Management Strategic Resources and Operations

Question: Discuss about the Management Strategic Resources and Operations. Answer: Introduction: According to Christopher (2016), the supply chain management in a company triggers the powerful base of competitive advantage among the competitors. It consist of various stages of production, like, purchasing, manufacturing, transporting etc. A successful supply management system in an organization must be able to manage and coordinate the different steps of supply management efficiently. The supply chain management has many roles to play in an organization both internal and external. It includes matters related to transportation, production, scheduling, processing of order, customer service, etc (Verma, Sharma Sheth 2016). In this paper, a case study on Amazon would be considered, where a detailed analysis on the supply chain management of this company would be done. Amazon is an American organization that deals in online transactions being made , with its headquarters at Seattle, Washington. It is one of the most re-known retailers that are in this business and have their business spread worldwide. Overview Of The Organization Amazon was founded in the year 1994, in Seattle Washington by Jeff Bezos. It serves worldwide under its online retailing business. The slogan of the company, work hard, have fun , make money rightly fits in the aim of the organization. It aims at providing anything and everything to its customers worldwide. Amazon is in partnership alliance with many firms and mergers. It has started releasing point of sale data to some verified authors, who gives an example of how well the company is working (Klaus 2013). Amazon has a multi level sales strategy that has set the targets and even build a customer to business relationship. There are 268,900 employees working in this organization. An effective supply chain management has made the company to gain a high response. It has efficient distribution centres and multi-tier inventory that has raised the level of services and sales. Linkage To The Theories Of Supply Chain Management SCOR SCOR refers to the supply chain reference model, and is linked to various business organizations to increase the speed of system implementation, support organizational goals, and improve inventory turns. scor is completed in various steps like plan, source, make, deliver, return, enable. Amazon is a well planned and well equipped company. it follows SCOR that by using all the levels implemented according to the theory. it has a well planned supply chain system that helps the company to plan the process accordingly, well planned inventory system to get the source of the product from, various couriers are linked and distribution hubs are made, good returning policy. all these plans, help the company to earn a good name in its field. RFID RFID refers to teh radio frequenct identification, which uses electromagnetic fields to track tags attached to various products.amazon has done partnership with RFID lab at Auburn University, in order to conduct research into how radio frequency identification would be used in the existing high tech centres of the organization. this would enhance the work of the organization at a greater level. IT in the maintenance of teh supply chain management an efficient information system is needed in order to conduct business online. amazon is well equipped in technology and information system that Linux based core technology. it has the worlds three largest databases and a central data warehouse of 28 HP servers. it uss Netscape Secure Commerce Server using the secure socket layer protocol in order to keep the cresit card details. Analysis Of The Supply Chain Management Supply Chain Strategy As stated by Coyle et al., (2016), before entering into any business, the strategy and goal must be formulated at first. The strategy for supply management and competitive management should have the same kind of aims. Amazon has analysed the huge responsiveness of its customers. In order to respond to the customers with efficiency, Amazon has structured the four main components such as storage facilities, multi-tier inventory management, highly efficient transportation and accurate information systems to provide the correct information along with its supply chain. All these factors explain how Amazons supply chain is successful. Inventory Outsourcing According to Richards (2015), outsourcing helps the companies to focus on the core activities and cost saving of the organizations. Maintaining inventories is costly, whereas when a company has to formulate in such a large scale, then inventory outsourcing is a good option. Companies like Amazon, needs to gain those benefits. According to some managers, outsourcing is not necessary, even when the demand is increasing and the level of inventory must increase too. According to these managers, the company can optimize its service, if the stock is stored and owned by itself. Yet, Amazon managed to outsource only some of its inventories. The popular products that were high on demand were managed and kept in their own inventories, whereas others were outsourced. It is an efficient method for Amazon to outsource its inventories, as it allows them to reduce the cost of storing the products under their own. Price Differentiation To Customers According to Bower Maxham III (2012), the organization that deals in dispatching and delivering items to its customers, need to divide its customers into various divisions on the basis of responsiveness, in order to facilitate different customers with different service levels and prices. Amazon has strategically planned various difference in deliveries till now. It is divided into various divisions where the customers are made to choose from different ranges and varieties and between different types of delivery options. It accurately groups up the products for its customers and makes it easier to decide on buying the product. A new membership program , Amazon prime, has offered some special offers to those clients who are regular customers or who most often surf their site (Amazon.in. 2016). Push-Pull Strategy According to Klaus (2013), Amazon initiated a new push pull strategy that needs no products or inventories, no overheads or warehouses. It acts as a middleman between the customers and the original retailers, whose products are being showcased in the website. As time passed, the increase in demand for the products of that company, forced Amazon to keep their products in stock. This gave rise to a push-pull strategy. The inventory is held as push strategy while the others are shipped as pull strategy. Various distribution centres are held in order to carry this strategy out. By having several distribution centres, there is an increase in the cost of holding goods though. Inventory Segmentation The inventory system of Amazon is a multi-tier inventory management system. This enables the company to plan its process and enables the company to offer increment in optimization of the service that would permit the company to have the least requirement of inventory needs to procure its service level. The problem with this kind of system is that each tier treats separately while there is no concern about the other kind of inventories (Grewal et al.,2012). Amazon has a three-tier inventory system, where the first tier is the Amazon distribution centre, the second tier is the wholesaler and partner whereas, the third tier comprises of the publishers, manufacturers, vendors and third party sellers. The first tier has the duty of maintaining the inventories, this allows the organization to keep fewer inventories. The second tier helps to maintain the record of products. If products are not present in Amazon dc then it would use the it systems to look for the goods in the partner inventories . This would enable Amazon to have no stock out experience in front of the customers. The third tier helps to fulfil the unlimited selection of goods offered in the organization (Stadtler 2015). Factors Affecting The Supply Chain Transportation Amazon allows its customer a range of delivery options in order to make up to the transportation cost. It provides free shipping facilities to achieve longer lengths of delivery time. This enables Amazon to decrease its cost and gain an efficient economy scale. Even though clients are ready to pay higher costs to get the product delivered faster. Still Amazon cannot use its greatest benefits from its transport system. This is the reason why Amazon must pay heed to its supply chain networks to minimise the costs. Order sourcing- the main problem that Amazon faces is to identify from where must it look for the product to fulfil the customers order. Once the order is placed, it is very important to fulfil that order on time. The probability of finding a solution in that short span of time is quite low as the products are in different places at that point of time. This led the company to maintain a management system that would get effective sourcing of the products in real time (Rushton, Croucher Baker (2014). Evaluation Of Operational Implications Supply chain network Amazon has various distribution centres throughout the world. Its locations are selected based on the distance to the markets, the nearest place to transportation facility that would enable the company to provide quick delivery, t lower transport costs and easy access. The transportation hubs are also selected in such areas where the customer demand for the products is more. The inbound trucks gets full loaded at first, unloads the packages and then the small outbound vehicles takes it to the destined places. Amazon has also adopted shipment approach, where the product would be picked and packaging would be done in Amazon, and delivered by the supply chain partners. Amazons basic aim must be to provide quality products at quality time to make their customers satisfied. Transportation- The most toughest part of transportation is that in order to achieve accuracy due to large number of small orders for the clients, the company is unable to get the advantage of scale (F. Bustinza, Parry Vendrell-Herrero (2013). Amazon created transportation hub to get away with huge transport costs. The hub needs longer time to gather the region zone together, therefore excess time to follow the strategy. Therefore, the company has generated various delivery options that would help Amazon to achieve a larger economy of scale with minimised costs and increment in customer satisfaction. Though this takes time to happen, and therefore, sometimes, customer receive the product after a long delay. Technology- Amazon deals in online shopping, and it has no storefront. Hence, for such an organization efficient and smooth technology is the basic need. The company needs to maintain a perfect visual store that would be user friendly in order to attract the customers. A9 is a company that provides Amazon with such a technology base that includes search engines, and search indie the books where the technology tends to speed up the ordering process (zpolat et al., 2013). Amazon requires an innovation that would support the back end supply chain. The organization has well maintained and advanced management systems for warehouses for order outsourcing, labour management, processing alternatives, suppliers collaborations and load balancing. Though there are some critiques regarding the working conditions of extra pressure on labours, so Amazon introduced the use of Kiva robots to do those work that became hectic for humans. Here robots search for the desired products in the warehouses that required huge time and effort of humans. There are in all 400 Kiva robots in the company, appointed for the job. This increase productivity of the company and also reduces the cost up to 50% ( Floyd et al., 2014). Amazon launched a new strategy called prime air or drones. It enables to deliver goods to customers within 30 minutes of time. The process consists of the prime air that starts packages to pass on conveyor belts that would be lifted by the drones and move straight to the customers address. This innovations has been started but is not efficiently used till date. Recommendations The problem in the supply chain of Amazon is it depends on the courier facilities to reduce its transportation cost and to make it efficient (Williams et al., (2013). The courier services creates a negative impact on Amazon by getting the delivery delayed or the product not in a good condition. Hence, the company should start its own chain of transport facilities that would deliver the product to its customers with greater efficiency and gain more trust from its clients. The benefits of using private facilities is not only favourable but also enhances branding facilities for the organization There is even a lack in integration among the supply chain of Amazon. Amazon must make the best collaborations with the companies that would use cooperation and coordination as the major tools to complete the task. Conclusion Supply chain management plays a vital role in every organization. An organization that deals in online service, the main motive of such a company should be to achieve smooth and efficient supply chain system (Monczka et al., 2015). Amazons basic aim is to offer an ultimate service to its clients. It has been able to provide and fulfil that mission since many years. In the long run, it has been able to climb up and , maintain a specific place amongst to competitors. It has an efficient and modern system of supply chain management that has led the company to gain the confidence of the customers. It is one of the top online shopping sites till date. The company needs to cooperate with its partners and do multi-tier inventory systems that would enhance its growth. An effective distribution system is the only thing that is needed by a company like Amazon, and its working on it too. All these qualities reflect the primary strategy of the company is to provide the best response to its clien ts and ensure their satisfaction. 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