Amazon.Com Supply Chain Management

Running head virago. com leave Chain Project Amazon. com Supply Chain Project Jarrel Nightingale emailprotected edu genus Capella University BUS3004 Supply Chain focussing Professor Dr. Robert Goldwasser December 10, 2012 Amazon. com Supply Chain Project Introduction In todays society, Online Shopping and the industry of e-commerce has become very familiar and mainstream. Many individuals capture integrated online shopping into their normal routine and progress to replaced traditional shopping alto get offher.Online shopping has become so popular, there has been a shopping holiday called Cyber Monday which is the equivalent to Black Friday. Traditional brick and mortar retail stores ar right off forced to offer their products online in lay out to persevere warlike. This is a new position for some commercial enterprisees to be in, so seames atomic number 18 forced to make the necessary adjustments to conform to the consumers demands. Complying with the demands of techno logy has become a problem for some of the smaller teleph wholeness circuites due to the lack of resources and infrastructure to perplex these changes.Amongst the many online retailers that have emerged, Amazon. com has set itself apart as the industry attraction in Online E-commerce. Since 1994, Amazon. com has create a successful empire that has become the negligence name for when one thinks about buying anything online. Through their documented success, Amazon. com has created the muster in for those to follow in order to become a successful Online Retailer. In this assignment, I will discuss Amazon. com as it relates to their success and the structure of its company.Business poseur Amazon. com sells books, music, and opposite items over the Internet and is one of the pioneers of consumer e-business. Amazon, invertebrate footd in Seattle, started by filling all orders using books purchased from a distributor in resolution to customer orders. This practice differs from th at of a traditional bookstore, which usually purchases directly from publishers and stocks books in anticipation of customer orders. In 2008, Amazon had eight wareho enforces in the U. S. and other fifteen in the rest of the world.Amazon stocks many books, though it unbosom gets other titles from distributors or publishers. It uses the U. S. Postal Service and other package carriers such as UPS and FedEx to send books to customers. Amazon has continued to expand the set of products that it sells online. Besides books and music, Amazon has added many product categories such as toys, apparel, electronics, jewelry, and shoes. (Chopra, et. Al, 2012) In increment to adding much products, the strategy of Amazon. com is technology ground as it relates to consumer demand.Amazons run chain is so tightly integrated that when an online customer buys a couple of books and a CD, the order-management corpse communicates with inventory- and warehouse-management systems to find the optimal d istribution center or centers for fulfilling the order. The customer knows in less than a minute how long it will take to delight the items and whether they will come in one package or each (Bacheldor, 2004). Global Challenges Unlike most companies, Amazon. com has positioned itself to remain competitive in the subject and global markets as well.Shipping is one of the most main expenses of e-commerce and transportation system internationally can be a lengthy and expensive process. As mentioned earlier, Amazon. com has build new warehouses and changed the markets supplied by each warehouse as its customer base has grown. Currently there are 15 warehouses in total 8 of those are located in the United States and the other 7 are located internationally. As a result, it has lowered shipping be and better responsiveness (Chopra, et. Al, 2012).There is a trade off because inventory and facility be ontogenesis as the number of facilities in the yield chain increase and transportati on costs decrease as the number of facilities increase. The functionality of its technology is in like manner designed to help with reducing costs so that transportation costs stay at a point where operating globally is still achievable. Amazon. coms interpret chain management applications communicate in palpable clock when an order is placed and assigns shipping warehousing and cost based on location (Bacheldor, 2004).When the average company ships internationally the retort time is typically in excess of 14 days and the cost to press forward takes any potential savings from purchasing online go away. Importance of kernel Planning Amazon. com is beginning to aggregate other e-commerce that are linked via strategical placement and investments. The vision is to make it so customers dont have to go elsewhere to shop very often especially online (Scally, 2000). The spirit it has is so strong that any association with Amazon. com helps create an impression of severity and succ ess for anyone that chooses to partner with them.Amazon has one of the most-sophisticated supply-chain systems in the world, and it was all built from scratch. homespun applications handle nearly every aspect of its supply chain warehouse management, transportation management, inbound and outbound shipping, demand forecasts, inventory planning, and more. In the uttermost(a) four years, Amazon has worked to minimize the need for human intervention in its supply-chain processes, such as manually inputting sales forecasts into an inventory-management system (Bacheldor, 2004).Today, Amazons supply-chain apps communicate in real time, a rarity when most companies have to integrate a alteration of software tools and manual processes, such as phone and fax orders. Ultimately, the goal is to try to touch every type of transaction on the web dealing with e-commerce and to integrate with business partners to enhance the online shopping fuck off (Scally, 2000). Many traditional brick and mortar stores are affiliating themselves with Amazon in order to gain online presence and sell its swop online. This is a mutual usefulness as it allows Amazon to continue to diversify its products.Role of Demand Forecasting and price Promotions To achieve strategic fit, a firm must tailor its supply chain to best meet the needs of different customer segments. To view as strategic fit, supply chain strategy must be modify over the life cycle of a product and as the competitive landscape changes. Future risks, uncertainties, and environmental concerns must be accounted for when firms design their supply chain strategy. Customers ordering a book at Amazon. com are instinctive to wait longer than those who drive to a nearby Borders store to get the same book.In contrast, customers can find a much larger variety of books at Amazon compared to the Borders store. Thus, Amazon customers trade off fast response times for high levels of variety (Chopra, et. Al, 2012). Amazon offers its customers a large wit of prices for products that are purchased from the company. For example, a person purchasing two books worth $30 could use standard shipping (ships in 35 business days) at a cost of $4. 98, two-day shipping (ships in 2 business days) at a cost of $13. 97, one-day shipping (ships in 1 business day) at a cost of $22. 97 or use destitute shipping (ships in 714 business days).The pricing computer menu allows Amazon to attract customers with varying levels of desired responsiveness (Chopra, et. Al, 2012). Whereas customers paying for one-day shipping impose a high degree of uncertainty on Amazon, customers opting for unacquainted(p) shipping can be used to level out the workload at the warehouse over time. Amazon can thus use its pricing to provide responsiveness to those who value it while using customers who pauperism a low price to help it improve its efficiency. Amazon alike uses pricing effectively to shift some of the Christmas peak to November, by offe r free or discounted shipping.The discount moves some of the December demand forward, allowing it to impose its December peak and improve its efficiency without giving up on responsiveness for those customers who do not want to order earlier. Conclusion Since 1994, Amazon. com has built a successful empire that has become the default name for when one thinks about buying anything online. Through their documented success, Amazon. com has created the blueprint for those to follow in order to become a successful Online Retailer. By offering a vast variety of products, Amazon has changed the way many consumers shop for our merchandise.In addition to more options, the prices are often times cheaper even though the merchandise ordered is always shipped from a different location. What Amazon started in 1994 has now been revolutionized as Amazon continues to find ways to better the merchandise, the technology involved, and most important the customer experience. References Anonymous. 1998. IceGroup Releases Amazon. com Analysis . PR Newswire, Retrieved from www. lexisnexis. com/hottopics/lnacademic Bacheldor, B. (2004). FROM SCRATCH Amazon keeps supply chain close to home. InformationWeek, (979), 40-40.Retrieved from http//search. proquest. com/docview/229180916? accountid=27965 Chopra, Sunil, Meindl, Peter. (05/2012). Supply Chain Management, 4/e for Capella University, 4th Edition. Pearson Learning Solutions. Scally, R. (2000). Amazon. com The force thats altering e-tail, one category at a time. DSN Retailing Today, 39(9), 42-44+. Retrieved from http//search. proquest. com/docview/228466615? accountid=27965 Willis, C. (1998, Apr 06). Does amazon. com really matter? Forbes, , 55-58. Retrieved from http//search. proquest. com/docview/195047045? accountid=27965