project
reddyspoo
amazon_drones.pptxAmazon Drones : A problem solving solution
Prepared by:
1
Group project /IST 7100)
Background history
Amazon.com is the leading e-commerce company in USA and also in the world.
It was established by Jeff Bezos in 1994 and went online in 1995.
It was started as online books, now with its
Its head quarters are placed in seattle, Washinton
It is also known as the largest online retailer.
IT follows multi-tier inventory model
Multi-tier inventory model
Problem Statement
Amazon is the leading e-commerce. It carries high demand title inventory and purchases low demand titles from distributor on the demand of customers orders.
It has a huge customer base all over the world. Out of all the customers, 45% of its customers are prime customers.
Prime customers are the premium members of amazon for whom the delivery service are quicker than others.
Primer customers pay 140% more than the non prime customers.
E –commerce sales are said to be increase by around 61% by the end of 2018. Now a days everyone is willing to be premium customers.
But half of the customers are have stopped ordering on amazon due to shipping time.
Huge unexpected delays in delivery due to traffic jams, natural disasters etc.
Recommended solution
Amazon wants to overcome the delays in the deliveries through Drone deliveries.
Delivery packages are delivered using unmanned vehicles(Drones) to the customer is safe and quick way.
Delivery packages which weigh under 5lbs can be delivered to the destinations which are under 10 mile radius within 30 mins of time.
Different models of drone are designed to operate in different regions of the world.
Drones are controlled remotely from the amazon delivery stations. Few drones can be designed in such a way that they are auto-controlled, they can guide them selves to the destination
Goals/ Objectives
. To deliver the goods in a secured manner.
. To deliver the goods with in 30 mins which are in 10 mile radius.
. To deliver the goods to any location whether it is an apartment, independent house, office etc.
. To increase the number of prime customers.
. Design the drones which are quiet while flying.
PLAN OF ACTION
. Users will opt for prime air delivery mentioning the shipping address.
. Amazon delivery go downs will be built for every 10Km radius.
. The order management people will send the request to the local amazon delivery godown .
. The delivery package will be packed and attached to the drone. The drones are then directed to the destination by amazon drone pilot from the control room.
. Delivery packages will be delivered to the destination within 30min. Each drone will take 1hr to complete the transaction and return to the Amazon centre.
Schedule
Amazon has never mentioned any schedule for its prime air project as it is dependent on the permissions from aviation department.
. The prime air concept was first revealed by its CEO Jeff Bezos in Dec,2013.
. Amazon R & D team has worked on designing and testing the drones for 2 years.
. In April 2015, FAA (Federal Aviation Administration) has given the permission to test its prototype for research purpose.
. FAA has presently banned the Commercial drone flights for security purpose.
. Amazon wants to start the service as soon as the government regulations are changed to support the drone flying.
Budget
Amazon spends more than half of its expenditure on R&D activities.
Last year it has spent around 2.9 billion dollars on shipping.
It has spent around 1.73 billion dollars on R&D, out which majority of amount was spent on prime air project.
Each prime air drone will cost around $1500 - $2500.
Evaluation
| Critical Success factor | Measurement |
| Packages should be delivered within 30 min | Distance of the destination and speed of the drone. |
| Average cost for prime air deliveries | % of cost invested in building drones. |
| Lower logistic costs and better profits | % of prime customers |
| Deliveries covering most of the areas | % of delivery godowns |
Conclusion
Amazon will gain better once the drones are functional.
Currently though FAA do not allow commercial drones, but in near future there is much possibility for Amazon drones to fly.
With its current business model and strong customer base, it will be able to gain huge profits and more number of customers through the drone deliveries.
Deliveries within 30 min with safety will bring more business making amazon the leader in e-commerce market.
The success of drones in the e-commerce may expand the usage of drones to other sections also.
http://www.slideshare.net/aftabssm/amazon-ppt
http://www.slideshare.net/andrewandersen779/drone-delivery-service
http://edition.cnn.com/2013/12/02/tech/innovation/amazon-drones-questions/
http://scholar.utc.edu/cgi/viewcontent.cgi?article=1051&context=honors-theses
https://www.quora.com/How-much-has-Amazon-invested-into-Amazon-Prime-Air-so-far
REFERENCES
