of Amazon’s success is emphasizing on customer centricity, they optimize all of their processes to make it easier for the customer to decide and buy the product, and to make it as cheap to the customers’ as possible One of the main processes that help Amazon greatly increase customer satisfaction is the fast, effective order processing in the extremely modern warehouse system

There are some outstanding features, which make the order processing highly effective and

special, in Amazon's warehouse management system

The pinnacle of the art of archiving by

technology

Nothing like traditional warehouses;

Amazon's warehouse is highly

computerized So much so that they require

a lot of lines of code to operate From the

moment the first signals were sent by the

computer Indicates which products are

taken down from the shelf Until the order of

packing, waiting, loading and unloading on

the vehicle Everything is closely monitored

by the managers here

Amazon's warehouse processing process is

applied according to the CFN (Customer

Fulfillment Networking) strategic model As

a result, warehouse productivity increased

by 40%, operating costs in 3 years decreased

from 20% of revenue; less than 10% of revenue

The excellence in stocking, picking

Each customer order will be loaded onto the warehouse staff's handheld device The system will automatically determine for them the closest distance between random items inside this warehouse This; help Amazon employees complete their "crab pick up" in the shortest amount of time Shorter pick-up time means shorter delivery time, more satisfied customers Everything

in the warehouse is automated; so employees only need to follow the instructions of the handheld device to be able to complete their work

Accuracy when picking up

Everything is done by machines; The human

factor is minimized Employees only need to

follow the instructions of the system Take

the shortest route, pick up the item and then

deliver it to the customer It helps to reduce

risks such as getting the wrong color of

clothes, wrong size or many other problems

Storage savings in Amazon warehouse

management

Any empty cell is filled the storage capacity

of the warehouse is greatly enhanced

Amazon claims that with this random sorting

method alone, their warehouse can hold 2

times more than traditional storage

The randomness also allows for easier

management, as customers can order

anything in Amazon's inventory Placing

products in any open space is an effective way to save warehouse space

Bringing robots into Amazon's warehouse management network

Amazon makes a breakthrough when it adds robots to its random, transforming network Amazon has thousands of robots that support warehouse operations Robots here are small box-like machines that lift shelves and run along a separate path The storage racks will

be continuously rotated by the computer system to bring out the empty space

When evaluating and comparing, it takes about 60-75 minutes for manual staff to complete the order receipt and delivery cycle, the warehouse system with robot only takes 15 minutes Warehouses can hold 50% more goods

2 The company’s functional areas involved in the order processing in warehouses

Amazon Web Service - AWS: is the world's most comprehensive and broadly adopted cloud

platform, which is developed by Amazon It plays a core role in the business process of Amazon

AWS stores all data, provides distributed computing processing capacity and software tools;

manages inventory, robotic systems

Picking Station: It all starts with the picking process, where the desired goods are picked up in

the pick towers Modern fulfillment centers use robots to aid the picking process, while older centers and centers with goods that are difficult to handle (bottles, clothing, etc.) use manual picking

● Manual Picking: The pickers push a cart with yellow boxes and have a hand-held

scanner The scanner tells them the shelf position for the next pick Since this is a random storage system, the shelf area may contain other products, and the same product may also reside on other shelves The picker scans the shelf barcode, then the item If everything

is fine, the picker moves on to the next position

● Robotic Picking: Similar to robotic queuing, robotic picking does not use robots to

remove items from shelves The robot has the role of bringing pods full of items to

associates working at pick stations

Robotics system

One of the most amazing aspects of Amazon fulfillment is their Amazon Robotics It has made the order process of Amazon faster, easier, more efficient, more productive and reduced the fulfillment cost by 40%

Almost every job in Amazon's warehouse uses robots to work From the moment the first signals are sent out by the computer showing what products are being taken off the shelf, to the order in which they are packed, waiting, unloading, and unloading Everything has a robot footprint

Amazon

Robot

Payload 450 kilograms (1000 pounds)

Speed of about 5 km/h

Hercules Similar to Kiva but with 3000 lbs lifting

In June 2019, Amazon MARS presented this robot for the first time This drive unit can also carry pods, but it can be used with a

variety of attachments

warehouse with the help of cameras and sensors It can be ordered and programmed

to transport packages within a facility by a

worker

Ernie Ernie moves around the stack using a robotic

arm It lifts totes from the stack to place

them in front of workers

empty totes around, Kemet specializes in

returning empty totes

with magnetic navigation where decision points are tags on the floor that indicate if it should change direction, speed up or slow

down as it travels along

conceived to perform last-mile deliveries to

your door

products to customers' front doors Drones can transport orders below five pounds

(2.26kg)

Packing Station: Each fulfillment center has 100 or so packing stations, although not all of them

are active all the time Here is the place where the item will be packaged and barcoded containing

all the necessary information about the parcel At this stage, the main resource is people and is supported by Machine Learning

SLAM system:

SLAM has nothing to do with wildly slamming your parcel around (that is done during delivery), but stands for Scan, Label, Apply, Manifest It is also a final quality check that weighs the parcel and compares the weight with the expected weight of the items and packaging again If there is

a discrepancy, the parcel is checked again manually

During packing, a barcode was attached to the parcel This links the parcel with the related information, but this is only machine-readable During SLAM, a machine scans this code, prints

a proper shipping label that humans can also read, and attaches this label to the parcel

A fulfillment center may have somewhere around 10 SLAM machines

Human Resource: Stowers, Pickers, Associates, Managers

The Inventory Control and Quality Assurance team: makes sure an item's physical location actually matches what's in the computer, tracking millions of units of inventory

Amnesty Floor Monitors supports robots by making sure the floors are clear and reset the units when needed

3 The Order Processing

The diagram of the order processing of Amazon