Amazon UK transshipment stow process analysis through discrete event simulation

• Main Author: Young, Eric, S.M. Massachusetts Institute of Technology
• Other Authors: Luca Daniel and Stephen C. Graves.
• Format: Others
• Language: English
• Published: Massachusetts Institute of Technology 2016
• Subjects: Electrical Engineering and Computer Science.; Sloan School of Management.; Leaders for Global Operations Program.
• Online Access: http://hdl.handle.net/1721.1/106075

S.M. Massachusetts Institute of Technology, Department of Electrical Engineering and Computer Science 2016 In conjunction with the Leaders for Global Operations Program at MIT. === Thesis: M.B.A., Massachusetts Institute of Technology, Sloan School of Management, 2016. In conjunction with the Leaders for Global Operations Program at MIT.. === Cataloged from PDF version of thesis. === Includes bibliographical references (pages 62-63). === This thesis investigated Amazon's implementation of transshipment, the act of moving inventory between fulfillment centers to facilitate order fulfillment, inventory rebalancing, and operational cost reduction. The role of transshipment in Amazon's fulfillment center network was explored and a proposed transshipment stow process is modelled to examine potential reductions in transshipment cycle time. As Amazon's fulfillment network has grown in size, the function of individual fulfillment center has evolved from shipping customer orders to providing a network-level, low-cost fulfillment option through transshipment. The complexity of this process, from the source fulfillment center to transportation and finally to the destination fulfillment center is examined in-depth to provide insight into transshipment processes that are typically not considered or modelled in research. One particular process-transshipment stow-was determined to have a large impact on transshipment cycle time. A proposed transshipment tote stow process was envisioned and modeled using discrete event simulation in order to determine cycle time savings versus volume efficiency tradeoffs. While the proposed transshipment tote stow process simulation was able to reduce transshipment cycle time by more than 80%, the tote stow process required an additional 7.5x amount of space compared to the current stow process. Based on initial simulations, the benefits of transshipment tote stow cycle time reduction does not outweigh the costs in space utilization. Transshipment-specific item stowing areas with periodic inventory consolidation may be the best tradeoff between cycle time, additional processes, and space. === by Eric Young. === S.M. === M.B.A.