Operations and Service Management: Amazon's Strategic Approach

This report provides an in-depth analysis of Amazon's operations and service management practices. It begins with an introduction to operations and service management, followed by an examination of Amazon's operational practices, focusing on the use of robotics, supply chain management, and technology. The report critically analyzes how these practices impact the company's efficiency, highlighting the benefits of robots in improving quality control, efficiency rates, shipping optimization, and risk mitigation. Furthermore, it evaluates how technology is embedded in Amazon's procedures, including inventory management, supply chain collaboration, and order tracking. The report also explains the supporting functions linked to operations management, such as human resource management and quality control, and how they contribute to the company's success. Overall, the report emphasizes how Amazon leverages operational excellence to achieve customer satisfaction and maintain its position as a leading e-commerce company.

Operations and Service
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
Operation management practices of chosen organisation...........................................................4
Critical analysis of how operation management practice affect in efficiency of company........5
Evaluate how technology could be embedded in this procedure & how it has already attained 6
Explanation of supporting functions linked to operations management practices & how they
help in ensuring company success..............................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Operation management is defined as a business practice to develop highest efficiency
level in an organisation. In addition to this, it is associated with transforming labour and
materials into the product and services that maximize profitability of a business entity. On the
other side, service management is undertaken as a customer centric approach that assist in
providing high quality and on time service to customer by which a positive brand is developed
and the market performance is increased (Tönnissen and Teuteberg, 2020). For every
organisation, it is significant to conduct operations & service management effectively as it help
in enhancing performance and achieving success at marketplace. In the present report, Amazon
is chosen as a base company. It is a American multinational technology company which is
founded in the year 1994 by Jeff Bezos. The head office of respective organisation is located in
Seattle, U.S. The company is involving in cloud computing, artificial intelligence, digital
streaming, e-commerce and is stand as biggest five companies in U.S in context of information
technology. The report will cover operation management practice used by respective company
and how it influence on the efficiency. In addition to this, there is discussion about how
technology can be embedded in the procedure. Moreover, supporting functions associated to
operations management practice and how it help in attaining success is elaborated in a proper
manner.
MAIN BODY
Operation management practices of chosen organisation
Operation management is basically a business practice that assist in developing highest
level of efficiency on an organisation. It is concerned with various activities such as effective
planning, organising, managing and controlling which assist in transforming products and
services into customer satisfaction and fulfilment of customer expectations as well. It is
important for a business entity to focus on managing its services and operations so that
objectives will be attained on time period (Slack and Brandon-Jones, 2018). It is analysed that
there are many benefits associated with operation management that is high profitability,
attainment of competitive advantage, better outcomes and so on. There are numerous operational
management practices that are conducted by an organisation that is supply chain management,

designing of goods & services, human resource management, scheduling, quality & innovation
management and so on. In relation to Amazon, it is a e-commerce company which offer large
range of products as well as services globally. In order to manage its operations, the company
conduct and analyse various operation management practices that assist in meeting with the
targets and attainment of objectives timely and effectively. The practices involved are quality
management, supply chain management, robotics, inventory management, adopting innovation
etc. The main operational management practices that is used by Amazon is robots that help in
managing all the operations in an effective manner.
Robotics is the intersection of engineering, science & technology which developed
machines termed as robots, which is mainly a substitute of human actions. The robots involve
mainly of mechanical arms tasked with screwing or welding on some part of machine (Russell,
and Taylor, 2019). It is stated that a typical robot consist of a movable physical structure, sensor
system, power supply, motor of some kind and a computer brain which controls all such
elements. Robots are mainly the machine which replicate human function and behaviour.
In relation to Amazon, it has around 2,00,000 mobile robots performing inside the
warehouse networks, alongside thousand of employees. The robot army assist organisation to
fulfil its ever raising promises of on time and speedy delivers to the customers who have
subscription of Amazon prime. In addition to this, it is determined that respective organisation
make use of Roomba-shaped robots known as drives mostly in order to deliver big stacks of
goods to human workers, by following set direction surrounding to the warehouse. The army of
robots are walled in through fences which bring to mind nothing high than indoor batting cases.
The employees of Amazon works at pick and stow stations that perform alongside with the
robots to analyse how effectively to store stock within the shelving pods & how such items will
be shipped together to the customers.
It is determined that each robot cost around $1 million associated with its running
expenses. In addition to this, Amazon will recoup such amount in two years and such savings
come from hiring less people, low cost of maintenance and so on. It not only assist company to
manage operations properly but also assist in developing healthy working environment (Lee and
Tang, 2018). Moreover, it is determined that Amazon as a largest online retailer also brought
Kiva system in past years. Kiva was a small company of robotics that is appreciated by logistics
customer as a autonomous warehouse vehicle. But due to its high cost, the company is shifted

towards the use of Roomba-shaped robots that has low maintenance and keeping cost a well. All
this will help company to deliver the products and services to customer’s on time and earn higher
profits in an appropriate and effective manner as well.
Critical analysis of how operation management practice affect in efficiency of company
In every company, operation management practices is significant because through it a
business entity perform its function, activities as well as operations in an effective manner. With
the help robots, an effective operational management practice help in speedy and fast deliver of
products to customer and also help in meeting with their requirements and expectations
effectively. With reference to Amazon, one of the main operational management practice used
by company is robots due to which they are able to manage operations and on-time delivery to
customers. It is determined that there are various benefits gained by using robots as a operational
management practices, which are as follows:
Improve quality control: With the help of robots, company is able to maintain and
improve its quality of operations (Ivanov, Tsipoulanidis and Schönberger, 2017). In context to
Amazon, by making use of such practice it is able to conduct each stage from manufacturing to
the delivery effectively and properly. In addition to this, it will also assist them in providing and
delivering goods to the customers at every location set by customer. All this will help in raising
market value & share that take place due to fulfilment of customer demand.
High efficiency rate: It is analysed that robots working in the warehouse and provide
large stacks of products to the employees. It works on a high speed due to which company is able
to finish operations on time period which in turn leads to delivery to customer on time. All this
help in raising efficiency of working and performing activities that leads to raise in performance
and profitability of company.
Shipping optimization: One of the major benefit or advantage that is gained by
company due to using of robots in managing operations is shipping optimization. With the help
of this, Amazon is able to speed up its operations which further leads to on time delivery of
products and services to customer. Along with this, the company is also able to plan shipment on
different locations which fulfil requirements and needs of customer (Heizer, Render and
Munson, 2017).
keeping up with demand: By the execution of robots as a operational management
practice, respective organisation is able to maintain a balance among demand and supply in an

appropriate manner. Amazon ensure delivery within 14 hours to its amazon prime customers that
is possible because of the increase in use of robots alongside of human working (Agrawal, Atasu
and Van Wassenhove, 2019). Because of maintaining demand and supply of products, it is able
to develop a brand image at marketplace and stands in the list of largest e-commerce companies
globally.
Improve risk mitigation: By developing as well as maintaining operations management,
an organisation can easily decline the level of risk that impact positively on the implementation
of activities and operations in a proper manner. If it is talking about Amazon, using of robots
decline the risk of mishandling of products, breakage of products and so on. This help in
systematically and properly carry out operational activities which leads to raise in productivity as
well as profitability of respective organisation in an appropriate manner.
Evaluate how technology could be embedded in this procedure & how it has already attained
Technology plays a significant role for the respective organisation as the whole business
is based on the technologies and artificial intelligence as well. There are various forms of
technologies that are available and also support business entity to manage its operations and
supply chain in an appropriate manner (Gao and Su, 2018). Amazon make use of modern and
advanced technologies in order to perform and implement operations so that the targets are met
and objectives are achieved on time. The various ways by which respective organisation can
embedded business procedure is given below:
Increase control – Amazon make use of new and advanced technology within the
business procedure as it assist in raising the control level. By using innovative technology,
organisation will be able to improve its production process & also corrects supply chain
activities. There are different problems as well as issued faced by Amazon at the time of
executing task that sometimes impact negatively on the overall performance of organisation. It is
determined that such technology supports to maintain the transparency and perform the
operations which fulfil the demand of customer in an appropriate manner.
Better inventory management – It is significant for the respective organisation to
maintain a high level of inventory so that it can meet with the requirements and demand of
customers timely and properly as well. By the assistance of new and advanced technologies,
Amazon is able to decline level of risk and minimize cost of operations which leads to raise in
productivity and profitability of company. It is crucial for company to manage its inventory as it

decline the level of risk associated and improve its level of performance effectively
(Engelsberger and Greiner, 2018).
Enhance collaboration between supply chain partners – By making use of innovative
and new technologies, an organisation is able to create an effective and strong relationship with
suppliers that reduces the level of errors arise at the time of operations. With reference to
Amazon, by making use of new technology, it will be able to improve its relationship with
suppliers & other associated members in a proper manner. This ensure availability of raw
materials for production of goods & desires that leads to meeting with demand and attainment of
objectives within stipulated time period.
Improve order tracking & delivering system – BY the execution and using of
technology, respective organisation is able to deliver its products and services on time period. It
raise the preference of customers to order products from Amazon. It raise the market
performance and profitability of company in an appropriate manner. Moreover, the company is
also able to provide customers an option to track their shipping by just entering a code on the
application. All this will help in improving tracking as well as delivering system that assist in
attracting large number of people and raise profitability of company.
All these are some of the advantages gained by Amazon through embed advanced and
new technology within the organisation (Daradkeh, and Moh'd Al-Dwairi, 2018). Furthermore,
it also assist in gaining higher profits and improving market performance in an appropriate
manner.
Explanation of supporting functions linked to operations management practices & how they help
in ensuring company success
There are many supporting functions which are associated to the operational management
practices used by company that is robots. It is determined that all such functions assist
implementing and performing operations that leads to attainment of higher growth and success at
marketplace. The supporting functions is given below:
Infrastructure of the organisation: It is stated that all the controlling and planning
activities assist companies to cost control in a proper manner. It is determined that infrastructure
plays an important role in implementing operations systematically and if it is not appropriate
then there will be delay in completion of activities. In relation to Amazon, its robots working in
warehouse is able to perform properly because of proper infrastructure because of which large

sacks is deliver to employee properly (da Costa Cordeiro, Marques and Gaspary, 2017). It also
help company to decline the level of cost of hiring human and raise profitability level in an
appropriate manner.
Human resources management: One of the most important supporting function is
HRM which is associated with the overall process of operations. It is important for an entity to
have an effective and talented employees who has the ability to perform assign work in a proper
manner. In relation to Amazon, robots loads the big sacks which is put and take by employees
from the starting and the ending point. If these employees did not perform such functions then
the operations will stop and make unable company to meet with the demand. Therefore, HRM
plays significant role for the proper execution of operations that leads to raise in performance
and growth of company.
Technological development: In the present time period, technology is changing rapidly
and impact both negatively and positively on the business functions and operations as well.
Using of new technology that is robots is only take place due to advanced technology and it also
function properly because of innovation in technology. Moreover, it also assist company to attain
competitive advantage at market place and ensure long-term sustainability as well.
Critical success factor: It is consider as one of the significant factor that help in gaining
higher growth and success at marketplace. It involves a course of gaining strategic advantage as
is consist of generic to brand specific changes. This factor has a belief that every penny considers
& for this company is putting efforts in order to provide excellent value to customers that leads
to fulfilment of customer expectations and satisfaction as well (Choi, Wallace and Wang,
2018). In the present time, Amazon is able to facilitate effective management of operations due
to which there is quality and on time deliver is received by customers. This will assist respective
organisation to create a string brand image that directly leads to increase in growth and
development at marketplace.
CONCLUSION
From the above discussion, it has been concluded that operation management practice
help a business entity to implement operations and activities in a systematic and effective
manner. In addition to this, it is determined that service management ensures quality service to
customers which develop brand image and enhance performance of a business entity. It is
determined that technology plays an important role as it help an organisation to decline the level

of complexities within the operational process and increase profitability level in an appropriate
manner. It is determined that using of new technology assist in factors such as better inventory
control and management, improve tracking and delivery system, enhance supply chain process
and so on. All this will help an organisation to increase their productivity as well as profitability
level.

REFERENCES
Books & Journal
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Choi, T.M., Wallace, S.W. and Wang, Y., 2018. Big data analytics in operations
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da Costa Cordeiro, W.L., Marques, J.A. and Gaspary, L.P., 2017. Data plane programmability
beyond openflow: Opportunities and challenges for network and service operations and
management. Journal of Network and Systems Management, 25(4), pp.784-818.
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business enterprises: the effects of information quality, system quality, and analysis
quality. In Operations and Service Management: Concepts, Methodologies, Tools, and
Applications (pp. 1096-1118). IGI Global.
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management. A decision-oriented introduction to the creation of value, 2.
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