Amazon wanted the savings of commingling without the expense and investment in proper systems for it. For accurate accounting of the source of a piece of commingled inventory, you need sku-level inventories with unit-level accounting. This is expensive, because it means each unit needs to be individually marked (e.g. a sticker with a unique ID number) upon receipt, which is more labor intensive than just counting them and sticking them on a shelf.
Amazon's sku and bin level accounting works perfectly fine for items that have a single origin. Shoehorning commingled inventory into that same system doesn't work. It was reckless, and they should bear the punative cost for its results.
Well, what amazes me is that it seems to have be done this way for a long time, no?
If so, it has a very low amount of problems and complains, since they could grow so big. If bad suppliers were a constant, they would be bad-mouthed enough and wouldn't have grown that big.
Or their inner working is better than this article implies...
Amazon's sku and bin level accounting works perfectly fine for items that have a single origin. Shoehorning commingled inventory into that same system doesn't work. It was reckless, and they should bear the punative cost for its results.