Task

International Supply Chain Management

Introduction

The main focus of the assessment is to assess the relevance of global supply chain management practices for Amazon Inc. The business of Amazon Inc. is one of the leading online retailers and the business has successfully expanded its operations to different activities as well. The supply chain network for Amazon is quite diverse which is one of the reasons that the company has been able to enhance its revenue and profitability on a consistent basis.

The report would be identifying some of the key drivers of evolutions in supply chain for the retail sector and the ethical challenges which the company manages to ensure transparency. Further the analysis shows the supply chain strategies which the business of Amazon incorporates in its day to day practices.

Further the assessment stress on the importance of a digitalisation of supply chain process which has the potential to develop competitive advantage for the business. The report would be concluding with some issues which are prevailing within the supply chain network of Amazon and how the business plans to make improvements to the same.

Discussion

Drivers of Evolution of Supply chain in Online Retail Sector

• Globalization: The trend of Globalization has reached and positively impacted all industries even the retail sector. Globalization has basically opened up markets where MNCs can set up their operations and expand their reach in the market. Amazon Inc. has successful operations in most of the global nations and this has been possible due to the effects of globalisation.
  
  Amazon has presence in more than 170 nations world wide which also means that the company can tap into the market and generate more revenue from operations (Bauer, 2024).  This connectivity with global nations has ensured that the supply chain processes evolve for a business effectively.

• Technological Advancements:  An online retail operation relies on its technology to ensure that appropriate communication is undertaken with customers and regular trade can be undertaken. For supply chain to be effective, the technology interface and system which is used by customers to place orders needs to be user friendly.  
  
  The level of technology is improving on a day-to-day basis and therefore companies also tend to improve its supply chain processes so that competitive advantage can be achieved in the market. In case of Amazon, the business continuously looks to improve its user interface so that the experience of the customers can be enhanced and higher sales can be achieved.

•  Availability of Labour and Infrastructure:  One of the main drivers for an effective supply chain is availability of labour and infrastructure in the nation where operations is to be set up. The infrastructure which is requires covers appropriate warehouses, transport vehicle fleets and other materials which are used in packaging.
  
  In case of Amazon Inc, the main elements of the supply chain Amazon Fulfilment centres and Amazon Delivery Fleet which ensures that swift deliveries are made and effectiveness is maintained in operations.

• Shift from Traditional retail operations to Online Operations: In this modern era, most of the retail operations are undertaken through online mode as it offers more reach and the business can cater the needs of more volume of customers.
  
  Further when pandemic situation was prevailing, online retail operations was the only option for the people to get necessary products in their homes. Amazon has just followed its business model from offering books online to delivery products to customers which they can order online.
  
  The above drivers have contributed significantly in the growth of supply chain networks at global levels for all companies.

Ethical Issues in Managing Global Supply Chain and Approaches Adopted by Amazon

In order to appropriately portray, the ethical challenges which arises in managing supply chain at international levels, a table is portrayed below showing the challenges, how it impacts supply chain operations. The table further would portray the steps taken by Amazon Inc. for managing such ethical issues in global supply chain.
 

Supply Chain Strategies of Amazon Inc

The supply chain process which is followed by Amazon Inc. initiates right from product procurement to final delivery to the customers. The business needs to take into account processes such as warehousing, inventory management, pricing and delivery of the products.

The strategy which the company follows is to ensure that sustainability is incorporated in supply chain operations and most modern technology is utilised in the operations. The management of Amazon Inc. utilises FBA onsite program for initiating its sales and further utilises its own Warehouse management program to ensure that efficiency is achieved in the operations (Min, Zacharia & Smith, 2019).

The management of Amazon Inc follows two key elements which forms its supply chain functions which are Amazon Fulfilment centres and Amazon Delivery Fleet. The fulfilment centres are established in around 170 nations worldwide and these have the responsibility for ensuring that the products are appropriately packed and ready for delivery.

The role of the delivery fleet is to ensure that around 2000 packages are delivered on a daily basis so that effectiveness is maintained and the business is able to cater the needs of the customers in an appropriate manner.

One of the aspects of the supply chain operations for Amazon is that it maintains an ethical network where focus is given on effective waste management, reduction of carbon emission and ensuring that transparency is maintained. As per the processes of Amazon, resources based view for the operations can be applied as the management of Amazon looks to utilise its resources in an appropriate manner and develop competitive advantage in the market (Rohilla, 2020).

The resource based view states that the company will make optimum use of its resources and would tend to ensure that the activities of the business are moulded to meet the operations. Another theory which can be applied to the supply chain operations of Amazon Inc is that of Stakeholder Theory. The management of the company ensures that appropriate stakeholders needs are identified (customers being the main stakeholders) and the service process is designed in a manner so that they can gain maximum utility from the same. 

One of the main areas of supply chain operations for Amazon is the level of technology which the company utilises to develop its application and improve the user interface so that overall experience of the customers can be enhanced. With better interface the management is able to communicate effectively with customers and even provide live tracking for the products so that they are well informed regarding the delivery schedule which the company intends to follow (Smith, Rupp & Offodile, 2017).

Considering the business model and overall strategy which the company follows, the supply chain process is appropriate as it allows the business to focus on the needs of the customers and ensure that more revenue is generated from operations. In an overall basis, it can be said that supply chain operations for Amazon is quite consistent with the overall business strategy which the company looks to follow.

Impact of Digitalisation of Supply Chain and Future Trends

The entire operations for Amazon is based on online retail model where the customers can order the products which they need online and then business would procure the same and deliver the products to the customers. With the digitalisation of its delivery services, the business was in the position to cater the needs of a huge volume of customers in the market and ensure their needs were fulfilled.

The business of Amazon utilises its application to collect information on the clients and also conducts surveys so that needs of the customers can be identified (Sofiah & Aisyah, 2022). In addition to this, the business ensures that all information are portrayed in the application so that the customers are always aware of the products which they are buying and their respective specifications. Amazon is innovating at such a rapid pace that it is challenging for rivals to follow up (Braun, 2018).

The massive retail chain has shaken up the supply chain automation market and pushed rivals to increase their investments. Amazon also bought Whole Foods in 2017, making the audacious decision to transition to traditional brick-and-mortar retail. By 2020, the business will run seven distinct types of physical Amazon stores. 
    
For the future, the business is intending to change its delivery processes and add drone services which will make the delivery services more effective and this can contribute towards the competitive advantage of the business. With the drone services, the business would b able to deliver products which weigh less than 5 pounds to a distance of 10 miles from the radius of the fulfilment centre (Yu et al., 2016).

In addition to this, it can further be expected that the Amazon Inc. would also be improving the level of technology and make the interface more user friendly so that accessibility can be enhanced and the overall experience of the consumers can be enhanced. There is further plans to enhance the sustainability criteria in the supply chain operations and ensure that the carbon foot print of the business is reduced to a minimum. It is expected that all these efforts would contribute towards a much more efficient supply chain network and contribute towards the competitive advantage of the business.
    
The business can integrate all these new technologies by making changes to its applications and providing more options to the customers and even by making changes to the delivery services so that close proximity deliveries are made through drones. The senior management has an important role to play in this regard as there show be a clear communication of the plans which the business is looking to pursue for the future.

Risks Exposures for Amazon Inc and Recommendations

Conclusion

The above analysis appropriately shows that the supply chain function of Amazon has improved significantly due to the innovative culture which the business follows. The approach of the management has always been to enhance the experience of the customers and therefore used technology to ensure that customer engagement is improved.

Further the business has always looked to expanded its operations in markets where there is favourable governmental policies, infrastructure and other factors.  The analysis appropriately shows some of the drivers of supply chain development and also the issues which are common. In addition to this, the analysis appropriately shows the approaches which the business follows in current practice and some of the future trends which are expected to be implemented.

 

Top Management Samples

References

Amazon Global Human Rights Principles. Sustainability (US). (2022). https://sustainability.aboutamazon.com/human-rights/principles
Apu.apus.edu (2024, February 2). Ethical issues in Supply Chain Management and Procurement: American Public University. APU.  https://www.apu.apus.edu/area-of-study/business-and-management/resources/ethical-issues-in-supply-chain-management-and-procurement/
Bauer, M. (2024). Amazon supply chain - how does it work?. Teikametrics. https://www.teikametrics.com/blog/how-amazon-supply-chain-works/
Bilovodska, O., Syhyda, L. & Saher, L., (2018). Supply chain management: world’s companies experience. MIND Journal, (5), pp.1-17.
Braun, G., (2018). The E-commerce Effect: The Modern Supply Chain Disruptor. C3 Solutions.
Ethicalconsumer.org (2023). How ethical is Amazon.com Inc?. Ethical Consumer.  https://www.ethicalconsumer.org/company-profile/amazoncom-inc
Min, S., Zacharia, Z.G. & Smith, C.D., (2019). Defining supply chain management: in the past, present, and future. Journal of business logistics, 40(1), pp.44-55.
Rohilla, A. (2020). A STUDY ON SUPPLY CHAIN MANAGEMENT TOWARDS AMAZON. COM, INC (Doctoral dissertation).
Smith, A.D., Rupp, W.T. & Offodile, O.F., (2017). Amazon. com, Inc.: Retailing Giant to High-Tech Player?.
Sofiah, M. & Aisyah, S., (2022). Analysis of Supply Chain Management Implementation on Amazon E-Commerce. Journal of Indonesian Management (JIM), 2(2), pp.385-390.
Yu, Y., Wang, X., Zhong, R.Y. & Huang, G.Q., (2016). E-commerce logistics in supply chain management: Practice perspective. Procedia Cirp, 52, pp.179-185.