Amazon’s ingenious supply chain management system – and a lesson or two we can all learn from it

Amazon’s Ingenious Supply Chain Management System – And a Lesson or Two We Can All Learn From It

Driven by a constant eagerness to automate company-wide operations, Amazon’s innovative supply chain management initiatives have set an example for numerous companies to follow suit. As the tech giant surpassed a $1 trillion net worth this year, there is a thing or two we can all learn from such tremendous success; what is it that Amazon is embracing, which is contributing to the outcomes it is reaping today?

Founder and CEO of Amazon, Jeff Bezos, has perpetually been at the forefront of applying the most advanced technology to increase efficiency, and customer service and eventually help bottom-line growth. Being an eCommerce-focused company, Amazon heavily relies on a streamlined Supply Chain Management system to deliver its orders accurately, and on time.

Likewise, its warehouses (known as Fulfillment Centers) and distribution offices are equipped with robots that are capable of carrying entire aisles from one point to another. With Fulfillment Centers spanning millions of square feet, this is a boon for a corporation that needs to process thousands of orders on any given day.

What are supply management systems?

A supply chain management system is basically consolidated management of the flow of services and items and involves all methods that change raw materials into end products. With an efficient supply, chain management system companies can reduce extra costs and deliver items to the consumers fast. 

A supply chain management system involves 5 important elements crucial to creating and delivering top-notch services and items on time and within the specified budget. The five levels of a supply chain management system involve:

  • Planning – companies develop a plan at this stage to make sure inventory is available for the whole manufacturing procedure. The demand for products varies which can affect the available resources to your company. Enterprises use analytical tools as an SCM solution for example supply chain analytics software to help predict supply and to figure out the most needed raw materials.
  • Sourcing – businesses must also evaluate supply chain management vendors who can supply the demanded materials within their budget. At this stage, the focus is on determining the right resources and making sure that they will arrive timely and without losing any money.
    Manufacturing – in making the end product for the customers, businesses must make to follow all the requirements. At this level, companies collect, test, and pack items and then amend the production operation procedure on the basis of their customer’s feedback. Items might go through several iterations before the end product is dispatched.
  • Delivery – in the delivery of final products to customers, businesses focus on customer expectations, brand image, and making sure that the delivery process is smooth. It’s substantial to make sure that the products are of high quality and can be delivered seamlessly to their customers.
  • Return – post-delivery, businesses focus on customer experience and efficient customer support, particularly with regard to returned items. In this phase, businesses make sure that the customers are not negatively affected. A seamless and smooth return or exchange strategy is just as crucial as the delivery process. 

Amazon’s supply chain strategy applies to the activities of delivery, storage, inventory management, and so on. Supply chain management embraces technology. The company uses unlimited robotic solutions, and automation, both to make and dispatch orders also for storing and stacking inventory. 

These supply chain management tools not only boost the company’s efficiency and delivery speed but also reduce staffing and warehouse costs – allowing funds to be used for supply chain needs or logistics. This infographic demonstrates just how massive Amazon’s Supply Chain Network is, and shows how the organization manages every step in its intricate delivery process - without a hiccup.

This infographic demonstrates just how massive Amazon’s Supply Chain Network is, and shows how the organization manages every step in its intricate delivery process - without a hiccup.

amazon supply chain

What is SCM software?

Supply chain management SCM software represents a set of modules or tools used in performing supply chain transactions, dealing with suppliers, and handling linked business procedures. Supply chain software maximizes the productivity and efficiency of business operations that involve planning and management of the entire supply chain. It assists businesses in automating product manufacturing, sourcing, and logistics. This improves the physical flow of business and informative flow as well. The company will leverage maximum cost-efficiency, higher performance, and hence heightened supply chain efficiency.

What is the purpose of supply chain management software?

Supply chain management application includes real-time analytical systems managing the flow of information and products through the supply chain network. The SCM software is designed to improve SCM operations such as production planning, supplier sourcing, transportation planning, inventory planning, and demand planning. These are the top SCM software features;

  • Inventory management – SCM software tools are used to track and control the availability of spare parts, stocked goods or raw materials. The software also helps in barcode integration, asset management, price forecasting, and future inventory.
    Order management – supply chain management software helps in purchase order process automation. It can generate and track purchase orders, create pricing, schedule supplier deliveries, and also create product configurations.
  • Logistics – this feature involves amending delivery performance and great customer satisfaction. The software helps in coordinating transportation channels. It also helps with labeling, storage optimization, and labor management.
    Forecasting – the supply chain software predicts customer demands and plans production and procurement procedures. This forecasting can be helpful to store extra products in the warehouse and remove the requirement to purchase unneeded raw materials. Thus, the costs are reduced.

With the correct supply chain management software SCM, you can uplift your business’s productivity and cost-efficiency. Top supply chains consist of software with an SCM commerce interface to elevate their bottom line. It’s crucial to keep in mind that different businesses have different goals and different reasons for incorporating supply chain software into their system.

Interested to know how you can transform the way your company conducts its supply chain operations? We've got the perfect software to help you get there! Please visit our Supply Chain software page to view a list of suitable solutions, that you can take your pick from.