Amazon is a company that has consistently focused on improving its supply chain management in order to gain a competitive edge. In the early days of the company, Amazon was known for its inventory management practices. This allowed the company to keep track of its stock and ensure that products were always available to customers. As the company grew, it began to focus on other aspects of its supply chain, such as transportation and logistics. By investing in these areas, Amazon was able to further improve its efficiencies and maintain its position as a leader in online retail.
Today, Amazon continues to invest in its supply chain management, with a particular focus on technology. The company has developed sophisticated algorithms that allow it to predict customer demand and manage its inventory accordingly.
Every business maintains its own supply chain in order to sort, or produce, items. The firm, however, must manage its supply chain in order for it to realize its maximum advantages. The business may guarantee that the appropriate product or service is accessible at the right time and place for the best price by using effective supply chain management (Kamal 2007).
Amazon is one of the businesses that has the best supply chain management in order to meet the high level of customer service required. As a result, this paper will discuss Amazon’s company, supply chain analysis, suggestions, and challenges for implementing them.
Supply chain management is the process of planning, implementing, and controlling the operations of supply chain with the purpose of satisfying customer requirements as efficiently as possible (Chopra & Meindl, 2001). In other words, it is “a synergetic integration of key business processes from end user through original suppliers that provides products, services, and information that add value for customers and other stakeholders” (Bullwinkle J. et al., 2008: p.116).
The supply chain includes all activities associated with the flow and transformation of goods from the raw materials stage through to the end user, as well as the associated information flows. Physical goods flows include processes such as purchasing, manufacturing, warehousing, order-fulfillment and transportation. The information flows include those necessary to coordinate the physical flows. Supply chain management is thus concerned with integrating these activities in order to improve overall performance (Coyle et al., 2003).
There are four key drivers of supply chain performance: customer service, cost, asset effectiveness, and revenue growth (Fawcett et al., 2006). Customer service is a measure of how well the supply chain meets customer requirements in terms of quantity, quality, time and place.
Cost includes all cost associated with operating the supply chain, such as purchasing, inventory carrying, warehousing, transportation, and order processing. Asset effectiveness is a measure of how efficiently the supply chain uses its resources, such as cash, inventory, and other assets. Revenue growth is a measure of how well the supply chain generates new revenue through innovation or market expansion.
Supply chain management is a broad area that includes many topics such as inventory management, supplier relationship management, transportation management, warehousing, and so on. In this paper, we will focus on two important aspects of supply chain management: inventory management and supplier relationship management.
Inventory management is the process of planning, controlling, and executing the movement and storage of goods in order to meet customer requirements at the lowest possible cost (Chopra & Meindl, 2001). The goal of inventory management is to have the right amount of inventory available at the right time to meet customer demand. This requires a careful balance between holding too much inventory (which ties up cash and space) and not having enough inventory (which can lead to lost sales).
There are two types of inventory: finished goods and raw materials. Finished goods are the products that are ready to be sold to customers. Raw materials are the materials or components that are used to create finished goods. In order to manage inventory effectively, businesses need to have a good understanding of customer demand. This requires forecasting demand and then stocking the correct level of inventory to meet that demand.
Supplier relationship management is the process of managing interactions with suppliers in order to obtain the best possible value for the company (Fawcett et al., 2006). The goal of supplier relationship management is to create a partnership with suppliers in order to improve the overall performance of the supply chain. This requires collaborating with suppliers to improve quality, delivery, and cost.
There are three types of supplier relationships: transactional, collaborative, and strategic. Transactional relationships are based on short-term contracts and agreements. The focus is on price and quality. Collaborative relationships are based on longer-term contracts and agreements. The focus is on collaboration and mutual trust. Strategic relationships are based on long-term partnerships. The focus is on joint planning and decision making.
Amazon is a global e-commerce firm based in Seattle, Washington, that was founded in 1994. The company originally sold books before diversifying into a variety of goods. Amazon’s mission is to provide customers with a single destination to shop for everything they need (Warman 2012). Amazon sells exclusively via the internet without having any retail outlets and uses its network of distribution centers to deliver.
The company has over 300 million active customers and continues to grow at a rapid pace (Fisher 2018). In order to meet customer demand, Amazon has had to invest heavily in its supply chain management. The company has made a number of changes to its inventory management, distribution, and logistics in order to keep up with customer demand.
Inventory Management:
Amazon uses a variety of methods to manage inventory and keep track of stock levels. The company uses an automated system that tracks stock levels and orders items from suppliers when levels get low. This system is known as Amazon’s Retail System or ARS. ARS was designed to help Amazon employees keep track of inventory levels across the company’s many warehouses (Lohr 2000).
Distribution:
Amazon has a vast distribution network that helps it get products to customers quickly and efficiently. The company has a number of warehouses located around the world. These warehouses are used to store inventory and ship items to customers. Amazon also uses a number of third-party logistics providers to help with distribution (Wang, et al. 2014).
Logistics:
Amazon’s logistics operation is responsible for getting products from suppliers to customers. The company has a fleet of trucks and vans that make deliveries to customers. Amazon also uses a number of third-party logistics providers to help with distribution (Wang, et al. 2014).
The company has made a number of changes to its inventory management, distribution, and logistics in order to keep up with customer demand. These changes have helped Amazon to become a leader in supply chain management.