Supply Chain Network of Amazon

Running Head: Supply Chain Network
AMAZON INC.
Strategic Supply Chain Management

Supply Chain Network 1
Table of Contents
Introduction......................................................................................................................................2
Analysis of Supply chain Network..................................................................................................2
Levels of supply chain.................................................................................................................4
Conclusion.......................................................................................................................................5
References........................................................................................................................................6

Supply Chain Network 2
Introduction
Amazon is an American electronic commerce and cloud computing company, headquartered in
Seattle, Washington, US. Company was founded in 1994 by Jeff Bezos and today, it stands on
the leading position in terms of internet retailing brand in terms of revenue and market
capitalisation. While in terms of sales, Amazon stands on second position while Alibaba Group
is on the first position. Initially, Jeff Bezos started selling books over this platform and after
reviewing the demand, products were further diversified. Today, almost every item is available
on Amazon and operating in various parts of the globe. Along with the company, Jeff Bezos,
founder and CEO of the organization stands in the list of top 30 richest men across the globe.
Achievements of every organization could be measured with the help of its supply chain
network. Supply chain network should be effective enough in order to attain the desired goals
and objectives. Effective supply chain network is the key to success and growth for every
organization. In terms of enhancing organizational efficiency, productivity and goodwill in the
market, it is necessary to adopt an effective supply chain network.
As Amazon Inc. is a large organization, hence, an effective supply chain network is necessary
with the objective of attainment of desired goals and objective along with the making the flow of
supply of goods and services within the organizations smoother. This report will constitute a
clear understanding regarding the analysis of supply chain network of Amazon Inc.

Supply Chain Network 3
Analysis of Supply chain Network
Amazon’s supply chain management is an effective approach through which competitive
advantage could easily be attained. Organization has adopted customer centric approach with the
objective of fulfilment of its target audience’s articulated as well as unarticulated demands. This
has makes the company more efficient and ultimately, organization has developed an effective
goodwill amongst the target audience. Supply chain network of Amazon includes advanced
procedures such as multi-tier inventory management system, advanced methodologies with the
use of information technology, superlative transportation and huge network of advance
warehouses. Combination of all these procedures forms an effective supply chain management
for Amazon and this network also acts as defensive strategy to maintain the acquired position in
the global market (Ahi & Searcy, 2013).
Apart from this, outsourcing the inventory is another crucial aspect for an effective supply chain
management system. Amazon uses to outsource the distribution of those products which are not
purchased by customers frequently as well as not ordered on immediate delivery basis. Along
with those products, the products whose storing cost is much higher than the profit margin are
also outsourced with the motive of reducing cost. On the other hand, Amazon uses to store the
frequently purchased products in their own warehouses with the objective of making fulfilment
of customer’s needs and desires. In order to gain better outcomes, organization has introduced
fast delivery option especially for the frequently purchased products in relation with making the
goods available quickly for the consumers in comparison with the standard delivery time. In
other words, by segregating its inventory, Amazon is able to be responsive to the customers as
well as cut costs or cut slack where it is needed (Monczka, Handfield, Giunipero & Patterson,
2015). In order to gain competitive advantage as well as to enhance its productivity for fulfilling
its target audience’s demands and wants, organization has adopted following strategies:
 Divides customer segments: Customers are divided on the basis of their chosen method
for delivery. Amazon offers various forms of delivery such as one day delivery, free
super saver delivery, prime customers delivery and first class delivery. This has been
introduced with the objective of fulfilling customer’s needs quickly and making them
realise their importance. All these segments are considered significant for organizational