The Impact of Sales and Operations Planning on Overall Company Performance
The sales and operation planning (S&OP) in supply chain integration greatly impacts Amazon’s overall performance. Firstly, it exists to provide some form of balance between supply and demand. As explained by Qin and Liu (2022), sales and operation planning ensures the company develops individualized plans to meet consumer needs. In addition, S&OP facilitates the “categorizing clients and offerings” (Qin & Liu, 2022, p. 712).
Most importantly, S&OP helps ensure the company’s operational costs are dispensed based on demands and supply needs. Moreover, sales and operation planning, as a process, has transformed how the commercial units of the company undertake its operations in order to achieve the intended outcomes. Overall, S&OP allows flexibility when addressing customer needs and minimizing operational costs.
Amazon’s Medium- and Long-Term Forecasts Informing Operations Management
Amazon’s medium- and long-term forecasts are critical, especially for the operational management department. According to Aversa et al. (2020), forecasts help the department determine the effectiveness of the decisions made over time. They also inform the department of the need to weigh the pros and cons of making choices. The company’s long-term forecasts are client-based, essential when developing products that meet consumers’ needs. Aversa et al. (2020) further noted that long-term forecasts have enabled Amazon to optimize its shareholder value.
However, the bond of contention lies in that Amazon, through its operational department, focuses more on long-term objectives at the expense of short-term goals. This explains why its stock prices continue to change, leading to unstable operation margins. Therefore, the company must find a way of balancing between the short and long-term objectives in order to meet the increasing demands of its consumers.
Enhancing Competitiveness through Logistics, Transportation Modes, and Warehouse Locations
Logistics, transportation modes, and warehouse locations have had a major impact on Amazon’s competitiveness. Firstly, regarding warehouse location, the company has over 145 warehouses around the globe, which ensures that consumers can access their products as quickly as possible (Bharadwaj, 2019, p. 280). Secondly, Amazon adopted an e-commerce logistics model, which facilitates the storage and delivery of products such as freight – this helps improve customer satisfaction. Lastly, Amazon relies on various transportation modes, including free shipping, to improve its customer experience (Aversa et al., 2020). Overall, logistics, warehouse, and transportation modes have allowed Amazon to gain access to specific regions and, in the process, increase its customer base.
The Influence of Global Sourcing and Procurement on Supply Chain Effectiveness
Global outsourcing and procurement impact the overall effectiveness of Amazon’s supply chain in various ways. Firstly, the two ensure the company obtains its raw materials and labor at a reduced cost. Secondly, procurement increases organizational productivity by allowing Amazon to identify and work with providers with a proven track record. Lastly, global outsourcing and procurement, as elucidated by Sadq et al. (2018), “offers quality assurance by meeting customers’ needs and eliminating risks through quality systems (p. 66). Essentially, the two are critical to ensuring the company meets the customer needs.
Benefits and Challenges of Outsourcing Logistics and Other Functions
Outsourcing logistics and other functions improves the company’s ability to undertake its operations effectively and efficiently. The overriding benefit of outsourcing logistics is that it allows the company to reduce freight costs while, at the same time, improving product quality. Outsourcing also helps the company streamline product delivery and improve customer needs (Sadq et al., 2018). On the other hand, several challenges are likely to occur when outsourcing logistics. They include difficulties coordinating operations, damages for longer distances, and challenges complying with local country rules and regulations. Overall, there is a risk for confidential information to be exposed as far as outsourcing is concerned.
E-Commerce Strategies to Promote Supply Chain Integration
Amazon is widely known for its ability to use e-commerce strategies to promote its supply chain integration and improve its sales and growth. For instance, the company, as observed by Lai et al. (2022), “controls listings in online search engines,” ensuring that potential customers can access its website without any difficulties (p. 419). The long-tail key phrases are often utilized to provide a wide range of options for clients searching for Amazon products. Amazon’s website uses search engines that allow users to access specific details such as product characteristics.
The first strategy that has been particularly effective is offering free shipping. This approach has helped increase the company’s customers, especially those who avoided shopping with Amazon due to high shipping costs (Aversa et al., 2020). Another strategy Amazon adopts is where customers are allowed “to write product reviews online and after that read comments by other clients” (Aversa et al., 2020, p. 100). This allows them to make informed decisions regarding the products of their choice.
The company’s online platform allows customers to compare the costs of various products. This strategy has worked before because customers can find all the information they need about Amazon’s products – they are not required to physically visit the stores (Aversa et al., 2020). The last strategy is the use of cross-selling, which increases the chances of customers buying related products.
Amazon as a Model for Supply Chain Integration for Other Companies
It is right to argue that Amazon sets an example for others to model about supply chain integration. Since its inception, the company has been at the forefront of introducing distribution centers worldwide to ensure products reach its consumers within a short period. In addition to this, Amazon has reliable “international shipping via cargo jets and a French package delivery firm,” enabling it to serve its customers within the indicated timeframe (Sadq et al., 2018).
Amazon also serves as an example for others through its global supply chain, which has seen it adopt various strategies to undertake freight services and, in the process, eliminate the overreliance on the middleman. Overall, has focused much of its attention on reducing the supply costs with the aim of increasing the product margin. In other words, the company has managed to integrate its supply chain fully, making it a reliable model for other players in the market.
The Role of Conscious Capitalism and a Christian Worldview in Amazon’s Supply Chain Integration
Conscious capitalism and a Christian worldview will have a major impact on Amazon’s supply chain integration. For the purpose of clarity, conscious capitalism “is a combination of higher ideals that inspire action and in turn produce businesses that are good, ethical, noble and heroic” (White, 2020, p. 87). Combined with a Christian worldview, the two will inform Amazon to not only focus on profitability and expansion but also consider elevating human conditions. This is necessary because organizations do not operate in a vacuum. With conscious capitalism, therefore, Amazon will have a high purpose other than making money – this, in turn, will make it more attractive to potential consumers. Overall, a Christian worldview is necessary as it elicits high levels of creativity, collaboration, and loyalty, especially on the part of the stakeholders.
References
Aversa, P., Haefliger, S., Hueller, F., Reza, D. G. (2020). Customer complementarity in the digital space: Exploring Amazon’s business model diversification. Long Range Planning, 10 (1), 85-100. Web.
Bharadwaj, S. (2019). The engineering behind a successful supply chain management strategy: An insight into Amazon. com. International Journal of Scientific and Technology Research, 8(10), 281-286.
Lai, G., Liu, H., Xiao, W., & Zhao, X. (2022). “Fulfilled by Amazon”: A Strategic perspective of competition at the e-commerce platform. Manufacturing & Service Operations Management, 24(3), 406-420. Web.
Qin, Y., & Liu, H. (2022). Application of value stream mapping in e-commerce: A case study on an Amazon Retailer. Sustainability, 14(2), 713. Web.
Sadq, Z. M., Sabir, H. N., & Saeed, V. S. H. (2018). Analyzing the Amazon success strategies. Journal of process management and new technologies, 6(4), 65-69. Web.
White, S. W. (2020). Amazon and Whole Foods: Adventures in grocery shopping. The Case Journal. 5(3), 85-99. Web.