How Amazon Changed The World Of Consumer Retail Through Supply Chain
Ever since its inception in 1994, Amazon has seen itself grow not only among e-commerce websites and platforms but as one of the most sought-after businesses in the whole world. Their business models are looked upon by professionals starting their new business and entrepreneurs looking to grow their business reach.
Amazon has successfully established itself as the world leader when it comes to managing a business and surviving in this rife environment of competition. However, it is important to know that just like any other company, Amazon too, had extremely humble beginnings. It has become the company it is today by starting as a small and simple book delivery service.
So, what is it that they have done right? The answer to this is perhaps very long because it factors in things like service, products and customer satisfaction. However, one thing they definitely got right is their supply chain, the thing that has helped them sustain a mammoth business like this. Here’s looking at how they could pull this off, and how their supply management is different from the rest.
1. Options For Fulfilment
The key to Amazon’s success is that it caters not only to the needs of their customers but pays equal attention to their sellers too. For them, Amazon has two fulfilment options. Sellers can either choose to fulfil the order themselves (FBM) or let Amazon handle the fulfilment of the order placed on the marketplace, also known as Fulfillment By Amazon (FBA).
This has made it easy for the company to integrate a lot of logistical needs like packaging and delivery. But, keeping an option open for the seller has worked in their advantage and provided convenience for sellers. Having multiple options open has made it easier for sellers to conduct business through Amazon and contributed to the robustness of their supply chain. Having systematic plans in place has made sure that supply norms are in alignment with their capacity.
2. Smart Warehousing
It is no secret that Amazon has a plethora of warehouses situated throughout the globe that help achieve the fast-paced delivery Amazon prides itself over. They have strategically placed their warehouses in popular spots all across locations to ensure speedy and timely delivery.
This helps ease the burden on the supply chain and ensures that deliveries are accurate and on time. Warehousing is also very essential to a supply chain in terms of cost efficiency and time management. A well-planned supply strategy will ensure that no wastage happens, and resources are used to their fullest. Having a warehouse in prime locations can put a strain on your budgets, but if you can afford it, the investment is worth it.
3. Diverse Delivery Options
When it comes to e-commerce platforms, almost all of them provide users with a plethora of payment options, right from e-wallets, net-banking, cash on delivery, to gift cards and many others. However, Amazon sets itself apart in this manner too. Along with a huge variety of payment options, Amazon also has a number of variants when it comes to delivery methods.
Along with the usual delivery methods through FedEx or their own chain, where your package is brought through a truck, they even have bikers and the Prime 2-day shipping that facilitates special or urgent orders. In the case of groceries and perishable items, the duration might be even less. Their latest innovation, however, is their integration with technology. Amazon has now started delivery by means of drones. This feature is still in its infancy and has not been scaled to a larger means until now, but the plan is definitely underway. Even though these features are not accessible to all and require the fulfilment of certain conditions, this type of upgrade definitely eases the burden on the supply chain, since automation takes up most of the difficult tasks.
4. Robust Order Tracing
Amazon has a state-of-the-art system when it comes to fleet tracking. This system ensures that orders are dispatched on time and that they are delivered on time without any difficulties. Since the system they use is meant to suit a large fleet, their technology might be complex. But it perfectly suits their supply chain wherein they can ensure the driver’s safety and compliance of traffic and road laws.
They make use of GPS tracking systems for their orders that help not only them but also their customers. Users can track their orders after they are shipped, and most of the time, they can also stay in touch with their delivery executive. This type of order tracking helps identify shortcomings in the supply chain and rectify them as soon as possible. It is difficult for a beginning start-up to get on board with technology like this, but it is still worth knowing what the best companies in the business are doing so that you stay up to date with any new developments.
5. Widespread Reach
Owing to the size of the company, it is no doubt that Amazon’s vast network has definitely acted in its advantage. Their reach has helped them sort and refine through their supply channel. And anyway, having a larger reach means having access to more resources, which in turn leads to efficiency.
Whatever the case may be, they have made sure to keep their deliveries and supply at par with the growth of their platform, and that has definitely helped them become leaders in supply management.
Conclusion
Surely, for a giant like Amazon, things are much more complicated than they seem, be it in the department of orders, operations or supply. But what’s important is that they have adapted to these changes and implemented them effectively.
Amazon is the perfect model for most companies working in the supply chain and its management. You might want to consider taking a page from their book, learning from their mistakes and consequent decisions. It might seem a bit overwhelming in the start, but remember, even Amazon started somewhere.
Depending on the type of your fleet, you can make use of a fleet management software to ease your business and logistics needs. Making use of these will not only keep you technologically up to date but also equip you to sustain your business among the growing competition.
