Conduct a value chain analysis of Amazon and associated operations using the digital supply chain model Below
Conduct a value chain analysis of Amazon and associated operations using the digital supply chain model Below. Based upon the outcomes of the analysis, the author will discuss one action that could improve the efficiency and effectiveness of the company.
Digitally Driven Supply Chain
Amazon had one of the most well developed supply chains in the world which included warehouse and transportation management, inbound and outbound shipping, demand forecasts, and inventory planning. Amazon’s supply chain was fast paced and tightly integrated and minimized the need for human intervention by adopting advanced technology. For instance, whenever a customer ordered books online, the order-management system immediately communicated with the inventory and warehouse-management systems to find the optimal distribution center to fulfill the order and in less than a minute, the customer was informed about the delivery date of the items. The supply chain team at Amazon focused on customer experience and vendor management. This involved daily planning, analysis, metrics and communication, and managing operational relationships with vendors, fulfillment centers, and retail teams. In order to deliver products to customers quickly, Amazon installed robots in its warehouses. The robots cut out much of the hard picking work and brought items directly to workers, who then processed the orders. Though using robots was a costly investment, it resulted in cost advantages over time by streamlining operations and increasing the number of items being processed and shipped through Amazon warehouses. Amazon depended on shipping carriers such as UPS, FedEx, and USPS for delivering products to customers. The company also used drop shipping47 wherein manufacturers shipped goods directly to consumers on its behalf.
Amazon boasted of one of the most advanced fulfillment networks in the world with large storage capacities. As of July 2015, Amazon managed about 149 active distribution centers the world over. In addition to warehouses, Amazon built sortation centers which took already packed orders from nearby Amazon fulfillment centers and sorted them according to the zip codes before sending them to shipping carriers for delivery to Amazon customers. Amazon had 19 sortation centers in the US as of November 2015.
