Amazon Supply Chain Essay

Retail super-giant Wal-Mart has fought its way to becoming the world's largest company. Wal-Mart’s legendary supply chain technology has allowed them to break the three-day barrier that some economists in the eighties felt that it was unbreakable. In other words, Wal-Mart is often able to replenish items on the Wal-Mart shelf in less than three days – not from the central warehouse to the shelf, but from the manufacturer to the shelf. With quick and reliable 2-day turn around, Wal-Mart is able to maintain lower levels of inventory and still meet customer demand. These lower inventory levels result in either a reduced floor plan with lower carrying costs and lower interest expense – or a greater diversity of products on the store shelves.

It can be served as a competitive advantage, which attracts more customers shifting from Amazon’s online retailer competitors into buying their products, thus increasing the market share.

Also, Amazon has emphasized on building “several distribution centers around the world to hasten deliveries”(Hof and Himelstein, 1999). Coupled with its software it provides a “laser-like focus on the buying experience”(IT Business Edge, 2012). Such a system and service is what draws customers towards Amazon and subsequently retains them.

Amazon has earned a great reputation in customer service for allowing customers to shop without face to face, avoiding talking to a customer’s service representative agent on the phone, everything it done online. Sales clerk does not exist, everything is ordered with a click of the mouse, and arrives extremenely quick in the mail (Cohen, 2009). Amazon at interval has gotten involved with the customers when they can have too. According to Green, H. (2009), “Amazon stands out most markedly from other companies, and helps explain how the company earned the No. 1 spot on Business Week’s customer service ranking this year”( para. 1).

Amazon.com has successfully managed to make its customers to feel that anything they could possibly want could be found on their website. Additionally, its products are marketed at a competitive price. Another important factor is their speedy delivery with their usage of UPS and FedEx (United States) and Royal Mail (United Kingdom). The company also caters for people that prefer online shopping with extra services such as Amazon Prime - a service with a yearly payment, customers are eligible for free next day delivery. Even though Amazon.com is known to be an online seller of most things, it still excels in its original market of book selling. Evidence of such is

Reorders are placed at the time of review (T), and the safety stock that must be reordered is:

In the process of developing its network to support its services, Amazon.com has built out an infrastructure that includes 145 warehouses around the world (84 in the United States, 29 in Europe, 4 in Canada, 10 in Japan, 15 in China and seven in India) that together account for more than 40 million square feet of space. Additionally, Amazon has made significant investments in material handling systems, including the acquisition of Kiva Systems for $775 million in 2012, which is working now as an Amazon subsidiary designing robots, developing software and other hardware that has been used in the distribution facilities of companies such as The Gap, Office Depot, and Staples (Lieb, 2014).

The Computer Hardware consists of dozens or more computers linked together by data communications hardware (Kroenke 11). Software roles would consist of hundreds of different programs that coordinate communications among the computers, along with other programs that help to streamline the process of picking, packing, and shipping products from the warehouse (Kroenke11). The system may store Data relating to customers’ orders, customers profiles from previous orders, product information along with inventory, among other facts relating to the shipping process. Hundreds of different Procedures are followed by customers, warehouse employees along with the shipping companies (Kroenke 11).The roles played by People include not only the users of the systems, but also those who operate and service the computers, also those who maintain the data along with those who support the networks of computers (Kroenke 11).

Retail super-giant Wal-Mart has fought its way to becoming the world's largest company. Much of their success can be attributed to providing a vast assortment of products at exceptional prices all under one roof. Wal-Mart began operations in 1964 and has since become the world leader in retail. Today, Wal-Mart is visited by 138 million customers per week at their 4,750 stores. Wal-Mart operates under four basic rules in order to satisfy such a large number of customers:

Providing customers more of what they want - low prices, vast selection, and convenience - Amazon continues to grow and evolve as a world-class e-commerce platform. “When you order products from Amazon, it arrives on your doorstep in two days, but people don’t think about how.” said George Prest, CEO of a logistics trade group.

Every company has their own supply chain in order to sort or produce goods. However, the company needs to manage supply chain to maximize its highest benefits. By having effective supply chain management, the company can ensure that the right product or service will be available at the time to the right place and at the right price (Kamal 2007). Amazon is one of the companies that have best supply chain practices in order to respond high level of responsiveness for the customers. Thereby, this paper explains about Amazon Company, analysis of Amazon’s supply chain, recommendations and barriers to implement will be discussed.

This paper reviews the supply chain management practices of Amazon.com (AMZN) and highlights findings in the framework of a Strengths – Weaknesses – Opportunities – Threats (SWOT) framework.

Amazon must also ensure that its products are delivered in a timely fashion, given that speed of delivery is yet another significant competitive component of being an online retailer. Amazon has a special algorithm "to determine the best shipping route and method for each item to make sure the consumer good arrives on time as its specified location" (Master 2012). However, the use of this system is not purely

In 2000, Amazon and Toys-R-Us entered into a symbiotic agreement that would benefit both corporate entities. Both companies had recently had unimpressive fiscal years due to differing issues. Toys “R” Us struggled with poor order fulfillment. Although they were equipped with enough merchandise, other issues kept them from being able to get orders to customers in a timely manner; especially during the busy holiday season. Conversely, Amazon was forced to write off $34 million because of a miscalculation in inventory and had orders that could not be honored (Ouchi, 2004). Following these debacles, both organizations felt that joining

Jeff Bezos looked out the open doorway of his office and stared at the “problem of the day,” which his assistant Sarah had posted on the whiteboard in the hallway. It was Friday, September 13, 2002, and the whiteboard read: ”You have 10 bottles with 100 pills each in them. In nine of the bottles, each pill weighs 10 mg. In one bottle, each pill weighs 9 mg. These pills are poisonous. You have a digital scale that reads out in mg. Can you determine which bottle contains the poison with only one weight measurement?” Bezos—founder, chairman, and CEO of Amazon.com—normally enjoyed trying to solve these brainteasers. But today his mind