Supply chain management isn't just a fact of life at Amazon. Corporate executives realize that supply chain management is in fact crucial to the success of Amazon now and in the future (Wheatley, 2000). Within five years of opening its doors to the public Amazon succeeded in enticing more than 20 million customers, located in more than 150 countries around the world (Wheatley, 2000).
Interestingly despite its economic gains Amazon has also realized multiple losses. These losses have resulted in stock price declines during the early quarters of 2000 (Wheatley, 2000). Why the change? Costs in an e-commerce business are often fixed. Amazon, because it is a Web-based business generally must deal with many high fixed costs. Fortunately the best way to overcome this obstacle is by selling as much as possible, or by increasing volume (Wheatley, 2000). Amazon has done this successfully, expanding its product base to include almost every product under the sun. While the company first started out by focusing on books, today Amazon offers more than 18 million different products to consumers (Wheatley, 2000).
To help minimize fixed costs Amazon has opened multiple distribution centers across the nation and world. The distribution centers currently rely primarily on automated processes to fulfill orders. Amazon has also expanded internationally by investing in integrated logistics solutions and software programs that will help improve supplier lead times and address varying transportation from distribution centers in multiple locations (Wheatley, 2000).
Conclusions
Supply chain management is a vital component of any organization's processes. It's not enough for a company to simply make a product and provide it to a customer. A company has to do so in the most efficient manner possible, meeting all customer needs, wants and expectations. When done correctly, supply chain management will propel even the smallest company to the head of the competition. Supply chain management is nothing more than the process whereby a company plans, sources, creates and delivers goods or products to their target audience. For a company to succeed this process must be streamlined to not only guarantee optimal customer service, but also to ensure that costs are contained so the company can realize significant profits. The one company that has continually achieved supply chain management excellence over time is Amazon.
Amazon's president and CEO believes that "end-to-end and click-to-ship" customer offerings at Amazon are among the more prevalent features that will continue to propel the company to the top (Wheatley, 1). Amazon continually works to upgrade and streamline its processes. Of highest important to the company is customer service, which according to annual surveys the company performs, thus far works efficiently.
Perhaps the one weak link Amazon has had in the past with respect to supply chain management is inventory management. It is difficult after all for a company offering so many...
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