About Amazon Company and its Operations
Question:
Discuss about the Implementing Analytics and Turning Information.
The main objective of the task is to provide a brief overview about the operation and supply chain management of Amazon Company. It is an online shopping company which provides several products to customers globally. Furthermore, the organization maintains effective and dynamic operation management. Apart from this, the paper explains that how supply chain and operation management helps to maximize the profitability in the firm. Further details of the task have been discussed below.
Amazon Company is an American electronic commerce company. The company was incorporated in 5th July 1994 by Jelf Bezos with its headquartered is located in Seattle, Washington U.S. The organization has separate retail websites for the France, Germany, Italy, Spain, the United Kingdom,Japan, China, India, Australia, Mexico and the United states. It is the biggest internet corporation measured by revenue. There are approx 566,000 employees employed in the organization (Britannica, 2018).
Operation management is an area of management which designs and controls the process of production and redesigning business operation in the manufacturing of products and services. Operation management focuses on the techniques and tools which ensures the effective and unique production process (Heizer, 2016). It helps to gain competitive advantages and also improves the financial image of the company. Amazon supply chain is the most efficient and effective among all the major companies across the world. In today’s competitive world, Amazon is changing the operation and supply chain management to overcome the competitors in the world (Christopher, 2016). The operations management of Amazon Company has been stated below.
Outsourcing inventory management and insourcing logistics: The Company’s supply chain and operation management depends on outsourcing of its inventory management. Especially the products which are not frequently bought or ordered are not stored in the company’s warehouse.
Delivery options to customers: The Company provides delivery options to potential customers in the global market. The firm has several warehouses for different types of products and services. The delivery options include prime customer delivery, one day delivery, free super saver delivery and first class delivery. Along with this, the organization provides fast delivery of the products and services (Brown, Blackmon, Cousins and Maylor, 2013).
Pull/push strategy for supply chain success: The company uses own pull and push strategies to stay in the competitive market and to attract more customers in the international market. Apart from this, Amazon uses push strategy to store its products in the warehouses and pull strategy to sell the products in the marketplace (Huang, Li, Tsai, Chung and Shih, 2014).
Amazon’s warehouse classes and Zones: The Company has 70 centers in the United States where more than 90,000 employees are employed. In order to increase revenue and returns, the company is trying to open new warehouses in the local urban markets. The number of warehouses are essential factors in order to maintain success and growth of the firm. The warehouses of the organization are divided into five storage areas.
Warehouse automation: The Company requires automated and robotic warehouse which is called Kiva systems. The robots of Amazon robotics can pick and pack without any human assistance. In today’s era, the organization is increasing its army of robots in its warehouse (Rushton, Croucher & Baker, 2014).
Operation Management of Amazon Company
Army supply chain cost: Due to the huge economies of scale, the company has been able to keep minimum cost of the products in the international market. It helps to increase number of customers in the huge market.
Design of goods and services takes place keeping in mind the taste of the customers. The packaging is done in such a manner that it must attract the customer. The Company has separate section for maintaining all the frameworks and therefore the design of goods and services is checked by the employees involved in making it.
Quality is that factor of business which is taken care at first priority. The quality management checks whether the product is relevant to its value or not. The quality of the product is a major concern of the company. Therefore, to manage the quality company goes through various cycles of examining the product and services (Evans & Lindsay, 2013).
The capacity design basically means the dimensions of the product that is being shown on the website. The section of the organization which takes care about this has to calculate the exact size and area of the commodity. It will help to provide accurate information to the buyers.
Amazon sets its location strategies as per the demand of the product in different areas. The strategy set by the company keeping in mind the necessity of the product form a particular area.
Layout design gives the customer a chance to check the measurements of the product before making a purchase. The description about design makes the buyers aware about the design methodology of the product. Therefore, it is used by Amazon company.
It is also a path by which human resource management of the company gives ample of opportunities to the new employees to enter into the field of marketing.
Supply chain management is a system of interacting with customers by the producers. Supply chain manages the overall formation of selling of product in a step by step approach.
The company under this management keeps a record about the availability of the stock. They manage the inventory and keep a track on the lack of stock that is needed in the company.
This is the most important operational management framework. Amazon has large warehouses which need to be maintained in a proper way. This is done by the company very appropriately.
In Amazon, company hires leaders to maintain harmony in the business. The leaders are responsible for taking decisions collectively and operating in a team. Leadership style of the company helps in solving the issues of the employees effectively and efficiently. The leadership technique unites the member of the organization. A proper leadership enables the members of the organization to perform in an effective manner. This creates a warm environment in the workplace and a comfortable place to work in the firm. A proper leadership style is only possible if there is larger participation in the company by the employees.
Amazon takes care about its responsibilities in a well manner. It is accountable to each and every employee working in the organization. It is answerable to employee’s problem and finds a solution to the problem from every aspect. This gives the employee’s a bit of satisfaction. Once the problem of the employees is solved, they work comfortably and without any stress. This gives good results to the business. Amazon is accountable to its employees in such a way that employees have no complaints working with them. This reduces the chances of conflicts in the workplace (Hugos, 2018).
Outsourcing inventory management and insourcing logistics
The company has set up a team which helps them to get notified before any risk is about to take place. The identification of risk in advance reduces the chances of having any loss to the company. This allows the company to be prepared with the solutions of the issues. Risk identification is a technique to resolve the major issues and challenges that are occurred in the firm. It is one of the greatest strategies used by Amazon which helps them in avoid further issues.
Before the company gets to know about the problem, the problem is controlled beforehand. In a big company like Amazon risk taking is easily acceptable. Therefore, the members of the company set themselves to face any kind of risk in the marketplace. The controlling of risk makes the company vulnerable in performing its functions and operations. This is a very effective method of managing the working of the company. Controlling the risk beforehand helps in reducing the chances of conflicts and issues.
The company uses various platforms where each and every employee is asked to share what they know. This helps other employees to develop their knowledge in different fields and different sectors. The process of knowledge sharing gives these employees a chance to express what they know about the process. Knowledge sharing also allows the workers to open their minds in different fields and develop interest in working in those areas. It gives them a chance to overcome the fear of getting to learn something new. Knowledge sharing is important aspect in Amazon company.
Management of change is important which is seen in Amazon frequently. The management of change helps the company to stand out against the competitors in the world. Management of change takes place when the environment changes its trends and way of living. The company takes care about its changing formation. Training and development coaching is provided to employees in order to increase effectiveness of the workers.
Value chain is a model of high level. It is developed by Michael Porter. The process of value chain involves receiving raw materials, adding value to raw materials and then making a finished good and finally selling the product that is been made to its customers. Every step is calculated at every production level (Ahi and Searcy, 2013). The process takes place step by step keeping in mind the aspect at every level. The Companies follow value chain by conducting each process step by step. Following supply chain in an order also gives a competitive advantage to the company. The value chain is a medium to make people aware about how the company functions and operations (Rothaermel, 2015).
It is a system involved in moving and selling of a product to the customer. The competition between producers takes place through supply chain. Value chains are underlined by supply chain, as without supply chain no producer can interact with their customers (Sanders, 2014). They cannot fulfill the demands of the producers without the supply chain. The supply chain is an important part to conduct any business. It takes care about the availability of the stock. Supply chain helps the company in knowing about the ratio and proportion of the stock and further the amount of stock needed. Therefore supply chain is essential factor that is to be measured in any company (Monczka, Handfield, Giunipero and Patterson, 2015).
Value chain allows Amazon company to check whether the raw materials being supplied by the manufacturer have a value or not. The quality of the product is very important that needs to be in mind while adding the value of the raw materials which is done by Amazon in a effective manner as it has to stand on the expectations of the company. This value chain makes the employee to maintain a track record on the following products (Ross, 2013).
Supply chain of Amazon takes places between the dealer and the customer. It takes care about the product delivered by the company goes through a certain process or not. The operation management in Amazon takes place with the help of supply chain where company has to follow the basic steps for processing the product to its customers.
Conclusion
On the above mentioned analysis, it is concluded that operation management of the Amazon plays an important role to attract and retain more customers globally. Operation management helps to control and design the production process within the organization. Along with this, it helps to gain highest efficiency and effectiveness in the firm. No company can survive its business operations and activities without effective operation and supply chain management. Moreover, the paper also explains the elements of the OM and role of supply chain management in Amazon.
References
Ahi, P. and Searcy, C. (2013). A comparative literature analysis of definitions for green and sustainable supply chain management. Journal of cleaner production, 52, (pp.329-341).
Britannica. (2018). About Amazoncom. [Online]. Available at https://www.britannica.com/topic/Amazoncom . [ Accessed as on 29th March 2018].
Brown, S., Blackmon, K., Cousins, P. and Maylor, H. (2013). Operations management: policy, practice and performance improvement. Routledge.
Burke, W. W. (2017). Organization change: Theory and practice (5th ed., pp. 9-13). Sage Publications.
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
Evans, J. R., & Lindsay, W. M. (2013). Managing for quality and performance excellence. Cengage Learning.
Griffin, R.W. (2013). Fundamentals of management (7th ed., pp. 433-464). Cengage Learning.
Heizer, J. (2016). Operations Management, 11/e (11th ed.,pp. 1-27). Pearson Education India.
Huang, C.L., Li, R.K., Tsai, C.H., Chung, Y.C. and Shih, C.H. (2014). A Comparative Study of Pull and Push Production Methods for Supply Chain Resilience. International Journal of Operations and Logistics Management, 3(1), (pp.1-15).
Hugos, M. H. (2018). Essentials of supply chain management (4th ed., pp. 1-77). John Wiley & Sons.
Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L. (2015). Purchasing and supply chain management (6th ed., pp. 409-459). Cengage Learning.
Ross, D. F. (2013). Competing through supply chain management: creating market-winning strategies through supply chain partnerships. Springer Science & Business Media.
Rothaermel, F.T. (2015). Strategic management. McGraw-Hill Education.
Rushton, A., Croucher, P., & Baker, P. (2014). The handbook of logistics and distribution management: Understanding the supply chain (5th ed., pp. 16-32). Kogan Page Publishers.
Sanders, N. R. (2014). Big data driven supply chain management: A framework for implementing analytics and turning information into intelligence. Pearson Education.
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