Description
Create a diagram of the supply chain plan using one of the following tools:
- Excel
- PowerPoint
- Visio
- PictoGram
- Other faculty-approved platform
Write an 875-word analysis of the supply chain. Include the following:
- Value chain and flow of structure
- Inputs
- Outputs, including customer service structure
- Inventory points and forecasting
- Sourcing activities
- Risks
- Locations
- Logistics
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Explanation & Answer
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Running Head: SUPPLY CHAIN PLAN
Supply Chain Plan – Amazon Company
Name
2/16/2020
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SUPPLY CHAIN PLAN
Supply Chain Plan - Amazon Company
Amazon is a cloud computing and e-commerce company. It has an impressive supply chain
network which helps it to make smarter decisions concerning supply chain management. Its supply
chain is as fast as the internet. The success factor of Amazon depends on its delivery and
distribution network and superior customer service. The company has transformed every aspect of
its supply chain including inventory, warehousing, prices, and delivery times. This paper will
provide an insight into the supply chain plan of Amazon containing value-chain analysis, inputs,
outputs, inventory, forecasting, sourcing, risks, locations, and logistics.
Amazon has a wide network of its supply chain and all its success rests on efficient supply
chain management. Value chain analysis of Amazon provides an analytical framework of the
business activities which are creating competitive advantage and value proposition for customers
(Lincoln IV, 2018). Below is a framework of the value chain and flow of structure of Amazon.
Inbound Logistics
Operations
Outbound Logistics
Marketing and Sales
Customer Service
The inbound logistics of Amazon is based on the Fulfillment by Amazon (FBA). At this
point, economies of scale is an important factor for value creation. Amazon is bringing in-sourcing
logistics. Through in-source logistic centers, sellers store their inventory in Amazon’s warehouse
named as FBA centers and deliver their products anywhere in the world and Amazon takes full
SUPPLY CHAIN PLAN
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responsibility for customer service, logistics, and customer returns. Sellers send their products to
Amazon’s warehouses which are located in high-demand areas, basically in high metropolitan
areas where products are placed closer to customers. Amazon spreads the inventory in all
warehouses steadily where it is made available to prime customers. Products are packed and
labeled by employees or robots (Dudovskiy, 2020). When a customer places an order, the product
is sorted out from the storage system and made available for delivery. If customers will order an
Amazon-owned product and an FBA product, Amazon will deliver both products in the same box
and will provide free shipping, two-day shipping, or other benefits.
Amazon runs its operations in 3 segments i.e. in North America, International, and Amazon
web services. Amazon also offers database, computing, and storage services to academic
institutions, start-up firms, and the government. Amazon’s outbound logistics integrates 109
fulfillment centers, makes outsourced arrangements, digital delivery, and physical stores
(Dudovskiy, 2020). Amazon’s logistics network is comprised of vans, ships, trucks, trains, and
planes. It competes with UPS and FedEx for international deliveries. Its marketing and selling
expenses have been increasing for the past 7 years i.e. 13.8 billion dollars in 2018. The company
is spending more on marketing as compared to Kroger, Best Buy, Wal-Mart, and Target (Green,
2017). It’s marketi...