Amazon’s SCOT
The most amazing application of mathematical optimization in logisticsWhat is SCOT?
The state of the art in advanced mathematics at the service of the operations management. I like how some important companies implement this scientific development. — Julio Mora OlivaresSCOT is an acronym meaning Supply Chain Optimization Technologies. Probably it is the largest and the most complete application of operational research in the field of logistic.
In summer 2017, I discovered that Amazon was hiring operational researchers in Italy. This intrigued me enough to start some research on the Internet. I found a plentiful source of information on LinkedIn profiles, where people were sharing their working experience, their goals and successes.
I’ve collected all the pieces of information and, with my experience, I was able to reconstruct a whole picture of this project.
Human resources
First things first: peopleThe team working on SCOT project covers many countries. In my search, I’ve noted places from North America, India, and Europe. This is a quite common characteristic of projects developed in large companies as Amazon.
What really impressed me indeed is to see so many roles involved in the same project. They are:
- Econometricians,
- Statisticians,
- Economists,
- Operational Research Scientists,
- Machine Learning Scientists,
- Software Engineers,
- Product Managers
So, from the management point of view, the project leader has to handle two independents source of complexity: many roles in many places.
Applications
Fantastic combination of Optimization, Computer Languages. and Inventory Management — Deepak BammiHave you ever bought something from Amazon? A book, of course. But also other goods as a Kindle reader or a cover for your smartphone.
I did all of this and every time, before the purchase order, I knew a precise forecast of the delivery date. Typically one day for many Prime products.
A so elevated level of service quality can be achieved with a full control of the supply chain. From my research seems that Amazon invested a lot on:
- inventory planning and control;
- last mile logistic network.
Inventory planning and control
The picture above was taken from an Amazon video on YouTube. Probably it gives only a vague idea of the inventory complexity managed behind the button “buy now with 1-click (r)”.
If you want some totals here they are:
Hundreds of millions of items, for hundreds of product lines worth billions of dollars of inventory world-wide.In a single sentence, the team of inventory planning control of Amazon:
decide and optimize what, when, where, and how much should buy to meet Amazon’s business goals and to make their customers happy.
Last mile logistic network
Another important area where SCOT gives a major improvement is the last mile logistics.
If you think of the entire user experience, the parcel delivery is the only ring of the supply chain out of the control of Amazon. But everybody knows how Amazon is obsessed with customer experience and satisfaction.
This means not only the optimal location of the delivery point to get an appropriate geographic coverage. But also control a complete fleet of people and vehicles physically delivering goods.
Technologies and IT impacts
From the technology point of view, SCOT has many interesting things to say.Optimization library
SCOT is an optimization library designed and built with the purpose to facilitate the integration, of optimization models, within the Amazon’s infrastructure without any knowledge of optimization.General purpose optimization engines
SCOT uses well known and powerful optimization engine: CPLEX, XPRESS and GUROBI.Programming languages
SCOT has some kind of relationship with the following programming languages:- ruby
- VB
- c#
- java
- python (my favorite)
I don’t know what is the main language used for SCOT. Also, I didn’t find any relationship with compiled languages such as C or C++.
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