Amazon Supply Chain Integration
In today’s business world, supply chain integration is a widely accepted concept that links all aspects of a company’s business activities with its customers and suppliers in a seamless chain of product and information flows. This strategy is considered a better way to achieve supply success. It largely entails designing coordinated flows of materials and information that help companies create smooth business processes throughout the extended supply chain. Amazon is a typical example of a firm that has heavily invested in smooth information and material flows, ultimately reducing its uncertainty in the supply chain and enhancing product delivery performance. As a result, the company has better results in meeting customer demands than its competitors. This study looks at Amazon’s progression of supply chain integration and how it has managed to incorporate a series of innovative e-commerce strategies series to build a strong coordinated relationship with customers and retail partners and emerge as the retail giant.
How do sales and operations planning in supply chain integration impact the company overall? What would Amazon’s medium- and long-term forecast inform the operations management department? How do logistics, transportation modes, and warehouse locations impact Amazon’s competitiveness?
Overall, sales and operations planning in supply chain integration impact Amazon’s functional divisions. Studies show that sales and operation are the bloodlines of today’s business, with the related decisions significantly impacting operational, financial, and service-level efficiency (Nemati et al., 2017). In Amazon’s case, sales planning is performed centrally while production and distribution are undertaken in the manufacturing sites (Majed et al., 2018). Furthermore, the company makes independent decisions in each of its functional divisions. This approach has dual effects. For one, it eliminates the cost of production opportunities by ignoring the interdependence among divisions. At the same time, it reduces the amount of complexity, thereby improving financial performance and enhancing the company’s services. Therefore, sales and operation planning in supply chain integration impact Amazon’s financial performance and the level of its services.
With quick and efficient supply chain management, Amazon’s medium and long-term forecast would inform the operations management department about delivery options for customers and automation. Essentially, the firm has different warehouses for various customer preferences and products (Majed et al., 2018). As such, the forecasts would be geared towards continuous efforts to meet every customer’s delivery preference. In the same breath, the forecasts would be advocating for picking and packing without any human assistance for quick and efficient warehouse services. Thus, informing the operation management department about customer delivery options and automation would ensure the company acquires and implements automated and robotic warehouse solutions.
Amazon’s logistics, transportation modes, and warehouse locations impact its competitive advantage by providing the management the ability to strategically direct its businesses. Usually, logistics, modes of transportation, and warehouse settings allow companies to integrate customer-based marketing plans for various products, along with the management of the supply chain (Márcio Tavares Thomé et al., 2012). The aforementioned processes bring together Amazon’s plans for business, including sourcing, marketing, manufacturing, and development. In this regard, Amazon’s logistics, transportation modes, and warehouse locations link the strategic plans for the business activities with their execution and review performance to influence competitiveness.
How does global sourcing and procurement impact the overall effectiveness of the supply chain? What are the benefits and challenges that have occurred when outsourcing logistic and other functions?
Global purchasing impacts the overall effectiveness of the supply chain by choosing what to buy and from where. Global outsourcing often opens doors for external knowledge and innovation. As Pakurár et al. (2019) put it, a worthwhile explanation behind this concept is the role of supplier integration in product development. As an innovative firm, Amazon tends to search for key supply chain integration components globally, while at the same time purchasing some locally (Majed et al., 2018). This undertaking is based on the transaction costs that trade zones created and different business challenges. In effect, the company acquires cutting-edge knowledge, technologies, and related competencies from offshore suppliers. This expertise ultimately influences innovative performance in terms of the supply chain. One of the benefits that stem from this supply chain effectiveness is that Amazon prioritizes a higher introduction rate of new innovative products (Robins School of Business, 2012). It also acquires higher product innovation from suppliers. Another notable benefit of global outsourcing and procurement for Amazon is the improvement of time-to-market for new products and a shorter time-to-market by the suppliers. Thus, global purchasing enhances the company’s ambition to extend its technological and organizational capability by coordinating supplier networks.
How has Amazon successfully leveraged e-commerce strategies to promote supply chain integration and boost sales and growth for the organization? Which strategies have been particularly effective and why?
Amazon’s driving force behind its innovative and efficient supply chain is leveraging its e-commerce strategies. One of the company’s advanced supply chain management practices is the introduction of a two-way delivery strategy. The idea was to cut down shipping costs and reduce the delivery period (Robins School of Business, 2012). The innovative strategy ensures that customer’s products are delivered in a timely fashion. Amazon has achieved a fast delivery process through automation, the establishment of classes and zones, as well as incorporating various delivery options for customers. In terms of automation, the company can pick and pack without the help of a human, enabling it to perform warehouse activities faster. Amazon has also positioned many warehouses near urban markets to increase fast delivery. Amazon’s robotics has particularly been effective in bringing products to customers for picking, ultimately reducing the need for human workers. Through these e-commerce strategies, Amazon has achieved quick and efficient supply chain management, establishing its dominance as the online retail giant.
Do you feel that Amazon sets an example for other companies to model regarding supply chain integration? Be sure to explain your rationale.
Yes, I feel that Amazon is setting the pace as the most innovative firm in the online retail industry. The company has especially utilized technology to reinforce the effectiveness of its supply chain activities. Notably, Amazon’s efforts to deliver goods to its customers promptly continue to pose a formidable challenge to other retail firms. The efficiency is attributed to the company’s advanced supply chain strategies and supply chain management methods that combine sophisticated information technology, innovative inventory management, an extensive network of warehouses, and efficient transportation (Majed et al., 2018). Additionally, the company has managed to meet every customer’s delivery preferences by establishing various delivery options. In effect, Amazon’s game-changing delivery strategies have resulted in its rapid growth and profitability.
How would conscious capitalism and a Christian worldview impact Amazon’s supply chain integration?
Conscious capitalism would limit Amazon’s bargaining powers and innovative capacity. One critical effect of the global shift has been heightened concentration in supply chain firms (U.S Department of Commerce, 2004). In this regard, capitalism would increase the power of buyers over commercial terms and Amazon’s rent allocation for its various warehouses. Investment in e-commerce technologies and the establishment of warehouses come with costs and risks (U.S Department of Commerce, 2004). As such, there is a need for centralized coordination to reduce the potential disruption of supply chain operations by various parties. However, with capitalism, Amazon would not be better positioned to assume efficient supply chain coordination and management functions. In the end, conscious capitalism would constrain the firm’s bargaining power and innovative capability.
Accordingly, the Christian perspective would impact Amazon’s relationship with its stakeholders. According to AlSagheer and Ahli (2011), each organization has a unique culture that defines its mission and values. For that reason, religion would define the firm’s relationship with suppliers, employees, and customers. Amazon would need a cultural change to integrate an innovative supply chain strategy with another company. Particularly, religious change is an uphill task as it would alter many things, such as values, mission, relationship, and business structure. Therefore, the Christian perspective would present compatibility challenges and become an impediment to Amazon’s supply chain integration.
Supply chain integration is crucial for survival and a competitive edge. In the face of stiff competition, businesses are forced to pay much attention to their manufacturing systems and effective planning and management of their supply chains. Amazon has demonstrated this phenomenon by evolving in response to product development, product life cycle, and customers; delivery preferences. The company has modified its supply chain via a series of innovative strategies, consequently meeting its customer demand, reducing transportation costs, and building a robust, coordinated relationship with customers and retail partners.
AlSagheer, A., & Ahli, M. (2011). Impact of supply chain integration on business performance and its challenges. International Business & Economics Research Journal (IBER), 10(12), 79. https://doi.org/10.19030/iber.v10i12.6651
Majed, S., Nuraddin, S., & Hama, S. (2018). Analyzing the Amazon success strategies. Journal of Process Management. New Technologies, 6(4), 65-69. https://doi.org/10.5937/jouproman6-19264
Márcio Tavares Thomé, A., Felipe Scavarda, L., Suclla Fernandez, N., & José Scavarda, A. (2012). Sales and operations planning and the firm performance. International Journal of Productivity and Performance Management, 61(4), 359-381. https://doi.org/10.1108/17410401211212643
Nemati, Y., Madhoshi, M., & Ghadikolaei, A. (2017). The effect of sales and operations planning (S&OP) on supply chain’s total performance: A case study in an Iranian dairy company. Computers & Chemical Engineering, 104, 323-338. https://doi.org/10.1016/j.compchemeng.2017.05.002
Pakurár, M., Haddad, H., Nagy, J., Popp, J., & Oláh, J. (2019). The impact of supply chain integration and internal control on financial performance in the Jordanian banking sector. Sustainability, 11(5), 1248. https://doi.org/10.3390/su11051248
Robins School of Business. (2012). Amazon.com: Offering everything from A to Z (pp. 1-16). Retrieved from https://robins.richmond.edu/documents/cases/Amazon.pdf
U.S Department of Commerce. (2004). Economic Impact of Inadequate Infrastructure for Supply Chain Integration (pp. 1-15). Research Triangle Park, USA: U.S Department of Commerce. Retrieved from https://www.nist.gov/system/files/documents/director/planning/report04-2.pdf
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Supply Chain Integration
Supply chain integration is a major contributing factor to organizational success. The goal of supply chain integration is alignment within the supply chain. As a business leader, how can you achieve greater supply chain integration with suppliers and customers?
Amazon is a prime example of a company that has successfully managed its supply chain to achieve growth and profitability. Research the progression of Amazon’s supply chain integration. Write a 1,000-1,250-word paper that address the following questions:
- How do sales and operations planning in supply chain integration impact the company overall? What would Amazon’s medium- and long-term forecast inform the operations management department? How do logistics, transportation modes, and warehouse locations impact Amazon’s competitiveness?
- How does global sourcing and procurement impact the overall effectiveness of the supply chain? What are the benefits and challenges that have occurred when outsourcing logistic and other functions?
- How has Amazon successfully leveraged e-commerce strategies to promote supply chain integration and boost sales and growth for the organization? Which strategies have been particularly effective and why?
- Do you feel that Amazon sets an example for other companies to model regarding supply chain integration? Be sure to explain your rationale.
- How would conscious capitalism and a Christian worldview impact Amazon’s supply chain integration?
Incorporate five to seven resources to support your paper.