MNG03218 - Amazon SCM System Project: Development, Maintenance

This report presents a proposal for implementing a Supply Chain Management (SCM) system within Amazon, aiming to improve sales revenue and customer relationships. It begins with an overview of Amazon's organizational background, including its internal strengths and weaknesses, as well as external opportunities and threats, analyzed through SWOT and PESTLE frameworks. The report identifies the lack of a robust SCM system as a problem and highlights the potential benefits of implementing one, such as increased efficiency, optimized shipping, risk mitigation, and improved customer service. The proposed SCM implementation follows the seven steps of the System Development Life Cycle (SDLC): planning, analysis, design, development, testing, implementation, and maintenance. The report also addresses project management, change management, and risk management considerations for the successful deployment of the SCM system within Amazon. This document is available on Desklib, a platform offering a wide range of study tools and resources for students.

Running head: SCM SYSTEM PROJECT DEVELOPMENT AND MAINTENANCE
Letter to Sponsor
Mr Jeff Bezos
CEO (Chief Executive Officer)
410 Terry Ave N, Seattle, WA 98109, USA
Washington, United States
Amazon is considered to be a leader in the online industry which focus on some of the business
issues. SWOT analysis mainly tends to identify some of the internal factors like strength and
weakness while the external factors tend to highlight opportunities and threats. The main focus
of this organization is all about providing large number of resources for selection of online items.
Amazon focuses on combining with capabilities as it comes up with some skilled and
professional employees which come up with negotiation power. Amazon is aware of different
kind of suppliers in the present market.
I am delighted to have an opportunity for presenting proposal report which is all about SCM in
Amazon. From present analysis, the main focus is all about implementing SCM in Amazon
which comprises of activities related to sales, data analysis. Apart from this, it focuses on
providing on-demand SCM solution for Amazon. It is expected that six months will be needed
for implementing SCM in Amazon. The whole project will be divided into seven steps of SDLC
that are planning, analysis, design, development, implementation, maintenance and lastly testing.
I am waiting for the feedback along with discussion on this proposal report of new SCM in
Amazon
Regards,

1SCM SYSTEM PROJECT DEVELOPMENT AND MAINTENANCE
SCM System Project Development and Maintenance
Name of the Student
Name of the University
Author Note:

2SCM SYSTEM PROJECT DEVELOPMENT AND MAINTENANCE
Executive Summary
The following report mainly deals with implementation of SCM (Supply Chain Management) in
Amazon. This particular trend aims to highlight the fact that how e-commerce industry can easily
improvise their revenue in sales along with maintaining relationship with their customers. This
particular report tends to focus new SCM which is being implemented in Amazon. This
particular tends to focus on the background of Amazon and providing luxury items and services
to its customer on world-wide platform. The report aims to focus on lack of SCM (Supply Chain
Management) along with comparing with Customers on customers. It tends to affect majority on
the sales revenue of Amazon.

3SCM SYSTEM PROJECT DEVELOPMENT AND MAINTENANCE
Table of Contents
Introduction..........................................................................................................................5
Discussion............................................................................................................................5
Organization Background................................................................................................5
Internal and External Environment of Amazon...............................................................6
SWOT analysis of Amazon.........................................................................................6
PESTLE analysis.........................................................................................................8
Identification of both Problem and Opportunity.............................................................9
Seven Steps of SDLC......................................................................................................9
Planning Stage...........................................................................................................10
Analyzing phase.........................................................................................................11
Design phase..............................................................................................................11
Development phase....................................................................................................12
Testing phase.............................................................................................................12
Implementation Phase................................................................................................12
Project Management, Change Management and Risk Management.............................13
Project Management..................................................................................................14
Change Management.................................................................................................14
Risk Management......................................................................................................14
Conclusion.........................................................................................................................14
References..........................................................................................................................15

4SCM SYSTEM PROJECT DEVELOPMENT AND MAINTENANCE
Introduction
The following report mainly deals with evaluation with the ability for development of a
system. It is all about implementation proposal for an information system (Supply Chain
Management) which makes use of system approach (Winemiller et al. 2016). The proposal
mainly targets a sponsor for Amazon which requires to organization to be easily convinced about
the perfectness and effectiveness of SCM. Amazon comes up with good customer relationship
management for establishing the brand image of the organization. It comes up with efficient
network of both suppliers and distributors (Vecchio, Benfratello and Sabet 2018). Amazon aims
to provide huge variety of products which provides both advantages over traditional retailers.
Amazon aims to implement some kind of software technology which is very difficult to imitate
as it needs funds.
In the coming pages of the report, an idea has been provided concerning internal and
external environment of Amazon. Also, an identification has been done concerning problem and
opportunity for this organization. The seven steps of SDLC (Software Development Life Cycle)
has been provided in brief. The last section of the report mainly deals with project management,
change management and risk management for this SDLC project in Amazon. In the report, a
discussion has been provided concerning detail activities and steps for guiding the
implementation of SDLC project in much better way. It also highlights various kind of
advantages and disadvantages of any alternative method for this project. The last section of the
report deals with the idea of mitigating risk, reducing overall cost and understanding the business
needs along with good quality.

5SCM SYSTEM PROJECT DEVELOPMENT AND MAINTENANCE
Discussion
Organization Background
Amazon aims to provide one of the largest selection of items for items on online platform
by taking consideration of IT system and customer service. Amazon can do this just as a result of
organizational capabilities (Demir, Esbah and AKGÜ 2016). Amazon has many skilled and
professional employees which will help the organization in maintaining negotiation power.
Amazon is very much informed about the current suppliers in the market. Suppliers are
considered to be an important parameter in Amazon as it tends to heavily depend on efficient
supply to its customers (D'Agostino 2018). So, Amazon should be very focused on maintaining a
healthy relationship with them. Team of Human resource are well equipped so that they can
easily contribute to organizational capabilities.
Amazon has cost-effective logistics along with outbound logistic system which is
considered to be a part of it. It mainly tends to organizes shipping based services which are
needed for avoiding any kind of involved cost (Khan, Alam and Alam 2015). It mainly
outsources all of its shipping services so that they can avoid any kind of issues related to cost.
All the products of Amazon are distributed, and product shipping is mainly done by external
contractors that is DHL. It makes the whole thing possible for reducing any kind of overhead
cost to be very much low (Cao 2018). It tends to provide the organization with an advantage for
understanding cost over traditional retailers that is Amazon.com. It is mainly done so that they
can sell their products at much lower price.
Internal and External Environment of Amazon

6SCM SYSTEM PROJECT DEVELOPMENT AND MAINTENANCE
SWOT analysis of Amazon
SWOT analysis of Amazon mainly tends to highlight the strength which is used by the
organization so that it can easily overcome its weakness (Wang and Gan 2017). Along with this,
it tends to highlight certain number of ways by which threats in business can be tackled. It is
mainly done so that they can easily maximize their benefits from the present opportunities in the
market.
Strength: Amazon comes up with huge number of strength in the ecommerce business
which tends to depend on all the strength. SWOT analysis model focus on some of internal
strategic factors by which the business can grow (Bennett Ravikumar and Paltán 2018). There is
large number of strength of Amazon like strong brand, extensive mix of product and high
amount of revenue in whole ecommerce industry.
Weakness: Amazon aims to address the present weakness along with challenges which
are limited to e-commerce industry. There is various aspect to SWOT analysis which tends to
highlight the internal factors (Diehl and Bishop 2017). It aims to create huge amount of damage
for the growing business. Amazon comes up with different kind of weakness like easily imitable
business model, limited penetration in growing e-commerce industry, presence of brick and
mortar.
Opportunities: There is large variety of opportunity for Amazon.com. The external
strategic factor can easily help the organization in growing is business. Amazon comes up with
huge number of benefits in the present e-commerce market like penetration in the developing
markets, expansion of brick and mortar business (Kantor and Streitfeld 2015). Amazon should
boast on certain number of measures for reducing counterfeit sales.

7SCM SYSTEM PROJECT DEVELOPMENT AND MAINTENANCE
Threats: Amazon tends to address huge number of threats in the present e-commerce
industry. There is some external strategic factor which can reduce the business performance. It is
taken to be into consideration for understanding the SWOT analysis (Wingfield et al. 2018).
Amazon tends to address huge number of threats in the present e-commerce industry like
cybercrime, imitation and lastly competition from large firms.
PESTLE analysis
PESTLE analysis is a well-known model which is a tool needed for identifying the
external factors which can shape the present condition (Smith, Rupp and Offodile 2017). It is
considered to be an important factor for an organization like Amazon for understanding the
various challenges. By the help of this tool, Amazon can easily identify various kind of threat
and opportunities associated with it.
Political Factors: Amazon tends to operate along with the side of political influence.
There is large number of political factors for Amazon like political stability for developed
stability, support from government bodies and lastly increasing efforts on cyber-security.
Economic factors: Amazon aims to focus on economic stability for various kind of
developing markets (Brandão, Schoneveld and Pacheco 2018). In the coming future, there will
be disposable income in some of the developing countries.
Social factors: Amazon tends to focus on increasing threat on wealth. Apart from this, it
tends to focus on increasing the number of consumers in some of the developing consumers.
Technological factors: There is large number of growth factors for Amazon like threat
and opportunity due to growing technology (Smith, Rupp and Offodile 2017). There is an
increasing number of IT efficiency and cybercrime in Amazon.

8SCM SYSTEM PROJECT DEVELOPMENT AND MAINTENANCE
Environmental factors: Amazon aims to consider large number of aspect for the
growing demand for external factors like growing technology in various programs, business
sustainability and growth.
Legal factors: Amazon tends to focus certain number of factors for rising product
regulation (Shaw 2018). It also tends to focus on easy important and export regulation, growing
environmental protection.
Identification of both Problem and Opportunity
Marketing is all about providing attention to business target and another kind of segment
that is based on various kind of customer activities. In Amazon, customer is considered to be
forefront (Christopher 2016). Amazon aims to focus on managing their customer relationship
with different customers. There is another kind of problem with can be encountered is that
Amazon does not have SCM for managing its products in warehouse (Fahimnia, Sarkis and
Davarzani 2015). The main function of SCM is to store all the information of the products can be
stored in details in Amazon. SCM in Amazon can provide huge number of benefits like
 Higher rate of efficiency
 Optimization of Shipping option
 Mitigation of various kind of involved risk
 Staying on top of the demand
 Elimination of waste
 Reducing delays
 Improving overall customer service
 Reducing the overhead cost.

9SCM SYSTEM PROJECT DEVELOPMENT AND MAINTENANCE
Seven Steps of SDLC
SDLC can be expanded as System development life cycle can be stated as a well-known
approach which is needed for having proper kind of understanding (Fernie and Sparks 2018). By
the help of SCM system, Amazon can easily improve its business performance.
Planning Stage
Identification of System
The main focus of SCM system in the present market is all about its mainstream. SCM
mainly comes with four kind of category that are operation, collaboration and lastly portal base.
SCM in Amazon is all about combination of daily operation and analyzing SCM in data
warehouse (Boonjing, Chanvarasuth and Lertwongsatien 2015). SCM in Amazon can be used for
identifying delivery of various kind of services and products. The warehouse in charge can easily
keep track of all the required activities.
Analyzing the feasibility of the project
Economic feasibility is all about having an analyzing a large number of things like cost
saving, increasing the overall revenue and another kind of benefits like design cost and proposal
of operating system (Touboulic and Walke 2015). It is an important factor for understanding the
two major components that are cost and benefits involved in it. Technical feasibility is
considered to be an important factor in Amazon.
Cost-Benefit Analysis for implementing SCM System in Amazon
Hardware $ 200,000.00
Software $ 50,000.00

10SCM SYSTEM PROJECT DEVELOPMENT AND MAINTENANCE
Development team salaries $ 200,000.00
Training $ 50,000.00
Total Development Cost $ 500,000.00
Hardware $ 200,000.00
Software $ 200,000.00
Operational Labor $ 50,000.00
Total Operational Cost $ 450,000.00
Approximate salary savings $ 100,000.00
Reduced operating cost $ 490,000.00
Total Benefit $ 590,000.00
Discount Rate Used 5.00%
Project Cost-
Benefit
Analysis
Analysis
Variables:
Discount
Rate Used
5.00%
Annual
Benefits
$
590,00
0.00
Annual
Operational
Costs
$
450,00
0.00
One-Time
Development
Cost
$
500,00
0.00
Year of
Project
0 1 2 3 4 5 TOTAL
S
Economic
Benefit
$0.00 $
590,000
.00
$
590,000
.00
$
590,000.
00
$
590,000.
00
$
590,000.
00
Discount
Rate
1.0000 0.9524 0.9070 0.8638 0.8227 0.7835
PV of
Benefits
$0.00 $561,90
4.76
$535,14
7.39
$509,66
4.18
$485,39
4.46
$462,28
0.44
NPV of all
BENEFITS
$0.00 $
561,904
.76
$
1,097,0
52.15
$
1,606,71
6.34
$
2,092,11
0.80
$
2,554,39
1.24
$
2,554,39
1.24

11SCM SYSTEM PROJECT DEVELOPMENT AND MAINTENANCE
One-Time
COSTS
$
(500,00
0.00)
Recurring
Costs
$0.00 $
(450,00
0.00)
$
(450,00
0.00)
$
(450,000
.00)
$
(450,000
.00)
$
(450,000
.00)
Discount
Rate
1.0000 0.9524 0.9070 0.8638 0.8227 0.7835
PV of
Recurring
Costs
$0.00 $
(428,57
1.43)
$
(408,16
3.27)
$
(388,726
.92)
$
(370,216
.11)
$
(352,586
.77)
NPV of all
COSTS
$
(500,00
0.00)
$
(928,57
1.43)
$
(1,336,7
34.69)
$
(1,725,4
61.61)
$
(2,095,6
77.73)
$
(2,448,2
64.50)
$
(2,448,2
64.50)
Overall NPV $
106,126.
73
Overall ROI
0.0433
Developing a Project Plan
After analyzing the feasibility of the project, there should be a formal plan so that all the
given steps of this SCM project can be documented (Bozarth and Handfield 2019). The plan has
been prepared in such a way that it contains proper schedule, resources and lastly scope.
Analyzing phase
The analyzing phase mainly tends to focus on proper analysis of information by proper
design of SCM system (Dubey et al. 2017). It mainly comes up with two activities like gathering
the requirements of the business and building process diagram.
Gathering Business Needs