In May 2026, Amazon launched Amazon Supply Chain Services, opening its multimodal freight, automated warehousing, and last-mile parcel delivery network to any company that wants to use it.
One of the clearest pieces of applied operations thinking I've read in a while. The √N framing cuts through a lot of hand-waving about Amazon's scale advantage.
One question on the inventory pooling argument as it applies to ASCS.
The √N safety stock benefit accrues to whoever owns and positions the inventory. In a carrier relationship — which is what ASCS is — the vendor owns the inventory. So P&G, not Amazon, would capture any pooling benefit on the inventory side.
Does the pooling argument for ASCS rest entirely on routing density rather than inventory? And if so, is the relevant advantage really about filling surplus fixed-cost capacity rather than √N pooling in the formal sense?
Gad —
One of the clearest pieces of applied operations thinking I've read in a while. The √N framing cuts through a lot of hand-waving about Amazon's scale advantage.
One question on the inventory pooling argument as it applies to ASCS.
The √N safety stock benefit accrues to whoever owns and positions the inventory. In a carrier relationship — which is what ASCS is — the vendor owns the inventory. So P&G, not Amazon, would capture any pooling benefit on the inventory side.
Does the pooling argument for ASCS rest entirely on routing density rather than inventory? And if so, is the relevant advantage really about filling surplus fixed-cost capacity rather than √N pooling in the formal sense?
Rajiv Misra
rajiv@xlri.ac.in