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2025 Update: Amazon’s Supply Chain Keeps Rewriting the Playbook

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2025 Update: Amazon’s Supply Chain Keeps Rewriting The Playbook

Seven years ago, we published a widely read piece on Amazon’s supply chain. At the time, the story was about bold bets on fulfillment centers, early robotics, and a push toward speed that most competitors couldn’t match. That article struck a nerve because it captured a turning point in logistics. Today, it deserves a fresh look—because Amazon hasn’t stood still.

Here’s the state of play:

From national to regional. Amazon has re-architected its U.S. network into regional clusters. This shift cut miles, cut air, and allowed seven billion packages to move same- or next-day in 2023. The kicker: it lowered cost-to-serve by nearly fifty cents per unit, proving that speed and efficiency can scale together.

Robotics at scale. The old Kiva bots were the spark. Today, Amazon runs more than a million robots, with systems like Sequoia that cut order processing time by a quarter and put inventory away faster than any human team ever could. Robotics are no longer pilots—they are the backbone.

Logistics-as-a-service. With Supply Chain by Amazon, the company now sells end-to-end logistics—factory to front door—to brands of every size. Combined with Multi-Channel Fulfillment and Buy with Prime, Amazon has quietly become a competitor to the 3PLs and integrators that once fed off its volume.

Last mile, diversified. Over 3,500 Delivery Service Partners now employ 275,000 people. More than 25,000 Rivian electric vans are on the road in the U.S., and drones are moving from pilots to practical service in a handful of markets. The last mile is now an ecosystem—densely packed, electrified, and increasingly difficult for rivals to replicate.

Hard lessons and pivots. Not every bet has stuck. The “Just Walk Out” cashierless experiment is being pulled from most Fresh stores. Dash Carts and simpler in-aisle tools are proving more practical. Amazon innovates aggressively, but it also cuts its losses fast when the math doesn’t work.

Sustainability. Amazon matched 100% of its electricity use with renewable energy in 2023. But the heavier lift lies in logistics: reducing packaging, decarbonizing fleets, and nudging sellers toward greener inbound flows through fees and credits.

Seven years on, the takeaway hasn’t changed—it’s only become sharper. Amazon keeps rewriting the playbook, from how goods are stored and moved to how logistics itself is sold. For the rest of the industry, that means the bar is always rising.

And our perspective in 2018:

Amazon’s CEO Jeff BezosThe Amazon Supply Chain: The Most Innovative in the World?

Is the Amazon supply chain the most innovative in the world? A very strong argument can be made that they are despite some announcements that were pie in the sky – like the patent they won in January for floating warehouses that use drones for deliveries and replenishment. Or for that matter, Jeff Bezos’ drone prediction made five years ago on 60 Minutes. Drones for home delivery are still too dangerous, as opposed to using drones for inventory management.

But other events are both innovative and meaningful. Let’s just review some of their activities over just the past year.

Relay

Relay, quietly released in October, is Amazon’s first trucking app, and is designed to make trips to Amazon warehouses faster and more efficient. Drivers can enter cargo information into the app before they arrive. Once they have entered the information, they are given a QR code which they will use at the security gate. The idea is that by pre-checking in, they use the QR code to pass through security instead of the manual process of showing and scanning a badge at the gate. With the pre-check in process, it gives Amazon better visibility into the current location of its deliveries, and can better prepare for arrivals. Some of Amazon’s warehouses and fulfillment centers have built lanes that are dedicated solely for Relay users. Relay aims to speed up the process of making deliveries to warehouses. Additionally, it can help to reduce manual processes.

The actual application of Relay is narrow, as it is only used for deliveries to Amazon facilities. However, the vision may be bigger. It may be a way for Amazon to make inroads for a much larger future Uber-type freight matching service.

Whole Foods and Dash

Amazon’s acquired Whole Foods in June for $13.7 billion in cash. The move finally puts Amazon in the position that it has been working towards for years in the grocery space. Grocery has been one area that Amazon has not been able to crack, even with the launch of Amazon Fresh. By bringing the Whole Foods brand into the Amazon family, the company immediately gets a boost for its grocery business.

Of course, Walmart is the goliath in this space. But Amazon seeks to use convenient deliveries and technology to begin to make up the difference. Amazon’s Dash buttons, introduced before the acquisition, are a great complement to the acquisition. The Dash Button is a small wireless device about the size of a pack of gum. When a customer presses the button, the device uses Wi-Fi to order items the customer has pre-selected from Amazon. Amazon’s vision is that people will mount their buttons in their kitchen, pantry, laundry room, and bathroom using the attached adhesive strip on the back of the device. Then, for example, when they run out of Tide laundry detergent, the consumer pushes the button and Tide is automatically ordered. A consumer would purchase a Dash Button for $4.99 on Amazon.com for each of their favorite brands. With each purchase comes a $4.99 instant credit after the first purchase.

Amazon brought its supply chain expertise as well. Whole Foods was notorious for holding too much inventory at their stores. When a client asked for something, a helpful associate would go to the backroom and search for it, and perhaps in ten minutes would return with the item, or perhaps not. Now they have gone to a lean, JIT grocery supply chain with virtually no inventory in the back. But the store shelves are as full, or fuller, than they were previously.

But much work remains to be done to build out a profitable home delivery network. In theory, the Whole Food stores could be used as forward warehouses, in addition or instead of being stores. But even after decluttering the back rooms, most of the Whole Foods locations do not offer the right layout to switch over to a delivery warehouse, as they do not have the required docks or quite enough back room space.

Amazon, the Carrier

In February, Amazon announced plans to build its first air cargo hub at Cincinnati/Northern Kentucky Airport. This is based on sound economics. When the 2-million-square-foot facility opens, it will reduce the company’s dependence on UPS and FedEx. But Amazon was already moving away from reliance on the parcel giants by giving an increasing share of its parcel business to lower cost regional providers. And many e-commerce shoppers have seen their orders delivered by the company’s fleet of private trucks.

Amazon had already moved into the ocean freight business for similar reasons. But this year, Amazon began taking greater control over shipments from China. Specifically, Amazon has started handling the shipment of goods from Chinese retailers that sell on its platform. For this line of business Amazon is acting as its own freight forwarder by reserving space on ships and clearing customs itself. This also reduced the fees it pays to outside logistics providers.

The company plans to use this new air hub to house its current and future fleet of planes. It’s expected to cost Amazon over $1.5 billion which means this will be a highly automated facility, just as UPS’s and FedEx’s are. It is reported the company will initially employ 2,000 people, which means this hub will work at scale.

It is speculated that Amazon’s end goal is to deliver packages for itself and other retailers. Large retailer competitors are very unlikely to ever use Amazon in this way; those companies see Amazon as their toughest competitor and will do nothing to help them achieve additional logistics scale. But small retailers could find this an interesting service. Many smaller retailers already sell through the Amazon marketplace. There could be bundled deal for marketing and logistics.

Amazon, the Warehousing Giant

In January it was reported that Amazon had 45,000 robots across 20 distribution centers. Today, they have roughly 100,000 robots in use across the world. Amazon has made huge investments in automation. The company spent $775 million to acquire Kiva Robots in 2012, now called Amazon Robotics. According to one report, worldwide Amazon has 493 warehouses covering about 180 square million feet. Their investment in autonomous mobile robots has certainly paid for itself in increased productivity with many more warehouses still ripe for the deployment of autonomous mobile robots.

But it looks smart for a second reason, warehouse workers are getting increasingly hard to find. We (ARC Advisory Group) had the CEO of a large North American logistics service provider in to visit us recently. He told us that a few years ago they had ten applicants for every open warehouse job they had; today it is just one. “If an ex-con with a burglary record shows up, we say ‘We know you will steal from us, but we can really use the help. You’re hired!’”

There is a greater need for warehouse workers because of ecommerce. Historically, consumers went to stores and picked their goods off the shelves. Now warehouse workers are increasingly doing the labor consumers use to do for themselves. Not surprisingly, this CEO also believes warehouse wages are poised to rise significantly.

In conclusion, while Amazon runs the most innovative supply chain, that doesn’t mean it is the best. Amazon is a much smaller and less profitable company than Walmart. Last mile deliveries are expensive, which kills profits. Amazon remains lucky that Wall Street values high growth so much more than profitability.

The post 2025 Update: Amazon’s Supply Chain Keeps Rewriting the Playbook appeared first on Logistics Viewpoints.

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Walmart AI Pricing Patents Signal Shift Toward Real-Time Retail Execution

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Walmart Ai Pricing Patents Signal Shift Toward Real Time Retail Execution

Walmart’s new patents and digital shelf rollout point to a more tightly integrated model linking demand forecasting, pricing, and store-level execution.

Walmart has secured two patents related to automated pricing and demand forecasting, drawing attention to how large retailers are evolving their pricing and execution capabilities.

One patent, System and Method for Dynamically Updating Prices on an E-Commerce Platform, covers a system that can dynamically update online prices based on changing market conditions. A second, Walmart Pricing and Demand Forecasting Patent Classification, relates to demand forecasting technology designed to estimate what customers will buy and recommend pricing accordingly. At the same time, Walmart is expanding digital shelf labels across its U.S. stores, replacing paper labels with centrally managed electronic displays.

Individually, none of these elements are new. Retailers have long used forecasting models, pricing tools, and store execution processes. What is notable is the combination.

Walmart now has three capabilities aligned:

Demand forecasting tied to predictive models

Price recommendation based on that demand

Store-level infrastructure capable of rapid execution

That combination reduces the operational friction historically associated with pricing in physical retail.

Pricing Moves Closer to Execution

Traditional store pricing changes required coordination across multiple steps: analysis, approval, printing, distribution, and manual shelf updates. That process introduced delay and inconsistency.

Digital shelf labels materially change that constraint. Prices can be updated centrally and executed across stores with significantly less manual intervention.

This does not change the underlying logic of pricing decisions. Retailers have always adjusted prices based on demand, competition, and margin targets. What changes is the speed and consistency of execution.

As a result, pricing moves closer to real-time operational control.

Implications for Supply Chain Operations

Pricing is not an isolated commercial function. It directly influences demand patterns, inventory flow, replenishment timing, and markdown activity.

When pricing becomes faster and more responsive, those linkages tighten.

Three implications are clear:

1. Increased Execution Speed
Retailers can align pricing decisions more quickly with current demand conditions, reducing lag between signal and action.

2. Stronger Dependence on Forecast Accuracy
When pricing recommendations are driven by predictive models, the quality of demand sensing becomes more consequential. Forecast errors can propagate more quickly into sales and inventory outcomes.

3. Closer Coupling of Merchandising and Supply Chain
Pricing decisions influence demand. Demand impacts inventory, replenishment, and store execution. Faster pricing cycles compress the distance between these functions.

Centralization and Control

Walmart has positioned its digital shelf label rollout as an efficiency and accuracy initiative. Centralized price management improves consistency between systems and store execution while reducing labor tied to manual updates.

That positioning aligns with the operational realities of large-scale retail. At Walmart’s footprint, even small improvements in execution efficiency translate into material cost and accuracy gains.

At the same time, the shift toward algorithm-supported pricing introduces standard enterprise control requirements. Organizations need clear governance around how pricing recommendations are generated, reviewed, and executed, particularly as systems become more automated.

A Broader Technology Pattern

Walmart’s patents are best understood as part of a broader shift in supply chain and retail technology.

AI and advanced analytics are moving closer to operational decision points. Forecasting models are no longer confined to planning environments; they are increasingly connected to systems that can act.

In this case, that connection spans:

Demand sensing

Price recommendation

Store-level execution

The result is a more tightly integrated operating model in which commercial decisions and supply chain execution are linked through software.

What This Signals

The significance of Walmart’s move is not tied to public debate over surge pricing scenarios. The underlying development is structural.

Retailers now have the ability to connect demand forecasting, pricing logic, and execution infrastructure into a faster decision loop.

For supply chain leaders, that represents a clear direction:

Execution is becoming more digital, more centralized, and more tightly coupled to predictive models.

The companies that benefit will be those that can align forecasting, pricing, and operational execution within a controlled, coordinated system.

The post Walmart AI Pricing Patents Signal Shift Toward Real-Time Retail Execution appeared first on Logistics Viewpoints.

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Supply Chain and Logistics News March 16th-19th 2026

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Supply Chain And Logistics News March 16th 19th 2026

This week’s installment of Supply Chain and Logistics news includes stories about record increases in oil prices, Rivian’s autonomous taxis, and much more. Firstly, the Trump administration has issued a 60-day waiver of the Jones Act, a century-old regulation that requires goods moved between US ports to be transported by US-built vessels, etc. Additionally, this week Uber & Rivian announced a partnership for Rivian to build 50,000 autonomous robotaxis by 2031 with over a billion dollars in investment from Uber. Schneider Electric and EcoVadis announced a partnership to target emissions in the health care sector. Lastly, DHL announces 10 warehousing sites to be used for data center manufacturing capacity, and Mind Robotics raises 100 million in series A funding.

Your Biggest Stories in Supply Chain and Logistics here:

Trump Administration Issues Pause on Century-old Maritime Law to Ease Oil Prices

The Trump administration has issued a 60-day waiver of the Jones Act. This century-old regulation typically requires goods moved between US ports to be carried on vessels that are US-built, US-owned, and US-crewed. However, with oil prices surging toward $100 a barrel due to escalating conflict in the Middle East, the suspension aims to ease logistics for vital commodities like oil, natural gas, and fertilizer. While the move is intended to lower costs at the pump and support farmers during the spring planting season, it has sparked a debate between those seeking immediate economic relief and domestic maritime unions concerned about the long-term impact on American shipping and labor.

Uber and Rivian Partner to Deploy up to 50,000 Fully Autonomous Robotaxis

Uber and Rivian have announced a massive strategic partnership that signals a major shift in the future of autonomous logistics and urban mobility. Under the terms of the deal, Uber is set to invest up to $1.25 billion in Rivian through 2031, a move specifically tied to the achievement of key autonomous performance milestones. The primary focus of this collaboration is the deployment of a specialized fleet of fully autonomous R2 robotaxis, with an initial order of 10,000 vehicles and an option to scale up to 50,000 units. From a supply chain perspective, this represents a significant commitment to vertical integration; Rivian is managing the end-to-end production of the vehicle, the compute stack, and the sensor suite, including its in-house RAP1 AI chips, while Uber provides the scaled platform for deployment. Commercial operations are slated to begin in San Francisco and Miami in 2028, eventually expanding to 25 cities globally by 2031.

Schneider Electric and EcoVadis Announce Partnership to Decarbonize Global Healthcare Supply Chains

Schneider Electric, a major player in the digital transformation of energy management and automation, and EcoVadis, a provider of business sustainability ratings, have announced a strategic partnership aimed at accelerating decarbonization within the healthcare industry. “Energize” is a collective initiative to engage pharmaceutical industry suppliers in climate action. The collaboration focuses on addressing Scope 3 emissions, those generated within a company’s value chain, which often represent the largest portion of a healthcare organization’s carbon footprint. By combining Schneider Electric’s expertise in energy procurement and sustainability consulting with EcoVadis’s supplier monitoring and rating platform, the partnership provides a structured pathway for pharmaceutical and medical device companies to transition their global suppliers toward renewable energy.

Mind Robotics, a Rivian spin-off, raises $500 million in Series A Funding

RJ Scaringe, CEO of Rivian, is positioning his new $2 billion spin-off, Mind Robotics, as a technological solution to the chronic shortage of manufacturing labor in the Western world. By developing a “foundation model” that acts as an industrial brain alongside specialized mechatronic bodies, the company aims to move beyond the rigid, fixed-motion plans of traditional robotics toward systems capable of human-like reasoning and adaptation. Scaringe emphasizes that while these machines must perform with human-level dexterity, they don’t necessarily need to be humanoid in form; instead, the focus is on creating a data-driven “flywheel” within Rivian’s own facilities to lower production costs and help domestic manufacturing remain globally competitive.

DHL Expands North American Logistics Infrastructure Amid Growing Global Demand for Data Center Logistics Services

DHL is significantly scaling its data center logistics (DCL) footprint in North America, announcing the addition of 10 dedicated sites totaling over seven million square feet of warehousing capacity. This expansion is a direct response to the explosive demand for AI-driven infrastructure and the specific needs of hyperscale and colocation data center operators. By offering specialized services like rack pre-configuration, white-glove handling of sensitive IT hardware, and warehouse-to-site transportation, DHL is positioning itself as an end-to-end partner in a sector where 85% of operators express a preference for a single logistics provider. This move not only addresses the logistical complexities of moving high-value components like GPUs and cooling systems across global borders but also underscores the critical role of integrated supply chains in maintaining the build speed of the digital backbone.

Song of the Week:

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How to Capitalize Quickly to Address Hyperconnected Industrial Demand

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How To Capitalize Quickly To Address Hyperconnected Industrial Demand

This first in a blog series offers a review of discussion that occurred during ARC Advisory Group’s 2026 Industry Leadership Forum. Specifically, it details a keynote conversation held with senior executives from Rolls-Royce, BTX Precision, and MxD.

The New Fabric of Demand: Modernizing Collaboration and Transparency for Real-Time Production

Industrial leaders have been talking about tearing down workflow and data silos for decades. Yet here we are again. For most, the reality is that most operations and supply chains today typically don’t indicate much progress. A few leaders have figured out how to use digital tools to scale and build pathways forward, a whopping 12.9% according to our latest data (yes, that’s sarcasm). However, even as they struggle to coordinate, orchestrate, and innovate across their operations and enterprise, much less tightly collaborate outside their four walls. In a digital world, this continued capability gap, the inability to closely link market signals to responsive production and external supply chains, is very quickly becoming a liability.

Recently, at the 30th Annual ARC Industry Leadership Forum in Orlando, I had the privilege of leading a keynote discussion entitled The New Fabric of Demand: Modernizing Collaboration and Transparency for Real-Time Production. As part of that, I moderated an excellent conversation that included Global Commodity Executive Greg Davidson of Rolls-Royce, CEO Berardino Baratta of MxD, and CRO Jamie Goettler of BTX Precision.

In this four-part series, we will explore that conversation fully, digging into how the “fabric of market demand” has fundamentally changed, and why structural modernization, both human and technological, is no longer just an option. It is an industrial imperative that will increasingly determine who wins in disrupted markets.

Why Legacy Workflow Will Actually Get Modernized

If we examine the present through the lens of the past, the fundamental laws of supply and demand haven’t really changed. What has changed is the hyperconnectivity of the world and our compressed time to both reward and volatility.

The hard truth is that legacy linear workflows simply do not work in hyperconnected, digitally-driven environments, which are non-linear by nature. As our industrial environments become more digital, they naturally open up countless new ways for how things can get done and how risk can enter the organization. As a result, disruption has shifted from a rare event to a fairly continuous and pervasive reality. In this new reality, responsiveness differentiates you from the competition, and lag time kills.

To survive and thrive in non-linear environments, tighter, integrated ecosystems are required, where silos are actively torn down or redesigned so that barriers to value can be continuously identified and quickly eliminated. At the core, this concept is unfolding around data access, contextualization, and sharing. It provides the urgency behind the need for building industrial data fabrics.

This rewiring certainly extends beyond operations and enterprise processes, enabling the entirety of the supply chain to be judged on its collective responsiveness to the market, all the way down to the individual company level. In this scenario, data can quickly point out laggards who limit value. As the orchestrators of these supply chains identify these limitations on value, they quickly break off and discard the connection and move on without these weak links.

Pillars of the New Fabric of Demand

To achieve necessary level of operational and supply chain responsiveness, the roles of every entity within an ecosystem must be rethought. In the subsequent three blogs of this series, we will take a deep dive into the three distinct pillars that make up this modern architecture, but I’ll begin by laying them out here:

The Market Signal is the catalyst of the entire ecosystem. It dictates the “what” and the “when,” defining what value, success and risk look like in real-time. In blog 2, I’ll explore how to move from reactive assumptions to proactively capturing the market signals that actually matter.
The Demand Architect is moving beyond traditional order-taking. The Demand Architect designs and orchestrates the ecosystem, aligning external partners as true extensions of the enterprise. In blog 3, I’ll discuss the structural agility required to lead this response, rather than just manage a process.
The Agile Partner is the engine of execution. The Agile Partner links supply chain dynamics directly to the shop floor, differentiating themselves through their responsiveness to the market signal. In the final blog in the series, I’ll tackle how data transparency and trust become technical requirements, not just buzzwords, without exposing mission-critical IP.

Building the Modern Industrial Enterprise

Legacy workflows cannot survive in a non-linear world. Industrial organizations must re-architect operations and ecosystems for real-time responsiveness and secure, transparent collaboration. To do so, they will need to:

Improve the measurement of responsiveness: Efficiency and margin-squeezing are important, but they aren’t game-changers. Your competitive edge now relies on how quickly you can adapt to market signals.
Embrace transparency over secrecy: Modern collaboration requires providing a contextualized “lens” into production status without compromising proprietary IP or cybersecurity. Industrial data fabrics are key.
As always, view technology as a tool, not an outcome: Industrial data fabrics are needed to break silos and AI to manage complexity and improve accuracy and speed of decisions. However, the age-old adage remains true. Just because you can apply AI to something doesn’t mean you should. It must be grounded in measurable Value on Investment (VOI), not just return.

The New Fabric of Demand Blog Series

This is the first in a series of four on The New Fabric of Demand: Modernizing Collaboration and Transparency for Real-Time Production. Over the coming days, I’ll publish a perspective from each of the three pillars of the new fabric of demand:

Pillar 1: The Market Signal
Pillar 2: The Demand Architect
Pillar 3: The Agile Partner

By Mike Guilfoyle, Vice President.

For more than two decades, Michael has assisted organizations, including numerous Fortune 500 companies, in identifying and capitalizing on growth opportunities and market disruption presented by the effects of digital economies, energy transition, and industrial sustainability on the energy, manufacturing, and technology industries.

The post How to Capitalize Quickly to Address Hyperconnected Industrial Demand appeared first on Logistics Viewpoints.

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