Supply Chain Management of Amazon Inc.

Running Head: AMAZON INC. 0
Supply Chain Management
Student Details
12/7/2018

Amazon Inc. 1
Executive Summary
Supply chain is an important factor and plays an important role in the growth of e-commerce.
This report will discussed about the supply chain management of the Amazon and how it
affected the business of the company and contributed in the growth of the Amazon. Due to
the internet technology now every organization wants to reach to the millions of customers
over the internet and sell their products to them. Amazon in cooperated its business in 1996
with the pull strategy and with the time and increase in its business, Amazon has expanded its
business strategy to push-pull. An effective supply chain management helps in reducing
inventories, sorter life cycles of products, and service delivery to the customers. Amazon
works on the main strategy of high responsiveness to the customers in order to achieve high
customer satisfaction. To achieve this goal, Amazon is enhancing its relations with its
partners through multi-tier inventory strategy. There are also some recommendations for the
company that includes improvement in the transportation system and bullwhip effect. This
paper is presenting the supply chain and logistics information of Amazon, problems in the
logistics and supply chain of the company, and the recommendations and solutions to
eliminate those issues.

Amazon Inc. 2
Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Background of Amazon.........................................................................................................3
Introduction of Logistics and Supply Chain..............................................................................4
Supply Chain Strategy of Amazon.....................................................................................5
Problems in Logistics and Supply Chain Management of Amazon..........................................7
Transportation........................................................................................................................7
Order Sourcing.......................................................................................................................7
Solutions to Mitigate the Issues.................................................................................................7
Transportation........................................................................................................................7
Technology.............................................................................................................................8
Recommendations......................................................................................................................8
Conclusion..................................................................................................................................9

Amazon Inc. 3
Introduction
Development in internet has brought a dynamic change in the shopping culture of people and
the business operations around the world. Initially, supermarkets and the retail shops were the
best practises for consumers to buy products, but due to development in the technology in
recent years have created a new online platform for retail stores from where consumers can
easily buy a product with the help of internet1. Online shopping is establishing itself as the
alternative tool for marketing. In order to achieve success, e-retail companies require an
effective strategy supply chain management2. Different companies have their different supply
chain for sorting and producing goods. A proper management of supply chain is needed for
maximising the benefits of an organization3. An effective supply chain management ensures
that the right product is available at the right time, at right price, and at the right place.
Features that define effective supply chain management include product delivery, supplier
relationship, efficient inventory management, and aggregate planning4. Amazon is one of the
biggest e-retail companies that has the best supply chain management and is considered
among one of the most successful e-retail companies worldwide5. This paper will be
discussing background of Amazon Company, introduction of logistics and supply chain of
Amazon, problems faced by Amazon in their logistics and supply chain management, and
solutions, recommendations and suggestions to eliminate the issues.
1 Darrell K. Rigby, The Future of Shopping (12 December 2011) <https://hbr.org/2011/12/the-future-of-
shopping>
2 SmartInsights, How to structure a successful e-retail strategy (04 August 2014) <
https://www.smartinsights.com/ecommerce/ecommerce-strategy/online-retail-strategy/>
3 David Frederick Ross, Introduction to Supply Chain Management Technologies (CRC Press, 2016)
4 John J. Vogt, P. W. C. de Wit, Business Logistics Management: Theory and Practice (Oxford University Press,
2005)
5 Tara Johnson, How the Amazon Supply Chain Strategy Works (25 July 2018) <
https://www.cpcstrategy.com/blog/2018/07/amazon-supply-chain/>