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Amazon.com Co-Locating Mini-Fulfillment Centers Inside Key Customer DCs

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Shipping Soap and Diapers from a P&G Mixing Center; Grocers Rightly Concerned about Threat from Amazon.

 In yet another in a two-year series of interesting and important news reports on developments in e-fulfillment, the Wall Street Journal broke a story last week on a partnership between Amazon.com and Procter & Gamble, in which Amazon locates mini-fulfillment centers inside P&G DCs.

The arrangement apparently started some three years ago, but is just now is coming to light. From the first arrangement, believed to have been in a P&G DC in Tunkhannock, PA, the consumer products and e-commerce giants have expanded the program, the Wall Street Journal reports. Amazon is now inside at least seven P&G distribution centers world-wide, including locations in Japan and Germany. 

The potential benefits are obvious. By shipping directly from P&G facilities, Amazon cuts out the shipment leg normally executed to move product from the manufacturer's distribution center to an Amazon fulfillment center.

Receiving costs are surely lower too, with a simple transfer inside the DC of pallets of goods on fork trucks into the Amazon area, versus unloading trucks and putting the items into storage in the traditional DC flow. Order picking processes in the embedded fulfillment centers are probably pretty simple too...Read more on SC Digest

Last modified on Monday, 28 October 2013 14:31

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