Amazon's Supply Chain Management: A Comprehensive Analysis

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SUPPLY CHAIN MANAGEMENT ASSIGNMENTS 4
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Executive summary
The assignment is related to the process of supply chain management in the context of most
renowned organisation Amazon. The report is constructed to identify the supply chain
management practices of Amazon. The assignment is providing a brief knowledge regarding
the factors related to supply management operations. With the help of the assignment, a
variety of information regarding supply chain management can be ascertained.
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Table of Contents
Executive summary....................................................................................................................2
Introduction................................................................................................................................5
Supply analysis...........................................................................................................................6
1. Identify and describe key product categories that the procurement department has to
manage...................................................................................................................................6
2. Research the supply market of the company and identify its suppliers (related to key
product categories) as well as their geographical dispersion.................................................6
3. Assess the supply market and importance of sourcing items (or services) (use Kraljic,
1983)......................................................................................................................................6
4. Research supplier selection, evaluation, and development practices and programs.......6
5. Research key supply-related challenges and opportunities in your company and
industry...................................................................................................................................6
Operation issues.........................................................................................................................7
1. Identify and describe your sales market and key customers of the company (including
their geographical dispersion, importance to the company)..................................................7
2. Identify, discuss and evaluate demand forecasting techniques used by the company.
Are different techniques used across the sales market? Why?..............................................7
3. Identity, discuss and evaluate inventory management techniques used by your
company; Are different techniques used for different products? Why?................................7
4. Research demand and inventory management challenges of the company....................7
Information issues......................................................................................................................8
3

1. Research for instances of bullwhip effect as well as their ‘causes’ and ‘remedies’
across the company’s supply chain (use Padmanabhan et al., 2009); discuss how this
impacted the company’s supply chain capabilities................................................................8
2. Identify key information technology tools used across the company’s key supply chain
business processes; explain how these IT tools impacted the company’s supply chain
capabilities..............................................................................................................................8
3. Identify collaborative practices used across the company’s supply chain (in
relationship with both suppliers and customers)? Focus on one practice (for both supplier
and customer side), discuss its implementation, challenges and opportunities, and impacts
on the company’s supply chain capabilities...........................................................................8
Integration issues........................................................................................................................9
1. Develop a comprehensive map of the company’s supply chain (using findings from
tasks a and b)..........................................................................................................................9
2. Using the 9-step framework for design and assessment of supply chain integration,
assess the company’s level of integration (collect relevant evidence for each step).............9
3. Expand your assessment of step 3 drawing on key tenets of the Triple-A Supply Chain,
i.e. agility, adaptability and alignment...................................................................................9
Sustainability issues.................................................................................................................10
1. Identify key procurement and supply chain sustainability practices used by the
company (see Pagell and Wu, 2009)....................................................................................10
2. Assess sustainability implementation and integration across the company’s supply
chain drawing on the triggers model (both internal and external) (use Seuring and Muller,
2008)....................................................................................................................................10
Conclusion................................................................................................................................11
References................................................................................................................................12
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Introduction
Supply chain management is a process in which the firms try to plan or frame strategies
regarding the manufacturing, packaging and delivering the product to the actual consumers.
This process helps in effectively supplying the products to the consumers and help in yielding
profits to the organisation. In this particular assignment, the factors of supply chain
management are discussed in context of Amazon. The primary objective or vision of the
assignment is to prepare a most effective integrated supply chain management model that can
help in enhancing the efficiency of the organisation. Amazon is an online venture that is
responsible for connecting the actual manufacture or suppliers to the consumers. The
designed model will help in enhancing the productivity and potential of the organisation and
will likewise help the organisation enhancing its goodwill in the market. The report is
constructed to identify the supply chain management practices of Amazon. The assignment is
providing a brief knowledge regarding the factors related to supply management operations.
The information provided with the help of this assignment helps in building the information
of the individual regarding the procurement and supply management process.
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Supply analysis
1. Identify and describe key product categories that the procurement
department has to manage
Amazon is a worldwide MNC selling about 3 billion products on an international level.
Procurement department is assigned to handle the operations from purchasing to the selling
of the product. This department is considered responsible for the selling and purchase of the
products. The key products of Amazon that are handled by the procurement department are
electronic supplies, industrial products, fitness products, personal-care items and
household commodities (Ovenden, 2019).
2. Research the supply market of the company and identify its suppliers
(related to key product categories) as well as their geographical dispersion
Amazon is an MNC that undertakes B2B or business to business operations. It helps in
connecting the actual sellers directly to the consumers with the help of its online platform. Its
key suppliers are named as Wellness Corporation, TrueBlue, GoPro and Nautilus
(Ovenden, 2019).
3. Assess the supply market and the importance of sourcing items (or
services)
The Amazon is involved in the process of B2B or business to business operations. It earns by
taking commission from the suppliers selling their products with the help of the website.
There are a number of suppliers that try to use the concerned platform for sourcing processes
like TrueBlue which is a recruitment outsourcing company joined with Amazon for the
process of sourcing (Johnson, 2018).
4. Research supplier selection, evaluation, and development practices and
programs
Amazon tries to follow Supplier Code in order to select their key suppliers on the basis of
that code it is important for the suppliers to follow the measures of health and safety while
manufacturing their products aside to this they must be following the policy of CSR and are
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not involved in the activity of child labour (Leblanc, 2018). Aside to this, the corporation
must undertake ethical measures in order to manufacture the products or sell the products. On
the basis of the stated activities, Amazon tries to evaluate its key suppliers. With the help of
all of these features, Amazon is seeking a great growth regarding its supply chain
management process (US About Amazon, 2019)
5. Research key supply-related challenges and opportunities in your
company and industry
One of the major threat or challenge for Amazon in regards to supply chain management is
related to privacy and security. Being an online platform it is difficult for the concerned
organisation to look after its security (Leblanc, 2018). Aside to this, the most promising
opportunity available for the industry is related to expanding its market area in the
international market (ScrapeHero, 2017).
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Operation issues
1. Identify and describe your sales market and key customers of the company
(including their geographical dispersion, importance to the company)
Being a renowned platform Amazon is very popular among individuals of all age groups. But
the company mainly tries to focus on the peoples having a tendency of expanding more in
good quality products. Aside to this, the company tries to deliver the product to its customers
on time and even provide them with the facility of free online delivery options (Dolan, 2018).
2. Identify, discuss and evaluate demand forecasting techniques used by the
company. Are different techniques used across the sales market? Why?
Amazon tries to conduct market surveys in order to analyse the demand of the consumers. It
tries to take help of social media platforms for conducting the surveys. With the help of
online platforms, the firm is able to cover a larger section of the society in less time interval.
Amazon tries to use the same technique in the sales market.
3. Identity, discuss and evaluate inventory management techniques used by
your company; Are different techniques used for different products?
Why?
There are a variety of inventory management techniques undertaken by Amazon, their
techniques are as follows:
 First-In-First-Out (FIFO)
 Managing relationship
 Regular auditing
 Sales forecasting
All of these methods are performed by the concerned party depending upon the condition of
the market and the nature of the commodity being sold (Ecommerce Tips, 2017).
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4. Research demand and inventory management challenges of the company
There are majorly three drawbacks or challenges that are faced by Amazon in regards to its
demand and inventory management, these are as follows:
 Less stock availability
 Ineffective supply chain management process
 Wrong description of the products (Ecommerce Tips, 2017).
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Information issues
1. Research for instances of bullwhip effect as well as their ‘causes’ and
‘remedies’ across the company’s supply chain discuss how this impacted
the company’s supply chain capabilities
Causes: The major causes of the bullwhip effect are fluctuation in prices of the product and
the ineffective batching of the product line.
Remedies: The problems related to bullwhip can be resolved by adopting effective planning
and forecasting methods.
2. Identify key information technology tools used across the company’s key
supply chain business processes; explain how these IT tools impacted the
company’s supply chain capabilities
A number of information technology tools used by Amazon for undertaking its supply chain
management process are named as Cloud computing, DSS Decision support system, RFID,
Sales orders and Oracle Sourcing. With the help of these tools the company is able to manage
its warehouses and can maintain the level of stock. Aside to the tools likewise helps in
forecasting the information regarding the stocks or sales of the products (Monczka et. al.,
2015)
3. Identify collaborative practices used across the company’s supply chain (in
relationship with both suppliers and customers)? Focus on one practice
(for both supplier and customer side), discuss its implementation,
challenges and opportunities, and impacts on the company’s supply chain
capabilities
Amazon follows a practice of collaborating with its major competitors. It is the policy of
Amazon to keep friends close and enemies even closer. It tries to maintain sound networks
with its major suppliers and it likewise tries to form strategic alliances with a number of its
supplying parties. With the help of these collaborations, the enterprise is able to enhance its
product line and the market area (Monczka et. al., 2015).
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Integration issues
1. Develop a comprehensive map of the company’s supply chain
(Figure 1: Comprehensive map of Amazon's supply chain management)
(Source: By Author)
The above diagram is showing the supply chain mapping of Amazon. With the help of this
diagram, it can be identified that Amazon adopts a different technique of supply for the
different nature of its customers (Monczka et. al., 2015).
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Standard
Shipping
Placing order
Suppliers
US portal service
Consumer
Urgent
Shipping
Placing order
Suppliers
Sortation center
US portal services
Consumers
Prime
customers
Placing order
Natinol suppliers
or Storefronts
Outsourcing
delivery
Consumers

2. Using the 9-step framework for design and assessment of supply chain
integration, assess the company’s level of integration
Steps Action Description
Step 1 Trading partners or suppliers Initially, the company will try to access its
key suppliers like Wellness Corporation,
TrueBlue, GoPro and Nautilus.
Step 2 Supply chain Strategies The next step is to frame strategies
regarding supply chain management. The
strategies are undertaken by analysing the
demand and the conditions of the market.
Step 3 Aligning strategies with processes The processes are then aligned with the
processes, in other words, it can be said
that the supply chain management
processes are framed on the basis of
strategies
Step 4 Process effectiveness The next step is to check the effectiveness
of the project by undertaking a number of
activities such as auditing, sales
forecasting and so forth.
Step 5 Improving internal integration or
failures
Any identified failures or mistakes in the
supply chain management process the
resolved by the process of continuous
monitoring and by the use of IT tools.
Step 6 Development of performance standards A number of performance standards are
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