Amazon has only been around for a few decades, but they have already changed the nature of retail in significant ways. And one of the main reasons why Amazon has become one of the fastest growing companies in the world is due to its supply chain management system.
Utilising a complex network of warehouses and transportation, multi-tier inventory technology, and data analytics, Amazon has dramatically upped the level of competition forever.
With Amazon Prime and the promise of fast same-day delivery, speed has become the main selling point for the company. And in line with this branding, Amazon has effectively disrupted any conventional processes. Here are three major ways in which Amazon has affected supply chain management.
Automation in the Fulfilment Process
All the way back in 2014, Amazon acquired Kiva Systems, a robotics company that they have since changed to Amazon Robotics. Not long after the acquisition, Amazon began rolling out robots into its warehouses and fulfilment centres. These robots started doing simple tasks that were mostly repetitive, and previously handled by humans.
Today, Amazon has more than a hundred thousand robotic units responsible for sorting, packing and fulfilling orders in warehouses all over the world. The level of automation in these fulfilment centres has helped propel Amazon to the top. It’s also what enables the company to provide quick and efficient services like same-day delivery and two-day international shipping.
In addition, the company runs an annual Amazon Picking Challenge, or APC, a contest for robotics engineers and researchers where they compete for a $25,000 prize to see who can come up with the best picking bot design – which, of course, is no small feat.
In short, this technology has played a significant role in warehouse automation, which in turn plays a significant role in supply chain management.
Enhanced Capabilities for Wholesale Businesses
The advent of online consumer platforms like Alibaba, eBay and Amazon’s Marketplace, has given wholesale businesses the ability to sell directly to consumers in an easier and more efficient way. Traditionally, wholesalers typically relied on trade shows and face-to-face interaction to sell their products. However, the creation of Amazon has given companies the ability to list all their products and reach an online audience without having to build and manage their own websites or eCommerce stores.
However, this is not the only way Amazon is changing the retail world. The eCommerce company, which initially started as a retail marketplace, has also evolved into a manufacturer by producing products of its own. Nowadays, a wide variety of products, from battery packs to women’s bags, are manufactured by Amazon and sold at low prices – effectively competing with other wholesalers and manufacturers.
With this in mind, it’s clear to see that they’re changing the future of retail.
Handling Logistics
Logistics is one of the most challenging aspects in the eCommerce industry. And one aspect of the supply chain that most merchants typically find the most difficult is the last-mile logistics of retail – delivering the item directly to the door of each customer.
Warehousing, packing, and shipping are processes that take a significant amount of time and effort – especially when there’s a 3-5 days delivery promise involved, let alone a one-day delivery time. If you take large order volumes into account, things can quickly become a nightmare.
Despite the logistic nightmare that most eCommerce businesses face, Amazon makes the last-mile logistics game look like a walk in the park. Amazon’s well-oiled and well-optimised logistics approach is among the most significant contributing factors behind their near universal success, and the reason why the company is disrupting supply chain management.
One thing is clear: success never sleeps, and neither does Amazon.