white paper- amazon (misleading 2 day shipping policy )
Memorandum
Dear Mr. Bezos,
Problem
A number of Amazon Prime customers complained on the Amazon website that they did not receive their packages on time. The primary issue here is that Amazon did not clearly communicate the two-day shipping policy. Instead of promising customers packages will arrive in two days, the policy actually guarantees the shipping time after packages leave the warehouse (Amazon, n.d.). Although the delayed package issue indirectly affects the whole image of Amazon, the miscommunication of its policy still needs to be addressed because it might cause Prime customers to stop using the feature of the company. The incentive for customers to continue subscribing to Prime membership will ultimately decrease if customer service keeps the shipping policy. As a result, Amazon may lose Prime customers and see its brand image will be damaged. The purpose of this memo is to provide a research plan to address the misleading Prime shipping policy issue.
Background
Amazon began the free two-day shipping policy for Prime membership in 2005. By implementing the free two-day shipping standard, Amazon disrupted the traditional retail industry. Amazon customers were accustomed to receiving packages with a quick turnover ratio. Therefore, the majority of Prime customers enrolled in the membership program without noticing the meaning of the two-day shipping, which is different from what is implied by shipping out to what customers expect about what will arrive in two days. Two-day shipping only refers to transit time as opposed to packages arriving exactly in two days (Amazon, n.d.).
Despite the misconception of the two-day shipping policy, Amazon used to be able to meet customers’ expectations. However, due to the fast-growing demand, Amazon is no longer able to maintain the two-day delivery. Even though data shared in Business Insider by Slice Intelligence showed that Amazon has done a great job in handling the package and speeding up the shipping process overtimes, Amazon still missed the guaranteed delivery time and failed to deliver packages under the 2-day shipping policy (Green, 2018). Since improving logistic efficiency is difficult for Amazon to address immediately, Amazon should now focus on restructuring the shipping policy to ensure it can fulfill customer expectations consistently.
Timeline
Research will be conducted in the following stages:
|
Deadline |
Goal |
Budget |
|
11/27 |
Reality of delivery time internal audit conducted |
$500 |
|
12/07 |
Evaluation of new policy option through market research and surveys |
$300 |
|
12/11 |
Report of solutions |
$200 |
|
12/17 |
Presentation of solution plan |
$0 |
Conclusion
Amazon will lose revenue if customers keep receiving delayed packages. Without a clear policy guideline, Prime customers might ultimately cancel their membership. Therefore, I hope to receive authorization to research the misleading Prime shipping policy issue and develop solutions that are able to secure membership, increase revenue, and make our company more accountable.
Reference:
Amazon. (n.d.) Amazon.com Help: How Are Shipping & Delivery Dates Calculated?. Retrieved from https://www.amazon.com/gp/help/customer/display.html?nodeId=3043211
Green, D. (2018). Disgruntled Amazon customers are complaining that their packages keep arriving late, and it could be an ominous sign for Prime. Retrieved from https://www.businessinsider.com/amazon-prime-customers-complain-delays-2018-4
https://www.ltdmgmt.com/art2.php
LOGISTICS CYCLE TIME
Chalotra, V. (2018). Order Processing Process in Physical Distribution Adopted by Small Scale Cements Manufacturing Firms. Journal of Supply Chain Management Systems, 7(3), 08-15. Retrieved from http://search.ebscohost.com.proxy1.library.jhu.edu/login.aspx?direct=true&db=bsu&AN=132839544&site=ehost-live&scope=site
Viswanathan, M., Li, X., John, G., & Narasimhan, O. (2018). Is cash king for sales compensation plans? Evidence from a large-scale field intervention. Journal of Marketing Research, 55(1), 368-381. https://doi.org/10.1509/jmr.14.0290
Leung, K., Choy, K., Siu, P., Ho, G., Lam, H. & Lee, C. (2018). A B2C e-commerce intelligent system for re-engineering the e-order fulfilment process. Expert Systems with Applications, 91, 386-401. https://doi.org/10.1016/j.eswa.2017.09.026
Summary: This research shows that lack of ability to improve order handling decreases business expansion.
Relationship: My problem is that improving logistic efficiency is difficult for Amazon to address immediately, Amazon should now focus on restructuring the shipping policy to ensure it can fulfill customer expectations consistently.
Direct Quote with introductory sentence:
Inefficiency of order processing has created barriers for e-commerce industry. “Further, not only does the internal incapability of efficient e-order handling become the major obstacle in business expansion, but is also a bottleneck in the entire e-commerce supply chain which affects the efficiency of e-fulfilment of the downstream supply chain partners.” (Leung, Choy, Siu, Ho, Lam, & Lee, 2018, p. 387)
Paraphrase with introductory sentence:
Re-engineering the order fulfilment processes would be a major challenge. Inefficient order handling process obstructs both business expansion and downstream logistic efficiency. (Leung et al., 2018)
2.
Jindel, S. (2018). Delaying Amazon’s onslaught. Journal of Commerce (1542-3867), 19(1), 108–115. Retrieved from http://search.ebscohost.com.proxy1.library.jhu.edu/login.aspx?direct=true&db=ofm&AN=127171170&site=ehost-live&scope=site
Summary: This research shows that the rise of e-commerce business affects the average delivery term in the logistic industry including companies such as UPS, FedEx.
Relationship: My problem is about restructuring the shipping policy to fulfill customer’s expectation.
Direct Quote with introductory sentence:
It is essential for Amazon to restructure the delivery policy. “However, with the rapid pace of changes in online retail, both UPS and FedEx have failed to offer seven-day delivery to residences.” (Jindel, 2018, p. 108)
Paraphrase with introductory sentence:
Failing to deliver package on time can be a major challenge. It is hard for logistic companies such as UPS and FedEx to support the seven-day delivery with a fast-growing demand in online retail. (Jindel, 2018)
3.
Kumar, S., Tiffany, M., & Vaidya, S. (2016). Supply chain analysis of e-tailing versus retailing operation – a case study. Enterprise Information Systems, 10(6), 639–665. doi:10.1080/17517575.2014.986218
Summary: This research shows that the expansion of e-tailing industry disrupts the traditional retail channels.
Relationship: My problem mentions that by implementing the free two-day shipping standard, Amazon disrupted the traditional retail industry.
Direct Quote with introductory sentence:
E-tailing is changing the traditional retail pattern. “The swift growth of e-commerce or e-tailing as a consumer retail channel has made it a serious competitor to traditional retail channels and is changing consumers’ purchasing behavior.” (Kumar, Tiffany, & Vaidya, 2016, p. 639)
Paraphrase with introductory sentence:
The transformation in retail industry changes consumer behavior. With rapid growth of e-commerce, e-tailors are replacing brick and mortar retails and shaping consumer purchasing behaviors. (Kumar, et al., 2016)
4.
Khan, I., & Rahman, Z. (2016). E-tail brand experience’s influence on e-brand trust and e-brand loyalty. International Journal of Retail & Distribution Management, 44(6), 588-606. doi:10.1108/IJRDM-09-2015-0143
Summary: This research shows that earning trust in the e-tail industry will build up customer loyalty.
Relationship: My problem is about restructuring the misleading policy in order to make company more accountable.
Direct Quote with introductory sentence:
It's imperative to investigate how to build on trust. “Social psychologists have viewed trust as an expectation related with the behavior of others in transactions and focused on the contextual factors that inhibit or enhance the maintenance and development of trust.” (Khan, & Rahman, 2016, p. 591)
Paraphrase with introductory sentence:
Earning the trust should be company’s priority. Research showed that firms should focus on enhancing the trust and maintaining consumer expectation with related transaction experiences. (Khan, et al., 2016)
5.
Moorman, C., & Day, G. S. (2016). Organizing for Marketing Excellence. Journal of Marketing, 80(6), 6–35. https://doi-org.proxy1.library.jhu.edu/10.1509/jm.15.0423
Summary: This research shows that marketing strategy should be aligned with firm’s capability.
Relationship: My problem is about updating shipping policy guideline in order to anticipate market changes.
Direct Quote with introductory sentence:
It is important to realize the capability of the firm. “First is a firm’s marketing capabilities, which are the complex bundles of firm-level skills and knowledge that carry out marketing tasks and firm adaptation to marketplace changes.” (Moorman, & Day, 2016, p. 6)
Paraphrase with introductory sentence:
Integrating customers’ requirement, companies’ capability and marketing strategy is important. Company should keep track on market changes so that would be able to adapt new policy, align the marketing strategy to the firm’s capability. (Moorman, et al., 2016)
Picker routing and storage-assignment strategies for precedence-constrained order picking
Order picking describes the process of retrieving items from their storage locations to satisfy customer orders. Because order picking is considered the most labor-intensive process in warehousing, effectively routing order pickers through a warehouse can result in considerable time and cost savings. In practice, picker routing is often influenced by precedence constraints, i.e., the order-picking sequence is partially predetermined due to fragility restrictions, stackability, shape, size, and preferred unloading sequence. Although many warehouses face such precedence constraints for picking items (especially in the grocery sector), they are hardly considered in the scientific literature. This paper is inspired by a practical case observed in a warehouse of a German manufacturer of household products, where heavy items are not allowed to be stored on top of light items to prevent damage to the light items. Currently, the sequence for retrieving the items from their storage locations is determined by applying a picker-routing strategy that neglects this precedence constraint, and the order pickers pack the items respecting their weights after picking. To avoid this sorting effort at the end of the order-picking process, we propose a picker-routing strategy that incorporates the precedence constraint by picking heavy items before light items. We develop an exact solution method to evaluate this strategy. Furthermore, we examine the influence of different problem parameters on the proposed picker-routing strategy, and we derive managerial insights for dealing with precedence constraints in order picking. © 2018 Elsevier Ltd
Žulj, I., Glock, C. H., Grosse, E. H., & Schneider, M. (2018). Picker routing and storage-assignment strategies for precedence-constrained order picking. Computers and Industrial Engineering, 123, 338-347. doi:10.1016/j.cie.2018.06.015
Hyman, L., & Tohill, J. (Eds.). (2017). Shopping for change: consumer activism and the possibilities of purchasing power. Retrieved from https://ebookcentral.proquest.com
Khan, I., & Rahman, Z. (2016). E-tail brand experience’s influence on e-brand trust and e-brand loyalty. International Journal of Retail & Distribution Management, 44(6), 588-606. doi:10.1108/IJRDM-09-2015-0143
Summary: This research shows that earning trust in the e-tail industry will build up customer loyalty.
Relationship:
Direct Quote with introductory sentence:
Social psychologists have viewed trust as an expectation related with the behavior of others in transactions, and focused on the contextual factors that inhibit or enhance the maintenance and development of trust.
Paraphrase with introductory sentence:
“These activities enable the firm to anticipate market changes, adapt the strategy to stay ahead of competition, align the organization to the strategy and market, activate effective implementation, ensure accountability for results, attract resources, and manage marketing assets.” (Moorman, & Day, 2016, p. 6)
1 customer satisfaction
2 misleading customers can cause customer leave
3 reputation mouth travel
Trust and loyalty are linked