Lean Management

Company Selected – Amazon Logistics

Group No 10
PRN No. Name
20020741006 Aishwarya Kulkarni
20020741008 Amit Lamba
20020741021 Ajit Dhongade
20020741095 Juned Shaikh
20020741098 Akash Kankal
 Company Overview
What is the Amazon Supply Chain & how it Challenges While
works?
• Warehousing
Implementing Lean
• Delivery Principles:
• Technology
• Not Engaging Frontline workers
• Manufacturing
• Pricing • Automation of Everything
• Global Reach • Standard Work
Fulfilment Options Available:
• Scanner Battery
FBA (Fulfilment by Amazon) & FBM (Fulfilment by Merchant)

Introducing Lean Practices at Amazon

The spirit of lean management was already at Amazon when I arrived in 2007. Since the day he
created Amazon, Jeff Bezos has been totally customer-centric. 
Eg: selection of the transportation method for a given package is driven, first, by the promised delivery date to the
customer
 Implementation of lean at Amazon

Micro-management using Kaizen

• Kaizen is combination of two Japanese symbols for “change” and “good”, most commonly translated as “change for the better”.
• Human involvement was major challenge in enforcement of “standard work” while deploying the lean concept
• Kaizen team was appointed to track down all abnormalities and eliminate them.
• senior management staff of customer service department spends at least one day a year in the fulfilment centre

Data is the king

• data-driven culture from frontline staff to the managers
• Amazon hired engineer for the purpose of various kinds of data mining.
• the organization is structured in a way that the data was open and available at every level
• Amazon utilized its data technology system to research consumer behaviour to analyse and improve
 
The Andon Cord
• The Andon cord eliminates tens of thousands of defects per year
• Amazon implemented this concept that if a repetitive error or defect is detected, the customer service agent had the authority to ‘stop the line’
• Amazon uses virtual Andon Cord, the Lean concept
 How has Lean
Management helped
Amazon
1. Delivering value
2. Customer centric
3. Continuous improvement
4. Broad perspective
5. Autonomation
6. Passion for invention
 As we know that Amazon has its business mainly in E commerce sectors hence delivering the shipments and orders at
right time and with right price to the customers becomes so important to the company.
 In turn lead times is one of the make or break topic for Amazon hence, for instance, it devotes more manpower to its
fulfillment and customer service centers than its engineering end to keep its level of service high
 Encouraging its own employees for Lean thinking and keen observation in the processes is one of the most valuable
techniques in Amazon
 Moreover, when it comes to delivering last mile packages, using our lean minds for route planning becomes so important
as it can reduce significant amount of transportation costs and lead time as well.
 How Amazon is managing lean techniques over long
period
Previously discussed issues and critical factors are maintained at
Amazon by using lean thinking process

Game-Changing Delivery Strategy Amazon Prime

Amazon prime concept of Amazon is basically born from the Lean
thinking strategy
Amazon started selling yearly membership under the tag Amazon
Prime which will guarantee – “two-day shipping/delivery” for more
than thousands of products with no shipping charge.
The two-day shipping strategy encouraged customer to change their
purchasing behavior. The other service offered to customer in the
Amazon Prime scheme was subscription to music, movies and books.
The economies of scale helped expand the customer and lowered
overall shipment costs.
Their lean thinking strategy not only out shined the brand image and
also made competitor’s life difficult by this innovative thinking.
And this is how Amazon is managing its lean thinking not only to
sustain and improve but also to innovate and deliver value to
customers
SUGGESTIONS
1.) Kaizen to stay competitive

• Threats from big retailers like Walmart.

• Walmart is planning to build warehouses at its stores where self-driving robots.
• Large retailers are weaponizing their stores and putting profit pressure on Amazon.
• Amazon need to a vigorous continuous improvement in their process to become more agile and to
retain the market share.

2.) Lean Labour

• The pandemic has exposed amazon treatments with its workers.

• Fatigue due to lengthy working hours.
• Amazon need to invest in this matters and implement lean labour.
• Lean labour can help improve the way they would align employees with production demand.