Impact of Sales and Operations Planning in Amazon’s Supply Chain Integration

Answer

Impact of Sales and Operations Planning in Amazon’s Supply Chain Integration

Founded and headquartered in Seattle, Washington, Amazon is among the world’s largest e-commerce companies and the world’s fastest growing e-commerce firm (Houde et al., 2017). It became the most profitable as well as fourth treasured public company in the third quarter of 2016 (Aversa et al., 2020). Sales and operation planning (S&OP) in Amazon’s supply chain impacts the company in various ways. First, S&OP balances between the company’s supply and demand. S&OP enables Amazon to plan its categories of customers, goods, and marketing approaches to meet its demand needs (Kaipia et al., 2017). Lii and Kuo (2016) add that S&OP assists when categorizing clients and offerings and when defining marketing approaches, allowing the company to effectively and efficiently meet or address customers’ needs. Through the S&OP, Amazon’s commercial dealings and costs are allocated in line with its supply needs. Similarly, the process enhances the company in its commercial units and the costs, therefore making sure its supply needs are met.

Secondly, the S&OP betters Amazon’s performance in all its functional supply chain spheres. The S&OP enhances flexibility in handling Amazon’s customer needs, its operational costs are minimized, and its workforce is impacted positively (Lii & Kuo, 2016). Thirdly, S&OP concentrates the company’s ability to set targets and coin plans aimed at achieving the targets (Kaipia et al., 2017). Additionally, S&OP enhances effective and efficient leadership in Amazon since it crosses borders between organizations. Finally, S&OP depend upon strategies of phases with integrated business processes. Chaudhuri et al. (2018) note that S&OP enables Amazon to have linkages with various organizations and bodies and offers opportunities for receiving objects/materials and transfer the same to buyers. Therefore, S&OP affects positively Amazon’s performance as a result of the improved flexibility as well as enhanced opportunity to meet and address the needs of customers.

Amazon’s medium- and long-term forecast

The medium- and long-term forecasts are essential for Amazon. Along with Amazon’s operational management division, the forecasts help the company to see that organizational decisions that are made by the company are suitable and can balance its products that are not obtainable at the same time (Rivet, 2017). Aversa et al. (2020) explain that the forecasts inform Amazon’s operations management division that the company has to make choices vividly and properly weigh tradeoffs. Additionally, Amazon’s long-term forecasts are consistent with its investment policy and they are customer-oriented, working to establish crucial things that customers value. Stevens and Johnson (2016) explain that Amazon has optimized its shareholder value by focusing on long-term achievements. Nonetheless, the company’s concentration on long-term approaches has impacted its short-term goals/objectives and financial performance (Bruque et al., 2015). Its stock prices have suffered, resulting in fluctuating operation margins. Thus, when devising strategies, Amazon ought to consider the short-terms objectives/goals to better a balance.

Further, logistics, transportation modes, as well as warehouse locations have affected Amazon’s competitiveness in various ways. First, Amazon has more than 145 warehouses globally, enabling their customers to get their products from the company within relatively shorter time periods and free (Rivet, 2017). Secondly, Amazon employs the e-commerce logistics model whereby products, like freight, are promptly and efficiently delivered, thus enhancing customers’ satisfaction (Houde et al., 2017).

hat relates directly to augmented cost savings. It also allows the company to choose providers who provide the best quality and cost from across the world, allowing Amazon to keep high and quality inventory levels (Stevens & Johnson, 2016).

 Through the use of global sourcing, Amazon has the ability of enhancing its operations. It obtains opportunities to minimize freight costs, while improving its services and products’ quality simultaneously. It is able to be extra flexible, thus streamlining the process of product delivery besides allowing it to address its customers’ needs. This way, turnover can be increased, while fixed assets can be minimized and inventory investment can be restricted to allow saving of costs. The use of outsourced functions betters the company’s information technology usage, making accessibility to the needed data easier and permitting Amazon to work with experts. Nonetheless, there are various challenges with global sourcing. There are hidden costs involved and confidential information is in danger of being exposed (Houde et al., 2017). Additionally, small unspecified time and standard quality services impact negatively outsourcing.

I feel Amazon sets out an example for other firms to model supply chain integration. First, Amazon has constantly been developing distribution centres across the globe to better product delivery in less than an hour to clients within the U.S. along with launching four university bookstores (Chaudhuri et al., 2018). Additionally, it has bettered its international shipping via cargo jets and a French package delivery firm, making it reach its clients within the shortest amount of time. Through Amazon’s Global Supply Chain by Amazon, strategies have been formulated for carrying out Amazon’s freight services, thus eliminating middlemen and consequently reducing its operational costs to allow it price its products differently (Rivet, 2017). This has lessened the company’s global burden of long logistics processes and enhanced its e-commerce strategy. The employment of online technology has bettered Amazon’s visibility throughout its supply chain. Lastly, Amazon has been distinct in minimizing its supply costs, while enhancing its products’ margins. Thus, Amazon has effectively and efficiently integrated the supply chain and should be a model to its competitors.