Supply Chain Integration in Amazon
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The success, as well as the monumental growth of Amazon Company, has been attributed to an integration of logistic of distribution and the integration nm of its supply chain. Nowadays Amazon has been specialized not only in delivering books but also selling almost everything to its users. It is capable of processing 400services or orders to its esteemed users in a second hence making it easy to attract approximately $90 billion revenue a year. It should be noted that supply chain integration is one of the primary contributing factors that most companies employ to be successful. There is, therefore, need for companies just like Amazon to analyze how best they can achieve the goals of supply chain integration relating to their customers and suppliers. This paper tends to conceptualize on the general application of supply chain integration by Amazon Company towards the achievement of its growth and profitability.
Sales and operational planning: Amazon Company has strongly focused on the sales as well as the operational planning, and it is indeed clear that they possess good coordination among these two departments. It should be pointed that the efficiency of a companys supply chain and profitability relies on their sales and operational planning just as been depicted at Amazon Company. Notably sales and operations planning have witnessed a great impact on the profitability of Amazon Company (Chan et al. 2012). For instance, it is through this platform that decision makers have attained consensus on a specified operating plan that matches the demand and supply in a profitable manner and aligns the company with the executive business goals. The allocation of sales and operations planning of supply chain integration especially in Amazon has ensured holistic balancing of the companys demands and supply. It is in this light that one tend to argue that Amazon company has been able to incorporate key financial indicators hence enabling their operational plan get aligned with the strategic business plans to produce desirable results.
Notably, ERP system is very instrumental in coordinating the sale and operations planning departments. The help of ERP system, as well as supply chain planning system, helps in creating a consensus plan among the inventory managers of the firm, financial, demand planning, and production managers of Amazon Company. The two concepts have helped the Amazon company identify their synergies and potential demands at all levels. Ideally, the amazons medium and long term forecast should inform the operation management department to employ a single integrated operations planning and sales among its supply chain to align its demands and inventory based on forecasted company demands (Christopher, 2016).
Logistic concept ensures that Amazon Company delivers right services and products to its customers in the right quantity, at the right place and time, with the right cost. They have effective transportation modes that ensure goods reach the customers within the specified time. The location of their warehouses makes it possible for faster delivery of products a factor that is vital in the competitive business arena. Ideally, the logistic management helps Amazon Company to balance between low cost and quality of services (Su, 2007).
Global sourcing and procurement at Amazon Company: global sourcing is one of the phenomena that affect the effectiveness of supply chain especially in Amazon Company. This is because it entails the global supply chain management skills and the formulation of criteria for supplier selection. Some of the significant challenges of global sourcing and procurement that have faced Amazon Company can be attributed to ineffective transportation, weakness in production, technological issues, and inefficient management systems globally. Other issues that have impacted the supply chain of Amazon as a result of the application of global sourcing gets attributed to customs and trade regulations (Isckia, 2009). It must be noted that global sourcing and procurement makes it difficult to control and make a critical assessment of the suppliers business processes. This practice becomes difficult because of their different locations in the world. Additionally, the cultural issues in global sourcing are also some of the concerns that have impacted the supply chain management of Amazon Company negatively. Other problems such as transport delay and procedures of crossing border lower the effectiveness of Amazon Company towards competing with other agencies.
Conversely, global sourcing and procurement also possess some o the benefits to Amazon Company. For instance, it is through this platform that they have been able to acquire the best suppliers and have a chance to research on issues relating to international competition. Engaging in global sourcing has enabled the Amazon Company to keep in control their inventories a factor that is instrumental in the competitive business arena. Ideally, global sourcing and procurement I Amazon have been evidenced due to access to innovative products that can be bought locally and hence sell globally as well as the proximity of quality goods. This has resulted in the reduction of cost a factor that boosts the profitability of the firm (Isckia, 2009).
Amazon's e-commerce strategies: to remain competitive Amazon Company has employed various e-commerce strategies to boost its growth and profitability. For instance, it has initiated the Free Super Saver Shipping program that offers free shipping services in all the orders done on Amazon. A program such as an amazon's prime which is a two-day shipping service has indeed changed the manner in which its customers view the shipping services concerning other related companies. This move makes its supply chain a prime area to start sustainable business services for most customers. They have also initiated various apps such as ShopSavvy and BuyVia to enable consumers to reach their desired products easily at an affordable price. This is done concerning the customers changing behaviors and demands. Creation of many apps has been the most effective strategy of e-commerce employed by Amazon since it ensures many of his clients are served on time with desired product of their needs (Peffers, 2001).
In a nutshell, I feel that Amazon Company is a model for most companies regarding their strategy of integrating supply chain. This is because they have maintained a rising move in e-commerce and effective logistic management. Amazon has various delivery stations that ensure that products do reach their customers at the doorstep in less than 60 minutes from the time of order. Therefore Amazon Company remains one of the most competitive online retailers that most companies should admire. Ethically, Amazon has boosted their business operations by inculcating sustainability especially in their supply chain management (Meade & Sarkis, 1998). Their operations have complied with the ethical considerations of green logics and therefore tend to minimize waste and energy, reevaluating human rights precepts, and employing the use of more energy efficient transportation means. These factors make it an ideal model for most companies.
References
Chan, H. K., Lettice, F., & Durowoju, O. A. (2012). Decision-making for supply chain integration: Supply chain integration. London: Springer.
Christopher, M. (2016). Logistics & supply chain management. Pearson Higher Ed.Isckia, T. (2009). Amazon's evolving ecosystem: A cyberbookstore and Application Service Provider. Canadian Journal of Administrative Sciences/Revue Canadienne des Sciences de l'Administration, 26(4), 332-343.
Meade, L., & Sarkis, J. (1998). Strategic analysis of logistics and supply chain management systems using the analytical network process. Transportation Research Part E: Logistics and Transportation Review, 34(3), 201-215.
Peffers, K. (2001). The future of electronic commerce: a shift from the EC channel to strategic electronic commerce. JITTA: Journal of Information Technology Theory and Application, 3(4), 7.
Su, S. I. I. (2007). The emerging global direct distribution business model: industry and research opportunities. Transportation Journal, 46(4), 58-65.
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