Supply Chain Management of Amazon Essay

1620 Words7 Pages
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.
AMZN opened its virtual doors on the World Wide Web in July 1995 as a web based bookseller and today offers Earth’s Biggest Selection according to the company’s 2012 annual report to shareholders. AMZN’s vision statement is to be Earth’s most customer-centric company for four primary customer sets: consumers, sellers, enterprises, and content creators. AMZN has organized its operations into two principal segments: North America and International. Figure 2 below shows AMZN’s net sales for the last three years reported. Figure 1: AMZN Net Sales
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AMZN serves consumers directly via its retail websites, which offers millions of unique products across many categories sold directly by AMZN or via its vast network of third party sellers. Regardless of who is actually providing the product AMZN provides excellent user interfaces, seamless fulfillment, and world class customer service. Similar to Wal-Mart’s everyday low price strategy, AMZN strives to offer its customers the lowest prices possible through low everyday product pricing and shipping offers.
AMZN fulfills customer orders through US and International fulfillment centers and warehouses as well as via digital delivery for media products. AMZN’s multi-tier inventory model also allows for order fulfillment through partner suppliers and third-parties. This enables AMZN to offer a vast product selection to its customers without the risk of large inventory carrying costs. AMZN’s multi-tier inventory model is depicted in figure 2 below. Figure 1: AMZN multi-tier inventory model. Source: Chiles and Dau, 2005
AMZN has competed on selection with traditional retailers since its inception. AMZN is able to support this selection through its multi-tier inventory network. The following is a description of the three tiers or echelons that comprise AMZN’s inventory network. The website www.amazon.com is the consumer interface and owns the
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