Discuss about the Supply Chain Management for Amazon.
Amazon was created by Jeff Bezos in 1994. It is the worldwide largest online e-commerce portal which has been known for its quality services, market capitalization and its revenues. Amazon was first selling the books and after that, the it was expanded to sell electronics product, online books, home appliances, grocery’s, wearing products, sports products, furniture, toys etc (Stone, 2013).
The revolution came when Amazon changed the approaches of the retail through supply chain management strategies and through distribution of advanced technologies. In the year 2004, Amazon was started, its yearly revenue was under $7 billion. In 2016, the revenue was reached to $136 billion. It took only 20 years by Amazon to achieve that much of revenue. Furthermore, it was observed that the concept of supply chain management (SCM) was successfully implemented and it has been increasing around 20 percent per year.
Amazon’s incessant efforts to bring products to all the customers and users in the speediest possible time by using efficient supply chain management. Amazon has around 2 million employees and offers more than 0.5 million variety of products through its e-commerce portal. It was also reported that Amazon is facing challenges around meeting order fulfilment rate of 99% on time due to upstream and downstream challenges in its Supply Chain Management (SCM).
Partnership For Supply Chain Management
Amazon partnered with many companies to enhance its revenue. Amazon partnered with Drugstore.com, Wineshopper.com, Pets.com, Sothebys.com HomeGrocer.com Living.com and Kozmo.com. In the year 2016, the U.K. Civil Aviation Authority was partnered with Amazon to examine some technologies and maybe in the future partnership will also benefit via the delivery service from air drone. In the year 2017, Nike and Twitter also announced a partnership with the Amazon.
- Jeff Bezos:He is the highest shareholder in Amazon. He has approximately 78.89 million of shares till May 2018.
- Andrew R. Jassy:He owns 87,849 shares till May 2018.
- Jeffrey M. Blackburn:He is senior vice president of business development and digital entertainment in Amazon. Blackburn owns 64,928 of shares till May 2018
- Jefferey Wilke:he has been the CEO of a worldwide consumer for Amazon since April 2016 and he holds 64,807 of shares. He owns 10,000 shares directly and 54,807 indirectly shares.
Activities That Are Important To The Supply Chain
Amazon has shown a vital change in the growth of the revenue from $7 billion to $136 it was only possible because the adaptation of supply chain management in their working process and as a result the company benefited with 6.4% of gross worldwide e-commerce sales. Suppose Amazon is growing with the rate of 20% per year then it should reach the revenue of $1 trillion per year by 2027.
Through its highly effective supply chain management and innovative initiative, Amazon was transformed from an online bookseller to the world most dominant and challenging power in the selling industry (Sultanow, 2016)
Subcontracting Account Management and logistics
The supply chain management is totally depending on outsourcing or subcontracting of management of the inventory. Especially, the products which are not purchased or get ordered aren’t stored in Amazon warehouses. The same day or short time shipping is possible only due to the dependence on logistics. It sells the third-party products doesn’t mean it is using third-party’s logistics to supply/deliver the products to the customers (Stone, 2013).
The company administration understand that they will not depending on the logistic of third-party because it would make increase the time of product delivery. This the reason Amazon has been using its own vehicles for delivery on the same day.
Drones: Future Supply Chain Management Strategies
The company already declared the company making the drones to deliver the products to the customers which will be call as Amazon Prime Air which would be delivering the products which are under five pounds in weights to the locations which are located within 10 miles of Amazon’s execution centres in just 30 minutes or may be less. It will may improve the supply chain management for this research continues for many years (Monczka, 2015)
Two Supply Chain brands
Samsung supply chain management
Samsung having a complex and vast supply chain management (SCM) system which repeatedly imitates a weak portion of the association. Their dealers are frequently muddled and incapable to understand the real request of the business which consequences in disappointment at in the first place. After augmented management and leadership the company could produce the product which consumer demanded.
Apple supply chain management
Apple supply chain management functions is measured to be the finest in the manufacturing and customer services. In significance to the purpose of product, to keep on revolutionising them consumer products which are based on the effective suppliers. Their dealers understand the demands and productions precisely they do in advance from them. Their record supply chain management are brilliant because they relay it to consumers demand and supply chain management between consumers. They also ensure the convenience of the products rather than unsatisfactory to their customers with the weak management of inventory (Post, 2008).
Samsung and Apple order completion:
Both the companies are competitive in current economy, their inventory is also in the correct place at the correct timing they both are quick and precise to provide the services. Samsung and both somehow to meet the customer demand. In addition, the customer prospects on deliver of the products within the time which is just remaining to quicken. They have been able to track, monitor and report the status of the consumers order at every and every step from ordering an item, its entry to the delivery. The optimize inventory is usage to minimize the backorders and accelerate the order completion. Managing warehouses keeping, picking and delivery is practiced decreasing processing times.
Increasing in the preferences of the products and the services
The business is evolving when there is new technology is being adapted by the company. The advancement in the technology helps in the better supply chain management. Samsung and Apple, both the company are updating the products; launching new model every month and they are user friendly and are made accordingly to the customer preferences. The business is grown only because of supply chain marketing. The information uprising has transformed the nature of relations with the customers. Customers can study all of the choices and link products without parting their desks. To continue modest, both company are applying the information of the commercial and professional work to visit one step forward to the customers.
Partnerships is carryout among two organization or individuals for an effective business. The supply chain marketing is a very good approach to do an efficient business and acquisition makes it easier to it (Brewster, 2016).
It is also mentioned to as the noncontrolling interest (NCI), is possession of not more than 50 percent of the company's equity by a stockholder or alternative company. For secretarial determinations, minority interest is a slight share of the company amounting to 50 percent less share of the voting. Minority interest demonstrations up as a noncurrent accountability on the balance sheet of the companies it representative the amount of its companies possessed by minority stockholders (Boxall, 2011).
Strategy 1: Accept a demand-driven for development and business working model based on real-time insights of demand and its shaping.
The tool for contingency planning and right prediction will confirm an overall view and an effective answer to the risks such as providers profitable out of commercial and political upheaval. Businesses regulate valuing and elevations strategies to form demand, move extra product rapidly, drive income growth, or additional expand limits for the high-demand product with limited market supply.
Strategy 2: Make an agile and adaptive supply chain management with fast integrated planning and execution. Managers need to risk and fulfil the demand of the customers, it is essential to familiarise the supply chains to altering market chances and events. Businesses must arrange dynamic preparation capabilities and repeatedly fine-tune processes to ensure receptive quickness to encounter altering demand. Marketplace reactivity, in the instant, has not ever been informal to attain than it is currently—another time, with cloud skill and the exact people, procedure, and expertise capabilities.
Strategy 3: Enhance product enterprises and product organisation for supply, sustainability and manufacturing to quicken lucrative innovation. Revolution is vital for being one step fast of the struggle. But innovation does not happen in a emptiness. To be effective, products necessity be mass-produced at the accurate cost, dwelling, and time. Choices made in the initial sequences of creation growth can make or disruption of the product (McMillan, 2008).
Amazon is the global largest online platform which has been measured by their revenues and capitalization from the market, and it is also second largest after the Alibaba Group in relations of total number of sales. Amazon examine some technologies and may be in the future partnership will also benefit via the delivery service from air drone. Amazon has shown a vital change in the growth of the revenue from $7 billion to $136. The supply chain management is totally depending on out sourcing or subcontracting of management of the inventory. The business is evolving when there is new technology is being adapted by the company. The advancement in the technology helps in the better supply chain management. Partnerships is carryout among two organization or individuals for an effective business. The supply chain marketing is a very good approach to do an efficient business and acquisition makes it easier to it. It is also mentioned to as the noncontrolling interest (NCI), is possession of not more than 50 percent of the company's equity by a stockholder or alternative company. The right estimate and eventuality preparation tools will confirm a comprehensive view and a real answer to dangers such as providers profitable out of commercial, political cataclysm, and normal tragedies moving manufacturing. Innovation or Revolution is vital for being one step fast of the struggle. But innovation does not happen in an emptiness.
Stone, B., 2013. The everything store: Jeff Bezos and the age of Amazon. Random House.
Sultanow, E., Chircu, A. and Chircu, F., 2016. E-commerce Adoption: A Revelatory Case Study in the German Oncology Pharmaceutical Supply Chain. In Proceedings of the Conference on Information Systems Applied Research ISSN(Vol. 2167, p. 1508).
Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and supply chain management. Cengage Learning.
Post, G.V., 2008. Management Information Systems Cases.
Brewster, C., Chung, C. and Sparrow, P., 2016. Globalizing human resource management. Routledge.
Boxall, P. and Purcell, J., 2011. Strategy and human resource management. Palgrave Macmillan.
McMillan, E., 2008. Complexity, management and the dynamics of change: Challenges for practice. Routledge.