Free Essay: Amazon Supply Chain Management

Successful organizations have specific characteristics such as their business model, mission, and vision or product offering that distinguish them from their average or failing counterparts. For an organization to get successful, it must identify and effectively solve challenges that might arise within its numerous departments. Most of an organization’s significant challenges emanate from a lack of the right job role designs for their employees, poor customer relationships, a need to be innovative, and poor production or process management. The majority of an organization's challenges result from poor company control, especially a lack of competent management and employee training. This essay assesses and analyzes how enhancing supply chain management as an aspect of process management affects Amazon.com.

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Company Overview

Amazon.com is an online store, inventor of electronic book reading, and a web service supplier that transformed into an iconic e-commerce business (Wells et al., 2015). It is a vast Internet-based initiative that vends books, entrainment features such as music and movies, houseware, dealing in all forms of electronics, toys, and other types of goods through their online platform. Amazon sells its products and services to a myriad of customers across the globe. It also operates a web service that entails renting data storage and computing resources by offering cloud computing services (Wells et al., 2015). Amazon.com has expanded from the U.S, where it initially operated to attaining an international or global status. Under its international segment, amazon offers services such as retail sales of consumer goods and subscriptions via internationally-focused websites. Amazon gets guided by its mission to be the world’s most customer-centered organization where individuals can discover anything they seek and purchase it online (Wells et al., 2015).

Diagnosis – Logistics and Supply Chains

Advancements and development in technology and the internet have enabled and fostered efficient buyers and seller relationships (Singh & Teng, 2016). It has resulted in numerous buyers and sellers joining and trading on online shopping platforms such as Amazon. Almost anybody connected to the internet is a few clicks away from purchasing anything online and having it delivered wherever they wish across the globe (Singh & Teng, 2016). The growth of ecommerce platforms has also generated various challenges. By considering the ease of accessibility, business efficiency is a critical element at all operation levels for ecommerce retailers such as Amazon. Notably, the demands and expectations of consumers have evolved. Modern-day consumers seek efficiency and quick delivery of purchased products or services (Singh & Teng, 2016).

The majority of Amazon’s consumers range between 18 and 34 years old, and they demand or expect quick and efficient same-day deliveries (Monczka et al., 2015). It necessitates for Amazon to enhance and invest in logistics that ensures correct and prompt movement and delivery of purchased products to each of their customers across the globe. The pursuance of speed and efficiency in delivering purchased products is expensive, yet Amazon needs to balance reducing cost and efficiency. There is a need for supply chain management transformations within Amazon to ensure efficiency, consumer satisfaction, and cost-saving (Monczka et al., 2015).

Importance of Supply Chain Management Efficiency

Supply chain management (SCM) is a critical aspect of a business; it entails a range of activities required in the planning, coordination, scheduling, controlling procurement, manufacturing, and prompt delivery of products to the consumer (Singh & Teng, 2016). Effective SCM is imperative for Amazon since it is the basis for ecommerce businesses. SCM is also fundamental in ensuring the growth of any business. With a well-organized supply chain, products reach the customer and at the right time (Singh & Teng, 2016). Where such results are attained via SCM, the organization enjoys cost reduction, enhanced cash utilization, and customer satisfaction.

Supply chain management’s efficiency is critical for any business since it governs and controls most business departments. SCM plays an important role in safeguarding the achievement of a business. Supply chain managers should focus on attaining the lowest cost and having the fastest production cycle. Amazon’s managers must ensure the efficiency of all services in procuring products, manufacturing, distribution, and ensuring all the organization’s processes are effectively coordinated. Amazon’s SCM must ensure that products getting delivered to their consumers are of the best quality since it helps retain customers. Amazons SCM must also ensure that the organization has enough resources to meet the customer’s demand. Therefore Amazon’s SCM manages and controls their products life cycle.

Target in Enhancing Supply Chain Management

Current e-commerce markets get characterized by intense competition and the need for innovation (Singh & Teng, 2016). Advanced technology and Internet access have ensured customers can easily access e-commerce platforms where they can purchase various products or services. Therefore, having an effective SCM ensures and promotes transparency, which gets attained by ensuring visibility across the entire network. It entails facilitating the customer and management to track their orders and inventory and distribution, respectively (Singh & Teng, 2016). Transparency in SCM also entails ensuring consumers are competently served, costs cut, and enhance consumer relationship management. Transparency also entails running an ecommerce integrated supply chain that allows customers to generate feedback about an organization’s products and service delivery (Singh & Teng, 2016).

Having an enhanced supply chain management will ensure the organization cuts cost (Jalagat, 2016). Therefore the business will enjoy a streamlined business process where unnecessary supply chain stages get eliminated. For instance, eliminating retailing stages translates to higher profits for the business. Enhancing supply chain management processes results in the adoption of multiple channel practices characterized by technological advancements. It ensures that the organization benefits from increased sales resulting from increased customer engagement. By effecting the SCM changes, consumers will enjoy increased efficiency and convenience, meeting their expectations, and the business will minimize delays, which could cause poor customer feedback. It also helps in eliminating logistical errors from the distribution channel (Jalagat, 2016).

Kotter 8-Step Change Model

Supply chain management transformations can get attained through the implementation of the Kotter 8-step change model. However, Amazon's supply chain manager initiating the change process must sufficiently understand its stages. The below discussed are Kotter 8-step Change model’s stages.

Creating a Sense of Urgency

The first initiative for change in an organization is ensuring employees are not in their comfort zone. All organization’s members must transform and understand the need to change and its urgency within the organization. Creating a sense of urgency is imperative because it creates immediate support for an inspiring vision. The different challenges and processes hindering the current system should get listed and why they should be transformed (Kotter, 2010). Employees can be involved in suggesting changes and solutions.

Amazon’s processes that need transformation include service delivery enhancement and product availability. It should entail ensuring that clients can purchase the right merchandise at their precise time and have it delivered where and when they need it (Tang, 2019). The success of an e-commerce platform depends on buyer gratification. Amazon’s SCM must understand that a slow distribution process upsurges the possibility of losing clients, and it can negatively impact the business’ reputation (Tang, 2019).

Forming a Guiding Coalition

The second transformation stage requires that supply chain managers form a project team (Kotter, 2010). The team should comprise volunteers who understand the need for organizational transformation and comprehend the aims of the venture. The group should comprise of members from different divisions or departments within the organization affected by the previous supply chain management processes. As such, the team at amazon should comprise individuals from the procurement, production, distribution, and customer relations among other departments within the organization (Kotter, 2010). The diversity will propose distinctive approaches to the problem-resolving and verdict taking processes.

Developing an Inspired Vision

The third step demands that the manager develops with the aid of the guiding coalition and leadership an inspired vision for alteration inside the organization (Kotter, 2010). By establishing a vibrant vision, the organization will benefit from instilling an understanding since every employee will know what the project seeks to attain within the outlined framework. The vision getting developed should include advancing the organization's supply chain management practices and a strategy to meet the defined goals (Tang, 2019). Amazon’s strategy should entail effective coordination of its information technology department, warehouses, portfolio management, and transporters.

Conveying the New Vision

The organization's leaders should effectively communicate and discuss the new modifications or changes with other employees. The process should help address any concerns arising as the organization strives towards the transformation and integrate them into the planning and implementation of the change process (Kotter, 2010). For the project leader to effectively convey the new vision, they must regularly communicate the vision and tactics by including it in the organization's routine policymaking and problem-solving engagements. The leader should encourage and take reactions from their subordinates and address their concerns or fears. Amazon’s SCM managers must utilize all available communication channels to communicate the vision (Kotter, 2010).

Eliminating Barriers to Action

Numerous obstacles often face the process of implementing organizational change. For instance, the process will likely face resistance from some employees, organizational policies, and disempowering managers (Kotter, 2010). To eliminate resistance, Amazon's SCM managers should communicate with top-tier managers and ensure that they support the organization's proposed transformation. Managers should also ensure that the organization's processes, structures, and enacted policies align with the proposed transformations. Employees can also get empowered to handle challenges that may arise with the transformation by offering them the necessary training and mentoring. Finally, the leader can reward employees who actively implement the changes (Tang, 2019).

Generate Short-term Wins

Research shows that rewards are one of the most motivating factors at a personal level. The project can get subdivided into short-term targets that will offer the employees an impression of advancement motivated by immediate success. Therefore, the manager should identify practicable short-term wins. For instance, at Amazon, SCM managers can include efforts that may help cut back expenses, advance procedures, and increase profits (Kotter, 2010). The manager should also reflect on the advantages and disadvantages of the selected target.