Proficiency in Supply Chain Management

Amazon.com: E-commerce Company

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Table of Contents
Introduction......................................................................................................................................3

Discussion........................................................................................................................................3

Overview of the Organization: Amazon Inc................................................................................4

Concept of Supply Chain Management (SCM) and Significance for Various Businesses..........5

The impact of Supply Chain Management (SCM) on Amazon's strategic decisions and overall
development.................................................................................................................................6

Supply Chain Management (SCM) can improve operational efficiency and cost reduction in
Amazon........................................................................................................................................7

Supply Chain Management (SCM) Models................................................................................9

Impact of Particular SCM Model on the Operational Efficiency of the Amazon Business......11

Conclusion.....................................................................................................................................11

References......................................................................................................................................13

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Introduction
Supply chain management, or SCM, oversees and improves a business's production and delivery
of goods and services. It seeks to improve and raise the efficacy of every process that turns raw
materials and component components into final products and then transports them to the
customer. Increasing customer value, cutting waste, and gaining a competitive advantage in the
market may all be achieved by a firm through efficient supply chain management and operational
efficiency. SCM aims to combine or centrally oversee a product's production, transport, and
distribution. Companies may expedite consumer product delivery and save needless fees and
processes by using effective chain management. To achieve this, the company enforces tighter
controls over internal inventory, vendor supply, sales, production, and distribution.

The report consists of key components, advantages, and sustainability of Supply Chain
Management for Amazon along with the key advantages of supply chain management in
improving operational efficiency and reducing costs. This assignment has worked on the Amazon
supply chain data for better understanding and the chosen company is also Amazon to understand
the concept of SCM as an example. The first subject addressed in the paper will be the influence
of supply chain management (SCM) on Amazon's overall development and strategic choices. It
considered elements of supply chain management (SCM) that support cost reduction and
increased operational performance at Amazon. choosing the Supply Chain Management (SCM)
model that best suits Amazon from the three that are offered. Analyzing the impact of a certain
supply chain management paradigm on the operational efficiency of Amazon Business. The final
part of the report concludes all the information regarding the title and delivers some
recommendations for Amazon to bring better information in supply chain management.

Discussion
Amazon is currently the top in the e-commerce business because of its innovative supply chain
design. When Amazon launched in 1995, it was a website dedicated to selling just books.
However, as of right now, Amazon is one of the fastest-growing companies in the world and has
one of the best supply chains (Beevi et al. 2024). Similar to its current approach, Amazon
adopted a similar supply chain architecture in 1995 when it limited its business to online book
sales. However, its reach is much wider, and several technological developments have helped to

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improve its simplified operations and heightened efficiency (Mukhamedjanova, 2020). Amazon
has a staggered online business model. Prioritising business-to-business ties with suppliers and
business-to-consumer relationships with consumers, Amazon eventually moved to integrate
business-to-business contacts after seeing the benefits of include customer surveys in item
descriptions. It now acts as a middleman in buyer-to-shopper transactions on a client-to-client
basis via the Amazon Commercial Centre arrangement. The business offers its platform so that
nearly anyone may sell nearly anything (Frazzon et al. 2019). With Amazon's support, those
partners may create whole websites through one scheme, and anybody can publish Amazon
connections and get a portion of deals that are explored. There is another option as well.

Overview of the Organization: Amazon Inc.

Amazon.com Inc. (Amazon) is an online retailer that provides shopping platforms. The company
sells a wide range of items, such as game consoles, toys, apparel, sporting equipment,
consumables, electronics, jewellery, and tools for infants and young children. Furthermore, it
offers related support services including home delivery and shipping, cloud web hosting, and
other web-related services (Habib and Hasan, 2019). Furthermore, the company provides
Amazon Web Services, which include databases, computing, storage, and other services, to
government agencies, start-ups, big businesses, and educational institutions. With more than 200
million subscribers globally to its premium membership program, Amazon Prime Video, it
surpassed Walmart to become the biggest retailer in the world outside of China in 2021 (Habib
and Hasan, 2019). According to developments in the mass manufacturing and mechanical
industries, Amazon has emerged as the leader in digital marketing. It started to become the
largest online shop in the world in 2021, as determined by revenue and market share. It also
functioned as an Internet organization, a center for commerce, a speaker supplier, a provider of
computer administration via AWS, a provider of live real-time features via Twitch, and a
provider of speakers (Brinch, 2018). Amazon.com, Inc. presented its financial results for the
quarter and six months ended June 30, 2024. The firm recorded sales of USD 147,977 million for
the second quarter, compared with USD 134,383 million in the same period last year. Net income
rose to USD 13,485 million from USD 6,750 million the previous year (Brinch, 2018).

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Concept of Supply Chain Management (SCM) and Significance for Various
Businesses
Supply Chain Management (SCM)

Supply chain management, or SCM, is the tracking and enhancement of the production and
distribution of Amazon's products and services. It aims to increase the efficiency and quality of
each process that transforms raw materials and components into finished items before shipping
them to the consumer. By using an efficient supply chain, a business may boost customer value,
simplify operations, and gain a competitive advantage in the marketplace (Arredondo and Alfaro
Tanco, 2021). SCM seeks to centrally control or coordinate the production and delivery of a
product. Companies may expedite consumer product delivery and save needless fees and
processes by using effective chain management. The company enforces tighter controls over
internal inventory, vendor supply, sales, production, and distribution in order to achieve
this.Nearly every product on the market is the result of the labour of several supply chain actors,
according to the fundamental principle of supply chain management (SCM) (Arredondo and
Alfaro Tanco, 2021).

Although supply chains have been around for a while, many companies did not view them as a
useful complement to their operations until recently. For example, Amazon invested in
technology to modernise and optimize its supply chain after realizing the importance of supply
chain management (SCM) to its operations (Arredondo and Alfaro Tanco, 2021). This included
using big data, which was collected from several suppliers and merchants, to improve its ability
to anticipate and manage inventories and sales (Hugos, 2024). In 2019, it brought on its first-ever
chief supply chain officer. Amazon has used SCM in its ESG (environment, social, and
governance) initiatives. To better understand their ESG policies, for example, the company
started asking suppliers to complete an online survey about the materials they use and if they had
an emissions reduction target in place (Hugos, 2024).

Supply Chain Management Software

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The impact of Supply Chain Management (SCM) on Amazon's strategic
decisions and overall development
SCM ensures that commodities are always available and never overstocked by optimizing
inventory levels. Order Processing: Orders are efficiently routed by SCM systems to the nearest
fulfillment centre for processing (Hugos, 2024). This process lowers freight costs and ensures
on-time delivery. Delays in manufacturing, delayed vendor shipments, and distribution channel
logistical errors can negatively affect brand reputation. With an effective SCM, every work can
be planned and completed from top to bottom. Minimizing delivery delays can help Amazon
keep its loyal customer base, keep revenues from declining, and enhance its brand (Hugos,
2024). Today, Amazon's omnichannel eCommerce business completes the new shopping
experiences for the majority of customers. It is imperative that brands put their consumers'
convenience and expectations first. Moreover, it starts right at the start of the supply chain. An
efficient eCommerce supply chain helps organizations grow omnichannel and expands a brand's
selling reach by drawing in content customers who are spread across platforms (Vidrova, 2020).

Extend and employ Flexible Because Amazon relies on a single source for its principal
distribution point, in the case of a crisis, its suppliers and warehouses face the danger of
disrupting the company's operations (Vidrova, 2020). It is usually a good idea to have more
suppliers and more locally managed distribution facilities. If something goes wrong with one of
the suppliers, the company may easily purchase goods from another one. For example, the online
cosmetics shop Nykaa invites high-end merchants to sell their products on its marketplace and
partners with other cosmetic brands. A customer's purchase placed on Nykaa may be picked up

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from Nykaa's warehouse or that of another provider. Businesses may ensure that their clientele
will be kept and that they won't have to worry about their business by taking this action (Vidrova,
2020).

1. Deliver merchandise to Amazon: send goods in bulk to Amazon Warehousing and Distribution
(AWD) by utilizing the Partner Carrier Program (PCP) and Amazon Global Logistics (AGL)
(Amhana et al. 2024).

2. Store and allocate inventory: when customers’ items get to their distribution centres, AWD
stores them efficiently and promptly offers them for sale. Using AWD, customers may hold
inventory in volume for as long as necessary to ensure that their items are readily available,
qualify for Prime, and arrive promptly.

3. Fulfil client orders: Amazon Solution uses the bulk inventory that they have recorded in AWD
to automatically refill their items in the Amazon fulfillment network. Orders placed by
consumers in the Amazon shop are chosen, packaged, and delivered by us using Fulfilment by
Amazon (FBA). If a customer orders something on the company’s website using Buy with Prime
or makes a purchase through another enabled sales channel, they will employ Multi-Channel
Fulfilment (MCF) for delivery (Masih, 2024).

Supply Chain Management (SCM) can improve operational efficiency and

cost reduction in Amazon
Technological innovations are having an increasingly significant impact on supply chain
management, bringing in a new era of productivity and innovation. Significant increases in

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productivity, transparency, and agility are provided by these developments. However, there are
risks and challenges associated with them as well, especially about deployment and the
modifications required to reach their full potential (Brinker and Haasis, 2024). Amazon continues
to encounter challenges in areas like inventory control and guaranteeing product quality, despite
its impressive growth. However, Amazon's commitment to technological innovation and strategic
execution offers a way to overcome these obstacles and provide a faultless client experience
(Masih, 2024).

Effectiveness and Automation

Supply chain management uses automation to expedite fulfilment processes. Businesses manage
storage, shipping, and customer service for merchants by strategically applying machine learning
and analytics capabilities. This enables companies to concentrate on growth, leaving logistics to
Amazon's technology expertise (Brinker and Haasis, 2024).

Data-Driven Optimization

Because of Amazon Web Services (AWS), the company's supply chain benefits from
unparalleled [visibility] and analytical capabilities. Effective inventory management and
consumer behavior analysis, made possible by AWS's [cloud computing] services, may optimize
the operation of the supply chain (Wang, 2022).

Users of Machines and Robotic Systems

Robotics and machine learning advancements are leading to an unprecedented level of

automation in supply chains. These technologies are revolutionizing the way businesses handle
inventory management and logistics by allowing more precise and efficient operations.
Automated warehouses and predictive analytics for inventory control are two examples (Wang,
2022).

The Internet of Things

The use of the Internet of Things (IoT) has greatly improved the supply chain's transparency by
making it easier to track and monitor assets and shipments across international borders. Using
real-time data, businesses may save costs, improve operational performance, and proactively
manage inventory levels to meet fluctuating demand (Wang, 2022).

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Technology Using Clouds

Cloud-based technology, which offers scalable, flexible solutions that significantly reduce the
need for significant physical infrastructure, is radically changing supply chain processes. Real-
time decision-making and swift adjustments to supply chain strategy are made feasible by this
technology, which also enables more collaborative and agile supply chain operations (Brinker
and Haasis, 2024).

AI applications

AI applications have a big influence on supply chain management, especially in Amazon's

analytics business. By using AI to enable greater forecasting skills, improve supplier
performance analysis, and identify potential efficiency gains, businesses can build strong, data-
informed supply chains (Brinker and Haasis, 2024).

Supply Chain Management (SCM) Models

Cost reductions, inventory management, and improved delivery efficacy are made possible by
supply chain management approaches. The inquiry confirms Amazon's deliberate use of data-
driven decision-making by showcasing appreciable enhancements in supply chain performance
metrics (Sanders, 2020). The fact is that all supply chain management philosophies include
efficiency and responsiveness as core elements. And that makes sense when you think about it.
Even if your supply chain is extremely efficient, it won't be able to adjust to a disturbance. But if
the supply chain only responds to infrequent or small demands, it won't be very efficient at
manufacturing huge quantities.

The Effective Chain Model

The efficient chain model is suitable for highly competitive sectors where end-to-end efficiency
is the ultimate aim. This strategy primarily relies on production projections in order to efficiently
burden and sweat equipment assets. The performance of the model also depends on the cost of
raw materials and commodities (Sanders, 2020). In the post-pandemic era, efficient chains are
facing capacity issues. The major reasons for this are material limits, labour shortages, and
delays. This is the primary idea. Missing a forecast might have unintended consequences. Long

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lead times and higher pricing for manufacturers at every stage of the supply chain may arise from
this. And that's when a lot of creative terminology is used (Sanders, 2020).

The Agile Approach

For producers who deal with specialty goods, the agile approach is perfect. Small-batch
production requires supply chain methodologies that are optimized for agility and leanness. Less
automation and greater knowledge are needed for that (Sanders, 2020). Additionally, by adding
more value, this approach enables companies to charge more. Businesses using an agile
methodology can increase volume. However, once they reach a certain volume barrier, they
usually lose their competitiveness. At bigger quantities, agile firms are significantly more cost-
effective than efficient-chain-model enterprises (Sanders, 2020).

The Modular Framework

The flexible model aims to be the perfect circumstance in every aspect. It could react to demands
for a high volume during peak season. Conversely, flexible model firms can manage and absorb
times when demand is little or nonexistent. This kind resembles a light switch. Flip it on or off as
required. To apply the flexible supply chain concept, a business needs the right tool (or
automated gear) for the job (Meredith and Shafer, 2023). This tactic also requires staff members
to have a broad variety of expertise or a sizable supplier network.

Since Amazon has been implementing Scrum in its work processes for a significant length of
time, the Agile Supply Chain Model was chosen. The company has managed its personnel using
agile methodologies since 1999. From 2004 to 2009, Scrum was widely used in its development
organisations (Beevi et al. 2024). One way to characterise Amazon's adoption strategy is as a
disjointed, decentralised departure from the standard Scrum adoption procedure. Teams at
Amazon were allowed to solve their own problems without depending on predetermined
directives from a central authority. The decentralised decision-making discretion aims to
facilitate teams' efficient and paperless production of high-quality software (Pont and Simon,
2024). Agile adoption has enhanced software delivery and allowed Amazon to save a substantial
amount of money. On average, 40% of the capacity of their dedicated servers was unused. Their
developers are now releasing code every 12 seconds and the frequency and duration of outages
have decreased as a result of the implementation of Agile concepts. At Amazon, Scrum was

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introduced from the bottom up. Rules or deadlines were not followed. It didn't start with
management-level choices and prescriptive adoption strategies (Pont and Simon, 2024).

Impact of Particular SCM Model on the Operational Efficiency of the

Amazon Business
 By fostering a culture of continuous improvement, the agile methodology aims to empower
teams to quickly adjust to shifting needs and provide value piecemeal. As a result, projects
become exciting endeavors that prioritize flexibility, teamwork, and customer satisfaction
(Beevi et al. 2024).
 Numerous agile concepts, including Extreme Programming, Scrum, Kanban, Lean,
Scrumban (a combination of Scrum and Kanban), and APF (Agile PeopleOps Framework),
can be used to execute agile methodologies (Gammelgaard and Nowicka, 2024).
 It is beneficial to use agile software development regardless of how unique your business's
workflow is. The software development lifecycle may be used to break down each project
into the following six stages: conception, inception, iteration, release, maintenance, and
retirement.
 The agile approach does not account for variations in the lifespan that might result from
certain methodological decisions (Beevi et al. 2024). Think about the Scrum framework,
which ensures that responsibilities are clearly defined and that the team using it operates in
two- to four-week sprints. In this way, extreme programming highlights engineering
processes (Gammelgaard and Nowicka, 2024).
 As soon as the company (Amazon) decides which framework can best manage the project
requirements, they should assemble their agile team. Think of an agile team like the Justice
League or the Avengers, where everyone has a specific task to do but yet needs to cooperate.

Conclusion
In the era of e-commerce, supply chain management, or SCM, is evolving beyond a purely
functional requirement. Companies that make SCM investments get a competitive edge in the
market, reduced costs, and increased customer satisfaction. The efficient movement of
commodities from suppliers to customers is facilitated by SCM. The report concluded the key
components, advantages, and sustainability of supply chain management for Amazon in addition
to the primary means by which it improves operating efficiency and reduces costs. This

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assignment focused on data from Amazon's supply chain for better understanding, and Amazon
was chosen as the company to serve as an example of supply chain management. The first
subject addressed in the report has been the influence of supply chain management (SCM) on
Amazon's overall development and strategic choices. It considered elements of supply chain
management (SCM) that support cost reduction and increased operational performance at
Amazon. Finally, choosing the Supply Chain Management (SCM) model that best suits Amazon
from the three that are offered.

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References
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customer’s satisfaction in Amazon in north America operations: a schematic review of the
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and service, 3(4), pp.183-197.

Arredondo, C.R. and Alfaro Tanco, J.A., 2021. Supply chain management: Some reflections to
improve its influence in business strategy. Innovar, 31(81), pp.7-19.

Beevi, L.S., Prathap, P.J., Chaithresh, K.S.S., Dani, W.V. and Ahamed, M.V., 2024, July. Supply
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Beevi, L.S., Prathap, P.J., Chaithresh, K.S.S., Dani, W.V. and Ahamed, M.V., 2024, July. Supply
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Brinch, M., 2018. Understanding the value of big data in supply chain management and its
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Brinker, J. and Haasis, H.D., 2022. Power in the context of SCM and supply chain digitalization:
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Frazzon, E.M., Rodriguez, C.M.T., Pereira, M.M., Pires, M.C. and Uhlmann, I., 2019. Towards
supply chain management 4.0. Brazilian Journal of Operations & Production
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Gammelgaard, B. and Nowicka, K., 2024. Next generation supply chain management: the impact
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1160.

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Habib, M.M. and Hasan, I., 2019, May. Supply Chain Management (SCM)–Is it Value Addition
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Meredith, J.R. and Shafer, S.M., 2023. Operations and supply chain management for MBAs.
John Wiley & Sons.

Mukhamedjanova, K.A., 2020. Concept of supply chain management. Journal of critical

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Pont, A. and Simon, A., 2024. Nurturing family business resilience through strategic supply
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