One has to realize that Amazon is really nothing more than the mall gone digital. It makes almost none of what is purchased through its portals. It merely facilitates the transaction and, like all middle men, extracts their cut of the proceeds.
This is not to be critical; we American's do love our malls don't we? The ascension in the ubiquity of the 'Net and the concomitant rise in Amazon's equity price is the physical proof of that love isn't it?
But as this article makes clear the desire to be lean and mean, as evinced by their systemic processes, does leave them open to random acts, natural or otherwise. It's the chink in their armor; one they can never entirely eliminate because, as middle men, they never entirely control those that actually produce the goods.
It's the woes all physical mall owners would understand.
John~
American Net'Zen
8
Maybe it's time to bring manufacturing back to the United States.
Yes, products will probably be more expensive but that is a small price to pay for avoiding this virus and bringing more jobs to Americans.
12
No, you don't have to raise prices. Any company that does that is gouging the customer.
7
This holds true for other companies such as Walmart as well, which rely upon "just in time" delivery. Our local Walmart is often poorly stocked as it is and has large numbers of bare shelves on a good day. I often have to order online and pick it up at the store in order to get the product. If I can I'll just order from Amazon and skip the trip to Walmart. And yeah, I'd rather buy local but that's just not so easy here in rural America.
As for those commenters who proclaim that this is good and we'll buy less junk, while that is indeed true, there are also so many products that we rely on that are manufactured in China or dependent on parts from China. So not only will we have to forgo things that we may depend on but the reduced sales will harm businesses and put employees out of work.
There's a good list at the "Organic Prepper" website which focuses on products that come from China; everything from many of our medications to food to auto parts. There's also a book, "A Year Without Made in China" which I recommend reading to get a feel for our current state of affairs. We have invited disaster on ourselves by shifting manufacture of so many things overseas to where it can be done cheaper with lax environmental regs. We may well dearly pay for this hubris.
20
Amazon’s lean inventory comes at the expense of its suppliers’ stocking up to meet demand uncertainties. This pushes the costs away from retailers to suppliers and their next vendors. Any disruption to supply chain will be exacerbated once current inventory in the pipeline is depleted and July Prime day starts looking shaky quickly.
5
Has anyone else noticed that Whole Foods has a *huge* inventory supply problem since Amazon purchased them? Who runs out of rice, all the rice? No lentils for weeks at at time. A store with zero bananas... What's the story, Amazon? You can't blame China. I wish my regular grocery store weren't so filthy and pathetic. I'd love to find a new place that has decent food and one-stop shopping.
17
Would be ironic (and scary) if the virus spreads significantly more globally and all those Chinese coronavirus masks are stuck in warehouses. Speaks to the futility of depending on China for too much.
6
People can survive for a while without new cowboy boots and printer ink. They can even be happy!
37
People are getting sick and dying and all Amazon is concerned with is the supply chain?
The same goes for their customers.Maybe is time to try an alternative.
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@cl people’s jobs and livelihood are dependent on that supply chain.
5
Maybe, just maybe, people will realize that we don't need all this junk.
23
Much of your story seems to be sourced to e-mail traffic between Amazon and its vendors and suppliers. Why are you confident that traffic is real?
Your first example: "“Hello!” read one recent email from Amazon to a seller, which The New York Times reviewed", "effect" is used incorrectly (presumably that's stet, and your editors didn't change it). Unlikely Amazon would make that mistake.
4
Was wondering if just in time inventory developed when materials were available closer to home rather than in China? Sadly, this story is a rude reminder of how consumer-dependent we are on such a complex delivery system. Making a list of wants versus needs right now.
6
Important question:
Can we trust that Amazon and its Chinese and other suppliers will know how to, and be certain to, prevent the spread of the virus via products or packaging, shipping and delivery methods? How can we consumers be sure that material coming from or through areas where the virus has migrated will be free of virus material still active? There are so many different kinds and texture and porousness of material and shipping conditions. What is the life-span or half-life of the virus under both ideal conditions for its vitality and conditions less hospitable? If it is a novel virus, how can we be sure of that information? Is the credible scientific certainty that the virus isn’t infectious when dried or dead?
Might be helpful and interesting for NYT to report to readers answers to these and related questions.
14
Might there be a silver lining in the epidemic? Help people realize that they don't really need the junk that Amazon sells?
13
@Ajax In my long experience, Amazon does not primarily traffic in "junk" -- they have a great selection of products, and great value for time & money.
7
@Kevin Smith In my experience any quality brand product that Amazon offers can also be bought for the same price, convenience and shipping speed from specialty retailers that pay their fair share of taxes and treat their employees fairly. Anything in Amazon that appears too good to be true almost certainly is either junk or counterfeit, and sometimes both.
20
The ability of Amazon to make a lot of money and to diversify with it is fundamentally dependent upon not keeping big inventories. Big inventories like well stocked store shelves tie up vast amounts of money, capital, which is depreciating in value the longer that the merchandise sits on those shelves. Keeping minimal inventory to satisfy quick turnover of goods is what gives on-line sellers the greatest advantage over brick and mortar stores. The only trick is knowing how much to keep on hand to keep the stock moving.
5
On your title:
Actually, all one has to do is walk into a now-Amazon-owned Whole Foods store to see some of the weakness on their the Amazon system.
Perhaps it avoids some level of food waste, but it also results in frequently-empty shelves, customers driving all the way there only to find that they are out of stock or too low on stock on an item. This situation then just adds to Amazon’s already-over-the-top carbon- and traffic-footprint, as shoppers then drive to a competitor for the item or order it online, which then requires added packaging, shipping, and round-trip driver delivery with all the layers of carbon footprint there. Even if they started using drones (not!!!) the adverse impacts on the physical and social environment would likely be substantial.
All the tech bros get off on the “move fast and break things” motto, but most people, including most really smart people, still see the wisdom in the older adage, “If it ain’t broke, don’t fix it.”
23
@Jackson
We frequently see them where we are. And have ever since Amazon took over. Also sales clerks in stores seem much more stressed, less knowledgable about products, less responsive to or solicitous of customers, and generally a much less pleasant or productive shopping experience.
Simply said: No longer worth the extra cost.
Whole Foods, in our experience, is now not just better named “Whole Paycheck” but without the value-added of truly knowledgable, respectful and responsive customer-service-oriented staff, “Wholly Not Worth It”
8
@Jackson I can't upload the picture here, but our local store has entire sections completely empty. They reconfigured the store to have less shelf space. Sometimes you'll see a facade of one item lined up at the edge of the shelf with zero inventory behind. Whole categories empty.
2
Is there anything Amazon can't be blamed for? Lean inventory has been around for decades. It drove every company I worked for, under various names, one of which the acronym was actually LEAN. Another was called Just In Time, which meant materials were ordered to arrive "just in time" to manufacture the products ordered as the orders came in. It was Wall Street-driven then and continues to be. Stock ratings go up and down depending on how much inventory a company has on hand.
13
@Jrb
It's fun to blame Amazon for everything. They constitute a disproportionate place in too many lives. Since they like to brag about being the be all and end all of one's waking, breathing and consuming consciousness, by all means blame them for everything. They certainly take enough credit and make enough money to handle it.
6
Why don't we all pay what it should cost to produce items here in the US? Nearly everything Target and Walmart sell are made in China.
6
@MrDeepState
Because over 244 years ago Adam Smith demonstrated in the Wealth of Nations that under an institutional arrangement of individual liberty, property rights, and voluntary exchange the self-interested conduct of international and domestic market participants could be shown to be consistent with a general betterment of the human condition.
And because nothing has disproved what he said in the intervening 200 years.
And it is still a remarkable read 244 years after its release. I kinda wish Bernie would read it.
3
@SteveRR And nothing has proved it either, since all of the developed economies of the world rejected Smith in favor of mixed economic systems of the kind Bernie favors.
5
So you believe that an Invisible Hand regulates markets? Kinda glad Bernie doesn’t
3
I ordered two (essentialy identical) items from the same company, based in England at the same time, mid-January. One that came from England came in the posted international period predicted. The one shipped from China took an extra two weeks to arrive and be delivered in the USA. Even the supplier noted that the coronavirus virus's disruption may have been the cause.
4
It's probably good that we finally appreciate how much we depend on China. The supply chain is invisible to most of us so now is as good a time to find out as any.
As for lean inventories and disruptions, companies that practice this, most famously Toyota, learn how to manage when things go wrong. Small disruptions occur all the time and these should be used as learning opportunities for the time when the Big One occurs. Maybe Amazon will get better as it works through this. Its supply chains are a lot bigger and more complex than Toyota's.
As for Amazon-bashing, let's not forget when we all bashed Microsoft, and before that IBM, and before that the Telephone Company, and before that Standard Oil. Bashing is fun but those who do it do not face the challenges that the bashed ones face or deliver the service or products.
8
Are you saying the bashing of the monopolistic predatory to supplier and customer abusing practices of Microsoft, IBM and AT&T were unwarranted? And the "complexity" of their businesses were to blame? Who are you trying to kid?
3
@danarlington
So you do not think any of those companies deserve their public drubbing?
2
This is classic shortcomings on just-in-time production and logistics. Really classic.
//Natural and man-made disasters will disrupt the flow of energy, goods and services. The down-stream customers of those goods and services will, in turn, not be able to produce their product or render their service because they were counting on incoming deliveries "just in time" and so have little or no inventory to work with. The disruption to the economic system will cascade to some degree depending on the nature and severity of the original disaster.//
3
Since some viruses can live up to a week in the right conditions, is it possible that items shipped from China to the rest of the world may harbor the Corona virus? Be careful what you order from Amazon!
3
@Fred Rodgers
I think that your comment may incite irrational fears about the spread of the Coronavirus. The Coronavirus is specifically spread between people by way of respiratory droplets from infected people when they cough or sneeze. That the virus might linger on products shipped from China to Amazon and then to a person’s home is completely unfounded.
12
@RJH Alternatively, people can independently catch a virus from contaminated surfaces. It is unclear how long the new coronavirus can survive on surfaces, but studies of other such viruses have found they can stay active for a week or more
2
@Fred Rodgers
But the Coronavirus is not just another virus, and there is no evidence to support your supposition. I have no idea what purpose that you serve by fabricating such a far fetched theory, because if what you say had the slightest bit of truth to it, then everything imported from China would be included in theory, and the WHO should recommend, following your theory to its logical conclusion, a quarantine of all imports from every country that has been infected.
Think about the vast implications and let the world know what should be done.
3
Early last week I was shopping at Walmart and noticed a severe shortage of toothpaste that I had never seen before. According to P&G the manufacturer of Crest some of their key ingredients for a lot of products are sourced in China.
Wondering if I should load up on some of the basics like hand sanitizers and Clorox wipes.
3
Lean inventories and the Just in Time management approach to inventory control have been the pinnacle of good manufacturing practices for over 20 years now. The current problems evidenced by the coronavirus have always been understood as a weak point of this approach.
11
@J. L. Rivers I absolutely agree with you. I am a the owner of small manufacturing company (22 employees) and I learned a long time ago that it's foolish to keep substantial amounts of material and hardware inventory in stock for production long before you need it. It just ties up money that you can use today.
Our customers also utilize just-in-time for our deliveries to them. Everybody does.
4
@J. L. Rivers - Just in time inventory is a great idea … unless the inventory is something quite critical to health or safety. Could you imagine if the Army decided that they only needed to keep one day's worth of ammunition around?
4
Right. For some organizations, like hospitals and the military, Just in Time is not the right strategy because everything they do is mission critical. That's why they use Rapid Deployment strategies, which rely on trapping large inventories at once.
3
It won't be just Amazon that it is affected by the Coronavirus if it gets much worse. China controls the world's commerce by making vast numbers of pieces, parts and finished products. While someone might not be able get a notebook or smart speaker there will also be HVAC vendors who can't get a switch to complete their product. Another product will be automobile parts (both new and aftermarket). GM suffered a shortage this summer due to a strike and it was no pretty for those needing their cars repaired. There are many more companies who are highly concerned about this and many of them make and sell products that we need.
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@JimH
What we need is a tiny subset of what we think we need. It'll be OK.
10
Amazon and Apple both show they need to diversify their supply chains; India and even some more US production would help soften issues of relying on a single supplier like from China, a totalitarian communist regime that could be blocked off due to trade wars, disease, natural disaster and the CCP just fighting back.
8
Here is a bright idea: scrap Prime Day for this year!
36
Just this year?
3
@Andy Now that is Just in Time Idea
4
I ordered something from Amazon yesterday and was flabbergasted to see that it will be delivered by MARCH 13! Yes, it is manufactured in China. Amazon is already feeling the pinch.
7
@Granny Franny It probably is not Amazon's product. Anyone can get their products listed for sale on Amazon who takes care of the payment (and shipping if the seller keeps their inventory at Amazon).
7
Yes, I understand that Amazon itself is not selling the item I ordered. However, I expect that ordinarily other sellers on Amazon are expected to meet Amazon’s prime delivery objectives.
In the past, the FCs don't start heavy stow volume until May, so there's still time to get things figured out.
I am really enjoying the news that Amazon is sweating.. finally there will be a stoppage to real "contraband's" from China. but it could be more !
No I am not enjoying people are hurting!
But given the fact that Amazon does not have any control of what product comes to me after being a a prime member for over 11 years I have up on my prime membership to stop to a end of spurious items flowing to me ..
Some times its getting mixed with items "ship and sold by Amazon" and no way to catch that my shower gel has way more soda than the one from Target purchased next day !
I hope Amazon makes sure its using vetted sources of the products next time they get their shipments from China !
Hope this man made virus crisis ends soon for us as a human race and I can become prime member again after the cleanup of the shelves in Amazon :)
3
@weary traveller How was amazon supposed to know that perfectly fine suppliers would be cut off by a new disease outbreak, or even trade wars. Yes, they should diversify, but this isn't an example of amazon being a bad actor.
5
Amazing how capitalism cares solely about supply chains when people are dying.
50
@Andrew Taylor Newsflash: capitalism has no morality.
3
@Andrew Correction: It's Chinese people who are dying. That's why the West feels a lack of sympathy, and would rather focus on their supply chains.
@Andrew Taylor You mean compared to the socialism of the CCP? Don't they have universal health care and thus are just fine?
1
It’s really not about whether any of us “like” Amazon or not. There are issues here that impact everyone. Amazon is one of the biggest companies in the country and contributes to our economy and workforce. Also, all the folks who use Amazon Pantry, order their batteries from amazon, etc will have to use other stores if amazon’s supplies dwindle. Other stores might not have enough supplies to keep up with the extra business.
It’s like dominoes. Nothing is separate from anything else. The ripple effect. It’s all connected. We’re all connected.
31
Lean inventories started with most retailers years ago. I remember when Walmart's computer system for the maintenance of inventories and shipping was touted as being as powerful as the Pentagon's. For a long time now, I've seen unstocked shelves and "item inventory" cards displayed there and the shelves of other retailers. For the malls, this particularly, has been their demise. Better to see it not available online than to have driven to the store to find out.
13
Amazon has already jumped the shark. They had plenty of trouble with meeting demand and upholding their Prime agreement over the holidays, even before this happened, and thanks to their 'lean' inventory, you can't depend on them to have what you want in stock in the middle of July either. Essentially you pay for Prime and they decide when you get your merchandise.
There are other retailers online who do have things in stock, ship just as quickly, and have prices just as competitive, because they're trying to beat the Amazon that used to be. I've systematically moved all of my purchases elsewhere. Other companies are more human, shipments arrive undamaged and on time, and everybody is happy.
20
Like with Amazon, products that I anticipate buying may be brought forward just in case supply disruption is worse than anticipated. An unmentioned side effect of Amazon buy ahead is that if the supply chain impact is less than anticipated, the glut of supply may drive down prices locally, and cause disruption for the manufacturers who have to slow production while the surplus is worked through.
Unless a cowboy hat or the majority of what sells on Amazon is of an emergency life and death matter we will somehow survive this retail crisis.
Less nonessential items being consumed by the world’s consumers, imagine that.
52
I doubt that China will be able to contain this coronavirus and we will have a global pandemic. This will have a massive effect on the global economy. China is the forerunner for business effects from this virus
18