SUPPY CHAIN MANAGEMENT

GROUP PRESENTATION
ON
SUPPLY CHAIN MANAGEMENT
OF
AMAZON INDIA

SUBMITTED BY
GROUP 10
SHASHANK JAISWAL
RITANSHU JAISWAL
SUBMITTED TO GRISHMA BATRA
PROF. KESHAV SHARMA SIDDHANT BANSAL
JAIPURIA INSTITUTE OF MANAGEMENT RISHAV BALIYAN
AMAZON INDIA
• Amazon- net sales amounts to $13.2 billion in the
first quarter of 2012, a 34% rise compared to
previous year’s quarterly sales (Shaughnessy, 2012)
• Founded by Jeff Bezos in Washington, in 1994
• Offer gadgets, apps, video games, clothing, décor,
food, toys and jewellery
• In 2018, Bezos revealed that its two-day delivery
service, Amazon Prime, had reached 100 million
customers worldwide
• Amazon distributes Video song, and audible books
through downloading and streaming in its Amazon
Prime Video, Amazon Music, and Audible subsidiaries
It includes:
• distribution company- Amazon Distribution,
• a movie and TV company- Amazon Pictures, and a
• cloud computing division- Amazon Web Services

VISION & MISSION

VISION: Our vision is to be earth's most customer-centric
company; to build a place where people can come to find
and discover anything they might want to buy online.

MISSION: We strive to offer our customers best lowest

possible prices, the best available selection and the
utmost experience.
COMPETITIVE ADVANTAGE OF
AMAZON

• COST LEADERSHIP as its Generic Strategy

• PORTERS MODEL
• Minimization of operational costs is the objective in this generic competitive strategy.
•  the cost leadership generic competitive strategy pushes Amazon.com Inc. to minimize
its price levels.
• Amazon’s cost leadership generic strategy is to build e-commerce competitive
advantage through continuous improvement of information technology infrastructure.
• Keep cost down for customers and bases its warehouse in rural areas where land is
much cheaper as compared to urban area.
• This strategic objective impacts Amazon’s marketing mix
AMAZON - INTENSIVE AMAZON SUPPLY CHAIN
STRATEGIES STRATEGY

• Market Development The supply chain management is based

on 4 main points:
• Market Penetration 1. Warehousing
• Product Development 2. Technology
• Diversification 3. Delivery
4. Manufacturing
SUPPLY CHAIN NETWORK DESIGN
 AMAZON
SUPLY
CHAIN
SIMPLIFIED
 • The major pillar of Amazon •4 types of delivery exists:
AMAZON strategy is its technology –
Amazon Web Services.
• Slow free delivery (4 to 5

TRANSPO • A cloud computing platform

days)
• Prime: delivery in less than
RT includes mixture of
Infrastructure as a service
48 hours
• Drop shipping:
SYSTEM
(IaaS), platform as a service
(PaaS) and software as a • Prime now: delivery in less
service (SaaS) than 2 hours
•Building its own fleet for
• Launched to handle online
delivery through air. The goal is
retail operations of Amazon.
to develpoe its own air delivery
• First company to introduce a network.
pay as you go cloud
computing model.
SUPPLY CHAIN DRIVERS

• Supply Chain Design designs with respect to drivers –

• Amazon
• Facilities -
• No of facilities – amazon has large no of warehouses which are close to customer which reduces
response time and increase responsiveness of supply chain .
• Number of facilities increases , inventory cost increases reduces transportation cost .
• Amazon has excess of capacity which denotes responsiveness as they have high level of
inventory stock
• Location of facility – Centralization which increases economies of scale
• Aggregation is used which allows amazon to hold few inventory in distribution centre.
 • Amazon uses Cross docking which shows more efficiency is been followed , using DC helps
to be more cost efficient.
• Huge level of inventory is maintained at different warehouses consisting of different
products.
• Decentralization fulfilment centers are been used
• Information

Inventory- • High investment is done in technology

• Amazon uses machine learning, IOT, analytics , cloud .
• Amazon uses robots which reduces costs .
• Amazon web Service which includes all merchants to access web and provide information
help customer to order.
• Pricing -
• Differential pricing strategy according to its product and customer segment
• Menu pricing depends on delivery of products which customer prefer.
• Customer Segment are -One day delivery ,Prime customer delivery
• sourcing -
• Outsourcing – Amazon outsource the products which are not ordered frequently as cost
of storing them is very high and they follow efficiency . As outsourcing are very risky .
• Amazon in house products for responsiveness , majority of products are available in their
own facilities which are frequently purchased .
Transportation-

• Amazon uses fastest mode of transportation which increases responsiveness , increases

transportation cost .
• Focus on Low value , high demand items transported by cheaper mode
• Last mile delivery
• If customer needs are high responsiveness they will pay extra amount for the delivery
depending upon which delivery option they had opted which helps amazon to achieve
economies of scale.
• For economies of scales, lead time will be long and transportation cost will be reduced
• Amazon uses its own delivery vehicle for same day delivery within few hours , increases
responsiveness , increases transportation cost .
Strategic Fit of the organization

Yes, I think that the Amazon’s Competitive strategy and supply chain strategy are aligned with each
other in providing the strategic fit to the organisation.

• Combination of Strategies

• Outsourcing of Storage & Distribution of Product

• Warehouse Management
• Price Differentiation Strategy.

• For all these segments, Amazon offers the customers an option of paying more for faster
delivery or retains the traditional lead-time.

• A key aspect of Amazon’s Supply chain Management is that it has evolved over the years in
response to its growth in the market.

• Follows Push Pull Strategy.

• Amazon’s one of the important factor in achieving the strategic fit is multi-tier inventory system
 FINANCIAL PERFORMANCE OF LAST THREE YEARS

As the above bar diagram suggests amazon has performed really well in last 3 years and have succeeded in improving the
revenue and earnings significantly.Strategic supply chain decisions has helped company in a major way as it is there core
and unique business activity.
 SUCCESS MODEL OF AMAZON’S SUPPLY CHAIN

Introduction of FAB: This has helped the company in maintaining large inventory through this network FAB there is no
extra holding cost involved as the order is only picked by the fulfilment centre when the order is placed by the costumer

Hybrid logistics model: Amazon adopted a logistic model which was hybrid as it realised that they alone through their
network cannot tap on the potential it was just not feasible so they used hybrid model wherein some deliveries were
done by them and some were sold directly by suppliers through other logistic firms present in the market place

Amazon SCOT (Supply chain optimisation policy): With time amazon adapted to the changing technology they innovated
quite a lot in order to give people what they want so they made use of various machine learning, data analytics and
complex simulations it helped in more than one way it showed demand forecast on point orders communication to the
network as soon as an order is generated this made whole process quite efficient which became one of the reason for
growth of amazon  

Managed Marketplace model: In this seller was free to choose self fulfilment and marketplace fulfilment Infused
inventory led in the marketplace by keeping an control on the operations and entities owned by sellers such as cloud-tail
amazon.

 
Recommendations

• Establishment of warehouse in the outskirts of every city (major and minor).

• Availability of the products which are frequently order in an area.
• Outsourcing of warehouse and delivery partners (For Ex- Mountain areas)
• Providing the no. of warehouse in which the product is arrived so that the customer can talk to
the warehouse manager.
• Reducing the different levels in the delivery part of supply chain and in place of that directly
sellers can deliver their products to the customers by replacing third party delivery partners
• Sometimes in the nearby warehouses the required product is not available. so the company
should mention the warehouse option to the customers in which they can order the product
from a different warehouse located in a far away location and further delivery charges can be
added accordingly.