Innovation Management Assignment: Drone Delivery System Of Amazon

Question

Task:
Innovation Management Assignment Instructions:

1. Choose an organization.
2. Research the hot topics about innovation related to this organisation
3. Then develop an innovation management action plan based on the criteria below.
4. Assuming you have the opportunity to make an elevator pitch to the CEO of this company, what would you say? Make a short pitch directed at the CEO that references your report.

Answer

Executive Summary
Rapid urbanization and technological advancements require business organizations to continuously engage in various forms of research and development through which they can cater to the needs of the customers in an effective and efficient manner. This innovation management assignment discusses the key innovative aspects of the delivery systems of Amazon through drone delivery systems. This report discusses the key innovative aspects that Amazon has already catered to and how it can further aim to diversify its business model through the aforementioned innovative idea. Aspects of service innovation designs, user involvement, and prototyping of the service have been discussed in this report. This report also provides an estimation of time, cost, and resources of the innovative idea through which the cross-functional management of Amazon can adjust themselves to the new business concept.

1. Introduction
Rapid urbanization and technological advancements have paved the way for business organizations across the globe to cater to innovative decision-making and strategies through which they can cater to the needs of the customers in an effective and efficient manner (Valkokari, 2015). The 21st century has witnessed a massive growth in disruptive technologies and innovations through which many companies have diversified their business model (Valkokari, 2015) among which Amazon has stood out by leading the way on various technological fronts; such fronts are in the forms of cloud computing, e-reading, online grocery shopping, video streaming, and artificial intelligence through which the customers can cater to a user-friendly interface to cater to their entertainment needs (Amazon, 2020). This report discusses three major topics about the innovation of Amazon and discusses the development of an idea for an innovative service based on the goals and portfolio management of the business organization. This report also discusses the aspects relating to streamlining the innovation process through the company's current capabilities and respective designs, user involvement, estimation of resources, and prototyping of the innovative service. This report concludes with an insight as to how the innovative model can be affected due to the future innovations that take place.

2. 3 Hot topics about the innovation of Amazon
The company which started merely as an online bookstore has now diversified itself into one of the biggest e-commerce giants which cater to the delivery of nearly all the essential goods that are required by the customers on a global scale (Amazon, 2020). Amazon has grown over the years due to its implementation of technological advancements and some of the hot topics of Amazon’s innovations are as follows:

2.1 Amazon Prime
The management of Amazon came up with an innovative idea known as “Amazon Prime” that offers the customers with a premium membership through which they can access some of the exclusive features offered by the e-commerce giant. In order to target the customers to pay an annual subscription of Prime membership, Amazon diversified their business model towards developing an OTT (Over-The-Top) platform that broadcasts various TV shows, movies, and Amazon original series as well as music. The subscribers of Amazon prime can not only cater to such entertainment services which also include Amazon Music but the customers can also cater to various attractive offers in terms of two-day shipping and free delivery charges (Amazon, 2020).

2.2 Alexa
The members of Amazon Prime have an added advantage when they want to cater to a form of artificial intelligence (AI) assistant towards their daily set of activities. Amazon launched an AI product known as Alexa which uses voice recognition to map out the essential needs of the customers (Ransbotham, 2017). The customers are required to say “Alexa, play the top trending songs of this week” and the product immediately prompts back by playing the tunes that the customers essentially searched for. Alexa is one of the top-grossing innovative products which have been launched by Amazon and serves the customers with a sense of non-contact user interface as the users of the product can search for any query and option just by saying “Alexa” (Amazon, 2020).

2.3 Amazon Web Services (AWS)
Amazon has further aimed to diversify and innovate their business model by introducing cloud computing software known as Amazon Web Services (AWS). AWS is a secure cloud services platform that offers computing power and enhanced database storage facilities and content delivery for the management of Amazon which helps them to streamline their mode of operations and serve towards the needs of the customers effectively and efficiently (). AWS helps to cut down on various Internet of Things (IoT) costs and provides a sense of security as well as authenticity for the organization to move faster in its daily operations related to deliveries and provision of entertainment services (Ransbotham, 2017).

3. Idea for an innovative service
Since Amazon caters to a vast distribution line on a global scale, the management of the e-commerce giant can take one step further towards the last-mile delivery services through the implementation of deliveries via drones. The drones can act as an effective tool towards delivering goods in the areas where logistics tends to be somewhat inefficient and the drones can be effective for the online shoppers as they can expect deliveries within an hour or so. Safety should be one of the key priorities for the management of Amazon where it caters to a technology known as “sense and avoid” for the drone delivery systems (Applin, 2016). The “sense and avoid” allows the drones to map out any form of hindrances that may appear on its radar and avoid them to save the drone form instances of damages, loss of goods or even crashing of the drones (Meier, 2017). The idea for implementing drones for Amazon’s delivery services allows the management to sell goods for customers who have an urgent requirement of the products ordered on the Amazon’s user interface and the implementation of drone delivery systems reduces the cost as well as delivery times significantly as well (Singiredd and Daim, 2018).

4. Streamlining the idea with the organization’s capabilities
The incremental profits earned by the management of Amazon acts as an added advantage while implementing innovative technological aspects within the delivery systems of the business organization (Valkokari, 2015). The drone services can be tested in developed nations such as the United States, United Kingdom, Austria, France, and even in Israel due to its vast geographic and demographic segmentation (Amazon, 2020). Such international locations can map out the key areas that require research and development through which the management of Amazon can streamline their distribution network by delivering goods to their customers within the same day that the order has been placed. Amazon is widely catered by the customers on a global scale due to the quality packaging and safety aspects that it adheres to and with the help of the drones, the logistical costs for Amazon can be reduced significantly through which the company can further deploy more drones in nations across the globe which help to cater to last-mile delivery services (Pugliese, 2017).

5. Service design
For the Prime members of Amazon, the two-day delivery system can be evolved towards a one day program through the implementation of the drone delivery systems. The design patterns should be catered by the engineers and developers in such a manner that it helps the drones to include advances in efficiency, stability, and above all safety of the product that needs to be delivered (Lotz, 2015). The drones should be able to do vertical takeoffs and landings without any form of human control (Shavaraniet al., 2018) and the whole program needs to be incorporated with the AWS systems as it will help the drones to effectively map out the pinpoint locations in which the deliveries need to be made and the routes that are effective and efficient enough to make the deliveries. Wings need to be deployed for the drones that help them to act as an aerodynamic bird for which the drones can shift from vertical positions to airplane modes to ensure optimum flight patterns (Siegel et al., 2016). The designs should be implemented with six-degree freedom through which it can survive turbulent wind conditions which helps the drones to ensure the safety of the product while making deliveries (Vempatiet al., 2017). Overall, a sensor should also be placed that notices the loss of packages in the middle of the delivery routes to avoid instances of customer dissatisfaction (Mittendorfet al., 2017).

Figure 1: The initial design of the drone delivery systems
Source: Amazon, 2020

6. User involvement
The users of the new drone delivery systems can be benefited from such services by the management of Amazon as customers who shop online eagerly wait for their products to arrive at their doorstep (Campbell et al., 2017). The waiting time is a form of compromise that the users have to face while adhering to online modes of shopping but through the integrated drone delivery systems, the prime members of Amazon can opt for 30-minute deliveries instead of a two day delivery time (Amazon, 2020). The users can order and receive their orders within the same day which acts as a significant boost of morale as well as satisfaction for the customers. The customers will receive notifications and will be able to track their order on a real-time basis which allows the customers to develop a sense of convenience as well as reliability through which the management of Amazon can aim to expand their customer database as well as market share (Braret al., 2015).

7. Time, costs, and resources

Table 1: Time, costs and resource analysis of the drone delivery systems
Source: Created by the learner

The aforementioned table demonstrates the key aspects of the development and implementation of drone delivery systems. First and foremost the management of Amazon must set up a research and development panel where they incorporate various key aspects relating to the enhanced delivery systems via drones such as safety, route sensing, and AI that depicts hindrances in the chosen delivery routes of the drones (Salama and Srinivas, 2020). The researchers will take into account the intangible aspects of development as well such as the durability of the drones, the capability to carry items that can be estimated up to five pounds, and developed further with the successful launch of the service (Harrington, 2015). Amazon also needs to set up a streamlined distribution network that adheres to the maintenance of the drones as well as the delivery of items in various locations that support and facilitate the drone delivery systems. Finally, after reviewing the analysis of various scenarios of the drone delivery systems; the management of Amazon needs to collaborate with manufacturers in the information technology sector that help them to provide essential drones in the long haul.

8. Prototyping and testing capabilities
The drones need to cater to certain technological advancements that can aim to identify the static and moving objects that appear in the path of the drone’s flight path to avoid instances of collision and damages (Eadicicco, 2016). Algorithms must be developed that rigger multi-view stereo vision that detects objects and such algorithms must be machine learning and proprietary computer visions that help the drones to maintain its durability and ensure the safety of the product while delivering the goods ordered (Mileham, 2016). Since the algorithms cater to a sense of AI, the drones should be able to map out moving objects such as animals or even human beings and must be programmed in an automated version that helps to pinpoint the customer’s delivery location (Kitjacharoenchaiet al., 2019). The drones should be able to descend like a helicopter and again fly back to the warehouses by triggering alternative routes if there are wires, clotheslines, or any other form of obstacle in the customer's yard (Fowler et al., 2018).The estimated weights that each drone can carry must be tested out and the developers need to ensure that the drones have a weight capacity of a minimum of 5 pounds (Dorling et al., 2016).

9. Cross-functional management
Upon the implementation of the new delivery systems, the management of the business organization has to cater to measures that ensure the utmost customer satisfaction. There may be instances where the goods carried by the drones may be lost or stolen and contingency measures must be adhered to by the management of Amazon to secure their goods to save themselves from huge losses. The marketing and logistics of Amazon need to go hand in hand where the promotional activities of the new business model demonstrate the efficiencies catered by the logistics and supply chain of Amazon.The customers need to be provided with a sense of assurance that their products are safe and it is feasible to opt for drone delivery systems as it speeds up the delivery process both for the customers as well as the business organization (Pargoe, 2019).

10. Conclusion
This report has demonstrated an innovative service that the management of Amazon can adhere to for their delivery systems and the key aspects of the innovative model have been discussed in this report. However, there are certain limitations of the new business model as the drones cannot be effective for bulk orders and heavy carriage goods. Innovations that can cater to a premium 24-hour delivery service for small as well as bulk orders can disrupt the effective launch of the new business model of Amazon. If other e-commerce companies can cater to an innovative delivery system that is much more feasible and effective than the implementation of drones then the management of Amazon can be affected through this process where other organizations can provide bulk orders within a short span of time; primarily where the delivery time does not exceed a period of 24 hours or so. The implementation of the drone delivery system can help the management of Amazon to significantly reduce their carbon footprint generated by their delivery partners and cater to a cost-efficient mode of operations in terms of delivery services.

References
Amazon.com 2020: A drone program taking flight [online]. Available at: https://blog.aboutamazon.com/transportation/a-drone-program-taking-flight [Accessed October 8, 2020]

Amazon.com 2020: Online Shopping for Electronics, Apparel, Computers, Books, DVDs & more [online]. Available at: https://www.amazon.com/ref=nav_logo [Accessed October 8, 2020]

Applin, S.A., 2016. Deliveries by Drone: Obstacles and Sociability. In The Future of Drone Use (pp. 71-91). TMC Asser Press, The Hague.

Brar, S., Rabbat, R., Raithatha, V., Runcie, G. and Yu, A., 2015.Drones for deliveries. Sutardja Center for Entrepreneurship & Technology, University of California, Berkeley, Technical Report, 8, p.2015.

Campbell, J.F., Sweeney, D. and Zhang, J., 2017. Strategic design for delivery with trucks and drones. Supply Chain Analytics Report SCMA (04 2017).

Dorling, K., Heinrichs, J., Messier, G.G. and Magierowski, S., 2016.Vehicle routing problems for drone delivery. IEEE Transactions on Systems, Man, and Cybernetics: Systems, 47(1), pp.70-85.

Eadicicco, L., 2016. Amazon Reveals New Details About Drone Deliveries. Time, Jan, 19.

Fowler, V., Student, H., Medlin, D.B. and Vannoy, S.A., 2018.Reverse Logistics: Scenarios Related To Drone Deliveries and Returns. Business students' personal branding: An empirical investigation, 1, p.54.

Harrington, A., 2015. Who controls the drones?. Engineering & Technology, 10(2), pp.80-83.

Kitjacharoenchai, P., Ventresca, M., Moshref-Javadi, M., Lee, S., Tanchoco, J.M. and Brunese, P.A., 2019. Multiple traveling salesman problem with drones: Mathematical model and heuristic approach. Computers & Industrial Engineering, 129, pp.14-30.

Lotz, A., 2015. Drones in Logistics: A Feasible Future or a waste of effort.

Meier, P. and Bergelund, J., 2017. Field-testing the First Cargo Drone Deliveries in the Amazon Rainforest.

Mileham, R., 2016. Prime movers [transport drones]. Engineering & Technology, 11(4), pp.70-72.

Mittendorf, C., Franzmann, D. and Ostermann, U., 2017. Why Would Customers Engage in Drone Deliveries?.

Pargoe, B.T., Drone Delivery Systems Corp, 2019. Systems, devices, and/or methods for managing drone deliveries.U.S. Patent 10,210,475.

Pugliese, L.D.P. and Guerriero, F., 2017, September.Last-mile deliveries by using drones and classical vehicles.In International Conference on Optimization and Decision Science (pp. 557-565).Springer, Cham.

Ransbotham, S. and Kiron, D., 2017.Analytics as a source of business innovation. MIT Sloan Management Review, 58(3).

Salama, M. and Srinivas, S., 2020.Joint optimization of customer location clustering and drone-based routing for last-mile deliveries. Innovation management assignment Transportation Research Part C: Emerging Technologies, 114, pp.620-642.

Shavarani, S.M., Nejad, M.G., Rismanchian, F. and Izbirak, G., 2018. Application of hierarchical facility location problem for optimization of a drone delivery system: a case study of Amazon prime air in the city of San Francisco. The International Journal of Advanced Manufacturing Technology, 95(9-12), pp.3141-3153.

Siegel, R.S., Welch, S.C. and Barfield, J.R., Verizon Telematics Inc, 2016. Method and system for drone deliveries to vehicles in route.U.S. Patent 9,494,937.

Singireddy, S.R.R. and Daim, T.U., 2018. Technology Roadmap: Drone Delivery–Amazon Prime Air. In Infrastructure and Technology Management (pp. 387-412). Springer, Cham.

Valkokari, K., 2015. Business, innovation, and knowledge ecosystems: How they differ and how to survive and thrive within them. Technology Innovation Management Review, 5(8).

Vempati, L., Crapanzano, R., Woodyard, C. and Trunkhill, C., 2017. Linear program and simulation model for aerial package delivery: a case study of Amazon Prime Air in Phoenix, AZ. In 17th AIAA Aviation Technology, Integration, and Operations Conference (p. 3936).

Appendix
Appendix 1

Figure: Amazon Air prototype for drone deliveries
Source: Amazon 2020