Improving Supply Chain Management of Amazon Inc.

Running Head: Supply Chain Management
Amazon inc.
Supply chain Management

Supply chain Management 1 | P a g e
The previous assessment discussed supply chain management of Amazon Inc. and from that
research, certain strengths and weaknesses of company’s supply chain has been evaluated. In the
first assessment, it was analysed that Amazon’s supply chain network is a combination of multi-
tier inventory management, superlative transportation, usage of information technology and big
warehouses to store fast moving goods. Along with this, organization has also adopted advanced
measures for maintaining acquired position in the market. With the help of this supply chain
network, Amazon has acquired the leading position in the online retailing industry. It has also
been evaluated that the existing supply chain management of organization includes various
frameworks but it does not cover the strategies and policies for mitigating the risk and
vulnerabilities of the system. Thus, whenever company faces challenging a challenging situation,
a new system or framework is adopted to face the challenges and issues appropriately in terms of
coping up with the challenges so that the organizational performance does not get affected
(Christopher, 2016).
In this assessment, various strategies will be discussed through which risks and vulnerabilities
involved in the supply chain network could be mitigated so that positive outcomes could be
attained. There are various issues and challenges which every organization faces while executing
organizational operations. Main motive of supply chain network is to reduce cost of production
and fulfil its customer’s demands effectively. Primary functionalities of supply chain network are
to fulfil target audience’s demands along with providing them appropriate choices so that their
requirements could be fulfilled. Effective supply chain management is an effective concept for
enhancing organizational performance along with gaining competitive advantage. Amazon’s
supply chain network includes functionality under which company outsource the distribution of
products those are not purchased by customers frequently. Apart from this, Amazon stores those
products in their own warehouses which are frequently purchased by consumers (Jacobs, Chase
& Lummus, 2014).
In this report, recommendations for improving existing supply chain network will be discussed in
order to gain positive outcomes along with making the organization more effective and efficient.
The main motive of giving recommendations for improving Amazon’s supply chain management
in order to enhance organizational revenues, profitability and performance in the competitive
business environment.

Supply chain Management 2 | P a g e
Recommendations for improving supply chain network of Amazon
One of the best possible methods for improving organizational supply chain network is
utilisation of ERP (Enterprise Resource Planning) software. Following are certain essential
element of ERP through organizational efficiency could be enhanced:
 Automatic purchasing: Controlling and monitoring inventory is essential element of
supply chain network as it provides indication to the purchase department to maintain
sufficient level of stock in order to fulfil target audience’s demand along with fulfilling
sudden demands from consumers. Adaptation of ERP software will help the
organization to make its supply chain network effective. In ERP system, an effective
feature will be implemented which will concur the purchasing system (Stadtler, 2015).
With the help of this system, orders will be placed automatically to the vendors
whenever the stock levels will drop. This will reduce efforts of employees to regularly
keep an eye on stock level, thus, employees’ efforts could be shifted towards other
significant departments to enhance organizational performance.
 Standardize: With the help of standardised ERP system, organizational efficiency could
be enhanced along with saving time and money. Standardised processes are the key
success features for supply chain strategy and standardised form of processes removes
the threat of low quality products and increase accuracy, encourages teamwork and
reduces miscommunication (Monczka, Handfield, Giunipero & Patterson, 2015).
 Creates transparency: Major issues faced under supply chain strategy are waste, fraud
and small glitches could easily fix with an effective ERP system. Main issue that occur
in managing inventory is reconciling the physical count of inventory with software
numbers. Creating transparency in the supply chain management will help the
organization to meet its customer’s demand in an effective manner along with coping up
with the external business environmental conditions (Hugos, 2018).
 Gain data insight: Data and information plays vital role in setting up strategies for
supply chain management. In relation with this, real time reports helps to make supply
chain effective and appropriate. This system helps both users as well as management to
instantly access inventory, production data and purchasing for critical decision making
purposes (Lai & Cheng, 2016).