The logistics and operations management is an interdisciplinary field comprising disciplines like the quality management and product development. It also includes “human resource” managements, logistics and the information systems. Operations cover the “performance management” of the group of design engineers. It also builds loops of quality-feedbacks to concise delivery performances and prediction of production. The design of the information architectures and the “supply chain management” also forms the part of operation management. The logistics along with “supply chain management” has been receiving attention since the last two decades. However, the management of the supply chain has not been understood yet conceptually (Francis et al. 2014).
The Amazon.com has been chosen in this report for evaluation of the fundamental organizational functions. As an “Operations Manager” of the company proper recommendations were needed to be asked. These should be based on the best suited processes placing the company in its best position. Analyzing of various crucial decisions affecting the company was also asked (Liu et al. 2016).
The following report firstly introduces the Amazon.com justifying its position as a “services industry”. A critical assessment of the company’s effectiveness on functioning with the performance objectives has been done. Next, the different location methods that the company could deploy with justification have been shown. Lastly, conclusions providing proper recommendations have been done with proper justifications.
The Amazon.com came up with a new business model for the book industry. It used to sell music, books and other various items online. It was founded in 1994. It was placed in Seattle in Washington, USA. It started with stuffing of book orders by utilizing the books bought from distributers. Then gradually it has diversified its kingdom including the selling of DVDs, CD, handbags, consumer electronics and various other products. It understood that, in order to be successful, the right product with right quality should be supplied at the right time. It integrated the five primary supply chain functions. These were the inventory control, distribution network, development of information system and distribution of networks (Ritala, Golnam and Wegmann 2014).
Over the last decades, operating strategy of Amazon has shifted from being an online retailer to a B2B service provider. Triggered by the urge for customer satisfactions or increase of market shares, the development process of Amazon has followed the following structures to become a clear service provider:
One of the primary factors in the success of Amazon was that, it provided no physical stores for the customers to shop. Thus, it took the full benefit of the e-commerce via online. The CEO of Amazon.com, Jeff Bezos claimed that, the formation of the e-commerce was nothing but a technology. It was unlike the formation of retail commerce that was “real estate based”. The technology gets cheaper with the rise in expense of real estate. The Amazon.com took the full benefits of internet by its effective policies of inventory management. It has helped in saving a lot of money (Stone 2013).
The “inventory management policy” of Amazon had helped it to upturn the inventories every couple of weeks. The average inventory has been recorded to about 2.6 times per annum. There laid a huge difference of Amazon.com from traditional book stores. It has been purchasing from the publishers directly and the stock books with anticipation with the customer orders. It has only been stoking the best- selling books. However it has also been gaining other titles from the distributers. It has been using the “U.S. Postal Service” and other various package carriers to send books and its other merchandises to the customers (Ivanov, Tsipoulanidis and Schönberger 2017).
The “configuring distribution facilities” and the “fulfillment centers” was a primary factor for the “supply chain linkage” for a retailing business over the internet. The “order fulfillment goal” has been dealing with the shipping of orders on the same date they had been ordered by the customers. For achieving this, Amazon.com has been reconfiguring its centers of distribution. This has been done after some years alternatively. In doing so, it closed some of its warehouses and opened new ones making it simpler to sort, locate and ship the orders of clients. It was reported that, within May 3013, it operated over eighty nine centers overall strategically located in various places of Asia, Europe and North America. Among forty six of them were located in US while forty three outside North America (Shin and Tucci 2015).
Thus a unique sourcing strategy has been formed by Amazon. It have partnered with the “Ingram Book Group”, shipping one book order at a tome directly to the customers. This was done, when there was shortage or no books left in the storage of Amazon. Amazon has been fulfilling any other orders by Ingram, in return to this. Again, Amazon has further partnered with Toys “R” Us, Target Corporation and Borders Groups. Amazon in further collaboration with them has been handling the inventory and shipping activities against a percentage of the sales or return of fees. The above partners of Amazon pay back the handling cost of inventory. It has also been assuming the overall risks collectively with any extra inventory. Amazon was the first come up with an “efficient in-house computing cloud” for its own information technology. It expanded within itself before offering others as “Amazon Web Services”. The similar pattern was again repeated by Amazon in other fields like e-commerce and payments also. Thus Amazon has evolved efficiently as a services industry (Amazon 2015).
Amazon’s foundation can be dated back to 1994, which with its establishment made its goal clear and has implemented it very well up till 2017. Amazon’s sole motive was to be the most customer centric retailing company from where people can relish services and products of any kind and any time. The company has always worked on their vision of becoming best e-commerce service providers. Company’s founder Jeff Bezos was heard saying to make Amazon Earth’s efficient service provider keeping consumer needs at the top (Klubeck 2017). The company has evaluated very strong features in its vision like specifying its targets and motives of expanding their business in aspects of products and location. Company at the start was selling books only to the college goers.
Amazon’s vision and mission can be entailed as providing the consumers
Vision
Mission
Above mentioned vision stated by company’s CEO can be verily understood with help of it highlighted components (Jusoh and Ling 2012).
Analyzing company’s vision and mission with their present work strategy it has been found that the company is progressing and also on its way they are fulfilling their mission (Mohapatra 2013). The company has kept consumer’s prioritization at the top by expanding globally and benefiting them with their diversified products. The free at the door service gives consumers great satisfaction as they do not need to go out and purchase product with an extra transportation cost (Huang and Benyoucef 2013). All objectives of the company are in coherence with the brand proficiency. CEO Jeff Bezos encourages on putting 70% of energy, time, focus and money enhancing consumer’s experience and only 30% on advertising. Its efficient CRM technology helps in acquiring customers, developing more potential customer and in avoiding customer loss.
Thus it can be asserted that Amazon is being successful in achieving its stated objective as it provides its customer feeling of trustworthy customer creating social bond with them. Its way of dealing has been so appealing for people that its growth is phenomenal from a startup to a market leader. It has not only served customers but also has created many jobs and provided platform for many mediocre sellers whose growth has been because of Amazon.
Nevertheless, for any company or organization there is always a room for growth. Amazon can enhance its technology and other services like it has done now by providing customer prime services which is enabling them to get deliveries in urgencies (Mohapatra 2013). It can make use of proper designed web programs to understand different customers better. They should also focus on recognizing what kind of customer has come online in regards with their particular interests and community. This will allow the company to design different sides to their brands to allure different customers. Amazon has for now focused on every step to sell customer online.
Three location methods found suitable for the company to find a suitable location were:
The Location Factor Rating Method:
Deciding the location can be a tough task. It can depend on various types of input and information. There are no such techniques as such which can give a proper analysis of a location or no foolproof method is present that can precisely decide the exact location, the company requires. However, techniques are available, that would help in organizing the information available from the locations (Yin et al. 2015). This technique helps in comparing different locations and choosing the best one. In a “location factor rating system”, the major important factors for choosing a precise location are identified. Each location factor is, rated on a scale of 0 to 1.00 according to their importance. In addition to this, a subjective score is also assigned. The subjective score ranges between 0 to100 generally, based on the attractiveness of the location when compared with the other locations. The score of all the locations are summed up, and ranked, according to their score. Although, decision should not be, made solely on these rankings but they provide a great assistance in the decision making of the organization.
The cost of transportation is generally a function of the weight, time and distance. The center of gravity technique is basically, a quantitative method for selecting a location in a geographic area based on their distance and weight (Vadrevu and Manikandan 2016). The method is used, to identify a set of co-ordinates for designating a central location on the map that is relative to the other locations. In this method, a grid is taken and it is set up on a Cartesian plane (Pettigrew 2014). The locations which, are to be considered, are given a set of coordinates (xn, yn) for identification of the location on the grid. Wi is, the annual weight shipped from the location. The main aim is to determine the most centralized location for the new facility. The method uses the following formula:
In the formula,
(x, y)= coordinates of the new facility at center of gravity
(xi, yi) =coordinates of existing facility i
Wi =annual weight shipped from facility i
The Load-distance method is basically, variation of the center of gravity method (Karapiperis and Verykios 2015). In this method, a single set of coordinates for any location is not identified. Instead of a single location, various locations are evaluated, using the value of the load-distance that is measured in weight and distance. For a particular location, the load-distance value is given by:
Where,
LD = the load-distance value
li = the load expressed as a weight, number of trips, or units being shipped from the proposed site to location i
di = the distance between the proposed site and location i
The distance is, given by di. If the value is known from the map the following formula for finding out the distance can be used.
Where,
(x, y) = coordinates of proposed site
(xi, yi) = coordinates of existing facility
The location with the lowest value would incur the minimum cost of transportation and hence would be the preferred location.
The center of gravity method was chosen for the organization to deploy for choosing the appropriate location.
Recommendations
In the previous task, all the location methods are discussed. Amazon.com is a ecommerce logistics company having many hubs all over the country. Along with that, Amazon has supply chain network all over the world. However, the target strategy for choosing location of delivery hubs for a particular region or after sales service center is Center of Gravity method.
The Center of Gravity method helps in choosing the areas where the weights delivered are higher than other areas. However, the hubs or future sales service centers should be placed where the customer base is strong and also demands of deliveries are the most. Thus, the Center of Gravity method is well equipped for the location selection for Amazon.com.
Conclusion:
Thus Amazon perceives a highly responsive supply chain followed by a pull strategy. The portfolios justifying it as a service industry might be its competence. This has been lying in the ability of the strategies. It have clearly included strategies like effective design of distribution systems, capitalization of the e-commerce technology, collaborated dealing strategic alliances and innovatively managing inventories. When any small business starts to develop, it becomes critical for them to invest whenever it is possible to automation. Here laid the success of Amazon which had always kept its logistic strategies automating. As the business developed, Amazon has amplified it in a commutable way. In the world of distribution, where everything has been progressing at a breakneck speed, it becomes difficult to make changes. Each and every building consists of theoretical boundaries over its space. It has been always disruptive as the locations are changed. However, Amazon has been building small logistic strategies and adding them as required. It has also made the logistic strategies portable and kept them simple. Amazon has kept them simple and uniform. It never made differentiations among any of its warehouses. The recommended strategy should be applied to increase the success level in achieving its premeasured objectives.
References:
Amazon, E.C., 2015. Amazon web services. Available in: https://aws. amazon. com/es/ec2/(November 2012).
Francis, M., Fisher, R., Thomas, A. and Rowlands, H., 2014. The meaning of ‘value’in purchasing, logistics and operations management. International Journal of Production Research, 52(22), pp.6576-6589.
Hashem, I.A.T., Yaqoob, I., Anuar, N.B., Mokhtar, S., Gani, A. and Khan, S.U., 2015. The rise of “big data” on cloud computing: Review and open research issues. Information Systems, 47, pp.98-115.
Huang, Z. and Benyoucef, M., 2013. From e-commerce to social commerce: A close look at design features. Electronic Commerce Research and Applications, 12(4), pp.246-259.
Ivanov, D., Tsipoulanidis, A. and Schönberger, J., 2017. Inventory Management. In Global Supply Chain and Operations Management (pp. 345-388). Springer International Publishing.
Jusoh, Z.M. and Ling, G.H., 2012. Factors influencing consumers’ attitude towards e-commerce purchases through online shopping. International Journal of Humanities and Social Science, 2(4), pp.223-230.
Karapiperis, D. and Verykios, V.S., 2015. Load-Balancing the Distance Computations in Record Linkage. ACM SIGKDD Explorations Newsletter, 17(1), pp.1-7.
Klubeck, M., 2017. Success Stories. In Success Metrics (pp. 153-175). Apress.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download
