Establishing And Integrating A Supply Chain Network: A Research Paper On Amazon.com

Background

Many researchers have been carried out regarding the Supply Chain Network. According to a study it can be defines as an evolution of the actual supply chain. Technology has been evolving ever since, due to this, organizations following a simple supply chain can upgrade their chains and make it complex (Eskandarpour, Dejax & Miemczyk, 2015). The complex structure involves a high rate of connectivity and interdependence among more organizations. One more study says that either organizations have the components to build a supply chain network or they have to purchase them. The components include transportation vehicles, physical locations and supporting system with the help of which the services and products firm markets has to be managed and delivered. In the seminal work of Farahani, Rezapour and Drezner, (2014), they had defined integration as “the quality of the state of collaboration that exists among departments that are required to achieve unity of effort by the demands of the environment”.

According to researches, it has been found that Amazon.com being an ecommerce site has a large need of human resources (Brindley, 2017). In US, it has been estimated that Amazon has hired more than 100,000 contractors or employers. The popularity of the site has increased its need of human resources (Brindley, 2017). Thus, the Supply Chain Network of the organization is becoming fragile. Some more in-depth research has found that there are significant drawbacks in the outbound transport network of the organization. Most of the traditional retailers have been controlling their transportation to various stores (Christopher, 2016). Amazon never had the control over the outbound transportation system. The main challenge faced by the organization is that the carriers such as FedEX and UPS do not serve Amazon only; they serve other customers as well. This creates a problem in the delivery process of the organization. The consequences caused due to the failure effects Amazon.

This study aims in exploring the advantages of establishing and integrating supply chain network in Amazon.com and the problems faced during the integration.

The research objectives are as follows:

1. To understand what is Supply Chain Network
2. To understandthe role of Supply Chain Network and its impact on Amazon.com
3. To find out the issues faced due to Supply Chain Network
4. To recommend some ways by which the issues can be mitigated for improving the performance

RQ1. What is the role and impacts of Supply Chain Network on Amazon.com?

RQ2. What are the issues faced by Amazon due to faults in Supply Chain Network and how it can be resolved?

According to Wang and Muddada, (2016), supply chain could be defined as a set of processes that are linked together in order to form a chain. Often various organizations look after their production and do not look after what the customers receive. The Supply Chain Network enables various firms to monitor the overall movement of information from starting to the end. This makes the organizations realize the importance of partnership and working together for ensuring that the best output is delivered to the customer. Supply Chain Network describes the movement and flow of information and materials. This movement is done by linking various organizations together for serving the end-customers. The Supply Chain Network portrays the link between various organizations (Wang & Muddada, 2016). It also describes how materials and information flow between the links. The complexity of Supply Chain Network depends on the amount of details it contains regarding the information. The concept of Supply Chain management has become very vital for organizations since some years. The business focuses have shifted from manufacturing value to customer value (Wang & Muddada, 2016). The companies are not concerned regarding the manufacturing costs for producing products of high quality. The main challenge is to deliver correct product to the correct place at the desired time, at the least possible cost and in proper quantity.

Research Objectives

According to McCormack and Johnson, (2016) Ssupply Chain Integration has been identified into four stages. In this stage one is represented by fragmented operations that taken place under an organization. Stage 2 focuses on the limited integration among the adjacent functions (McCormack & Johnson, 2016). Stage 3 requires the internal integration of planning in a company and the stage four represents the actual Supply Chain Integration that includes downstream to the customers and upstream to the suppliers.

Three parts of Supply Chain Integration has been outlined, they are coordination, resource sharing, information integration and organizational relationship linkage (Christopher, 2016). Information integration means sharing information among the members present in the supply chain, like forecast, inventory status, sales, promotion plans and production plans. Organizational relationship refers to the communication channels among the members of the supply chain.

Supply Chain Management helps in meeting these challenges faced by the organization. Supply Chain Management is a technology discipline which refers to the steps of coordinating the processes involved in designing, building, purchasing and selling a particular product (Christopher, 2016). Supply Chain management is of great value to organizations because it improves customer service. This is done by providing them the appropriate product in appropriate location at the right time. This as a result increases the revenue of the organization. It enables the companies to launch the products in market quicker compared to the estimated time.

According to Kozlenkova, Hult and Lund, (2015) the Supply Chain Network of Amazon is considered one of the best in the world. It has a competitive strategy of providing the experience of retailer services to the customers. The organization has used a perfect combination of superlative transportation, multi-tier inventory management, efficient usage of IT, wide range of warehouses under the organization and superlative transportation. These factors align its Supply Chain Network with competitive strategy. The next factor is related to the outsourcing of inventory management (Kozlenkova, Hult & Lund, 2015). Amazon outsources the distribution as well as storage of products, which are not usually ordered or purchased. It also outsources the products whose marginal cost is much less compared to the storage cost. Amazon stocks common products in its own warehouse. This helps the organization in responding when the customer initiates an order. The time consumed in extracting the product, packing it and delivering it to the customer is reduced largely (Hugos, 2018). Supply Chain Network helps the organization in segregating its inventory and enables it to be responsive when needed by customers.

Definition of Supply Chain Network

Implementation of Supply Chain Network has various impacts on Amazon. They are as follows

• Efficiency: the incorporation of supply chains, product innovation strategies and integrated logistics increased the efficiency of the organization (Hasani &Khosrojerdi, 2016). This has been one of the best benefits obtained from the implementation of Supply Chain Network. The implementation of Supply Chain Network enables the organization to adjust dynamically to fluctuating economies, short product life cycle and emergency markets.
• Cost effects: The application of Supply Chain Network had decreased cost incurred in various areas (Hasani &Khosrojerdi, 2016). The most important includes improving the inventory system, improves the responsiveness of the system towards the customer’s requirements, adjusts the storage place for the finished goods that eliminates the defective resources and improves the relationship among the vendors and distributors.
• Increased output: the major benefits of Supply Chain Network is the improvement in communication (Hasani &Khosrojerdi, 2016). This also increases the collaborations and coordination with the transport and shipping companies, suppliers and vendors.
• No delays: the mostimportant benefit of Supply Chain Network is that with the help of communication, the organization can lower delays in their processes (Hasani & Khosrojerdi, 2016). This process would mitigate the late shipments from logistic errors in the hold-ups on production lines, distribution channels, shipment from the vendors and late shipments from different vendors.

There are some problems that are faced by the organization (Laudon &  Laudon, 2015). Some issues faced due to the application of Supply Chain Network are as follows

• Manufacturing strategies: The optimization strategies of the lead-time are not properly defined.
• Outsourcing strategy: the outsourcing strategies for various activities and products are not properly defined.
• Strategy of customer services: the customer service strategy is not properly The level of serviceaccording to the customer importance is not properly organized.
• Asset network: the asset network strategy does not establish in the production equipment.

Though Amazon has been performing well after implementation of Supply Chain Network there is some areas where some improvements can be brought for improving improve the performance of the organization. These recommendations would also help the organization to make an excellent experience on Supply Chain Network. Some recommendations are as follows

• Amazon relies on courier companies like UPS and FedEX largely. Recently the brand image of Amazon has improved a lot due to the unreliability of connectivity. Side by side, the remaining components of Supply Chain Network are efficient, supplementing and complementing each other. The part of Supply Chain Network where customer interaction takes place is proved deficient. As a result, Amazon can set up its own transportation system. This would actualize fast delivery with the help of creating their own fleet of personnel and vehicles that could be used in delivery.
• Amazon can integrate Supply Chain Network in abetter way and shift from the cooperation model with the suppliers to the coordination mode. This would encourage information sharing among all of its partners as well as suppliers by using latest technologies. This recommendation describes the creation of a unified IT system. This system would have the ability to involve the stakeholders and suppliers in a single Supply Chain Network; it would not just consist of Amazon. This would also encourage introduction of new business model and substantial investment on necessary fields. In the newly introduced business model, Amazon would not perform alone, but bring together the elements and components of the Supply Chain Network under the same roof.
• The last recommendation is regarding the greater visibility on every component of Supply Chain Network along with more transparency and accountability in the ongoing process. According to various studies, Amazon outsources some of its functions, which leads to issues in accountability. Therefore, Amazon should integrate its Supply Chain Network in a single IT system such that the bottlenecks could be identified and necessary steps could be taken in order to prevent them.

In this research paper, philosophy could be used because it would be useful for investigating the issue in a logical as well as critical manner (Vaioleti, 2016). The positivism research philosophy has been derived from the sensory experiences and the analysis is based on the facts.

For this particular paper, analytical study would be used in order to get a detailed view regarding the theories as well as concepts that already exist on the study (Flick 2015).

In order to carry out this study data would be collected from primary as well as secondary sources. Primary data would be collected through interviews and surveys. Secondary data would be carried out with the help of data that are available from the online platform (Smith 2015).  Both type of data would be helpful for carrying out the research paper.

The sampling techniques that would be used in order to carry out this study are probability and non-probability sampling technique. Along with this simple and random sampling would also be used for gaining a better understanding regarding the topic (Csikszentmihalyi &  Larson, 2014). It is expected that the overall people taking part in the survey would be around 55 among which 52 would be employees and 3 managers. They would be requested to present their perspective on the study.

For carrying out the analysis of the quantitative data that has been received from survey, it would be transformed in the form of numeric and percentages. This would help in gaining a comparison as well as comprehensive data. These data is then converted into graphs and charts for presenting a pictorial representation of the received data. For evaluating the qualitative data, thematic approach has to be undertaken (Gast &  Ledford 2014). The information obtained from the interviews would be noted down considering different themes, which are related to the study.

Strict guidelines of ethics would be followed while carrying out the research. For collecting the primary data, participants would not be forced for participating in the survey. A consent form would be provided to the people who would like to participate in the research (Panneerselvam, 2014). The consent form has to be signed by the participants as a proof that they have participated willingly. The survey paper would not contain any logo of the organization, which portrays a kind of advertisement of the company. For carrying out secondary research, referencing is important to avoid plagiarism.

Supply Chain Integration Stages

According to there are various limitations of a research study. In the first place, the time span is always an issue or limitation in preparing a research paper. Along with this the availability of various resources is a limitation as well (Simonsohn, 2017). Few resources that are necessary to carry out the research might not be available. The responses obtained from the participants might not be sufficient for receiving a particular result. Along with this, there might be some issues regarding the permissions that have to be obtained from the manager of the managers. The research needs to be planned as well as executed in an appropriate manner, which would help in completing the study in a proper way.

References:

Brindley, C. (2017). Supply chain risk. Routledge.

Christopher, M. (2016). Logistics & supply chain management. Pearson UK.

Christopher, M. (2016). Logistics & supply chain management. Pearson UK.

Csikszentmihalyi, M., & Larson, R. (2014). Validity and reliability of the experience-sampling method. In Flow and the foundations of positive psychology (pp. 35-54). Springer, Dordrecht.

Eskandarpour, M., Dejax, P., Miemczyk, J., & Péton, O. (2015). Sustainable supply chain network design: An optimization-oriented review. Omega, 54, 11-32.

Farahani, R. Z., Rezapour, S., Drezner, T., & Fallah, S. (2014). Competitive supply chain network design: An overview of classifications, models, solution techniques and applications. Omega, 45, 92-118.

Flick, U., (2015). Introducing research methodology: A beginner’s guide to doing a research project.Sage.

Gast, D.L. and Ledford, J.R. eds., (2014). Single case research methodology: Applications in special education and behavioral sciences. Routledge.

Hasani, A., & Khosrojerdi, A. (2016). Robust global supply chain network design under disruption and uncertainty considering resilience strategies: A parallel memetic algorithm for a real-life case study. Transportation Research Part E: Logistics and Transportation Review, 87, 20-52.

Hugos, M. H. (2018). Essentials of supply chain management. John Wiley & Sons.

Kozlenkova, I. V., Hult, G. T. M., Lund, D. J., Mena, J. A., & Kekec, P. (2015). The role of marketing channels in supply chain management. Journal of Retailing, 91(4), 586-609.

Laudon, K. C., & Laudon, J. P. (2015). Management information systems (Vol. 8). Prentice Hall.

Mangan, J., Lalwani, C., & Lalwani, C. L. (2016). Global logistics and supply chain management. John Wiley & Sons.

McCormack, K. P., & Johnson, W. C. (2016). Supply chain networks and business process orientation: advanced strategies and best practices. CRC Press.

Panneerselvam, R., (2014). Research methodology. PHI Learning Pvt.Ltd..

Simonsohn, U., Nelson, L. and Simmons, J., (2017). Research Methodology, Design, and Analysis. Annual Review of Psychology, 69(1).

Smith, J.A. ed., (2015). Qualitative psychology: A practical guide to research methods. Sage.

Stevens, G. C., & Johnson, M. (2016). Integrating the supply chain… 25 years on. International Journal of Physical Distribution & Logistics Management, 46(1), 19-42.

Vaioleti, T.M., (2016). Talanoa research methodology: A developing position on Pacific research. Waikato Journal of Education, 12(1).

Wang, J., Muddada, R. R., Wang, H., Ding, J., Lin, Y., Liu, C., & Zhang, W. (2016). Toward a resilient holistic supply chain network system: Concept, review and future direction. IEEE Systems Journal, 10(2), 410-421.

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