12 Order Fulfillment Along the Supply Chain

Step 6. The boxes are then sealed for delivery. If gift wrapping was selected, this is done by hand.

Step 7. The full boxes are then taped, weighed, labeled, and routed to one of the truck bays in the warehouse for shipment; some owned by UPS, the U.S. Postal Service (USPS), and other shippers.

Del Rey (2013) provides a photo slideshow of the operation of one Amazon.com’s largest cen- ters located in Phoenix, AZ.
Amazon.com also rents out space in its ware- house and provides logistics services to other companies. It takes orders for them, too. How does it work?

1. 
   Sellers label and ship items in bulk to Amazon. com.
   
2. 
   When Amazon.com receives sellers’ items, it stores them until an order is placed.
   
3. 
   When an order is placed, Amazon.com will pick, pack, and ship the items to individual customers and may combine several items in the same order.
   
4. 
   Amazon.com manages after-ordering cus- tomer service and handles returns as needed. Until a couple of years ago, Amazon.com out-
   

sourced the actual shipment of products to UPS and the USPS. This enabled them to locate their

warehouses and distribution centers in low cost states in order to ship to high cost states with larger populations. It also limited their shipments to next day or two-day service. In mid-2012 Amazon.com decided to offer “same day” delivery service in a select group of cities (Manjoo 2012). A number of EC companies tried “same day” service before and failed. In order to deliver this service Amazon. com spent millions of dollars to construct distribu- tion centers in major metropolitan areas in California, Texas, Virginia, Tennessee, and New Jersey. In these cases shipments are handled by other third-party deliver services.

Some Recent Innovations

Amazon is a great innovation company. Some recent innovations that will be discussed later in this chapter are: same day delivery (e.g., Amazon Fresh), the use of robots in warehouses, and the use of drones (in planning) for delivery within 30 minutes.