Amazon
The first company that comes to my mind for their impeccable deliveries and supply chain is Amazon, India. Amazon offers 2 options to its vendors; One option is of where Amazon itself assumes all the responsibilities regarding order fulfilment and the other one wherein Sellers themselves take the responsibilities of order fulfilment.
In the recent new feature on Amazon Retail Analytics (ARA), they have added is of Probability Level Demand Forecast, wherein vendors can better understand and improve their business. In this feature, amazon puts more of a burden on the vendor to decide what tolerance they have for carrying inventory based on expected need from Amazon. This feature has forced vendors to critically analyze the inventory they will reserve for Amazon. The forecast will be based on three probabilities, P70 (which indicates that there is 70% chance that Amazon will purchase the level of demand indicated or less and 30% chance that they will purchase more), P80, P90.
The Supply Chain process of Amazon has 4 Components:-
1. Warehousing:-
It ensures that the products are easily accessible from pretty much everywhere because it’s warehouses are strategically placed in big metros and population hubs and inventory is strategically spread so that supply meets demand with mini-warehouses spread across the smaller areas to cater to those areas efficiently and effectively. The heavy reliance on Push and Pull strategy makes it easy for Amazon to strategically classify the products and stock the ones which have high demand forecasts and depend on third-party sellers for other products. Warehouses are optimized efficiently where each is divided into 5 storage areas( ie- Library Prime storage stores, pallet prime storage stores, case flow prime storage stores, reverse storage stores, Random storage areas) to allow team members and pick and pack robots to pull products instantly and maintain efficiency in delivery as well.
2. Delivery:-
Amazon offers myriad of delivery options (from traditional to super high tech) including the instant delivery options like Amazon prime and prime now. Amazon relies on outsourcing inventory management and insourcing logistics. The latest technology which is still under work in India and operational in other countries is Drone Delivery, Amazon-branded trucks and delivery vans
3. Technology:-
Technology is widely embraced in the company and automation and robotic solutions are used whenever it can happen in the process. This leads to reducing costs and multi-tier inventory management to maintain efficiency in the system and facilitate lightning fast delivery. Company is, in fact, using technology to seep and capture more market.
4. Manufacturing:-
Company has, in fact, understood that many of the products can be manufactured for much fewer costs and this process has, in turn, helped Amazon to control the whole life cycle of many products with huge profit margin and reduce its reliance on third-party sellers and manufacturers.
Amazon’s continuous innovations and increasing the level of customer fulfilment has helped the company to capture new markets and gain the trust of customers quickly. It has also forced the competitors to make their supply chain more proactive and customer-centric by continuously reengineering their own.
An Article By: Mayuree Kabra
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