Impact of sales and operations planning in supply chain integration on the Amazon company
The supply chain is critical for Amazon because it ensures connections with different bodies and provides an opportunity to receive materials or objects and transfer them to the buyers. This procedure is rather complex, and its establishment requires much attention from the management. For example, they consider the influence provided by sales and operations planning. This business management process allows the company to balance between demand and supply (Supply Chain Market para. 3).
It helps when classifying offerings and clients as well as when defining marketing strategies, which allows addressing customers’ needs. Similarly, commerce is considered, and the costs are allocated to align with the supply needs. Except for that, sales and operations planning affect performance positively due to the improved flexibility and enhanced the opportunity to meet customers’ needs.
The company receives an opportunity to reduce operational costs. This process also puts more emphasis on the development of organizational goals and ways of their achievement. With effective leadership, it allows building a good relationship with other companies involved in the supply chain (Oliver & Watson, 2011).
Amazon’s medium- and long-term forecast
Medium- and long-term forecast is critical for the organization. With its help, the operation management department can see that organizational decisions made by Amazon are appropriate and it can balance those products that cannot be obtained at the same time. It will inform the department about the fact that the company is costumer-oriented. Its activities are aligned with the investment policy. The value is obtained through the focus on the long term goals, but the short ones lack consideration.
Logistics ensures that Amazon can operate decently with its supply chain. It allows to make the flow and storage of products efficient and cost-effective and to address customers’ needs. Being a customer-oriented organization, Amazon and its competitiveness depend greatly on the quick delivery of client-adapted offerings, which is achieved due to the logistics. Transportation modes and warehouse locations, in this way, allow enhancing the accessibility of distinct regions and cities, which increases the number of customers and offerings (Kiel, Smith and Ubbels 77).
Impact of global sourcing and procurement on the overall effectiveness of the supply chain
Global sourcing provides Amazon with the opportunity to “obtain in-depth and measurable supplier performance that directly relates to increased cost savings” (Castiglia para. 2). It has a positive influence on the operations maintained by the supply chain because it streamlines the procedure of product transportation making it more efficient.
Global sourcing allows the company to select those providers who offer the best cost and quality, is not limited to Amazon’s native country. Being located at a distance of other the parties involved in the supply chain, the organization tends to maintain high inventory levels, as lead times are not concrete. Negative influences can be limited through improved relationships with suppliers. Dealing with global sourcing, Amazon controls the situation with the help of investment and emphasis made on the competitiveness of the suppliers.
In this framework, procurement tends to be a vital source of supply chain efficiency and effectiveness. It helps to involve in the supply chain those organizations that provide products able to meet the needs of the customers and maintain cost-effective operations. Amazon receives an opportunity to utilize services provided by external sources (transportation, for example). It can ensure that the supply chain will not face operational issues, as the best cooperators can be selected via competitive bidding. Thus, it can be ensured that all parties of the supply chain can cooperate efficiently so that no delays occur and the expenditures can be limited.
When outsourcing logistics and other functions, Amazon can enhance its operations. It receives an opportunity to reduce freight costs but improve the quality of the products and services at the same time. It can also become more flexible, which streamlines the process of product delivery and allows us to address customers’ needs better. In this way, fixed assets can be reduced and their turnover increased. Inventory investment can be limited, which allows saving costs. Considering this particular example, logistics costs can be reduced. Due to the shipper service, the cycle time can be shortened.
The usage of outsourced functions improves the usage of information technology, making access to the appropriate data easier and allowing them to work with qualified personnel. Still, it is critical to remember that outsourcing makes it more difficult to meet specific requirements and goals. As a result, Amazon’s growth needs maybe not taken into consideration. The systems and approaches utilized by cooperating parties may differ, which often leads to misunderstanding and other issues. Finally, it is more difficult to control the situation and ensure security under such circumstances (Husdal para. 10).
Amazon’s e-commerce strategies to promote supply chain integration and boost sales
Amazon controls its listing in search engines, which ensures that potential clients will find its website with no problems and it will be on the top. The products are usually followed by the long-tail key phrases, which means that more different search request will lead to the same product. The very search engine that is used on the website allows defining various product features.
The customers can also receive personalized recommendations. Still, it seems to be more critical than the company offers free shipping, which increases the number of customers, involving those who would usually reject the possibility of online purchasing because of the shipping costs. Moreover, it leads to the involvement of one more party in the supply chain. It also provides all clients with the opportunity to write online product reviews and then read the comments left by other customers. Finally, the cross-sell increases the chances for the related products to be bought. As a result, the number of clients increase and the company gains more (Blatt para. 6).
Amazon as an example for other companies to model regarding supply chain integration
I believe that other organizations can benefit if they follow Amazon’s example when integrating its supply chain. The literature reveals that this organization operates rather successfully and even improves its performance over time, becoming more competitive. The company focuses on its clients and tries to attract them in different ways, which determines the positive results it faces. Amazon utilizes informational technologies that play a critical role in the lives of the population today.
Allowing the customers to comment and conduct researchers, it attracts them with its readiness to cooperate. Thus, getting to know more about their needs, Amazon searches for the suppliers in the global framework, which expands the range of options and allows them to select those that meet both the needs of the company and the customers. Moreover, Amazon receives an opportunity to offer free product transportation, in this way, which appeals to the clients and strengthens relationships with other companies.
Still, some professionals, including Schuman state that the approach utilized by Amazon is rather unethical to other similar businesses because it tends to devastate the competition (para. 1). In this way, it is a good example for the company that is willing to become a leader or even a monopolist in the industry regardless of the influence made on other companies. Those who are willing to conciliate should search for another example or adapt to this one.
Works Cited
Blatt, Glori. 3 Strategies Your Ecommerce Company Should Borrow From Amazon.
Castiglia, Franck. Why is Strategic Sourcing Important to your Supply Chain?
Husdal, Jan. 3PL Outsourcing – Challenges and Benefits.
Kiel, Jan, Ruairidh Smith and Barry Ubbels. “The Impact of Transport Investments on Competitiveness.” Transportation Research Procedia 1.1 (2014): 77-88. Print.
Schuman, Evan. What Amazon Is Doing with its Supply Chain Could Devastate the Competition.
Supply Chain Market. Balancing Demand and Supply with Effective Sales and Operations Planning. 2016.