How Amazon Revamped Their Supply Chain Management

In 1995, Amazon.com was introduced to the world as one of the first online shopping websites. After more than two decades, Amazon has grown from an online bookstore to becoming a dominant force in the retail sector.

Amazon has always considered itself as a customer-centric company. The company really believes that if it doesn’t listen to customers, it will fail.

The customer – satisfaction drive reformed the supply chain process like manufacturing and delivery of products to reach their customers on time.

Amazon sells countless products and is transforming as a logistics company as it facilitates the storage and sale of goods from third party vendors.

In its chase of faster delivery, lower costs, and greater market share, Amazon continues to reinvest all of its free cash flow into growth initiatives rather than shareholder dividends and to pioneer innovative approaches.

In 2005, Amazon bought Amazon Prime which provides annual membership that offers two-day shipping. With a separate mobile app, customers can arrange to have deliveries made during specific hours of the day.

With the advancement in technology, Amazon developed a drone based delivery method. Amazon needs drones because same-day delivery is quickly becoming a competitive advantage for Amazon’s rivals.  This innovative approach could place packages on customer doorsteps in 30 minutes or less.

In December 2016, Amazon used drone delivery service called Prime Air to deliver a TV streaming stick and a bag of popcorn to the garden of a nearby customer in Cambridge, England. The company is gradually expanding service in the area, partly due to a favourable regulatory environment created by U.K. authorities.

Not every organisation has influence, budget or determination like Amazon, however, that doesn’t mean there aren’t lessons for small or medium – size organizations to gain from them.

Understanding and adapting the logistics and supply chain management techniques can help other organisation to achieve their goals.

Check out XLRI’s certified course in Logistics and Supply Chain Management course provided by Education Lanes – A Tech Mahindra Growth Factories Ltd initiative and soar your career in this industry.

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