Case Study Of Operations Management At Zappos

1877 Words 8 Pages
Operations Management at Zappos Zappos is a very unique organization that provides a different perspective on operations management. Zappos is an organization that sells shoes, clothes, and other fashion accessories available through an online website. The organization was first founded in 1999 by Nick Swinmurn who would eventually partner with Tony Hsieh, who is currently the CEO of Zappos (Hsieh, 2013). It would take the company many years and many sacrifices before it would be considered a successful company and have proof in its profits (Hsieh, 2013). Zappos is known for speedy delivery of a good product that can be returned for any reason. They actually encourage you to order more than one pair and just send back what you do not like …show more content…
Hsieh describes that a company must always have an innovative and forward thinking in a constant motion (Hsieh, 2013). Unfortunately outsourcing the shipping of Zappos product turned out to be too much for the company, E Logistics, to handle once Zappos inventory increased with sales (Hsieh, 2013). The service agreement was not being met and the inventory was sitting in boxes waiting to be opened and arranged properly on the shelves (Hsieh, 2013). It became too overwhelming for the company, which did not entail the proper technology and operational standards to handle the increase of demand in which Zappos needed (Hsieh, 2013). Zappos decided to open its own warehouse and chose to stay in Kentucky due to the great location. WHISKEY (WhareHouse Inventory System in KentuckY) would be the new name of their warehouse and systems used to design it (Hsieh, 2013). A valuable lesson was learned by Hsieh after ending the relationship of outsourcing to E Logistics. The lesson learned was that their company should never outsource a core competency (Hsieh, 2013). Inventory management and shipping was one of Zappos key core competencies and a major core operational standard of the company (Hsieh, …show more content…
This is another example of Zappos wowing their client and banking on a return of investment through the returning customer and one who will share their experience with others (Hsieh, 2013). It is not unheard of to place an order and have it at your doorstep the very next day (Hsieh, 2013). These are just a few examples of the way Zappos provides a unique service encounter design to its clients without relying on the conventional ways of advertising that many other companies use. Zappos believes in keeping its employees happy, which is a belief that ultimately keeps customers happy too (Hsieh, 2013). Zappos culture is very highly regarded in the media as Hsieh is constantly looking for improvements (Perschel, 2010). Hsieh believes in a constant work flow with high associate engagement, which he has referred to as flow (Perschel,

Related Documents