Transcript
Page 1: 2018 Amazon Virtual Summit - Day 3

Copyright 2017 - Q4 Amazon Virtual Summit

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The 2018 Amazon Virtual Summit

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● Session Recording + Slides Will Be Sent Out

● Join in the Poll Questions!

● Submit Questions to Our Panelists

Today’s Logistics

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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

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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

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Jay LagardeFounder and CEO

Ken FurlongDirector of Product

Today’s Speakers

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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

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STACK TEXT ROW 1STACK TEXT ROW 2Criticality of Lead Times for Profitability

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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

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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.

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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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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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STACK TEXT ROW 1STACK TEXT ROW 2Driving Down Lead Times

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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

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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

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From your Suppliers Directly to Amazon

● Training

● Prep: box labels, shipping labels, etc.

● Supply chain connect

● Amazon sticker service can be efficient when needed

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STACK TEXT ROW 1STACK TEXT ROW 2Know Your Real Costs

How Local Optimization Hides Big Costs

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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.

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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

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Supply Chain Models

Local Direct Cross Dock

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LocalConsPros Use for:

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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

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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

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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

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DirectConsPros Use for:

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DirectConsPros Use for:

● Single shipping event

● No facility costs

● No time / handling costs

● No personnel costs

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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

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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

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Cross DockConsPros Use for:

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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

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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

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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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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!

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FBA Supply Chain Optimization

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Jay LagardeFounder and CEO

Ken FurlongDirector of Product

Questions for Today’s Speaker(s)?

Copyright 2018 - The Amazon Virtual Summit


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