Supply Chain Management
Supply Chain Management
SUPPLY CHAIN MANAGEMENT SYSTEM IN AMAZON.COM1. Sustainability on
Supply Chain in Amazon.comWith Amazons immense reach comes
responsibility,as well as opportunity. Now the largest online
retailer in the U.S., with over $60 billion in sales in 2012, this
e-commerce giant connects buyers and suppliers from across the
world. In many ways, Amazon can be seen as a greener option than
traditional storefront retailers because it does not need to
operate physical locations. Also, Amazonstransportation
logisticsand distribution center efficiencies may reduce the
lifecycle energy use of consumer products. If Amazon can embrace
sustainable practices, it has the potential to improve the buying
experience for customers and differentiate itself further from the
competition.Investors are even asking Amazon for more on
sustainability. Calvert Asset Management Company filed another
shareholder resolution in 2013 calling for Amazons board of
directors to produce a report that details how the company is
managing sustainability topics relevant to its operations. The
resolution has gained considerable backing and Amazon says it will
address the request. At the heart of Amazons operations rests its
supply chain, complicated by the volume of transactions and
associated companies and individuals selling on its website.
Managing and disclosing sustainability issues in Amazons supply
chain will be a difficult task.While that may require an
organizational shift, Amazon can leverage the success it had with
reinventing the customer experience. In 2002, Amazon introduced the
Free Super Saver Shipping program, which offers free shipping on
Amazon orders. Then, in 2005, Amazon added Amazon Prime, a two-day
free shipping program that has further enhanced the consumer
experience and changed the way consumers look at shipping. By
changing the location of distribution centers and rethinking
logistics, Amazon was able to get products to customers fast, and
free, and began to compete more with local brick and mortar shops.
Amazons work with shipping changes required collaboration with
suppliers, which makes its supply chain a prime area to initiate
sustainable business practices.Despite all its experience in supply
chain efficiency, Amazon is one of the few remaining large Internet
companies thats silent on sustainability. Amazon does not publish a
sustainability report and, unlike more than two-thirds of S&P
500 companies, does not disclose its greenhouse gas emissions to
theCarbon Disclosure Project. Amazon israted poorlyon efforts to
diminish its carbon footprint by the rating organizationClimate
Counts, and Amazon data centers ranked low inenergy efficiency by
Greenpeace.Amazon was also accused of mistreatment of its warehouse
employees. A Pennsylvaniapaperinvestigated a local Amazon warehouse
and found that workers were forced to endure extreme heat nearing
100 degrees F. Since then, CEO Jeffrey Bezos has pledged to spend
$52 million on air conditioning units in distribution centers to
address the concern. Amazon began to realize that managing social
matters in its supply chain is a growing issue and nearly has
doubled the number of audited suppliers between 2011 and 2012, from
159 to 315. A great start, but Amazon still lags far behind
competitors.Many of Amazons competitors have improved their
business practices by addressing sustainability in their supply
chains.Apple, Amazons tablet competitor, began to report on
sustainability metrics afterstakeholder concern arose over its
supply chain. Were going deeper into the supply chain than any
other company we know of and were reporting at a level of detail
that is unparalleled in our industry, Apples 2012 sustainability
report says. Since then, Apples largest supplier,Foxconn, has
changed its business practices, and Apple is seeking more suppliers
with sustainable labor policies.Amazon is also competing in the
local commerce industry with Best Buy, which worked with BSRs
Center for Sustainable Procurement to research how it could improve
sustainability within stores. The BSR report, published in June,
showed that changes inBest Buys in-store displayspotentially could
reduce costs and waste if the display units are redesigned for
reuse.As Walmart moves to a same-day delivery service, it will
compete more heavily with Amazon for local customers. After
embracing sustainable principles within its own operations, Walmart
created a supplier sustainability index, rating suppliers on their
operations. Walmart is well known for using its purchasing power to
incent suppliers into becoming more sustainable. Amazon has a
similar opportunity with its supply chain. The task may seem
daunting, but Amazon is well-positioned in the market to encourage
suppliers to become more transparent on social and environmental
issues.There is an even greater opportunity for Amazon in pursuing
a sustainable supply chain: delighting customers. Amazon is well
aware of customers interest in product sustainability and
researched Americasgreen product purchasing trendsin 2011. Region
by region, each in its own way, America is gradually getting
greener, Lakshmi Nidamarthi, manager of the Amazon Green Program,
wrote about the study. While Amazon is aware of the green
tendencies of its customers, it has yet to address this preference.
This is surprising for a company rated with the highest score for a
retailer in theAmerican Customer Satisfaction Index. Amazon now has
the opportunity to draw on its commitment to customer satisfaction
to provide customers with the sustainability information they
desire.Amazon has proven it can delve into its supply chain to
improve the customer experience before. The e-commerce giant can
use its experience in supplier network innovation and customer
satisfaction to better manage sustainability topics. We are
internally driven to improve our services, adding benefits and
features, before we have to. We lower prices and increase value for
customers before we have to. We invent before we have to, Bezos
said in a letter to shareholders.That has proven true in the past,
but now Amazon has the chance to look externally at competitors as
examples and address sustainability within its own supply chain.
Amazon can capitalize on this opportunity to satisfy customers and
shareholders by shifting its perspective. By incorporating supply
chain sustainability strategies such as instituting a stronger
supplier code of conduct, minimizing waste and energy, reevaluating
labor and human rights policies, using more energy-efficient
transportation and addressing the use of conflict minerals in
shipping, Amazon can become a more sustainable company.
2. Supply Chain Standards in Amazon Amazon is strongly committed
to conducting its business in a lawful and ethical manner,
including engaging with suppliers that are committed to the same
principles. Amazon require suppliers their manufacturing supply
chain to comply with their Supplier Code of Conduct* ("Supplier
Code"), which is detailed below. Amazon also expected the suppliers
to hold their suppliers and subcontractors to the standards and
practices covered by their Supplier Code. Amazon products must be
manufacturer in a manner that meets or exceeds the expectations of
Amazon and their customers as reflected in their Supplier Code.Here
are some of the key areas that they focus on: Health and safety in
production areas and any living quarters The right to legal wages
and benefits Appropriate working hours and overtime pay Prevention
of child labor or forced labor Fair and ethical treatment,
including non-discriminationTo ensure that their audit protocol and
standards incorporate best-in-class practices, they conduct a
formal benchmarking with industry experts to review Amazon criteria
against globally-recognized international standards and other
businesses in the retail and electronics industries. They work
closely with a leading independent specialist in designing,
operating, and continually improving their audit program. Amazon
managers participate directly in many of the on-site audits. Audit
reports and findings are reviewed regularly by the senior
leadership of the appropriate business and corrective action plans
are implemented as needed.They partner closely with their suppliers
to drive continuous improvement in worker conditions. They train
their suppliers on the standards and conduct required by their
Supplier Code. Amazon use independent auditors to audit suppliers
and verify compliance, including through confidential worker
interviews. They audit all the suppliers at least once per year to
monitor continued compliance and improvement; many sites are
audited multiple times a year, including for follow-up audits to
address specific findings. Amazon may terminate its relationships
with any supplier that violates their Supplier Code or does not
cooperate with our auditors.Every site audit includes: Inspection
of all areas of the site and any living quarters Confidential
worker interviews conducted without site management present Review
and analysis of site documents to assess workers' age, contracts,
compensation, working hours, and workplace conditions Audit and
review of current licenses and any past compliance issues; and
Identification of areas for improvement and development of a
remediation plan. Upon completion of an audit, a supplier must
promptly provide a detailed remediation plan for each issue
identified. Amazon tracks remediation closely and conducts
follow-up audits for significant issues. Between audits, Amazon
employees often meet on-site with supplier managers to discuss open
issues and remediation progress.
3. Amazon, The Faux Retailer Amazons corporate mission says it
for the most part: We seek to be Earths most customer-centric
company for four primary customer sets: consumers, sellers,
enterprises, and content creators. Three out of their four
constituencies are non-consumer. Unlike other retailers, Amazon has
been investing very heavily in the back-end logistics and
fulfillment technology (Kiva Systems, warehouses totaling almost 50
million sqft) in addition to their intense focus on enterprise
technologies (AWS, Amazon Web Services now hosting SAP) and
consumer devices (Kindle) and technology (IVONA). But almost
everybody thinks of Amazon as a retailer and keeps comparing them
to other retailers. Is that fair? There is no doubt that Amazon
started as a retailer sans the stores in the then new and emerging
world of online retail. There is also no doubt that retailers are
their most obvious competition and they do have a lot of common
business objectives. Amazon single handedly has hastened the speed
and extent of change that we now take for granted in retailing.
They pioneered the concepts of customer reviews,
you-might-also-like, people-who-bought-this-also-bought, low
prices, fast fulfillment and delivery including their newest
same-day delivery efforts, delivery boxes to avoid missed carrier
appointments, subscribe-and-save, hassle-free returns, Amazon prime
bundling 2-day shipping with host of other services like media
streaming and book-lending, and digital books and devices like
Kindle. The list goes on and these are only some of their
consumer-facing innovations. But Amazon has also been big on
innovations on the back-end which in turn enable these
consumer-facing innovations like investing in warehousing
facilities closest to their biggest customer hubs, technology
platforms built for e-commerce including hardware systems like
Kiva, hosting thousands of store-fronts that collectively provide
millions of products: Amazon Marketplace definitely the largest
under a single brand-umbrella, fulfillment by Amazon, checkout by
Amazon, Kindle Publishing, and programs like Amazon Affiliates. The
fact is that Amazon today is first and foremost the largest
retailing platform hosting thousands of stores enabled through
Amazon services than simply an online retailer. But how does that
make Amazon a faux retailer? Retail has three core pillars:
Merchandising, Stores, and Logistics. One of the biggest focus and
risk areas for a retailer is merchandising: Deciding what to sell.
By enabling thousands of small merchants (who are not Amazon
employees) Amazon has practically sub-contracted the biggest retail
function and with it a large part of the risk associated with
unwanted merchandise! Stores and logistics are the other two
retailing pillars. Being an online retailer, Amazon obviously does
not have to worry about the stores. That leaves Logistics: Once
again, rather than limiting to create conventional logistics
infrastructure of a typical retailer, Amazon developed a logistics
services platform complete with technology, hardware, and
operations management that gives them the advantage of scale as
they manage receiving and fulfillment services for thousands of
merchants, as well as enables them to create a large
warehouse-network to enable most optimal shipping for their own
merchandise. Then comes their AWS (Amazon Web Services) or their
cloud as it is better known. Once again, Amazon was among the
pioneers to develop the cloud services for enterprises and quietly
announced hosting SAP in their 4th quarter press release, AWS
announced that SAP Business Suite is now certified to run on the
AWS cloud platform. Enterprises running SAP Business Suite can now
leverage the on-demand, pay as you go AWS platform to support
thousands of concurrent users in production without making costly
capital expenditures for their underlying infrastructure. AWS also
announced that SAP HANA, SAPs in-memory database and platform, is
certified to run on AWS and is available for purchase via AWS
Marketplace. GIGAOM estimates that AWS is now over 1.5 billion
dollars business for Amazon. Granted they may not be making money
on it yet (not big money, anyway), but the potential upside of
having the worlds best-known ERP available on AWS is huge. Finally,
there is Kindle: Now evolved into a tablet and competing with other
tablets more often than the e-readers. Amazon recently bought IVONA
that powers the Text-to-Speech, Voice Guide and Explore by Touch
features on Kindle Fire tablets. What might that indicate? That
Amazon will likely continue to enhance their foray into tablets (or
consumer devices) at least in the short-term! With such a
un-conventional portfolio, what type of company does Amazon make?
Definitely no conventional label works. However, there are two
broad themes that emerge:1. Technology: This has always been their
strong point and Amazon has never been shy about putting it to use.
Their seller-platform, logistics services, AWS, and tablets all
point to their single strength: Ability to understand,
create/develop, and exploit technology unlike any other company we
have seen so far. 2. Logistics: This has emerged as an Amazon
strength for the last few years, but their unique way of developing
it into a commercial platform is amazing. Suddenly, all the
mom-and-pop shops out there can provide you with world-class
ordering experience including shipping and tracking and they only
have to worry about what to sell4. Third-party sellersAmazon
derives many of its sales from third-party sellers who sell
products on Amazon (around 40% in 2008). Associates receive a
commission for referring customers to Amazon by placing links on
their websites to Amazon, if the referral results in a sale.
Worldwide, Amazon has "over 900,000 members" in its affiliate
programs. According to W3Techs the Amazon Affiliate Program is used
by 1.2% of all websites, and it is the second most popular
advertising network after Google Ads. It is frequently used by
websites and non-profits to provide a way for supporters to earn
them commission. Amazon reported over 1.3 million sellers sold
products through Amazon's websites in 2007. Unlike eBay, Amazon
sellers do not have to maintain separate payment accounts; all
payments are handled by Amazon.Associates can access the Amazon
catalog directly on their websites by using the Amazon Web Services
(AWS) XML service. A new affiliate product, aStore, allows
Associates to embed a subset of Amazon products within another
website, or linked to another website. In June 2010, Amazon Seller
Product Suggestions was launched (rumored to be internally called
"Project Genesis") to provide more transparency to sellers by
recommending specific products to third-party sellers to sell on
Amazon. Products suggested are based on customers' browsing
history. 5. Amazon sales rankThe Amazon sales rank (ASR) provides
an indication of the popularity of a product sold on any Amazon
locale. It is a relative indicator of popularity that is updated
hourly. Effectively, it is a "best sellers list" for the millions
of products stocked by Amazon. While the ASR has no direct effect
on the sales of a product, it is used by Amazon to determine which
products to include in their best sellers lists. Products that
appear in these lists enjoy additional exposure on the Amazon
website, and this may lead to an increase in sales. In particular,
products that experience large jumps (up or down) in their sales
ranks may be included within Amazon's lists of "movers and
shakers," and this also provides additional exposure that may lead
to an increase in sales. For competitive reasons, Amazon does not
release actual sales figures to the public. However, Amazon has now
begun to release point of sale data via the Nielsen BookScan
service to verified authors. While the ASR has been the source of
much speculation by publishers, manufacturers and marketers, Amazon
itself does not release the details of its sales rank calculation
algorithm. In addition, it states:Please keep in mind that our
sales rank figures are simply meant to be a guide of general
interest for the customer and not definitive sales information for
publisherswe assume you have this information regularly from your
distribution sources6. Amazon technologyCustomer Relationship
Management (CRM) and Information Management (IM) support Amazons
business strategy. The core technology that keeps Amazon running is
Linux-based. As of 2005, Amazon had the worlds three largest Linux
databases, with capacities of 7.8 TB, 18.5 TB, and 24.7 TB. The
central data warehouse of Amazon is made of 28 Hewlett Packard
servers with four CPUs per node running Oracle database software.
Amazons technology architecture handles millions of back-end
operations every day, as well as queries from more than half a
million third-party sellers. With hundreds of thousands of people
sending their credit card numbers to Amazons servers everyday,
security becomes a major concern. Amazon employs Netscape Secure
Commerce Server using the Secure Socket Layer protocol which stores
all credit card details in a separate database. The company also
records data on customer buyer behavior which enables them to offer
or recommend to an individual specific item, or bundles of items
based upon preferences demonstrated through purchases or items
visited. On January 31, 2013 Amazon experienced an outage that
lasted approximately 49 minutes, leaving its site inaccessible to
some customers. On May 5, 2014 Amazon unveiled a partnership with
Twitter. Twitter users can link their accounts to an Amazon
account, and automatically add items to the shopping cart by
responding to any tweet with an Amazon product link bearing the
hashtag #AmazonCart. Customers never leave the Twitter feed, and
the product is waiting for them when they head over to Amazon. 7.
Multi-level sales strategyAmazon employs a multi-level e-commerce
strategy. Amazon started off by focusing on Business-to-Consumer
relationships between itself and its customers, and
Business-to-Business relationships between itself and its suppliers
but it then moved to incorporate Customer-to-Business transactions
as it realized the value of customer reviews as part of the product
descriptions. It now also facilitates customer to customer with the
provision of the Amazon marketplace which act as an intermediary to
facilitate consumer to consumer transactions. The company lets
almost anyone sell almost anything using its platform. In addition
to affiliate program that lets anybody post Amazon links and earn a
commission on click through sales, there is now a program which let
those affiliates build entire websites based on Amazons platform.
Some other large e-commerce sellers use Amazon to sell their
products in addition to selling them through their own websites.
The sales are processed through Amazon.com and end up at individual
sellers for processing and order fulfillment and Amazon leases
space for these retailers. Small sellers of used and new goods go
to Amazon Marketplace to offer goods at a fixed price. Amazon also
employs the use of drop shippers or meta sellers. These are members
or entities that advertise goods on Amazon who order these goods
direct from other competing websites but usually from other Amazon
members. These meta sellers may have millions of products listed,
have large transaction numbers and are grouped alongside other less
prolific members giving them credibility as just someone who has
been in business for a long time. Markup is anywhere from 50% to
100% and sometimes more, these sellers maintain that items are in
stock when the opposite is true. As Amazon increases their
dominance in the marketplace these drop shippers have become more
and more commonplace in recent years 8. Amazon Supply Chain
Strategies You Should Copy The Use of Analytics of Buying History
to Market to Individual Customers.When you shop on Amazon, you dont
even have to surf their site because the company is flashing
similar products you have purchased and items that you have
searched for in the past. There is no Jedi mind trick here, they
are simply using analytics of your past purchasing and browsing
behavior to sway your buying habits. TRICK YOU CAN USE: You dont
need a sophisticated algorithm to accomplish the same thing Amazon
is doing. Even if all of your customers purchase via phone, simply
have your customer service reps at the ready with past order
history to try to drive similar kinds of purchases. If a customer
continuously buys items within a certain price point, recommend
items that cost around that same amount. Common sense? Yes, but not
common practice. Call the Service Desk and You Might Get the
CEOEvery executive at Amazon is required to spend some time
fielding customer service callsincluding CEO Jeff Bezos. Amazon
does this to make certain everyone in the company is committed to
listening to, understanding, and acting on the needs of each
customer. I've looked under the hood of about 50 companies a year
for the last 15 years and very rarely do I see executives roll up
their sleeves and get into the trenches of their own businesses. If
one thing on this list is mimicked, it should be this one. TRICK
YOU CAN USE: Get your scaredie-cat CEO and his immediate sphere of
influence and throw headsets on them. Fielding customer complaints
will be good for them and everyone else at your company. Putting
Cool Names To Different Parts of Your Company to Drive ValueWith
trendy names like Pike Street, Pinzon, Strathwood, Kindle, Dash,
etcAmazon has us chomping at the bit with what they are coming out
with next. Truth be told, many of these brands are simply Amazon
private labeling different products. By associating slick brands to
these services or products and creating a PR campaign around them
comes across as new and fresh and makes customers feel they want
in. TRICK YOU CAN USE: You can have a lot of fun with this. For
starters, put a name to deliveries on your own truck, like "Your
Company Name Same Day" and write a white paper about your new same
day delivery service. Schedule a Free Tour of Your Facility.Any
customer can request a tour of Amazons fulfillment centers to see
how efficient they are. If you want to develop a better
relationship with your customers and suppliers, invite them to your
facility and show them how you do things.TRICK YOU CAN USE: Put a
day on the calendar once every quarter for and block out time for a
tour of your entire facility and some of the new things you are
doing, and invite every single customer and vendor. A dividend that
may come from this are collaboration opportunities. When a vendor
or customer looks under the hood of your operation, they might
suggest things that help them and give you more profits (like
shipping one big shipment a week instead of smaller shipments every
day or shipping product without packaging to save them time when
receiving your product). Brand PackagingWe all know when we receive
a brown box with a smile on it that it comes from Amazon. Brand
recognition is huge and putting your company logo on your boxes is
a great way to stay on your customers minds. TRICK YOU CAN USE:
Packaging material is a very competitive business. You can have
your company name and logo put on your boxes for a very nominal
fee. It's well worth the extra pennies. Honor the First Sale Your
Company Ever MadeThe first book Amazon.com ever sold was from
Bezos' garage in July 1995. The book was Fluid Concepts &
Creative Analogies: Computer Models of the Fundamental Mechanisms
of Thought. This has been mentioned scores of times when people
talk or write about the history of Amazon and is a big part of the
whole "feel good" story they want everyone to know.TRICK YOU CAN
USE:Highlight the first sale of your company on your website or
with a plaque in your lobby to show how hard you work and how far
you've come. Everyone loves to know people's humble beginnings.
Sell Something OddMy 11 year old son brought to my attention that
you can literally buy unicorn meat on Amazon. I dont know what the
hell was in it, but we almost bought it for the gross factor alone.
The point is my son and I spent two days telling everyone of his
friends and their dad's about the unicorn meat they can buy on
Amazon (if they felt so inclined) and kept Amazon's name in our
every day conversation. TRICK YOU CAN USE: You can cross the line
here if you get too raunchy. The key is to show your customers that
you have a sense of humor. But take a small chance and throw
something in your product line that get's people talking...even if
it sheaves them out. Market Something You are Good at to Diversify
Your Offering Through the evolution of Amazons E-commerce platform,
the company came up with the wildly popular Amazon Web Services
offering. Every company has different things that they are good at;
things that have value to others. The point here is to put a dollar
figure on it and market it to potential customers. TRICK YOU CAN
USE: Lets say you have a kick butt customer service department that
people always praise you about. Then perhaps you could package it
up and sell customer service training courses. Or perhaps you are
located on the outskirts of a major city and have mastered the art
of delivering within that particular city. Then there's another
service offering that you could market. Invent Something Insanely
Impossible for PR Reasons.I thought Amazon nailed it when they
announced their delivery helicopter drones on 60 Minutes a few
months back. Of course there are many factors that make it
impossible; cost, safety, national security, practicality, etc. But
it was a cool idea and is still a fun topic to talk about. Thats as
a hard one to top, but put an innovative goal out there that tells
your customers you are always trying to get better and might be a
little nuts...in a fun way.TRICK YOU CAN USE: Again, you can get
creative here. Perhaps you tell your customers that it's your
company's is going to have the first insert your product here on
the planet Mars. Hey, I actually like that idea. Feel free to use
it if you like it.
9. Lessons from Amazon Put yourself in customer's shoes: at
Amazon, they care so much about customers and this is not just
something fancy to say. In many internal meetings, Bezos leaves one
empty chair next to him and tell people that they should also think
on behalf of one important customer who can't manage to be there.
Then the word "empty chair" becomes a symbol of customer centric
business practices inside Amazon. Also, many executives have to
attend call center training so they can know customer's feedback,
good or bad, firsthand. Don't be distracted by the competition:
many companies focus on benchmarking performance against
competitors but this is not the case for Amazon. Bezos believes
that the pace of industry change is too fast so it's not good to
make knee jerk reaction after competitors do something new. What
Amazon does is to acknowledge what happens but keep focusing on it
customer's needs. Keep an eye on the ball: "culture of metrics" is
the word used to described the obsession over the performance
measurement. They're currently tracking about 500 KPIs and 80% of
them are customer related.
Go extra mile: Bezos once insisted on using better quality box
so customer can reuse it. And when Amazon's brand is on every box,
it's the free publicity. He also pushed many executives at DCs to
extend order closing time to 6pm or 7pm, even though this means
over-time cost to Amazon. Plant seeds and watch them grow: the
example of this philosophy is that Amazon invests in many hardware
technologies that don't make any short-term gain just to make sure
that they build Kindle that people love. Learn to improvise: Amazon
asks candidates to make action plans, outside their comfort zone,
with the assumption that there will be no budget for such plan, to
test how each candidate react to unfamiliar business issues. As
mentioned earlier, the pace of industry change is fast so they need
people who can think outside the box. Build the dream team: Amazon
believes small work team is more efficient. To determine the right
size of each team, they've developed a "rule of thumb". If it needs
more than 2 pizzas to feed the team, that team is too big (so I
name it "2-Pizza Heuristics").10. Amazon's Supply Networks Strategy
Amazon.com, Inc.is an American multinationalelectronics
commercecompany with headquarters in Settle Washington, United
States. It is the world's largest online retailer. They started as
an online bookstore but have diversified to so many other products
like music downloads, furniture, food and basically almost all
consumer electronics. Currently, Amazon is a major a provider of
cloud computing services. Amazons has a separate retail online
stores for different countries for example the USA, UK, China,
Italy, Germany and others.
According to a research by Gartner with in a period of 3 years
Amazon moves from the 1oth spot in the world ranking in the best
top 10 supply chain company to the 2ndin the year 2012 that is just
behind the world technology company and smartphone giant Apple. The
figure below shows the customers centric approach of Amazons
business model.
[1]FIG 1 Customer Centric Model In the supply system of Amazon,
there is a unique approach about how they handle their customers
which they describes it as starting with the customer and moving
backwards.as depicted in the diagram above they are customer focus
and they are frugal which means, they spend much money on things or
items customers really like and lastly they are very innovative in
their supplynetworks where they constantly, brings in new
technology to assist with their supply chain network.The customer
centric nature and the success has also been partially dependent
and their largeness and corporate image. Amazon from its beginning
have acquired some many companies which includes mdb,
Lexcycle,askville,buy.vip,shelfari,smallparts,woot,cdnow,zappos,alexa,audible,pets.com
and others. The replenishmentstrategyof Amazon reflects mostly with
understanding customers needs first and formost. They do their
stocking and inventory with customer preference than have more
variety of goods and than lower cost. Amazon offers a very wide
range of productsthroughthe use of wholesale suppliers and
independent producers which includes the companies shown like
Etsy,ticketmaster,foursquare,ppaya,ftopia,Quora,Flipboard,Netflix,airbub
,Tapjoy,zynga,esa,Dropbox,Unicredit Bank,Nasdaq,yelp,the
guardian,Ericsson ,Hitachi Systems,SchneiderElectric,reddit and
other.
FIG 2SupplyNetwork The diagram above illustrates the total
supply networks of the global retail giant Amazon. Step 1 shows
when the customer places an order in wherever location he may be.
The order is than assigned to the closest of the seven major
distribution centers in the United States of America .The next step
is as shown in the diagram indicates that the order is been shown
red in the person whose item is ordered in the warehouse it than
creates ride conveyors through DC, the items is been sorted out by
a bar code and than the creates arrives at the central point and
bar codes of the products matched with orders, the items sorted are
than sorted automatically into ne of the many boxes chutes into a
box. As shown in the diagram the bar code identifies customers
order and than the customer order is packed taped and weighed. The
taped and weighed boxes are shipped by the United Parcel Services
and sent to customer between seven days. In a nutshell looking at
the trend and successes Amazon.com has been able to achieve in this
relatively short period as compared to other companies in the
industry, do readers belief Amazon can overtake Apple in the list
of best supply chain companies in the very new future (5 10 years)
and to what extent is this saying true Amazon.com the Hidden
Empire.
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