Supply Chain Management in Amazon
The research demonstrates the role of supply chain management in operations management activities is a complex process under which the administration activities of an organization are conducted through various methods to achieve the organizational goals and achieve the highest level of efficiency in the organization (Ajagunna, Llori and McLean 2022). The method that is selected for analyzing the business operations of Amazon is supply chain management. Supply chain management is a term used to effectively manage the organization’s flow of goods and services. It is also used worldwide to transform the raw materials of the goods and services into finished products and services. In the process of supply chain management, the supplying activities of the organization are taken into consideration that is improved to gain a competitive advantage over all the competitors in the industry. Supply Chain Management is highly dependent on the production process conducted by the organization in the respective countries worldwide. The improvement in the supply chain management of the organization helps reduce the production cost and finally helps to reduce the price of the finished goods and services. It helps generate more revenue through the business operations and expand the customer base in the market. This research includes the analysis of the supply chain management of Amazon and its operations worldwide (Rushton, Croucher and Baker 2022). The research helps to identify the role of technology in the supply chain management process of Amazon and the improvements that are made with the help of technology in the success of the organization and in achieving the organizational objectives.
Supply Chain Management in Amazon is conducted on a very large basis and is considered among one of the largest supply chains in the world. It majorly works on warehousing, management of inventory, production cost and the delivery of the goods and services. Amazon uses the most advanced technology in implementing supply chain management activities (Ivanov, Dolgui and Sokolov 2022). With the usage of high tech technology, the business operations under the supply chain management of Amazon can reduce the cost of goods and services. It is conducted majorly with the help of the two methods (Siqin et al. 2022). Amazon’s two techniques are Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM). Fulfillment by Amazon (FBA) is the logistics service that Amazon provides to the business houses under which the commodities are stored in the particular centers built by Amazon. From these Amazon centers, the commodities are then packaged and delivered to the customers according to their orders. Fulfillment by Merchant (FBM) is a service provided by Amazon (Bullard 2019). It is the responsibility of the sellers to supply the products and services to all the customers worldwide.
Warehousing
Figure 1: Supply Chain Management in Amazon
Source: (Rushton, Croucher and Baker 2022)
It consists of some major concepts and methods used to improve the efficiency of the business operations. The supply chain management strategies of Amazon are as following:
Warehousing is the method used by Amazon, which includes the strategies for improving the storage facilities of the commodities in all the warehouses established by Amazon all over the world. Mostly the warehouses of Amazon are situated near populated areas in the cities to reduce the cost of transportation in the process of supply chain management (Lai et al. 2022). In the supply chain management of Amazon, warehousing plays a significant role in completing the whole process of supplying the products and services successfully. The warehouses of Amazon are regularly updated with the most advanced technology to reduce the time and wastage in the supply chain management process.
Delivery is the mechanism through which the package delivered to the customer is identified and is successfully delivered according to the address provided by the customer. Delivery is the essential part of the supply chain management process of Amazon as it helps to complete the process of supply chain management most effectively (Jansons et al. 2022). Amazon implements strategies to improve the delivery process of commodities worldwide by using the method of centralization. Under the method of centralization, Amazon frames the strategies and policies directly from the headquarters in the USA and then implements them worldwide.
Technology is widely used in the supply chain management of Amazon worldwide. Amazon uses robotics and artificial intelligence technology to reduce mistakes in supply chain management. Amazon is consistently working on improving the technology to enhance the supply chain management process in the company (Furtado et al. 2022). The improvements in the technology improve the efficiency of the work and increase the supply chain management process’s speed, which helps reduce the production cost.
Supply chain management in Amazon plays a significant role that influences the company’s strategic decisions. The strategies that Amazon uses to improve the supply chain management process are one of the most advanced methods in the industry. Here are some factors that demonstrate the supply chain management rule in Amazon.
The supply chain management process has helped Amazon achieve a rapid growth rate in the past ten years. The rapid growth of Amazon is majorly achieved by the efficient supply chain that they create. This is a possible cause of delivering products and services to the customers in the minimum possible time (Peprah et al. 2022). The reduction in the delivery time of production services is due to the usage of the most advanced technologies in the supply chain management process. Moreover, it helped Amazon generate more revenue in the industry and expand its customer base.
Delivery
Another major impact of the supply chain in Amazon is enhancing the delivery process of goods and services to customers worldwide. From the beginning, Amazon is innovating various kinds of delivery strategies in the industry that makes the task of the competitor more difficult (Sanjeev, Dadhabai and Shailaja 2022). For example, delivering production services to customers in two days is one of the most successful strategies implemented by Amazon. All this is possible majorly because of improving the supply chain process in Amazon.
Supply chain management also impacts Amazon through the agency theory of supply chain management. Under the agency theory, Amazon tries to implement relevant policies in the company that are majorly focused on reducing the production cost and increasing revenue. For example, Amazon implements the policy of using artificial intelligence in the supply chain management process, which helps reduce the cost of production and generate more revenue (Aigbogun et al. 2022). Agency theory in the supply chain management of Amazon also helps to reduce the wastage of time and money in the process and to grow and develop the organization.
Just in time is the concept or theory in the supply chain management process under which the goods and services are ordered and supplied in the exact right quantity without any surpluses to reduce wastage. The supply chain management of Amazon also impacts Andy’s process of just in time that is practiced in Amazon (Indla 2021). For example, in the warehouses of Amazon, just in time method is practiced worldwide for managing the goods and services. In the warehouses of Amazon, the goods are ordered when the previous stock of goods is about to get over. It helps avoid surplus production services in the warehouses and helps to utilize this space most effectively.
In the supply chain management process of Amazon, there are various kinds of technological advancements present that can enhance the effectiveness and productivity of the process. Technology is one of the most important components of the supply chain management process for Amazon because it helps to complete the process in time by the usage of the most advanced technology. Here are some factors that demonstrate the role of technology in the supply chain management process of Amazon.
Amazon prime air is the innovative technology that Amazon introduces for supplying the production services from their warehouses to their customers directly. Under this supply chain management process, a drone will pick up the products from the Amazon warehouses and deliver them to the customers at particular locations (McCutcheon 2022). The technology used in Amazon prime air can reduce the manual work done in the warehouse and deliver goods and services. Moreover, Amazon prime air uses the most advanced drone technology to deliver goods to customers without any barriers.
Technology
In the supply chain management through the E-commerce industry, Amazon uses technology most effectively to deliver goods and services to their customers. In the E-commerce industry, the goods and services are delivered through an online portal to customers worldwide according to the orders made by them (Liu 2022). For this purpose, Amazon can create mobile or tablet applications and a website through which the technology is maintained for the supply chain management process. The supply chain management through the E-commerce industry requires fast processing servers along with the constant update in the technology of Amazon.
Amazon tracking is a concept under which it is creating a pool of trucks and drivers that are higher only for delivering the production services of Amazon to the customers. The pool of drivers and trucks is interconnected with an online portal to continuously track the activities of the drivers and evaluate the delivery of goods and services to the customers. Technology please a major role in building the concept like Amazon tracking because connecting all the drivers and trucks with an online portal and continuously monitoring the activities requires advanced technology (Bowen 2022). The purpose behind hiding trucks and drivers only for the delivery of goods and services of Amazon is to reduce the delivery time and provide good quality production services to the customers.
Amazon warehousing is a method used in the supply chain management process under which an effective logistics network is created for delivering the products and services to the customers. Under this method, Amazon warehouses are created in different parts of the world and are connected to a single online portal to track down the delivery activities of goods and services (Tutam 2022). The supply chain management process is enhanced through the delivery of production services by using the warehouses because it helps maintain the quality of delivery.
The supporting functions linked to the supply chain management process help to improve the existing supply chain of Amazon through different methods. Here are some supporting functions that are linked to the SCM of Amazon.
Resource management is the concept required to arrange and allocate different kinds of resources in the supply chain management process of the organization. Resource management acts as a supportive function to the supply chain management process as it helps reduce the wastage in the process and helps enhance the performance (Romulo et al. 2022). Resource Management as a supportive function also helps to determine the available capacity of the supply chain of Amazon according to the resources available. It also helps to determine the quality and quantity of the resources that are used in the process of supply chain of Amazon.
Impact of Supply Chain Management on Amazon
The information workflow is used for the smooth flow of information from the manufacturer to the customers in the supply chain management process. Information workflow in supply chain management acts as a supportive function as it ensures that the activities are conducted in the right manner and in the right direction (Panneerselvam 2022). The information workflow helps to avoid the situations of misinformation in the communication channel and provides information about the activities in the supply chain management process of Amazon. It is beneficial for organization as well as for the employees as it is used to reduce the conflicts and helps for the smooth flow of information form the top management to the staff.
Operations in the supply chain management process include planning and forecasting the activities conducted to deliver the products and services to the customers of Amazon. The supportive function of operations helps enhance the supply chain management process by improving the steps involved in the process (Siqin et al. 2022). It also helps to accumulate the number of materials used in the supply chain management process to avoid any loss.
Conclusion
From the above discussion about the supply chain management process of Amazon, it is concluded that there are various factors involved in making the process successful. The discussion provides a basic understanding of the role of the supply chain of Amazon in improving the efficiency of the operations and other related activities. The discussion can explain the role of technology in the supply chain management process of Amazon and the innovative methods that Amazon is using to complete the process. Moreover, some major supportive functions are mentioned in the discussion that helps to enhance the process of supply chain management process of Amazon. The supportive function includes resource management, operations and information workflow that demonstrated the impact of these factors on the supply chain management process of Amazon. The role of technology in the supply chain of Amazon is also explained through the factors such as Amazon trucking, Amazon warehousing, Amazon prime air and e-commerce. All these factors mentioned in the discussion demonstrate the activities of Amazon that are conducted through the usage of these technological advancements in the industry. The supply chain management process of Amazon in the discussion can analyze the activities conducted in completing the process of delivering goods and services to the customers worldwide. Moreover, the discussion provides a clear picture of the whole process of the supply chain of Amazon and the steps involved in delivering the goods and services to the customers.
Rapid Growth
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