UNIVERSITY OF TRANSPORT

HO CHI MINH CITY

INFORMATION TECHNOLOGY AND
DIGITAL TRANSFORMATION IN
LOGISTICS

COURSE CONCLUSION REPORT

TOPIC: THE LOGISTICS AND GOODS TRANSPORTATION
SYSTEM OF AMAZON
…….

Guiding Professor : MSc. Đặng Nhân Cách

Class : QL23IECC

Student Team Executing :

Mai Thị Kim Hồng 079305012771

Phan Đình Phương Nghi 077305010115

Lê Thị Hồng Nhung 068305002750

Nguyễn Trúc Quyên 052305007428

Ninh Nguyệt Sông Thương 094305006630

Ho Chi Minh City, November 2023.

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 CONTENTS

I. Introduction: .................................................................................................................... 3
II. Acknowledgments: .......................................................................................................... 4
III. Context and Research Objectives: ................................................................................... 5
3.1 Overview of Logistics and E-commerce in Amazon: ................................................................ 5
3.2 Specific Research Objectives: ................................................................................................. 5
3.3 Research Approach Guidelines: ............................................................................................. 6
3.4 Significance of the Research: ................................................................................................. 6
IV. Logistics system analysis: ............................................................................................... 7
4.1 Order Placement and Processing Procedure: ........................................................................ 7
4.2 Inventory management and storage: .................................................................................... 8
4.3 Transportation and Delivery .................................................................................................. 8
4.4 Quality Assurance and Returns .............................................................................................10
V. Advantages and Disadvantages of the systems: ............................................................ 11
5.1 Advantages of the system: ...................................................................................................11
5.2 Limitations of the system: ....................................................................................................12
VI. Competitive Advantage of the systems: ....................................................................... 13
6.1 Core Values of the Amazon System.......................................................................................13
6.2 Amazon's Competitive Advantages Over Competitors ..........................................................14

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I. Introduction:
In the ever-evolving landscape of global commerce, the efficiency and
effectiveness of logistics and goods transportation systems play a pivotal role in the
success of businesses. Among the frontrunners in this arena stands Amazon, a
company that has not only revolutionized e-commerce but has also set new
standards for supply chain management and delivery services. This essay delves
into the intricate workings of the logistics and goods transportation system of
Amazon, exploring the key components that contribute to its unparalleled success
in this critical aspect of the business.

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 II. Acknowledgments:
I would like to express my sincere gratitude to all those who have
contributed to the completion of this essay on the logistics and goods transportation
system of Amazon. My appreciation goes to the researchers, professionals, and
practitioners whose insights and expertise have been invaluable in providing a
comprehensive understanding of the intricate logistics network that underpins
Amazon's operations.
I extend my thanks to the academic community for fostering an
environment of learning and exploration, allowing for the pursuit of knowledge in
areas such as supply chain management and logistics. Additionally, I appreciate the
efforts of individuals who have shared their experiences and perspectives, adding
depth to the analysis presented in this essay.
Lastly, I would like to express my gratitude to Amazon as a company, for
not only being a subject of study but for continually pushing the boundaries of
innovation in logistics, setting benchmarks for the industry. The company's
commitment to excellence has undoubtedly paved the way for a more streamlined
and customer-centric approach to goods transportation.
With these acknowledgments, let us embark on a journey to unravel the
intricacies of Amazon's logistics and goods transportation system, a system that has
not only transformed the company but has left an indelible mark on the landscape
of modern commerce.

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III. Context and Research Objectives:
3.1 Overview of Logistics and E-commerce in Amazon:
Amazon.com, Inc (NASDAQ: AMZN) is a multinational e-commerce company
based in the United States, founded by Jeff Bezos in 1994. Amazon is one of the
largest companies globally with a business model primarily focused on multi-sector
e-commerce, providing a diverse range of products from books, electronics, home
goods, fashion, to cloud services, and entertainment platforms.
Logistics operations have played a vital role for Amazon's company
development:
1. Optimizing the management and coordination of goods throughout all
processes. This optimization requires flexibility and speed to meet the needs of
online consumers.
2. Providing smooth and convenient online shopping experiences for
consumers. This includes fast, reliable, and efficient delivery, which are crucial
factors determining customer satisfaction.
3. Creating a competitive environment and enhancing business
efficiency, enabling the company to minimize transportation costs and
strengthen competitiveness against other businesses.
3.2 Specific Research Objectives:
The objective of this research focuses on exploring, analyzing, and evaluating
the processes, technologies, and strategies that Amazon uses in their logistics
system. Specifically, the objectives could revolve around the following points:
Analyzing the transportation process: focusing on examining and detailing the
goods transportation process, including order processing, inventory management,
storage, transportation, and delivery.
Applying flexible information technology in warehouse management: Amazon
has utilized information technology to manage, organize, and optimize the storage
of goods in their warehouses.
Evaluating ordering and inventory strategies: how Amazon inventories goods to
efficiently meet customer demands, including ensuring product quality and
providing optimal returns.

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 3.3 Research Approach Guidelines:
Conducting this research involves the following methods and procedures:
Understanding and gathering data from reliable sources: using knowledge and
data from published materials such as books, scientific articles to understand
trends, challenges, and opportunities in Amazon's logistics field.
Analyzing public data: utilizing available public data from market reports or
logistics activities in Amazon's e-commerce. Additionally, during research, there
should be data verification to ensure accuracy and reliability.
By combining these methods, a solid foundation will be established for analysis
and valuable conclusions. This will provide accurate and specific information about
Amazon's logistics system.
3.4 Significance of the Research:
During this era of the Industry 4.0 revolution, logistics and supply chain
management have been greatly influenced by the rapid development of e-
commerce and online shopping platforms. Amazon holds widespread global
influence, and studying their logistics and goods transportation system not only
holds significant importance but also yields core values including:
4. Understanding Industry 4.0 trends: Providing valuable insights into the
impact of the Industry 4.0 revolution on logistics, particularly within e-
commerce and expanding online shopping models, bringing timely changes in
goods transportation and distribution methods.
5. Reflecting future logistics development trends: Amazon's handling of
goods supply issues provides essential information to forecast and shape
potential changes in the industry.
6. Application in other fields: Research to gather knowledge and
experiences from Amazon's logistics system for widespread application in other
fields, such as sharing and applying experiences to optimize transportation
systems of other businesses.
7. Providing a practical view of a corporation's logistics operations:
Offering insight into the complexity of managing such systems, which can
assist other businesses in understanding challenges and opportunities while
constructing and managing their logistics systems.
8. Driving innovation: Understanding how Amazon applies technology
to manage and improve their logistics system can promote the adoption of new
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 technologies like artificial intelligence and automation in the logistics process
of larger corporations.

IV. Logistics system analysis:

4.1 Order Placement and Processing Procedure:
Amazon's warehouse and storage management system is designed for
automation and optimization. Across the globe, distribution centers equipped with
modern technology such as automated robots and packaging systems ensure swift
handling of goods.

Amazon also utilizes real-time tracking systems to manage inventory and

predict customer demand. Intelligent algorithms assist in maintaining an ideal
inventory level, minimizing losses, and ensuring flexibility in order fulfillment.
This enhances the overall shopping experience for users and optimizes the supply
chain.
1. Search and choose the products:
Customers come to the Amazon website or app to search for their desired products
When they found the product, they select to add it to their shopping cart.
2. Check the shopping cart and place an order:
Customers check the shopping cart then modify the quantity and select the payment
method
Confirm and place an order.
3. Order confirmation:
The customer will receive a confirmation notification from Amazon via email or
through their application.
4. Order processing:
The order processing system includes the following steps:
Check product availability: are the products and their quantities in stock?
Confirm inventory: Determine if the product is available or not, and identify the
warehouse if there are multiple warehouses
Verify payment information: The system verifies the customer's payment
information to ensure that payment transactions are executed correctly and
securely.
5. Packing the products:
The products are transferred to the packing center to be packed, then prepare for
transportation
6. Shipping and delivery:
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The packaged items are sent to a post office or shipping partner for delivery to the
specified address.
7. Update the delivery status:
The status is updated for the customers to easily follow the delivery process.
8. Delivery and receive:
The customers receive and confirm when they get their product.
9. Feedback and reviews:
After receive the product, Customers can provide feedback and reviews for
products, as well as share their experience when shopping on Amazon.
4.2 Inventory management and storage:
Amazon has a modern inventory management and storage system to ensure
efficiency and quick responsiveness to millions of daily orders. Besides that,
Amazon integrate various technologies with modern management systems:
1. Storage center:
Amazon owns and manages a large network of storage centers worldwide for
convenient inventory holding and efficient of orders.
2. Automation system:
Using the automation technology and robot to optimization the storage and order
processing procedures.
The robots can move the products efficiently in warehouses.
3. Classify and packing automation:
The Amazon system can sort and pack the goods accurately and quickly.
4. Using IOT technology:
Using the IOT (Internet of Things) to follow the location and status of goods in
warehouse, help them to optimize inventory management.
5.The order management system:
Using Warehouse Management System (WMS) to manage all aspects of the
warehouse. The key features of WMS include inventory management, tracking the
location of goods, order and shipment management, and storage optimization.
6. Forecasting algorithm:
Applying the forecasting algorithms to estimate products demand quantities and
identify efficient storage locations.
7. Complex storage policies:
Used to determine the storage location according to demand, size and product type.
8. Process the order quickly:
Optimize the order process to ensure quick and on-time delivery.
4.3 Transportation and Delivery
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 Orders depart from the warehouse to the customer's confirmed address in the
system. Amazon's transportation is carried out through various means such as road,
air, cooperation with partners, etc. Customers receive their products as quickly as
possible, ensuring that the items are not damaged and of the highest quality.

1. Road Transportation
Amazon has a dense road transportation system in information and product
distribution centers. Amazon's transportation vehicles can carry up to 2000
packages at once. These vehicles transport packages to sorting centers for further
transportation.

2. Air Transportation
Fast air transportation within 2 days is exclusive to Prime members. To
facilitate this, Amazon uses specialized aircraft from over 20 airports across the
United States. These aircraft, named Prime Air, are stationed at airports used by
Amazon for the fastest delivery, ensuring that products reach consumers in the
shortest time.

3. Transportation through Partner

Companies Transporting Amazon products through partner companies is also a
fast and accurate method. To expedite the transportation process without
overloading, Amazon has collaborated with reliable transportation partners
worldwide, including HPW CARGO. These partner companies are responsible for
developing transportation staff, while Amazon takes care of training and providing
necessary tools when needed.

In addition, Amazon also utilizes independent transportation contractors. This

collaboration allows efficient use of professional services with low investment,
flexibility in management, and delivery.

4. Future Automated Transportation

Amazon prioritizes experimenting with future transportation means,
particularly automation. Prime members often experience modern and interesting
vehicles, such as compact self-driving delivery boxes. Additionally, lightweight
unmanned aerial vehicles fly directly to customers' doorsteps. These modern
methods not only enhance the shopping experience for customers but also generate
highly effective advertising effects.

5. Transportation and Delivery Policy

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 Amazon always prioritizes customer rights and ensures that customers do not
suffer losses. Orders marked as "guaranteed delivery" come with specified delivery
dates and shipping fees. If a customer does not receive the product by the specified
date, Amazon will refund the entire shipping fee or provide appropriate
compensation policies.

6. Delivery Time

The time it takes for Amazon's transportation to reach its destination depends
on the nature of the order. Factors such as weather and traffic congestion can affect
delivery times. Orders may arrive earlier or later than the estimated delivery time.
In cases of delays causing inconvenience to customers, Amazon provides suitable
compensation to ensure customer satisfaction.

4.4 Quality Assurance and Returns

Group 1: When Amazon is the Seller When Amazon is both the seller and
shipper, warranty and return policies apply. Products sold and shipped by Amazon
come with both quality assurance and return policies. Each product has its own
return policy, and returns are allowed.

Group 2: When Another Seller is Involved Caution is advised when dealing

with products sold by other sellers on Amazon. Not all sellers on Amazon
guarantee quality. When purchasing products not directly sold by Amazon, it's
essential to carefully review the reliability of the seller, check customer reviews,
and understand the product's warranty policy. If the seller is a partner of Amazon, a
30-day free return policy applies. This is indicated by the note "Product is eligible
for Amazon’s 30-day returns policy" under Special Offers and Product Promotions.

Amazon's Return Procedure

When dealing with damaged or faulty products directly sold and shipped by
Amazon, customers can return the product within 30 days from the date of receipt,
provided the product is unopened or opened with the original tags intact. Amazon
will either refund the money or exchange the product. The return process on
Amazon involves the following steps:

Step 1: In the "Orders" section, choose the item to return.

Step 2: Select "Why are you returning this?" and choose a reason from the options
or specify your reason.

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Step 3: Choose the solution – exchange for a similar item or get a refund. If
exchanging, Amazon suggests similar products. Amazon will refund the price
difference if the new item is of lower value. The processing time for orders takes
approximately 2 to 3 weeks. To check the order status, go to "Orders" and select
"Return/Refund Status."

Note: Depending on the reason for return, Amazon may require you to send the
item back using one of five methods: any carrier, U.S. Postal Service, UPS Pickup,
Amazon Locker, or UPS Drop-Off. Additionally, carefully package the item and
include any required accompanying documents.

V. Advantages and Disadvantages of the systems:

It is not an exaggeration to say that the Amazon system is a giant in the e-
commerce sector globally and particularly in the United States. Currently,
Amazon is one of the leading e-commerce websites worldwide, offering an
incredibly diverse and extensive range of goods and products. What is especially
crucial today is that all customers trust the Amazon system. They share a similar
enthusiasm and readiness to purchase products on the market due to its reputable
standing and the benefits it provides to buyers. In fact, conducting transactions on
the platform is remarkably straightforward, taking only about one day if you
provide or have relevant information.
But before making decisions about whether consumers should buy
products or whether businesses should do business online on major e-commerce
websites in the world, we should learn about the advantages and limitations. Its
mode for them to set goals and make the right choices for themselves?

5.1 Advantages of the system:

The Amazon system has many advantages, including:
1. Amazon's diversity: offers a wide range of products and services, from books
to electronics, food, and more.
2. Access to potential customers around the world.
3. Convenience for consumers: shop online conveniently without wasting much
time or travel costs.
4. Ability to compare prices and compare product prices from users.
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 5. A professional and dedicated team providing continuous support.
6. Security and preservation of transportation and storage systems.
7. Fast and free delivery service for many products.
8. Online retail with the world's largest, most powerful platform, creating
opportunities for sellers and businesses
9. Amazon also has a community for active people, sharing reviews and
shopping experiences.
10.To give consumers confidence, Amazon also has a return policy for defective
products, incorrect product delivery, etc.
11.Amazon is also one of the leading cloud services, supporting many
businesses and organizations.
12.Select affordable prices, suitable to consumers' economic conditions.
13.Integrate the manufacturer's scoring system to increase the reputation and
appeal of the product

5.2 Limitations of the system:

It is not an exaggeration to say that the Amazon system is a giant in the e-
commerce sector globally and particularly in the United States. Currently,
Amazon is one of the leading e-commerce websites worldwide, offering an
incredibly diverse and extensive range of goods and products. What is especially
crucial today is that all customers trust the Amazon system. They share a similar
enthusiasm and readiness to purchase products on the market due to its reputable
standing and the benefits they provide to buyers. In fact, conducting transactions
on the platform is remarkably straightforward, taking only about one day if you
provide or have relevant information.
Some limitations of Amazon include:
1. Customer Service Quality: Some users have expressed dissatisfaction with
their experience when facing issues and seeking support from Amazon.
2. Security Issues: In the past, there have been security incidents and risks
related to users’ personal information on this platform.
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 3. Impact on Local Businesses: Amazon often receives criticism for its
operations potentially affecting local businesses and creating unhealthy
competition.
4. Labor-related Concerns: Some individuals have raised concerns about
working conditions at Amazon distribution centers and issues related to the
rights of workers.
5. Environmental Impact: Transportation and packaging activities on Amazon
may have negative effects on the environment. However, these limitations
may change over time, as Amazon continuously strives to improve these
aspects.

VI. Competitive Advantage of the systems:

6.1 Core Values of the Amazon System
Customer-Centric Approach: Amazon focuses on providing the best
shopping experience for customers, emphasizing understanding customer needs and
delivering high-quality products and services at a good value.
Commitment to Innovation: Innovation is at the core of Amazon's strategic
focus. They continuously develop and introduce new ideas to improve their services
and products.
Transparency and Honesty: Amazon highly values transparency in business
management and communication with customers. They strive to provide accurate
and honest information about products, prices, and transaction conditions.
Automation and Efficiency: Amazon utilizes technology to optimize business
processes and provide services efficiently. They aim to automate operations to
minimize errors and enhance performance.
Commitment to Society and Environment: Amazon is increasingly focusing
on social responsibility and environmental sustainability. The company has made
commitments related to sustainability and efforts to minimize its impact on the
environment.

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 6.2 Amazon's Competitive Advantages Over Competitors
Amazon possesses several competitive advantages over its counterparts in e-
commerce and various other sectors. Here are some key advantages:
Large and Diverse Scale: Amazon is one of the largest and most diverse
businesses globally, with operations spanning e-commerce, cloud services (AWS),
streaming, and content production and distribution.
Large Scale for Investment: The large scale enables Amazon to make
significant investments in research and development, reducing costs, and creating
new services.
Strong Supply Chain and Logistics System: Amazon has a high-quality
supply chain and logistics system, maintaining fast and efficient delivery services.
Modern storage centers and transportation systems contribute to Amazon's scale and
performance advantage.
Big Data and Large-Scale Analysis: Amazon leverages big data to understand
customer behavior and optimize the shopping experience. Large-scale analysis helps
predict market trends, manage inventory, and personalize the shopping experience.
Innovation and Investment in Research and Development: Amazon
consistently invests in research and development, introducing new products and
services like Amazon Echo, Alexa, Kindle, and AWS. The ability to innovate helps
Amazon maintain a pioneering position in multiple industries.
Diverse Business Model: Amazon's diverse business model reduces risks
associated with changes in specific markets. They are not solely reliant on e-
commerce but also have services like cloud computing, streaming, and other
diversified areas.
Commitment to Customer and Excellent Customer Service: Amazon has
built a strong brand through its commitment to customers and the provision of
excellent customer service. Fast delivery services, flexible return policies, and high-
quality products play a crucial role in customer satisfaction.
Global Reach: Amazon operates globally, present in many countries. This
allows them to tap into diverse markets and leverage their global scale.
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 These advantages enable Amazon to maintain leadership in the industry and
continue expanding partnerships, income sources, and customer base worldwide.
However, it's important to note that competition in this industry is intensifying,
requiring the continual maintenance and development of competitive advantages.

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