Developing a Strategic Framework for Global Expansion

AMAZON ROBOTICS

Developing a Strategic Framework for Global Expansion

STUDENT TEAM: Sadie Cox – EGL (BSE & MSE Industrial and Operations Engineering) Mustafa Cagil Isik – Master of Business Administration

PROJECT SPONSORS:

Gustavo Frattini – Senior Engineer, Advanced Manufacturing Engineering Paul Seay – Senior Manager, Advanced Manufacturing Engineering

FACULTY ADVISORS:

Kate Astashkina – Ross School of Business Peter D. Washabaugh – College of Engineering

Amazon Robotics (AR) is the division of Amazon.com Inc. responsible for developing and deploying automation technology to empower order fulfillment and delivery at speeds previously considered infeasible. Now and in the future, it is considered integral to Amazon’s tradition of customer obsession and ability to dominate in markets across the globe.

The mission of AR is to be a key enabler of Amazon’s growth, rather than a bottleneck for it. AR has historically operated in a reactive manner- both in terms of external demand established by Amazon and internal manufacturing constraints and development. This tradition of reaction has prevented AR from establishing a strategy for long-term operations planning and risk insulation. Black swan events, including the COVID-19 pandemic and war in Europe, paired with growing demand in markets outside of AR’s exclusively American manufacturing base have exposed the need for a more proactive approach to global operations.

To meet this need, AR charged the Tauber team with developing a strategic framework for global expansion assessment accompanied with a roadmap, gap analysis and revision mechanism. The Tauber team conducted 40 informational interviews, incorporated 60 internal, and 50 external data points, and analyzed 200 distinct suppliers and 1,200 individual components. The team’s results impact internal and external stakeholders in more than 20 countries, incorporate precarious geopolitical and macroeconomic trends, and present significant savings in operational efficiency factors. The final deliverable includes (1) a set of indicators to determine whether to expand manufacturing capabilities for a point in time, (2) a strategic framework to determine where to expand, and (3) final recommendations to materialize the estimated savings in landed cost, lead time and carbon emissions.

Future developments in the Tauber team’s life cycle assessments and supplier value stream maps will introduce an unexampled echelon of visibility into key performance data. In tandem with the implementation of the final recommendations, the Tauber team’s efforts set in motion a more resilient, sustainable, and efficient operational future for AR and Amazon.