Multimodal Transportation Optimization

The provided text focuses on the challenges and solutions within multimodal transportation. It delves into topics such as warehouse management optimization, strategic brand management in logistics, emergency services integration within intelligent transportation systems, and drone-assisted parcel delivery. The text also examines intermodal freight transport mode choice analysis and risk assessment in multimodal supply chains.

Running head: TRANSPORT AND INVENTORY MANAGEMENT
Transport and Inventory Management
Name of the Student:
Name of the University:
Author’s Note:

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Executive Summary
In this report, in task 1 the intermodal/multimodal transportation choice for Amazon is identified.
The methods to increase the intermodal /multimodality in supply chain of Amazon are analyzed.
Amazon has considered delivery by drones which can make the intermodal/multimodal delivery
system of Amazon more efficient. The advantages and disadvantages of the intermodal and
multimodal transportation choice are discussed. Delivery by drones can be speedy and can help
Amazon gain a competitive advantage in the marketplace. However, this transportation choice
can be risky, can lead to accidents and requires strong monitoring .In task 2, the warehouse
management system of Amazon is analyzed in terms of types of warehouse, warehouse size, use
of technology, types of inventory to be stored. The strategic and operational factors of Amazon
which include location, cost, space, and culture, stock movement and technology are analyzed.
A better order picking principle to suit the company’s strategic and operational factors is
discussed. The order picking principle should be more systematic in Amazon to increase the
efficiency of order picking and make it more effective. The proposed order picking principles are
linked with 1) Inventory Types, 2) Utilization of Space, 3) Stock Movement 4) Technology 5)
The location of picking areas.

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Contents
Introduction......................................................................................................................................3
Topic 1.............................................................................................................................................3
Transport and Logistics Management of Amazon...........................................................................3
B. Intermodal /Multimodal Transportation choice of Amazon.......................................................3
C. Ways to Increase Intermodal / Multimodality in Supply Chain of Amazon..............................4
D. Advantages and Disadvantages of the intermodal/multimodal Transportation Choice.............5
Topic 2.............................................................................................................................................7
B. Warehouse Management of Amazon..........................................................................................7
Type of Warehouse and Size.......................................................................................................7
Use of Technology.......................................................................................................................7
Types of Inventory to be Stored...................................................................................................8
Strategic and Operational Factors................................................................................................8
Location, Cost, Space and Capacity.............................................................................................8
Service Level, Communication, Culture, Stock Movement and Technology.............................9
C. Picking......................................................................................................................................10
1. Inventory Types.....................................................................................................................10
2. Space Utilization....................................................................................................................10
3. Stock Movement....................................................................................................................10

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4) Technology............................................................................................................................10
5) Location of picking areas.......................................................................................................11
Conclusion.....................................................................................................................................12

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Introduction
The intermodal/ multimodal transportation choice of Amazon increases the productivity of the
Supply chain. Amazon is focusing on new technology like delivery by drones to solve current
issues in transportation system which is a lengthy procedure. The delivery by drone will ensure
speedy delivery to customers (da Silva et al., 2013).The warehouse management system of
Amazon makes use of modern technology and chaotic management for storage of inventory.
However, a systematic picking procedure can increase the picking productivity of Amazon.

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Topic 1
Transport and Logistics Management of Amazon
A. Figure :( Product movement and Supply chain Network of Amazon)
Source:( Richards, 2014).
B. Intermodal /Multimodal Transportation choice of Amazon
Amazon has adopted modern tools and technology in its transportation system and
logistics management and makes use of updated technology for an efficient supply chain
management. In Amazon the transportation system is skillfully managed by the Amazon
Fulfillment service. The trucking division is known as the Amazon Transportation service.

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Amazon does not own a 100 percentage of fleet which is private though the organization has its
trucks. The freight between locations of Amazon is moved by utilizing the tractors and trailers
of the Company. Amazon makes use of trucking companies for transportation from Amazon
locations to the parcel carriers. Truck drivers are matched with shippers by Amazon and to
support this process Amazon has used technology and innovation and makes use of an app
(Zehendner & Feillet, 2014). Vans are used by Amazon for delivery of parcel, this clearly
reflects that the organization has shifted into transportation. Amazon also owns air-cargo fleet
and this will take away business from parcel delivery partners of Amazon like Blue Dart, FedEx
and Aramex. The transportation services of Amazon are an extension of the Amazon Fulfillment
Service. Amazon has entered in the transportation business because with a private fleet and
owning some percentage of the transportation will reduce the cost of transportation of Amazon.
Tractor trailers are used by Amazon to move from larger Distribution Centers to the fulfillment
centers of the Company. The supply networks are reconfigured by Amazon and smaller
distribution centers are built by Amazon which is located near to the population centers or
customers (Almeida, Gularte & Yamashita, 2014).
C. Ways to Increase Intermodal / Multimodality in Supply Chain of Amazon
Amazon is investing in drones and unmanned aerial vehicles and in airborne fulfillment
centers (AFCs) or flying warehouses to improve the supply chain management system of the
process to increase the intermodal/multimodality in its supply chain. The boats, trains and planes
of Amazon will serve as a station and UAVs will receive maintenance, pick up cargos and
recharge from them. Amazon has obtained a patent from the U.S. Patent and Trademark office
because the organization intended to develop boats, trains and planes to dock the drone fleet of
the Company. The demand of customers will be analyzed and these vehicles will travel to the

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areas of demand for the purpose of delivery (Caris, Macharis & Janssens, 2013). The histories of
purchases in a region will enable Amazon to predict the demand of a location and thus the
organization will be able to analyze which location will order a higher number of products.
Different consumer items, inspection equipment and replacement parts will be stocked in the
intermodal vehicles so that repairmen of drones and their examination can be conducted (Bock,
2010).
D. Advantages and Disadvantages of the intermodal/multimodal Transportation Choice
Intermodal transportation makes use of two or more modes for freight transportation
process. Truck, railroad and steamship are different modes of transportation. Transportation by
air is expensive although used in this mode for transportation. For example in intermodal
transportation, an empty container is moved by a truck to the shipper (Givoni & Banister, 2010).
The containers are loaded with goods by the shipper. The steamship loaded with the containers at
port moves them in the port of destination. From the destination port the container is moved to
the warehouse of the receiver. Thus the main advantage of intermodal freight transportation is
that flexibility is obtained for the movement of freight. An efficient way is adopted for the
transportation of freight, since at least two modes of transportation are used in the process, a lot
of money can be saved with an efficient transportation plan (SteadieSeifi et al.,
2014).Transportation cost is likely to increase because freights are moved by several types of
mode of transportation. There is lack of communication and idle time of equipment which
increases the cost of transportation (Bell, 2015).Some equipments move from one location to
another which also increases the cost of the transportation process (Vilko & Hallikas, 2012).
Supply Chain management is efficiently managed when intermodal transportation system is used
(Reis, 2014). The organizations within the supply chain of an organization involved in

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intermodal freight transportation also assist and cooperate with each other and organizations can
better respond to the market changes(Moccia et al., 2011).Information is shared and needs are
communicated in intermodal transportation system. In intermodal transportation, multiple
carriers are contracted whereas in multimodal transportation a single carrier is contracted (Harris,
Wang & Wang, 2015).
The advantages of delivery by drone adopted by Amazon are as follows
i) Amazon will gain competitive advantage by delivery of products to customers with the
help of drone as this will increase the speed of delivery.
ii) Delivery by drones will also enhance brand image of Amazon as this process is
environmental friendly, transportation carriers on roads can increase pollution (Zhang,
Wiegmans & Tavasszy, 2013).
iii) A revolutionary Move- If Amazon can develop delivery by drones then it will be a
revolutionary process for Amazon and will help the Company to gain competitive advantage
(Martinez et al., 2010).
Disadvantages of Delivery by drones
1) Insurance policy will be required by Amazon to start for delivery by drones which will
increase the cost of the organization.
2) The delivery of products by drones is risky and can lead to injuries.
3) Federal Aviation Administration- Under the rule of FAA, Amazon will have to
maintain strict control for delivery of products by drones because the drones can’t fly over

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people and ground staffs are required to be employed to monitor the safety of drones (Ferrucci &
Bock, 2014).
4) The drone may trespass on privately properties and can accidentally fall on these
properties (Murray & Chu, 2015).

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2 Topic 2
A Figure: (Warehouse Floor Plans of Amazon)
Source: (Terry-Armstrong, 2013).
B. Warehouse Management of Amazon
Type of Warehouse and Size
Amazon has different has different types of warehouse and fulfillment centers depending
of inventory type of products and space utilization. These centers include redistribution centers,
apparel and footwear, return centers, 3PL outsourced facilities. Amazon also has a network of

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distribution centers for grocery and warehouses for storage of cold items. These buildings are
used for services like Amazon Fresh or Pantry operations. The size of warehouses of Amazon is
around one million square feet.
Figure: (Warehouse Floor Plans of Amazon)
Source :( Terry-Armstrong, 2013)
Use of Technology
Extensive use of barcode scanners in the warehouses of Amazon is evident during the
whole process of processing of order, picking of items and shipping. Amazon makes use of the
digital technology for the warehouse management. Amazon tries to optimize shipping practices
and order picking principles adopted by Amazon are also innovative. For instance, these days in
China the company has partnered with merchants with merchants and they allow the
organization to directly pick up goods from the stores of the merchants and these goods are then
shipped to customers. Amazon has adopted completely digital warehouses and fulfillment
centers (Terry-Armstrong, 2013).
Types of Inventory to be Stored
The distribution buildings of Amazon are located close to the proximity of metropolitan
cities across the globe. The Prime Now Hubs of Amazon are stocked with velocity items which

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are highly popular among customers like the bestseller books or products. Only a limited line of
products, approximately 10,000 items are stored in these hubs. Thus, the Amazon Prime
members can get their products delivered within 60 minutes of placing the order.
The regional centers in Amazon are used to sort products into smaller packages by the
Zip code and then smaller packages are delivered to the post offices which are allotted for the
Zip codes. These centers are built to sort packages for a region so that outbound cost can be
reduced and smaller packages can be delivered by local carriers instead of reputed carries like
UPS and FedEx. These regional centers are also used to deliver goods to the delivery stations of
Amazon (Terry-Armstrong, 2013).
Strategic and Operational Factors
Location, Cost, Space and Capacity
The warehouses of Amazon are located in various countries United States, Europe and
Asia. The capacity of warehouses vary, for instance in some countries the capacity of
warehouses have recently been doubled by Amazon into 13 m cu feet. Space in the warehouses
of Amazon is utilized effectively to reduce cost. The delivery stations of Amazon in the Europe
and Japan are small with a capability of rapid regional delivery (Karásek, 2013).
Service Level, Communication, Culture, Stock Movement and Technology
Amazon uses SkuVaults technology for warehouse management and management of
inventory. This system pulls the product and order data after which orders are processed. The
data is then processed in real-time to the store of Amazon. SkuVault also makes use of pick lists
which are organized by location so that the orders can be picked efficiently. Skuvalut technology

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also pulls orders from different channel so that the pending sales from different channels of
Amazon can be tracked by Skuvault (Terry-Armstrong, 2013).
Amazon also makes use of chaotic storage and products are kept randomly on the
shelving space that is available in a warehouse and the manager of the warehouse knows which
products are kept where. They advise the pickers on the routes to be taken so that a large number
of orders can be fulfilled within a short span of time. Amazon makes use of Inventory
Management System software for this purpose. With the help of this software for warehouse
management, information about a particular product and their location can be accessed with the
help of barcodes and barcodes scanner. Inventories across multiple warehouses can be tracked
with the help of the print of barcodes (Gupta et al., 2015). A Type of barcode known as Stock
Keeping Unit (SKUs) is utilized for the identification of particular type of products. The stock
keeping units can be scanned in different locations throughout the warehouse and then the
Inventory Management Systems is utilized to keep a vivid record of which items are kept where,
the items that are removed and added in a location are also recorded by this warehouse
management system software, the number of items stored in a particular location are also utilized
by the warehouse management software (Keller, Parameswaran, & Jacob, 2011). With the help
of this software, empty space for storage is immediately filled in the warehouse and cost is saved
by utilization of storage space. Chaotic storage also enables Amazon to store twice the number of
goods it stored five years back and locations are recognized by owners more efficiently by this
system (Holtkamp et al., 2010).
An order picking principle that can be proposed for Amazon is each inventory should
have discrete pick location (Heizer,2016).

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C. Picking
The proposed order picking principle can be linked
1. Inventory Types
In Amazon a discrete pick location should be allotted for each inventory. Multiple SKUs
kept in the same bin location can reduce productivity of picking.
2. Space Utilization
In Amazon, space in the warehouse can be utilized better if the bin location is matched
with the item to be stored. For instance, if the rack of bin location can accommodate a 4 feet by 4
feet box, then finished good packaged in a container 3 feet by 3 feet should not be stored in it
(Gong & De Koster, 2011).
3. Stock Movement
For every SKU of Amazon, cube movement velocity can be calculated. The cube
movement velocity is the movement of stocks in units multiplied by cubic dimension of the unit.
The SKUs with high cube movement can be stored in racks whereas SKUs with low cube
movement can be kept in smaller storage media (De Koster, 2012).
4) Technology
It is tough for the pickers of Amazon to track the location of products because in Amazon
products are received in a bulk in the warehouse. Therefore, optimization of routes and processes
are of paramount importance to make the picking process in Amazon more efficient. The most
optimal routes for pickers can be identified in the warehouses of Amazon with the help of the
data collected about products and locations by the inventory management software (Sainathuni et
al., 2014). Thus utilization of the warehouse management software can guide pickers about the

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number of orders that are required to be picked, the location of the orders and the best route to
pick up the orders (Ross, 2015). This information can enable the pickers to pick orders at a bulk
instead of one at a time and they do not have to run across the warehouse to fulfill
orders .Wasted time on overlap can be avoided by this method as the pickers don’t have to go the
same location several times to complete separate orders and thus efficiency of picking system
enhances dramatically (Giannikas et al., 2013).
5) Location of picking areas
The picking productivity in Amazon can increase if with “hit density.” Higher pick
density can lead to high pick productivity in Amazon. For instance, the operators in Amazon
should pick from one out of every 10 pick locations rather than picking from one out of every
100 pick locations to increase pick productivity (Chao & Norton, 2016). In warehouses of
Amazon, hot zones can be set where SKUs with highest picking activity can be kept. The SKUs
should be defined in terms of ABC velocity. If the pick density of SKUs is increased, travel time
will be reduced and the picking process will speed up leading to high pick productivity. The
slowest velocity items can be picked from the vertical locations and fast velocity items can be
kept at floor level (Richards, 2014).

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Conclusion
It can be concluded that the drones will make the intermodal/multimodal transportation
system of Amazon more efficient. Warehouse management system in Amazon is utilized to
automate different business processes like inventory management, accounting, shipping and an
organized and efficient business process can be created with the help of integration in the
process. Also, the warehouses of Amazon are extremely efficiently managed with the use of
modern technology however a systematic order picking principle adopted by Amazon can
increase the efficiency of picking and warehouse management.

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