Understanding Operations, Logistics, and Supply Chain Management

This essay provides an in-depth understanding of operations, logistics, and supply chain management. It covers topics such as managing quality, location and layout, and the triple bottom line theory. The case study focuses on Amazon, a multinational technology company, and discusses various strategies and theories for effective management.

Understanding
Operations, Logistics
and Supply Chain
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
Main Body.......................................................................................................................................1
Managing quality....................................................................................................................1
Location and Layout..............................................................................................................4
Triple Bottom Line theory......................................................................................................6
Recommendations..................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Management of operation, Logistic and supply chain is essential for an organisation to
maintain continuous and smooth flow of operations and function. Logistic and Supply chain
management is essential to maintain a balance and coordination in demand and supply level
where as maintenance of quality in operation and product is also necessary to maintain the cost
efficiency and satisfy the customer (Gunasekaran, Subramanian and Ngai, 2019). The
organisation selected for current essay is Amazon which is a well known multinational
technology company situated at Seattle, Washington, US. Amazon deals in e-commerce, digital
streaming, cloud computing, and artificial intelligence. This essay includes a description about 2
core areas of a business i.e. its location and layout together with managing quality. Various
supply management and quality management theory like TQM and six sigma are also discussed
in this essay. At last, a description about triple bottom line and recommendation are also form a
part of this essay.
Main Body
Management of a business organisation is a crucial activity that includes many strategic
decisions and polices to manage the free flow of supply and high quality level within
organisation and in its product to cater larger section of customers (Sweis, Obeidat and Kanaan,
2019). Amazon is a multinational organisation and world’s biggest online retailers that is selling
a vast number of products and services at global level that includes, books, clothes, consumer
electronics, music, games, movies, etc. With the enhancement in number of competitors in e-
commerce and other sector it become necessary for Amazon to maintain high quality level and
efficient supply chain network. The various theories and strategies that can be used by Amazon
to have better business position in market and to improve its operations and supply chain
management are described below:
Managing quality
Managing quality is important and essential for all organisation to ensure production or
supply of high quality products and services through eliminating and reducing defects and
incorporating continuous improvements and required changes in the operations and system of an
organisation. Quality management is basically a process or act of overseeing and monitoring all
business activities and task in order to maintain and achieve desired level of excellence
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(Stamatis, 2019). It basically includes determination of policy, proper creating and executing
quality planning and having proper quality control measure for its continuous improvement.
Amazon is operating at global level and encounter with a high level of competition, in such
conditions proper quality management and improvement is the best way to maintain its success
and support its business operation. A critical review of strategies and theories relevant for proper
management of quality and supports operations of Amazon are discussed below:
Total quality management
It is long term management approach that insures continuous improvement in quality
through facilitating an integrated approach where all member of an organisation participate
effectively for improving process, services, products and overall culture of workplace and
organisation (Bouranta and et. al., 2019). The main principles of TQM that must be complied
and adopted by Amazon to ensure effective quality management and continuous improvement:
Customer focus- The most crucial function of TQM is to have customer focus as they are
last and ultimate consumer of products and services delivered who decide the quality level. Thus,
this principles emphasis on the fact that all the strategies and plans should be made by Amazon
while considering needs and demands of customers in order to align with its customers. Further,
Amazon should also make efforts to research and develop understanding about expectations and
needs of customers so that better quality and more suitable product can be provided to customers
to enhance their satisfaction level.
Integrated system - The TQM approach emphasis on proper integration and coordination of
different functional unit of an organisation in order to achieve excellence in all parts of
organisation. Adoption of this principle of TQM by Amazon ensures better interconnection
across various process and function that facilitates better understanding of quality policies and
other standards by all functional unit of organisation thus, helps in achievement of excellence in
quality and ensures continuous improvement.
Employees involvement- Effective participation and involvement of employees in decision
making and other operations ensures effective solution and timely addressing of quality related
problems. Thus, this principle of TQM is useful for Amazon to bring more employees
empowerment and engagement that enhance the creativity and innovation level, therefore ensure
improvement in quality for Amazon (Sweis, Obeidat and Kanaan, 2019).
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Fact- based decision making- TQM also emphasis on fact based decision making that
improves the viability and reliability of strategise made. Amazon should also review its past facts
and record before making new strategies so that better decision and policies can be made in the
basis of past experience.
Communication- It is important factor that plays crucial role in improvement in quality
through ensuring proper transfer and flow of information within the organisation. Use of this
principle ensure awareness about plan, strategies and methods of continuous improvement of
Amazon that lead to better motivation of employees and also improve their morale which ensures
improvement in quality (Nguyen and Nagase, 2019).
Thus, on the basis of above discussion it can be evaluated that TQM approach and strategy
is helpful for Amazon to have continuous improvement in its quality through ensuring a proper
integration among all the activities of business together with effective communication. Further,
fact based decisions making also reduce and eliminates the chance of defects and error that
enhance viability of its decisions and ensure improvement in quality.
Six Sigma
It is considered as a quality program or approach that aim at improving experience of
customers and also facilitates reduction in overall cost through ensuring efficiency in its
operation and reducing chance of error. Use of Six sigma approach by Amazon facilitates a
technique and tool that ensures improvement in quality through making process more smooth
and reducing wastage (Stamatis, 2019). The core principles of Six sigma that ensures
improvement in quality and also enhance competitive strength and profit margin of Amazon
through ensuring reduction in wastage are provided below:
Define- The first step of six sigma is defining the actual level of performance that an
organisation wants to achieve. For that purpose Amazon can conduct regular market research to
evaluate the changes in needs and demands of customer so that a significant level of quality that
is required to satisfy customers can be set (Six Sigma Principles, 2020).
Measure- The next step of six sigma is to measure current level of performance. This
step facilitates a better opportunity for Amazon to review its current operations so that the
expected loop holes can be identified. High storage cost and inefficiency in product quality are
identified by Amazon as their issues.
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Analysis- After the identification of issues, main cause that has facilitated and created
that issues is analysed (Henrique and Godinho Filho, 2020). The main reason behind high
storage cost is lack of balance between supply and demand and inefficiency in quality is lead by
improper evaluation of market trend.
Improve the process- It is the stage where actual action are taken to resolve and address
the faced issues. Fir instance, Amazon can use of more effective inventory management tools
like LIFI, FIFO or EOQ to reduce its warehousing cost. To improve the efficiency and quality of
product supplied better market analysis and research can be made by Amazon to ensure better
understanding about current trend.
Control- It is last step where a check and monitoring is kept on all business activities to
maintain their efficiency level. Effective control and monitoring measures must be taken by
Amazon as it ensures tummy detection of loop holes together with better timely corrective action
to maintain the improvement in quality level (Singh and Rathi, 2019).
Thus, on the basis of above discussion it can be evaluated that six sigma approach is
suitable for Amazon to have improvement in its quality through facilitating better analysis of
problem and also ensures timely corrective action that reduce chances of defects and error in
quality.
Location and Layout
Location and layout is an important aspect for organisations as these facilitates smooth
and steady flow of goods and services from one place to another. Location and layout in e-
commerce enables firms in effective supply and delivery of products to its end-user (Pedrielli
and et. al., 2016). Location facilitates e-commerce organisation to place its their products online
effectively and efficiently so that customers can able to buy its products and services at one
click. Layout encompasses about how e-commerce organisations can manage its supply chain,
how can it promote its production in order to achieve its objectives. Locations refers to various
strategic decisions that require huge financial investment and also these are one time
investments. E-commerce organisation required to focus on suitable online locations through
which they can able to attract high number of customers. Layout in e-commerce refers to supply
chain and distribution network through which these organisation can deliver their products to
end-user on right time at right place. Amazon.com is one of leading e-commerce multinational
organisation which serves it products across worldwide. It highly important for firm to cultivate
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feasible and sustainable layout facility in terms of effective supply chain management. As this
enables organisation to produce and deliver its products/services in most-cost effective manner
with purpose of satisfying consumer’s demands and needs. There various supply chain
management theories which can be carried out by Amazon.com in order to generate effective
supply network.
1. Channel Coordination Theory: this supply chain management framework is concern
with enhancing performance of supply chain through proper alignment of plans and
mission goals of e-commerce organisations. This particular framework is highly
emphasise on inventory managements and ordering decisions. This theory include
various stages which required to be coordinated such as parts suppliers, transportation,
manufacture, retailers. Although, this theory includes asymmetric information’s,
paradigms manufacturing, mass customization, short product life-cycle, outsourcing.
Through rapid development of e-commerce field, manufacturers and retailers are
applying strategies related to branding differentiation and profits sharing. This is done in
order to improve channel coordination and supply chain performance (Halldórsson,
Hsuan and Kotzab, 2015). In context of Amazon, company can carried out this theory as
it is useful in reducing overall costs and save times. Amazon has implemented strong
supply chain strategies with help of using innovative technology. Through this company
has achieved rapid growth in few years.
2. Customer Relationship Management Theory: this theory of supply chain is customer
oriented. This particular theory is associated with how an organisation whether commerce
or e-commerce can enhance its customer relations. There are seven ‘R’ of CRM model
which contribute in supply chain such as right product, right customers, right place, right
time, right quantity, right condition and at right cost. This theory includes chain of
various stages through which people get their products and services. Such as store front
and field service or online store service, sales, marketing, customer service and support.
Through effective supply chain e-commerce company can able to attract and retain its
loyal customers. This theory enables organisation to determine and compile customer
trends on basis of their purchasing history on online platforms (Miller, Ganster and
Griffis, 2018). This provide better ways to e-commerce organisation to communicate and
interact with its end-users and can able to modify their supply chain to enhance retention.
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In case of Amazon, this theory helps firm in improvising demand and supply planning,
enables to establish self service portals, enhance after sales services, reduce costs
expenditure. Moreover, it helps in organising and targeting effective campaigns in order
to use centralized customer data. By applying this theory company can satisfy its large
range of customers by delivering them better handle product and add value to their
money.
Triple Bottom Line theory
Triple Bottom Line theory refers to framework or mechanism suggests or justify that each
organisation must look after its social and environmental responsibility. This model consist of
three elements economic profits, social responsibility (people), and last environment protection.
This framework is carried out by organisation in order to evaluate their performance in order to
cultivate high business value. In context of Amazon.com, company required to focus on these
elements in order to sustain its competitive advantage and its brand image within market (Glavas
and Mish, 2015).
 Environment protection: this element of TBL associated with natural capital bottom
line that refers to sustainable environmental practices. This element is concern with
reducing ecological footprint and consumption of energy. Every organisation has
obligation to no harm to climate through its business activities and eliminate
environmental impact as much as possible. Amazon operates its business at large scale so
it is required for firm to take initiatives in reducing environmental effects. Company can
make use of reproducible packaging in order to reduce waste generated from such
packaging. Through such environmental practices company can become more sustainable
and ethical. Also, Amazon taking steps to reduce carbon through its shipments.
 Social responsibility: this element relates with people, social equity, stakeholders etc.
this component focuses on that organisation must take care of its labour workforce and
shareholders by organising fair and beneficial business activities. Amazon has organised
various corporate social responsibilities programs and initiatives that support local
communities (Svensson and et. al., 2018). Company has take initiative with feeding
America also it has donated numerous electronic devices to schools under program of
Amazon’s Device Donation Program. Amazon has indulge in various activities to
support, educating and empowering workers.
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 Economic profits: this component is associated generating profits by reducing cost of
inputs in order to earn higher revenue. Organisation required to seek profit aspect as
economic benefits which can be enjoyed by society. Amazon is a large organisation and
in order to earn higher profits company can work on its quality measures by improving its
shipments, delivery. Also, firm can work on its cost efficiency.
Recommendations
In accordance with above discussion following recommendations can be made for Amazon
to have improvement in its quality and other business operations:
 Use of Total quality management theory is recommended for Amazon as it facilitates
customer focus that ensures delivery and supply of suitable product that meets customer
expectation. Further, proper communication and involvement of employees is also
offered by TQM approach that enhances viability of decision and reduce the chances of
chaos and confusion which helps in reducing cost and avoid unnecessary wastage. Thus,
use of TQM approach is suggested for Amazon as it ensures improvements in its quality
and business operation through fact based decision making.
 Customer relationship management theory is recommended to Amazon.com. Through
implementing this theory in its supply chain Management. Company can able to enhance
its customer relations. This theory enables Amazon to keep its shipments and delivery
services effective by ensuring that it has efficient procurement of raw material,
warehousing, manufacturing and distribution. This model helps firm to evaluate sales
force automation, marketing automation in its supply chain network. By this company
can provide better customer experience and after sales services through offering right
goods on right place to right customers. Also, this will enhance productivity and
profitability level of company.
CONCLUSION
On the basis of above essay it can be concluded that proper mangent of operation, logistic
and supply chain is important for an organisation to have smooth function and improvement in
its quality. Further, it can be summarised that use of TQM and Six Sigma strategies and theorise
are useful for an organisation to improve its quality and overall performance. Further various
strategies are also used to ensure effective supply management. Further, it can be summarised
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that use of triple bottom line is made to fulfil and meet social, economical and all other
responsibility to remain sustainable.
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REFERENCES
Books and journal
Bouranta, N and et. al., 2019. The key factors of total quality management in the service sector:
A cross-cultural study. Benchmarking: An International Journal.
Sweis, R., Obeidat, B. and Kanaan, R. K., 2019. Reviewing the Literature on Total Quality
Management and Organizational Performance. Journal of Business & Management
(COES&RJ-JBM). 7(3). pp.192-215.
Nguyen, T. L. H. and Nagase, K., 2019. The influence of total quality management on customer
satisfaction. International Journal of Healthcare Management. 12(4). pp.277-285.
Stamatis, D. H., 2019. Six Sigma fundamentals: A complete introduction to the system, methods,
and tools. CRC Press.
Henrique, D. B. and Godinho Filho, M., 2020. A systematic literature review of empirical
research in Lean and Six Sigma in healthcare. Total Quality Management & Business
Excellence. 31(3-4). pp.429-449.
Singh, M. and Rathi, R., 2019. A structured review of Lean Six Sigma in various industrial
sectors. International Journal of Lean Six Sigma.
Gunasekaran, A., Subramanian, N. and Ngai, W. T .E., 2019. Quality management in the 21st
century enterprises: Research pathway towards Industry 4.0.
Sweis, R., Obeidat, B. and Kanaan, R. K., 2019. Reviewing the Literature on Total Quality
Management and Organizational Performance. Journal of Business & Management
(COES&RJ-JBM). 7(3). pp.192-215.
Glavas, A. and Mish, J., 2015. Resources and capabilities of triple bottom line firms: going over
old or breaking new ground?. Journal of Business Ethics. 127(3). pp.623-642.
Halldórsson, Á., Hsuan, J. and Kotzab, H., 2015. Complementary theories to supply chain
management revisited–from borrowing theories to theorizing. Supply Chain
Management: An International Journal.
Miller, J. W., Ganster, D. C. and Griffis, S. E., 2018. Leveraging big data to develop supply
chain management theory: The case of panel data. Journal of Business Logistics. 39(3).
pp.182-202.
Pedrielli, G. and et. al., 2016, December. Hybrid order picking strategies for fashion E-
commerce warehouse systems. In 2016 Winter Simulation Conference (WSC) (pp. 2250-
2261). IEEE.
Svensson, G. and et. al., 2018. Framing the triple bottom line approach: direct and mediation
effects between economic, social and environmental elements. Journal of Cleaner
Production. 197. pp.972-991.
Online:
Six Sigma Principles. 2020. [Online] Available Through:<
https://www.graphicproducts.com/articles/six-sigma-principles/ >.
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