2018 amazon virtual summit - day 3
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Copyright 2017 - Q4 Amazon Virtual Summit
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The 2018 Amazon Virtual Summit
● Session Recording + Slides Will Be Sent Out
● Join in the Poll Questions!
● Submit Questions to Our Panelists
Today’s Logistics
Day 1The Growing Necessity To Brand On Amazon
Day 2How To Set Your 2018 Goals & Smash Them
Day 3Secrets To A Lean Amazon Supply Chain
Amazon Virtual Summit Details
Overview
Founded in 2007
Google Premier Partner
400+ Active Retail Clients
Top 50 Fastest Growing Company San Diego
D E L I V E R I N G L A S T I N G
R E S U L T S F O R O U R C L I E N T S
Solutions
Retail-focused PPC & Shopping
Amazon Sales Acceleration
Facebook Performance Marketing
Creative Services
About CPC Strategy
Jay LagardeFounder and CEO
Ken FurlongDirector of Product
Today’s Speakers
Copyright 2018 - The Amazon Virtual Summit
Today’s Agenda
● The criticality of lead time for profitability
● Tactics for driving down lead times
● Know your real costs: how local optimization
hides large costs
● Pros and Cons of different Amazon supply
chain models
● How Lean strategies increase business agility
Copyright 2017 - Q4 Amazon Virtual Summit
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STACK TEXT ROW 1STACK TEXT ROW 2Criticality of Lead Times for Profitability
The Criticality of Lead Times for Profitability
1. The longer your lead times, the less you can capitalize on near term demand.
Lost Revenue
Lost Capital
Copyright 2018 - The Amazon Virtual Summit
The Criticality of Lead Times for Profitability
1. The longer your lead times, the less you can capitalize on rising demand.
2. The longer your lead times, the further into the future you need to forecast – and the less reliable your forecasts will be.
Copyright 2018 - The Amazon Virtual Summit
The Criticality of Lead Times for Profitability
1. The longer your lead times, the less you can capitalize on rising demand.
2. The longer your lead times, the further into the future you need to forecast – and the less reliable your forecasts will be.
3. The longer your lead times, the more inventory you will have in your supply chain.
Copyright 2018 - The Amazon Virtual Summit
The Criticality of Lead Times for Profitability
1. The longer your lead times, the less you can capitalize on rising demand.
2. The longer your lead times, the further into the future you need to forecast – and the less reliable your forecasts will be.
3. The longer your lead times, the more inventory you will have in your supply chain.
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Copyright 2018 - The Amazon Virtual Summit
Copyright 2017 - Q4 Amazon Virtual Summit
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STACK TEXT ROW 1STACK TEXT ROW 2Driving Down Lead Times
From your Warehouse to Amazon
● Automate shipment setup
● Rigorously follow prep rules
● Synchronize inbound and
outbound operations
● Use Amazon-partnered carriers
● Parcel vs LTL vs FCL
Copyright 2018 - The Amazon Virtual Summit
From your Suppliers to You
● Speak your supplier’s order language
● Automate orders
● Communicate your forecast
● Consider smaller, more frequent orders
● Pay on time
● Build a supply-chain partnership
Copyright 2018 - The Amazon Virtual Summit
From your Suppliers Directly to Amazon
● Training
● Prep: box labels, shipping labels, etc.
● Supply chain connect
● Amazon sticker service can be efficient when needed
Copyright 2018 - The Amazon Virtual Summit
Copyright 2017 - Q4 Amazon Virtual Summit
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STACK TEXT ROW 1STACK TEXT ROW 2Know Your Real Costs
How Local Optimization Hides Big Costs
Know Your Real Costs
● Holding Costs
○ Physical Space
○ Storage Solutions
○ Unit Tracking, (Re)Sorting
○ FBA Storage Fees
○ Perishability
○ Insurance, Utilities, etc.
● Opportunity Costs
● Demand Risk
● Etc.
Copyright 2018 - The Amazon Virtual Summit
Local Optimization
Volume Discounts
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Local Optimization
Volume Discounts
● What’s the holding cost per unit?
● Will you still have room to maneuver (literally or figuratively)?
● Would your suppliers actually prefer a different structure?
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Pros & Cons of DifferentAmazon Supply Chain Models
Supply Chain Models
Local Direct Cross Dock
Copyright 2018 - The Amazon Virtual Summit
LocalConsPros Use for:
LocalConsPros Use for:
● Multi-channel flexibility
● Potentially lower cost
structure than Direct
(because of FBA storage
fees)
● Protect competitive
advantages and
information
● Opportunity to provide
value-add in the form of
customized packaging and
bundling
LocalConsPros Use for:
● Holding Costs
○ Facility
○ Personnel / Time
■ In-Processing
■ Organization
■ Out-Processing
● Multiple Shipping Events
● Multi-channel flexibility
● Potentially lower cost
structure than Direct
(because of FBA storage
fees)
● Protect competitive
advantages and
information
● Opportunity to provide
value-add in the form of
customized packaging and
bundling
LocalConsPros Use for:
● Multi-channel Kits
● Multi-channel SKUs that
cannot be direct shipped
● Low-holding-cost SKUs
with higher than average
demand variability
● Holding Costs
○ Facility
○ Personnel / Time
■ In-Processing
■ Organization
■ Out-Processing
● Multiple Shipping Events
● Multi-channel flexibility
● Potentially lower cost
structure than Direct
(because of FBA storage
fees)
● Protect competitive
advantages and
information
● Opportunity to provide
value-add in the form of
customized packaging and
bundling
DirectConsPros Use for:
DirectConsPros Use for:
● Single shipping event
● No facility costs
● No time / handling costs
● No personnel costs
DirectConsPros Use for:
● Potentially higher cost
structure due to FBA
storage fees
● Can’t pool inventory
between multiple channels
● Transparency of your
supply chain (both to your
supplies and your
channels)
● Single shipping event
● No facility costs
● No time / handling costs
● No personnel costs
DirectConsPros Use for:
● High holding cost SKUs
● Single channel SKUs
● Commoditized SKUs
(assuming they can be
direct shipped)
● Potentially higher cost
structure due to FBA
storage fees
● Can’t pool inventory
between multiple channels
● Transparency of your
supply chain (both to your
supplies and your
channels)
● Single shipping event
● No facility costs
● No time / handling costs
● No personnel costs
Cross DockConsPros Use for:
Cross DockConsPros Use for:
● Lower / no facility costs
● Lower personnel / time
costs
● Protect competitive
advantages and
information
● Opportunity for QA
● Opportunity to provide
value-add in the form of
customized packaging and
kitting
Cross DockConsPros Use for:
● Juggling multiple
shipments can be tricky
with limited space,
personnel, and time.
● More difficult to pool
inventory between
channels
● Lower / no facility costs
● Lower personnel / time
costs
● Protect competitive
advantages and
information
● Opportunity for QA
● Opportunity to provide
value-add in the form of
customized packaging and
kitting
Cross DockConsPros Use for:
● High holding cost SKUs
● Single channel SKUs
● Commoditized SKUs
● SKUs that have a higher
than usual defect rate
● SKUs for which custom
packaging or stickering is
advantageous or required
● Certain types of kits
● Juggling multiple
shipments can be tricky
with limited space,
personnel, and time.
● More difficult to pool
inventory between
channels
● Lower / no facility costs
● Lower personnel / time
costs
● Protect competitive
advantages and
information
● Opportunity for QA
● Opportunity to provide
value-add in the form of
customized packaging and
kitting
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STACK TEXT ROW 1STACK TEXT ROW 2Recap
Lean Strategies
● Help you capitalize on rising demand or avoid
discounting because of falling demand.
● Reduce quality issues in in-processing, thereby
reducing your out-processing (and, therefore,
lead times).
● Reduce the amount of capital and/or physical
space you have tied up, thus increasing your
ability to stock new SKUs as demand changes.
Lead Times:Drive them down!
Know Your Costs
And don’t optimize locally!
Copyright 2018 - The Amazon Virtual Summit
FBA Supply Chain Optimization
Jay LagardeFounder and CEO
Ken FurlongDirector of Product
Questions for Today’s Speaker(s)?
Copyright 2018 - The Amazon Virtual Summit
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