The key to Amazon's success in fleet management
In the previous article, we explored the importance of logistics management and fleet management in online stores. We examined the role of fleet management in the supply chain of online stores and provided solutions to improve fleet management in online stores and e-commerce businesses.
In this mini-article, we take a look at Amazon, one of the most successful examples of online stores in the world, and discuss the challenges this company has faced in fleet management and the solutions to overcome these issues. Stay with us.
Amazon, a Successful Example of Online Business
We are all familiar with Amazon. An American company that started its work in 1995 by selling books and gradually became the giant of retail and e-commerce worldwide. One of the secrets to Amazon's success in capturing the global market was overcoming logistics bottlenecks in its supply chain, a point we will discuss further in this article.
Amazon Has Its Own Challenges Too!
Many might think that Amazon, in its current position, is effortlessly ruling the world of e-commerce, but this notion is fundamentally incorrect. After Amazon was founded in 1994 and five years into its existence, they decided to expand their market and add more products. The most significant challenge this posed for Amazon was packaging and managing goods for better delivery.
Solutions That Worked Well!
To deliver purchased products and goods to customers faster, Amazon established hubs (distribution centers) in major cities and various countries to send goods in the shortest possible time.
The company operates in three ways for shipping goods:
- Amazon's transportation fleet
- Postal companies (its two major business partners, UPS and FedEx)
- Companies providing logistics services
However, the most significant advantage Amazon has over other companies in shipping goods is knowing the exact location of shipped products. This means that Amazon's fleet management team, using software provided to its drivers, can be aware of the precise location of the shipped goods. Fleet management, from Amazon managers' perspective, is the most crucial part that requires special attention because this section is the direct point of contact with the customer, allowing them to interact directly with the customer and receive feedback.
For this reason, Amazon considers different standards based on the type of shipped goods, which significantly impacts reducing the company's logistics costs.
Another ambitious move by Amazon in shipping goods is turning them into a private postal company in delivery, which means competing with its business partners, UPS and FedEx.
According to a Wall Street Journal report, Amazon's strategy to achieve this goal was to first deliver products that customers purchased directly from Amazon and then handle the delivery of manufacturers' products that faced issues in their shipping and fleet management. This way, Amazon would become a company in the field of goods delivery.
Driver App, Simple and Practical
To manage its fleet more efficiently, Amazon is developing an app with the following benefits to better manage its fleet.
- Greater focus on delivery
- Increased driver productivity
- Focus on more connection between warehousing, packaging, and logistics
- Reduced shipping costs
This program has been used in Amazon's fleet since December 2017, and the company's managers intend to improve this software in the coming years as a communication link between drivers and the company.
Conclusion
Fleet management plays an important role in online businesses, especially online retail. Large businesses in this field have implemented and executed various ideas for better fleet management and have been able to significantly reduce their costs using these ideas.
We would be happy to hear your thoughts on this matter. At the end of this page, you can share your valuable opinions with us. In future posts on the Logiico Blog, we will take a look at fleet management in online stores operating in Iran.
