idea-space

Amazon - Best Practices in Supply Chain Management started by raimund.hudak

Relevance and need

Posted by raimund.hudak in category: Setting the research focus
What do we want to study, what is the problem?
To analyze and understand the logical underpinnings of Amazon's distribution strategy in the United States and how best practices from the U.S. distribution system were adapted and transferred to Europe. Given that suppliers, markets, work practices, transportation systems, and customer service expectations differ across Europe, students must look at how to reconfigure Amazon's European distribution network
What is the link of supply chain management and value chain management?
How is Amazon performing in their value chain management?
 

    Context

    Posted by raimund.hudak in category: Setting the research focus
    What is the context we need to address?
    In addition to spreading geographically, supply chains now involve more companies. Nearly 80 percent of executives say they expect the number of collaborative relationships with third parties to increase.
    Shifts in costs and other operational fundamentals are happening so quickly that conventional supply chain strategies and design techniques can’t keep up. New designs are outdated before executives can implement them. 
     
    Not surprisingly, organizational silos are the biggest barrier. Many executives report that their organizations are too busy to share information or simply do not believe collaborative decision making is that important. 
     
    Rising customer demands ranks as the third highest supply chain challenge, and two out of every three companies struggle to accurately identify customer needs
    “We must combine SCM with CRM… get supply chain staff thinking in terms of a commercial customer mindset. Bringing the customer perspective into all facets of SCM will push us to further supply chain excellence.”
    Vice President, Supply Chain,  consumer products company
     
     Amazon's Supply Networks Strategy
     
    Amazon.com, Inc. is an American multinational electronics commerce company with headquarters in Settle Washington, United States. It is the world'slargest online retailer. They started as an online bookstore but have diversified to so manyother products like music downloads, furniture, food and basically almost allconsumer electronics. Currently, Amazon is a major a provider of cloudcomputing services. Amazon’s has a separate retail online stores for differentcountries for example the USA, UK, China, Italy, Germany and others.   
     
    According to a research by Gartner with in a period of 3 years Amazon moves from the 1oth spot in the world ranking in the best top 10 supply chain company to the 2nd in the year 2015 that is just behind the world technology company and smartphone giant Apple.
    In 2015, Amazon surpassed Walmart as the most valuable retailer in the United States by market capitalization,[ and is, as of 2016 Q3, the fourth most valuable public company.
      
    The main objectivesof the idea collabroation is to gather different views how to approach the case study of Supply Chain Management and collect relevant information for studentst o prepare a research paper for the classroom.
     
    Collaborators can share their ideas and materials and provide further inputs into the topic -Supply Chain Management.
     

      Research question

      Posted by raimund.hudak in category: Setting the research focus
      What is the research question?
      Value Chain Model - Developed by Michael Porter but different from competitive model because it focuses within the company
      . Analyzes the cross-functional flow of products or services within an organization that add value to customers. 
       
      What is the link between the value chain management and supply chain mamangement (SCM)?
      Why is SCM is a key process in developing value in a company?
      What is the difference between a value chain and a supply chain?
       
      The difference between a value chain and a supply chain is that a supply chain is the process of all parties involved in fulfilling a customer request, while a value chain is a set of interrelated activities a company uses to create a competitive advantage.
      The idea of value chain was pioneered by Michael Porter. Five steps in the value chain give a company the ability to create value that exceeds the cost of providing its good or service to customers. Maximizing the activities in any one of the five steps allows a company to have a competitive advantage over competitors in its industry. The five steps or activities are inbound logistics, operations, outbound logistics, marketing and sales, and service.
      Inbound logistics include receiving, warehousing and inventory control. Operations include value-creating activities that transform inputs into products. Outbound logistics include activities required to get a finished product to a customer. Marketing and sales are activities associated with getting a buyer to purchase a product. Service activities include those that maintain and enhance a product's value, such as customer support.
      The supply chain comprises the flow of all information, products, materials and funds between the different stages of creating and selling a product. Every step in the process, from creating a good or service, manufacturing it, transporting it to a place of sale, and then selling it is a company's supply chain. The supply chain includes all functions involved in receiving and filling a customer request. These functions include product development, marketing, operations, distribution, finance and customer service.
       
       
      Subjects to be covered:
      Advertising;Agile software development; Business growth; Business models; Communitydevelopment; Cross functional management; Decision making; Distribution;Execution; Expansion; Globalization; Growth; Incubators; Inventory management;Managing uncertainty; Order processing; Plant location; Risk; Social Security;Supply chain management; Uncertainty; Warehousing
       

        Literature

        Posted by raimund.hudak in category: Preparation
        Identify key literature on the topic
        • Brandt, Richard L. (2011). One Click: Jeff Bezos and the Rise of Amazon.com. New York: Portfolio Penguin. ISBN 978-1-59184-375-7.
        • Daisey, Mike (2002). 21 Dog Years. Free Press. ISBN 0-7432-2580-5.
        • Friedman, Mara (2004). Amazon.com for Dummies. Wiley Publishing. ISBN 0-7645-5840-4.
        • Marcus, James (2004). Amazonia: Five Years at the Epicenter of the Dot.Com Juggernaut. W. W. Norton. ISBN 1-56584-870-5.
        • Spector, Robert (2000). Amazon.com – Get Big Fast: Inside the Revolutionary Business Model That Changed the World. HarperCollins. ISBN 0-06-662041-4.
        • Stone, Brad (2013). The Everything Store: Jeff Bezos and the Age of Amazon. New York: Little Brown and Co. ISBN 9780316219266. OCLC 856249407
         

          Research approach

          Posted by raimund.hudak in category: Preparation
          Define your research approach, consider validity, reliability, sampling etc.
          Basic Concept of the Value Chain Model
              
          1. Deals with core business processes, such as SCM
           
          2. Enables tracking a new idea to create a new  product and/or service from origination all the  way to customer satisfaction.  
           
          •Explain how the value chain and value web models help businesses identify opportunities.
           

            Prepare data

            Posted by raimund.hudak in category: Data Analysis
            Compile and prepare the data and distribute roles for data analysis
            Prerequisites andinformation can be uploaded here!
             
            http://www.slideshare.net/MaxJallifier/final-presentation-16443977
             
            By 2013, Amazonhad become one of the world's largest e-commerce players with over $60 billionin annual sales. Although its profitability had been uneven even after 18 yearssince its inception, its stock price had risen almost 17,000% since the companywent public. During this time Amazon has spread its business across a varietyof products and services that some see as unrelated
             
            http://de.slideshare.net/aneeshp1/case-study-on-amazoncoms-supply-chain-management-practices
             
            *
             
            1. Put yourself in customer's shoes
            At Amazon, they care so much about customers and this is not just something fancy to say. In many internal meetings, Bezos leaves one empty chair next to him and tell people that they should also think on behalf of one important customer who can't manage to be there. Then the word "empty chair" becomes a symbol of customer centric business practices inside Amazon.
            Also, many executives have to attend call center training so they can know customer's feedback, good or bad, firsthand.
             
            2. Don't be distracted by the competition
            Many companies focus on benchmarking performance against competitors but this is not the case for Amazon. Bezos believes that the pace of industry change is too fast so it's not good to make knee jerk reaction after competitors do something new. What Amazon does is to acknowledge what happens but keep focusing on it customer's needs.
             
            3. Keep an eye on the ball
            Culture of Metrics is the word used to described the obsession over the performance measurement. They're currently tracking about 500 KPIs and 80% of them are customer related.
             
            4. Go extra mile
            Bezos once insisted on using better quality box so customer can reuse it. And when Amazon's brand is on every box, it's the free publicity. He also pushed many executives at DCs to extend order closing time to 6pm or 7pm, even though this means over-time cost to Amazon.
             
            5. Plant seeds and watch them grow
            The example of this philosophy is that Amazon invests in many hardware technologies that don't make any short-term gain just to make sure that they build Kindle that people love.
             
            6. Learn to improvise
            Amazon asks candidates to make action plans, outside their comfort zone, with the assumption that there will be no budget for such plan, to test how each candidate react to unfamiliar business issues. As mentioned earlier, the pace of industry change is fast so they need people who can think outside the box.
             
            7. Build the dream team
            Amazon believes small work team is more efficient. To determine the right size of each team, they've developed a "rule of thumb". If it needs more than 2 pizzas to feed the team, that team is too big (so I name it "2-Pizza Heuristics").
             
             

              Analyze, Elaborate, iterate

              Posted by raimund.hudak in category: Data Analysis
              Analyse and elaborate on the findings, iterate and reach the key results of your research effort
              Analyze key elements of the value chain:
               
              How does a strong value chain management team help a company?
              A company's value chain allows it to create a competitive advantage over its competitors. A strong value chain management team helps a company create high value and a strong competitive advantage in any or all of the value chain's five steps.
              The value chain is made up of five interrelated activities that allow a company to create value that exceeds the cost of providing its good or service. A strong value chain management team maximizes the value of each one of the five interrelated activities: inbound logistics, operations, outbound logistics, marketing, and sales and service.
              Inbound logistics include the receiving, warehousing and inventory control of raw input materials. Operations include the value-adding activities that turn inputs into a final product. Outbound logistics include activities required to get the finished product to a customer. Marketing and sales are the activities associated with getting a potential buyer to purchase a product, including channel selection, advertising and pricing. Service includes activities that maintain and enhance a product's value, such as customer service.
              Any or all of these five areas are vital for a company to create a competitive advantage. To improve a company's value chain, its value chain management team identifies each part of its production process and where improvements can be made. These improvements can either reduce costs or improve production capacity. The additional value creation results in a company's customers deriving the most benefit from the company's product or service for the lowest cost.
               
               
               
               

                Distribute tasks and roles

                Posted by raimund.hudak in category: Article writing
                Distribute tasks and roles for the article writing
                 

                  Write, iterate

                  Posted by raimund.hudak in category: Article writing
                  Write the term paper
                   

                    Submit

                    Posted by raimund.hudak in category: Feedback and next steps
                    Submit your presentations and final term paper HERE
                     

                      Refine and plan next steps

                      Posted by raimund.hudak in category: Feedback and next steps
                      In case of revision or outcomes, refine the work and continue towards common research agenda