The Supply Chain Matters blog highlights Amazon’s significant resources expected to be deployed to maintain online sales growth in the upcoming holiday fulfillment surge period.

In a prior Supply Chan Matters posting, we highlighted various highly watched market and customer sentiment forecasts pointing to an expected very optimistic holiday sales period between the beginning of November thru the end of December.  Optimism is especially focused on even higher growth in online buying and customer fulfillment activity.

At the same time, inventory availability, component and transportation capacity shortages will provide a host of added challenges in the coming weeks. Amid ongoing supply chain inventory and global-wide transportation shortages, the time for execution is at-hand, and “all-hands-on-deck” efforts are about to kick into highest gear.

Online retail platform provider Amazon has consistently demonstrated abilities to marshal people, capacity and technology resources for the holiday period and would appear that in 2021, all of the available levers are being brought to the forefront.

In an Amazon blog posting published this week, and in select national media appearances, John Felton, Senior Vice President, Global Delivery Service, outlines the online retailer’s plans to serve customers during this year’s holiday period. This communication is clearly targeted to existing and would be customers to temper fears that the online retailer will be impacted by ongoing supply chain disruptions and that Amazon will not be deterred.

Some noteworthy statements include:

We’ve hired even more people and invested in technology to help us better predict what products our customers will want- and where and when they’ll want to receive them.

From a fulfillment strategy lens the above statement implies a keen emphasis on product demand sensing, precision timing of merchandising and promotional activities, as well as steering online customers to different fulfillment time options. Recently announced is a new effort to let smaller third-party sellers offer select items to be designated for in-store pickup for shoppers who live near the merchant’s brick-and-mortar stores, under a same day and free shipping banner. Throughout the year, this online retailer has additionally been investing in “mini-fulfillment centers” located in proximity to select U.S. cities. Consumers in a number of markets will reportedly have the ability to shop up to 3 million items listed on Amazon and receive these orders in only a few hours. At least 15 different U.S. metro areas are planned for this capability.

While transportation disruptions and severe capacity constraints occupy daily headlines, the blog indicates a further keen focus on demand planning to; “balance customers’ needs against any supply-chain or transportation challenges that may occur.”

An extensive bulleted listing outlines investments in added people, aircraft, ships and buildings, including the increasing of ports of entry globally by 50 percent. Noted is that Amazon’s air assets will include more than 85 aircraft, a surface transportation fleet of more than 50,000 trailers to haul freight globally and driven by tens of thousands of additional contracted drivers.

Noted on the labor front is the availability of more than one million workers globally and an additional 150,000 seasonal fulfillment and order delivery workers, not to mention complements of “gig” workers who can be called on to deliver packages in personal vehicles.

 

Beyond the Storyline- Added Realities

It is fairly obvious that there are not a lot of corporations that can invest in the sheer scope of Amazon’s efforts, easily amounting to billions of dollars in customer fulfillment investments annually.

There are other implications as well.

Supply chain execution, logistics and customer fulfillment teams will once again face the challenge that for each added worker, contracted transportation resources, flex warehouse or air charter capacity that has been contracted by Amazon, it could well be at the detriment of other online retail providers seeking these same resources during this year’s holiday surge. Not all have the deep pockets and cash generating businesses that Amazon can leverage.

Over the coming 8 weeks there are sure to be added supply chain fulfillment headlines, either positive or not so positive. When we all look back and assess the 2021 holiday fulfillment period, the byline may well be the gap of scope, influence and execution among the few largest online providers and other online providers grew wider once again. On the other hand, if Amazon stumbles at all, we will know the true scope of this 2021 supply chain disruption.

 

Bob Ferrari

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