Supply Integration: The case of Amazon.com

Answer

Supply Integration: The case of Amazon.com

Introduction

Supply chain is a crucial aspect of a company’s operations. Benchmark supply chains, according to Jutamat et al. (2019), have reported a shift by companies to integrated supply structures under one corporate executive. Integrated structures, as Sadq et al. (2018) note, create a common culture, vision, and strategy focused on total value, a step that often delivers improved performance and increased value. Among the companies that have reaped bountifully from integrated supply chain is Amazon. The aim of this paper is to discuss how a company can achieve greater supply chain integration with customers and suppliers, using the case of Amazon.

Impacts of Sales and Operations Planning In Supply Chain Integration on Amazon

Sales and operations planning in supply chain integration have had various impacts on Amazon. First, sales and operation planning has helped in balancing Amazon’s supply and demand by allowing the company to plan its customers, goods and marketing strategies classifications so that it can effectively and efficiently meet its demand requirements (Bruque-Cámara et al., 2016). Secondly, the sales and operations planning have bettered performance in all Amazon’s functional supply chain areas. Jutamat et al. (2019) state that the planning helps Amazon to follow paths of its products and materials as they navigate through its various turns and twists of its supply chain, and equally give the company a higher degree of flexibility and control when things do not go as planned. The planning has, therefore, boosted Amazon’s overall traceability and transparency. Additionally, Amazon’s operational costs are lessened and its workforce is impacted positively. Mark (2018) reasons that Amazon has been able to perform as a cohesive whole since the planning has helped simplify the company’s operations, thus, cutting down on repetitive, unnecessary costs and efforts. As these inefficiency areas are eliminated through sales and operations planning, Amazon is more capable of increasing its level of service to stakeholders while concentrating upon capital-generating assets and improvements (Isckia & Denis, 2017). Planning sales and operations of the company has helped Amazon to develop extensive supplier relationship and link with many stakeholders. Their resources and time have been freed up, shortening their lead times to customers (Sadq et al., 2018).

Medium- and Long-Term Forecasts and Amazon’s Operations Management Department

Amazon’s medium- and long-term forecasts inform Amazon’s operation management department that the organization is properly weighing their trade-offs and making vivid decisions. Amazon has remained consistent with being customer focused and with their investment policy and has leveraged its share value through its focus on its long-term achievements (Sadq et al., 2018). Nonetheless, their concentration on long-term strategies has, according to Sharanya and Nair (2018), affected their short-term goals and financial performance. Thus, Amazon’s stock price has been hard hit and its operation margins set fluctuating. Thus, when conceiving medium- and long-term strategies, the company ought to consider the short-term goals also to strike and enhance the balance.

Amazon’s Competitiveness and Logistics, Transportation Modes, and Warehouse Locations

Logistics, transportation modes, and warehouse locations have had significant effects on Amazon’s competitiveness. First, Amazon has more than 145 warehouses globally, allowing the company’s customers to receive their products and services within a short span of time (Mark, 2018). Secondly, the company has employed the e-commerce logistics model through which products, such as freight, are delivered efficiently and on time and that enhances Amazon’s customer satisfaction (Isckia & Denis, 2017). Lastly, transportation modes, such as the free shipping mode with a two-day free shipping, have bettered Amazon’s customer satisfaction, therefor, building the company’s client’s trust (Ritala, Gonam & Wegmann, 2015).

Effects of Global Sourcing and Procurement on a Supply Chain

Global sourcing and procurement impacts the effectiveness of supply chain through quality assurance, risk reduction, and cost reduction. First, global sourcing enhances reduced cost of raw materials and labour (Sabitha, n.d.) and productivity besides aiding the opening of new marketplaces (Sharanya & Nair, 2018). These allow business establishments to employ trending strategies and cultures into present business models. Global sourcing also offers quality assurance by meeting customers’ requirements and eliminating business risks through systems control and quality product (Bruque-Cámara et al., 2016).

Benefits and Challenges of Outsourcing Logistics

The benefits of outsourcing, according to Mark (2018), include the availability of high-quality products and new technology. Outsourcing ensures that risks are shared, excellent expertise is acquired, and minimization of a company’s operational costs (Sharanya & Nair, 2018). Conversely, the challenges of outsourcing include the danger of a company’s confidential business information being exposed and involvement in unseen operational costs (Sadq et al., 2018). Moreover, unspecified delivery times along with small standard quantity and quality affect outsourcing.

Amazon and E-Commerce Strategies

Amazon has successfully leveraged e-commerce strategies in different ways to promote its supply chain integration and boost its sales and growth. First, Amazon has ensured that its customers get all the information they need about their products at a look online without necessarily having to physically visit the company’s stores (Mark, 2018). The online platform enables Amazon’s customers to view products without incurring travelling costs. Secondly, at Amazon, product bundling has been influenced by e-commerce and this lessened the burden of contrasting and comparing the company’s individual products (Ritala, Gonam & Wegmann, 2015). Thirdly, through e-commerce, Amazon has been able to strategize on the niche products innovation. By rightly identifying its target customers, Amazon has been able to offer services that meet their customers’ needs. Lastly, Amazon has successfully differentiated its pricing through reasonable pricing and price lining, making the same products that are offered by their rivals have different pricing for Amazon’s customers to choose the most appropriate for them (Jutamat et al., 2019).

Various strategies have been effective for Amazon’s e-commerce. The main is online provision of product information. Online product information provision has been effective since most customers currently use various devices to access online services and so do not have to travel to Amazon’s physical stores to check products that they desire (Sadq et al., 2018). The online viewing/reviewing of products is embraced by consumers since there are no transportation costs incurred (Ritala, Gonam & Wegmann, 2015). Similarly, the online platform offers consumers easy access to information regarding a variety of products and products’ possible substitutes (Sabitha, n.d.). Similarly, price discrimination has been effective to Amazon. Isckia and Denis (2017) point out that customers are presently able to check products’ pricing and purchase the products they consider affordable to them.  Amazon has bolstered this approach by designating stores in various geographical locations across the world. The stores function to ensure that Amazon’s products are distributed to Amazon’s customers on time.

Amazon as Model for Supply Chain Integration

From the foregoing, Amazon sets a good example for other organizations to model in as far as supply chain integration is concerned. Amazon has constantly been developing distribution centres to better its product delivery in the shortest possible time to their customers globally (Jutamat et al., 2019). The company has bettered its oversea shipping within the years of its existence through cargo jets and has acquired a French package delivery firm (Sharanya & Nair, 2018). Amazon has also established a Global Supply Chain by Amazon - techniques of carrying out their freight services and eliminate middlemen parties Additionally, Amazon has lessened the global burden of long logistics processes. According to Isckia and Denis (2017), Amazon has a wholesaler shipping license which, alongside the company’s global supply chain, has meritoriously bettered the company’s e-commerce strategy. Consequently, Amazon has realized rapid company growth and increasing consumer marketplace. Mark (2018) notes that Amazon has remained exceptional in employing its e-commerce and global marketplace supply chain to focus on their consumers and marketplace demands through the developed strategies to meet their customers’ demand. Similarly, the online knowhow has significantly boosted Amazon’s visibility across the world through their supply chain. Lastly, Amazon has remained outstanding in minimizing its supply costs while bettering its products margin. Thus, Amazon has integrated effectively its supply chain, making them a role model to companies.

Conscious Capitalism and Christian Worldview and Amazon's Supply Chain Integration

Conscious capitalism posits that the purpose of any organization is to make the world better, along with providing share value, and those non-competing principles ought to be enacted in all decisions and all levels of the company (Sabitha, n.d.). By this definition, Amazon will have to embrace fair dealings with all their stakeholders with the goal of creating value for all their stakeholders’ spiritual, ecological, financial, and ethical aspects. Similarly, the Christian worldview, which advocates for doing good to all, will impact Amazon by making the company embrace social responsibility practices and ensuring that their products are of reasonable quality, quantity and that reasonable prices are charged. The Christian worldview would also bar Amazon from engaging in some practices and products, ensuring that they deal in practices and products that are only permissible to Christians.

Conclusion

To stay in touch with increasing competition, slimming margins, and a declining amount of differentiation between companies and brands, companies are fast integrating their supply chains. Understanding why and how is the most crucial component of competing in the present globalized marketplace. integrated supply chains enable companies to: compete better on cost by having fewer middlemen and eliminating wasted materials and time; condense their product life cycles by ensuring that they have fewer connections in their supply chains and having tighter coordination between warehousing, transportation, and delivery; and allows establishments to quickly respond to changes within the markets, and claim stakes to new marketplaces for an early advantage. From the case, Amazon serves as a good example of supply chain integration to companies.