Supply Chain Management Assignment: Emerging Trends in Amazon
In this supply chain management assignment, you will conduct research in existing practice and emerging trends in supply chain management with a specific focus an Amazon as your case study. You are asked to read the Amazon.com case study, watch the Amazon - Supply Chain Conference 2017 video provided (https://www.youtube.com/watch?v=Okq0xvlagXo), and conduct a desktop research on Amazon Corporation to critically study their past, current, and possible future operations and supply chain management practices.
The aim of the supply chain management assignment is to develop an evaluative study about the Supply Chain and Logistics operations of the Amazon Corporation. The study shall be substantiated by a complementary analysis of the emerging trends in supply chain and logistics along with the patterns of supply chain operations followed by Amazon. The research is developed based on the summary of the points derived from the conference on supply chain, held in the year, 2017. The Amazon supply chain prerogatives were introduced and interpreted by Tim Collins, the Vice President of Worldwide Logistics at Amazon, focusing on the tagline, “Go Digital.”
Detailed overview of Amazon Corporation
Introducing Amazon Corporation, it is nominated as the leading e-commerce company, at present, with a net worth of $1.7 trillion. Founded in the year, 1994 by, Jeff Bezos, Amazon had been ruling the e-commerce sector, with its excellent optimized supply chain and distribution networks and updated digitalized platforms of operation (About Amazon, 2021). The business strategy of the company had been the confluence of technology, teamed with an obsession for customer satisfaction and lead the competition, through cost leadership.
Jeff Bezos is believer of creating a virtuous cycle, wherein the stakeholders can start from any point. The hierarchy of the company never considered the supply chain operations to be separate from the heart of the business operations as the majority of the services rendered are dependent on the distribution network and supply chain. The value proposition of Amazon is to emphasize on meeting the customer requirements at all possible levels and making it easy for the customers to relate to the products and services and ensure an end to their search in the e-commerce portal.
Jeff Bezos considers technology to be the blood to run the operations of the company. He never separates technology from the distribution network and supply chain operations and hence, monitors the updation and integration of technologies to run the operations (About Amazon, 2021). AWS is considered to be the largest global infrastructure for Amazon, which empowers the company to deliver and integrate the customer applications and reach out to the content and network, from all possible locations (He et al.2017).
The target market of Amazon is not limited to any segment and has products and services, which are needed by every demographic segment, along with geographic locations. The cost leadership contributes towards a better reach. The company applies the Aspect Workforce Management (WFM) , to integrate the management of the workforce, followed by application of cost leadership along with robust technological support to address customer needs (Janger&Twerski, 2019). The key stakeholders of Amazon are the customers, the suppliers, and the employees, who help in running the business efficiently.
Critical analysis of Amazon’s operations and supply chain management practice
From the discussion by Tim Collins at the conference of 2017, it has been made clear that the focus on the supply chain process had been there for Jeff Bezos, from the very beginning of the formation of Amazon Corporation (youtube.com, 2021). With the idea of expanding the business from a mere bookstore to a panorama of every possible products and services, the founder had focused on integrating the supply chain and distribution networks, with the primary business operations of the company (Dias Galuchi et al.2019). The emphasis on optimizing the supply chain and logistics operations of Amazon had been always supported by technological interventions and innovative practices, which led to the formation of a well-knit supply chain framework.
Considering the majority of the operations of the company, to be dependent on the e-commerce portal and the engagement of supply chain and distribution networks, to use the process, for optimized delivery, the company ensures that the supply chain and logistics framework is updated and optimized, throughout. The application of the Probability Level Demand Forecast model instrumentalizes the core of the supply chain and distribution framework of Amazon (Merlino&Spro?e, 2017). At present , it has been evident that , business organizations focus largely on the optimization of supply chain networks and distribution channels, by integrating cutting-edge technology , to encourage the company, cut through the competitive scale (Yu et al.2016).
The focus on technological optimization and sustainability are the characterizing the current supply chain networks and distribution channels. Amazon had scrupulously followed the trends in integrating supply chain with the main operations of the company, run through the use of innovation and disruptive technology. The two main elements of the supply chain framework and distribution channel of Amazon are Fulfillment By Amazon (FBA), and Sell Your Own Fulfillment (FBM) (Angeleanu, 2015). These two features add on to the fulfillment services of Amazon, making the organization, more convincing for the people.
Critics on the other hand have stated that the supply chain and logistics framework of Amazon is insufficient to address the demands of the customers. Despite , ensuring customer satisfaction, at all possible levels, the company at times fails to fulfill the customer demands, as the supply chain framework and distribution network suffers from incorrect forecasting and the company addresses these grievances in an yearly format, which creates the problems of stock over piling.
Additionally, it has also been criticized that the last-mile deliveries by Amazon is an ordeal , especially during the festive seasons. Further, there have been complaints from the customers that despite having the orders to be placed and tracked through AWS, there are issues of late or failed check-outs (Merlino&Spro?e, 2017). Nonetheless, despite having these issues, Amazon strives hard to retain the customer smile and maintain the supply chain and logistics operations, through timely and proper optimization.
Key challenges of Amazon in Australia and New Zealand region
In congruence to the above critical analysis, it is evident that Amazon, despite facing supply chain and logistics issues, remains the leader in the e-commerce sector, mainly through its continued endeavor for technological integration and optimization. Amazon operates across 58 global countries, which includes Australia as well. The plans of expansion in New Zealand had been developed by Amazon, on creating a strong foothold in Australia. However, it has been found that Amazon faces few challenges, while operating in these two nations, Australia and New Zealand. The challenges are mainly two and include technological challenge and competitive challenges. The challenges are explained below:
Challenge 1: Security and compliance issues on Data Privacy and use of AWS
The customers of Australia and New Zealand use the AWS cloud services to store the confidential information, likely the card numbers, and conduct process sensitive transactions. However, it has been found that a considerable number of customers have complained about their data getting infringed, payments made, but the orders are not yet fulfilled and delivered (Sudbury& Hutchinson, 2016). This made the company fall into the broth of security and compliance issues with the policies in Australia and New Zealand.
Challenge 2: Competition from the existing retailers in the two countries
The rising competition in business can also be seen between Amazon and the largest retailers in Australia and New Zealand. In order to compete the aura of Amazon, big companies like Woolworths, FoodTown, Countdown and Thomas Dux banners are migrating into the online platform for taking orders as well as making home deliveries (Semprini, 2017).
In light of the above discussion, it is evident that Amazon suffers from three major problems, which includes technological security, incorrect forecasting and growing competition. Hence, three specific recommendations are provided , to Amazon to help the company address these challenges and recover from the complications.
Recommendation 1: Amazon needs to focus on renewing their SSL (Secure Sockets Layer) , every six months and ensure a total PCI (Payment Card Industry) compliance. This would not only ensure a secured process of transaction from Amazon , but also for the customers.
Recommendation 2: Amazon needs to tighten its IoT (Internet of Things) applications and use RFID for better visibility and enhance the forecasting accuracy.
Recommendation 3: Amazon needs to retain its cost leadership strategy, as it will outcompete most of the business brands and even integrate sustainable business operations, securing the environment.
(2021). Retrieved 10 September 2021, from https://www.youtube.com/watch?v=Okq0xvlagXo&t=135s About Amazon. (2021). Retrieved 10 September 2021, from https://www.aboutamazon.com/
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