Supply Chain Management

Team Members -
1. Shruti Adsare
2. Suchi Agarwal
3. Prerana Trivedi
4. Rahul Gaikwad

Guided by -
Prof. Dr. David Holman
 Introduction

Amazon Company Logo

Headquarters - Seattle, Washington, U.S

 History
Financial results
Entered the Nasdaq SE Company suffers loss from Amazon Kindle. Market capitalization
Raised $54 million. the 2001 dot com bubble Surpasses Walmart
First profits

1994 1997 1998 2001 2005 2007 201 2016 2017

1

Beginnings Global Expansion Diversification Innovation Kindle Fire & Fire HD

Online bookstore Competitors- Enters UK, Germany and Amazon Fresh Amazon Locker-Amazon Acquired goodreads,
Barnes & Noble Partnership other Asian countries Amazon Music Prime Air LoveFilm, Kiva Systems
with Ingram Book Group LLC Amazon Prime Launched Amazon Video
AWS Direct
AI
Amazon Products
 Mission Objectives

Vision Mission Goal

• We aim to be Earth’s most • To raise the bar of the • Empower businesses and
customer centric company. customer experience by using content creators to maximize
the internet and technology. their success.
 Amazon business model
PARTNERS SUPPLY SIDE DISTRIBUTION DEMAND SIDE

Content
Creators Prime Video
NON PRIME
Amazon Music
Appstore for Android
Content
Echo & Alexa
Distributors
Fire tablets
Fire TV
Manufacturers Kindle E-readers Platform PRIME USER
Kindle Books
Consumer

BUSINESS
SELLERS VENDORS
COMPANIES
Supply Chain Map of Amazon
Logistics Innovation by Amazon
 Wholeness System Thinking
Wholeness System
thinking
Wholeness Synthesis
• Identification of superior system • Understanding role and
• Identifying the role of Amazon’s importance of purpose
supply chain in the superior
system

Wholeness Analysis
• Taking system apart and studying
its individual parts separately
• Aggregate understanding of the
parts and interactions into the
understanding of the whole
system
 Wholeness System Thinking

Evaluating the performance

Understanding the purpose

Doing the right things
Doing things right
Master the process of executing
the tasks (Knowledge)

Understand where and when to

use these resources
(Information)

Know the resources you have

(Data)
 SCM Principles

Integration

Decoupling Management
Point of Processes

6 SCM Principles

Bullwhip Value added

effect processes

Push – Pull
Strategy
 Integration

Horizontal Integration Vertical Integration

• Amazon acquired similar businesses in • Amazon acquired a company operating in

the same sector. the same industry's production process.
• Logistics • Strengthening its supply chain
• IT • Reducing production costs
• Food Industry • Capturing upstream or downstream profits
• Consumer Electronics • Accessing new distribution channels
• OTT Platform
 Management of Processes

Migration of data to Communication with

the Cloud Key Partners Customers Kiva robotic system

Automate a number Logistics (Delivery) Reduces error rate

of critical processes becomes better
 Value added processes

Value added Services

The core Amazon business model is based on
an eCommerce market platform that offers

• Prime Video
• Amazon Music
• Echo & Alexa
• Vendor products
• Fire Tablets
• Fire TV,
• Kindle E-readers
• Merchant products
• One-day delivery
• Kiva Robots
 Push – Pull Strategy
Push strategy is to stock the warehouses with
products forecasting demand.

Pull strategy is selling the product directly

from third-party sellers.

In Pull systems there is no inventory, no

warehouse and no overhead.

The strategy has changed to push-pull.

In Amazon, the inventory is held up using a

push strategy while orders are shipped using
a pull strategy.
 Bullwhip Effect

• Distorted information from one end to

the other can lead to inefficiencies.

• It is reduced with the use of Inventory

management software.

• EDI can transfer data back and forth to

communicate to Amazon and meet
obligations.

• Order management system helps to

eliminates the bullwhip effect.

Source - https://www.coursehero.com/file/p3468n3/The-difficulty-in-handling-the-bullwhip-effect-is-that-it-cannot-be-forecasted/
 Decoupling Point

Supplier FC’s DC’s Customer

Decoupling point

• Decoupling point is where push meets pull.

• The decoupling point in Amazon is Distribution Centres.

• Pure push strategy for all products stored in warehouses.

• All products sold through third party sellers follow a pure pull strategy.
 4 Lean Principles
Pull

One Piece Flow Takt Time

Zero Defect
 Pull

• Low inventory management cost

• Increasing the range of products in their inventory in

order to expand their customer base Order

AFC
• Not outsourcing inventory management for popular or
frequently purchased products Delivery

• Distributors stock non-popular products and delivered

them as needed.

Source - Bharadwaj, Samrat. (2020). The Engineering Behind A Successful Supply Chain Management Strategy:
An Insight into Amazon.com. International Journal of Scientific & Technology Research. 8. 281-286.
 One Piece Flow

Mistakes can also be spotted mid-batch

One-piece flow is all about reducing WIP before they affect the entire order.

Reduces waste
in Process

Requires a huge amount of

coordination and consistency

Source - https://kaastailored.com/blog/what-is-one-piece-flow/
 Takt Time

• Deliver the products as quickly as possible, meet

promised delivery date to the customer.

• Autonomation helps human beings perform tasks

which adds value in a defect-free and safe way.

• Unnecessary processes are eliminated using

Automation to Optimize Logistics process.

Source - https://www.mckinsey.com/business-functions/operations/our-insights/when-toyota-met-e-commerce-lean-at-Amazon
 Zero Defects

• Defects are not acceptable

• Do it right the first time.

• Andon Cord method to reduce defects.

• Employee can issue a warning if a possible quality or

safety concern is noticed.

Source - https://www.lean.org/leanpost/Posting.cfm?LeanPostId=1100
 Amazon’s Competitive Advantage

Efficient Supply Chain Management

• Highly Competitive Pricing.

• Broader Product Assortments Via Marketplace.
Fig : Financials of AWS
• Warehousing
TY
4 Lean Principles
 Pull

Source - Bharadwaj, Samrat. (2020). The Engineering Behind A Successful Supply Chain Management Strategy:
An Insight into Amazon.com. International Journal of Scientific & Technology Research. 8. 281-286.