Amazon is one of the top e-commerce companies selling products to people irrespective of their geographic locations. The company has long relied on the services of delivery companies such as FedEx or UPS (D’Onfro, 2015). This reliance sometimes had quite adverse effects as some deliveries were delayed, which could be crucial for Amazon’s customers. For instance, the delays during the Christmas season of 2013 made the company’s top management consider the development of the in-house logistics and transportation department. Amazon has announced its plans to develop “its overnight-air-logistics operations” (D’Onfro, 2015, para. 2). The company’s executives stress that this department can grow into a distinct division providing delivery services to other organizations. The proposed Transportation Improvement Plan will provide a detailed analysis of the creation of Amazon’s transportation and logistics department, its possible effects on the company’s development, as well as possible improvements.
The strategy Amazon has developed can help the organization enhance its competitive advantage through minimizing (or even diminishing) its reliance on delivery companies. Amazon will be able to control all the processes (from customers’ purchasing experience to the order received) and improve customer satisfaction. The company already has a significant fleet (4,000 semi-trucks) that ensures effective ground transportation (IB Intelligence, 2017). Amazon is also expanding its sea transportation operations. The organization has several facilities (in different countries such as the USA and China) managing cargo shipment. These facilities help the company control the package delivery process. It is clear that the company already has quite a successful experience in addressing issues associated with the development of the transportation department. This experience can be used when developing air transportation operations. As far as these operations are concerned, the company is acquiring several facilities to ensure the effective work of the department. For instance, Amazon will have its air cargo hub in Kentucky. It is noteworthy that the hub is located near similar facilities of FedEx and UPS. Amazon already has 16 planes operating in the company’s fleet and plans to lease over twenty planes (IB Intelligence, 2017). The development of this kind of transportation and logistics department requires substantial funds and a certain time.
The proposed plan will include the analysis of the steps undertaken to create the department, the effectiveness of the supply chain, customer satisfaction, possible improvements, as well as possible outcomes for the company’s development. Specific attention will be paid to the way the development of the department is implemented, as well as the overall cost-effectiveness of the creation of the new department. The plan will also include the analysis of any difficulties the company has had or may have in the future. Such aspects as finances and human resources will be central to the analysis.
In conclusion, it is necessary to note that Amazon’s decision to create their transportation and logistics department can help the company improve the quality of services provided or even develop a new branch and further diversify. In that way, the company can improve its overall performance, but it is possible if the strategy will be implemented properly. It is necessary to analyze possible outcomes of the measures undertaken, which can help other companies to use Amazon’s experience. The development of a transportation and logistics department is often associated with various issues that can undermine the cost-effectiveness of new operations.
References
BI Intelligence. (2017). Amazon is opening its first air cargo hub. Business Insider. Web.
D’Onfro, J. (2015). Amazon’s next $400 billion opportunity. Business Insider. Web.