Integrated Logistics and Supply: A Case Study of Amazon

Running head: INTEGRATED LOGISTICS
Integrated logistics and supply
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INTEGRATED LOGISTICS
Contents
Introduction.................................................................................................................................................2
Discussion....................................................................................................................................................2
Recommendation........................................................................................................................................8
Conclusion.................................................................................................................................................10
References.................................................................................................................................................11
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Introduction
In this report Amazon’s supply chain network and logistic operations is examined and discussed
with focus to understand their different aspects in context to transportation, packaging and
inventory management and warehousing and logistics network design. Further recommendations
are given after evaluation and understanding of aspects for improvement in these supply chain
drivers of Amazon. Lastly discussion is made on use of big data and integration to improve
operational effectiveness at Amazon.
Discussion
Overview of Amazon
Amazon is exceptional e-commerce Retail Company that is ideal in its approach of doing
business and is one of the most globally successful retail firms in the world that was established
in early 1994 by founder Jeff Bezos. It is in online shopping industry which is headquartered at
Seattle, US. Amazon is one of the biggest online retailer in measure by revenue and market
capture; the other one being Alibaba. It is estimated that in future around 85% of overall
products available across the world will be purchasable over Amazon. In 2017, the net income of
Amazon was 3.033 bn USD, operating income was 4.106 bn USD and revenues earned was
around 177.86 bn USD (Martin and Holweg 2017).
The name Amazon was given by Jeff Bezos after getting inspired from Amazon River which is
best defined as being fascinating and unique and projects the trail that Bezos has planned to
follow which is similar to path of river Amazon that is greatest in its kind. It initially began as
online bookstore and now offers a range of wide products that includes different merchandise
items, furniture, food, software, video games etc and recently they have added online video
streaming and music download service through their platforms. They have a large extension in
different markets that comprises North America, Western Europe, Brazil, Japan, India and China
with future plans to extend to South East Asia and Eastern Europe (Chopra and Sodhi 2014).
Amazon is customer centric company that focuses on four major customer types i.e. consumers,
sellers, enterprises and content creators. Amazon continuously works on product development
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and innovation to satisfy customer needs and meet their expectations with their wide variety of
merchandise. According to Bharadwaj (2015) after Kindle, Amazon recently introduced Alexa
which is a cloud based smart voice service. Another of their creative products which is at testing
phase only in parts of America and London are Amazon Locker which was launched in early
2011 and has been extensively extended in 2016. Amazon locker is self service product that was
developed mainly for users who are unable to receive parcels due to stretched working schedules
that makes it impossible to reach to post offices on time. In future Amazon has more plans to
introduce technologically powerful products in market to meet emerging customer needs.
Supply chain & logistics at Amazon
The effectiveness of supply chain of most of the successful companies have relied on their focus
of building and rebuilding supply chains to facilitate better service delivery as promptly and
inexpensively as possible with world class technology and competitive talent that boosts
performance. Along with streamlining of process, high technical and service standards, strong
investment in infrastructure development all these companies have continuously aimed on speed
and cost effectiveness. Recently the focus has shifted more on reducing supply chain costs to
build better effectiveness. Similarly Amazon too focuses on Triple A approach to build
effectiveness through agility, adaptability and alignment to offer sustained competitive
advantage (Monroe 2017). Amazon’s supply chain is one of the robust across the world as it is
firstly Agile which means that Amazon’s supply chain & logistic are capable to react promptly to
any sudden changes of demand and supply or uncertainties. Next it is Adaptable which means
that supply chain of Amazon is greatly adaptive to changes in market structure and approaches.
Lastly it is Aligned which means supply chain of Amazon is capable to maintain alignment of
interests of all their participants in supply network indicating that more optimised the
performance of supply chain better is the maximisation of interest of participants.
This Triple A approach offers Amazon competitive edge and their supply and logistics chain is
composed on two major sections. Firstly they are engaged in customer order cycle where a
customer buys merchandise from Amazon online and they indicate buyer while Amazon is
supplier. However when Amazon orders merchandise that are not stored in their warehouses or
are out of stock then they are engaged in replenishment cycle as buyer (Varma and Khan 2014).
This means that once customer confirms order online then two kinds of processes initiates, if
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