Dec 31, 2020
How Amazon is incorporating technology in the management of its supply chain?
Amazon Inc. is an American trillion-dollar MNC that primarily focuses on e-commerce business, online streaming with its platform like Amazon Prime, cloud computing with its services from AWS. The company has its roots in almost every domain and that even includes space!
Yes, you heard that right, Amazon owns the company named Blue Origin which works in the domain of space just like SpaceX.
The headquarters of Amazon Inc. is located in Seattle, United States.
Now for a common man, there are two ways he can do a job. He can either put his efforts and get it done or pay someone to do the job for him. Amazon has very tactfully used this to leverage its business. And after all who wouldn’t be willing to pay if someone does the job perfectly for you.
All you have to do is sit on a couch, spend your time, and invest your money!.
If we have a look at the revenue breakdown of the company, we can see that the core area of revenue is its e-commerce business.
There was a time when people used to go out to buy stuff, but today the situation is reversed. The item searches its owner traveling hundreds of kilometers.
Not only that, during the COVID19 pandemic the company doubled its revenue earning millions of dollars quarterly. And just as you may expect, their online retail business helped them get to the million-dollar profit figure. Now, the question arises, what makes its business model so immune that even the pandemic couldn’t affect it? Well, thanks to its fantastic Supply Chain Management System. Never heard of the SCM system? Worry not!
Supply Chain Management is a system where you manage the entire flow of goods or services from its starting point to the endpoint.
Let’s say you are watching ‘The Queen’s Gambit” Series on Amazon Prime and you get so moved by the series that you order a chess set from Amazon.com.
Now when you put up an order from the website, Amazon is connecting you directly with the retailer somewhere across your country or the world. Your order is notified to the retailer and then the retailer would pack your items and ship it to you via Amazon.
The entire process of getting the item from the retailer to delivering it to your doorstep in time is managed by Amazon.
So basically, if you are using a ladle to have your soup. You are the customer, soup is the retailer and ladle is our Amazon.
Amazon’s supply chain system has been ever-evolving which helped it sustain itself in the market despite a failure rate of more than 70% in the E-commerce sector primarily due to fierce competition.
Amazon realized the fact of the growing number of netizens and used the power of digitization to leverage its supply chain system.
For instance, with the growing digitization, the world has become smaller. It’s easier to keep track of the goods and services that you are offering to the customers. You can as very well connect the retail business to the customers.
Amazon’s initial business comprised of selling books online. With time it expanded its business from shipping items in the US to the world. Shipping can be a costly affair and to tackle that Amazon started moving goods via ships. It entered the ocean freight business in 2016.
There are millions of orders placed on Amazon every second from across the world. Amazon holds several warehouses where all the items from the retailers are collected, packed, and shipped to their respective delivery locations. Amazon automated its warehouses by deploying thousands of robots. It acquired the robotics company Kiva in 2012 to achieve such a feat. The supply chain management was greatly strengthened by this adaption.
Amazon has also invested in future technologies like the usage of drones to ship items.
Amazon has also introduced the Amazon Flex Program wherein independent contractors who are called delivery partners can deliver Amazon orders. This has not only improved the delivery system of goods but also produced a lot of jobs.
With the onset of Big Data Analytics, Amazon has also been working on anticipatory shipping to bring down the shipping costs. It has also filed a patent for this in 2014.
Customers can also get in quicker deliveries once they become a member of Amazon Prime. The Amazon prime service saw a huge subscription from people because of its wide range of benefits. This also helped Amazon strengthen its grip on the e-commerce business.
So what is the lesson learned?
If you adapt with time, you’ll reap its benefits otherwise no one can stop you from being extinct.
Amazon has always been improving its reach in various domains since its inception and its focus on customer satisfaction has led it to become one of the top conglomerate companies.
I would like to thank my readers for dropping here. I hope the time you spent reading my article has been fruitful.😊
