Amazon: Supply Chain Integration

Topic: Logistics
Words: 1147 Pages: 4

Sales and Operations Planning in Supply Chain Integration

Strategic planning aims to identify the most promising areas of supply chain activities that ensure its efficiency and competitiveness. Integrated planning is a unique form of organizing joint activities in the supply chain, in which partners regularly exchange information about the current state of demand in real-time (Goh & Eldridge, 2019). In addition, this is reflected in the implementation of the production plan, shipments, and inventory levels and quickly makes effective joint decisions in case of deviation of current projects from prescribed standards.

The medium-term forecast is used in sales planning, production planning and budgeting, and analysis of various production plans. The long-term forecast is used in planning new products, capital expenditures, location and extent of equipment, research, and development. After obtaining correct data from the client, the manufacturer conducts a primary analysis of the data, making a slice of the current situation within the set KPIs (Goh & Eldridge, 2019). Then, on a weekly basis, alternative indicators of the inventory level in the retail network warehouse and the level of service are calculated. Tracking the dynamics of the project’s alternative and actual KPI level allows Amazon to reflect its implementation’s effect clearly.

The basis of Amazon’s operations is a modern system that guides consumers during their purchases from one stage to another. The system considers consumer requests, receives payments, and organizes the delivery. Amazon uses efficient operations to have low overhead, so it gets significant economies of scale and uses its substantial economic power to get discounts from publishers, manufacturers, and suppliers (Cohen, 2018). Consequently, the extensive network of the logistics chain allows the company to have several advantages over competitors. Many warehouses and their availability become one of the key factors influencing the choice of buyers. Thus, the ability to move goods quickly while maintaining their low cost allows Amazon to be very competitive.

Global Sourcing and Procurement

Global purchase of raw materials, components, and production is the rule rather than the exception in today’s supply chain. Businesses have progressively developed partnerships with third-party providers outside their nation during the previous few decades. The manufacture of items used in international trade is dispersed throughout a global supply chain that spans several businesses in various nations (Haslam, 2022). Financial corporations are broadening and refining procurement methods outside local sources to fulfil increasing demand fueled by more powerful e-commerce and altering consumer spending patterns (Haslam, 2022). Global sourcing of raw materials and goods is considered a method to help with supply and production increases.

The analysis of responsible and foreign experience shows that the use of outsourcing is effective if: the company decides to focus resources on the main activity that represents its strategic advantages over competitors. The organization is going through a period of internal changes, and there is a steady trend of business growth (Huang et al., 2019). Proportionally, there is an increase in the volume of functions performed; therefore, in this case, outsourcing eliminates the need to hire additional personnel and equipment for the corresponding workplaces (Huang et al., 2019). Despite all the advantages of outsourcing, it should be recognized that this model has many risks. The main include the leakage of confidential information, the lack of operational leverage and management of processes transferred to the outsourcer, and a gradual uncontrolled increase in prices for services provided.

E-Commerce Strategies

The most recent technological advancements in information systems and technology have the potential to aid in the implementation of data and logistical integration. This improves the overall supply chain’s interaction, collaboration, and coordination. Managers understood that the Internet might increase decision-making efficiency by giving real-time information and allowing improved cooperation and coordination between commercial partners or logistical chain links (Onyusheva & Seenalasataporn, 2018). Amazon is engaged in placing orders on their websites and delivering products to customers. Moreover, they have also created a platform that allows manufacturers worldwide to gain access to a considerable number of customers. This serves as the basis of the agent and business process management concept, focused on improving the efficiency, level of interaction and cooperation of all objects and processes within the supply chain.

An essential strategy in the electronic execution of orders is the so-called “last mile” of logistics. First of all, this refers to the ability to make routes inside megacities and urban settlements correctly. With a qualitative approach to this problem, the time for order fulfillment is reduced, thereby improving the logistics service. Distribution logistics is characterized by the following functions: distribution management, order management and customer service (Onyusheva & Seenalasataporn, 2018). The concept of e-fulfillment lies in the field of the order process, from the request at a specific point of sale to the delivery of the product to the customer. Electronic order is used to describe distribution functions or logistics more narrowly; however, in a broader sense, this concept refers to how company completes customer orders.

Model Regarding Supply Chain Integration

The logistics chain is the channel through which products are delivered from the supplier to the final consumer. Therefore, it is influenced by almost all the functions performed by its member organizations. With effective management, the logistics chain becomes one of the best opportunities to improve the quality of customer service and the primary source of competitive advantage (Banker, 2021). The logistics chain strategy is of critical importance not only for the effective achievement of results it also serves as a basis for determining and prioritizing the modernization of the business process, system improvement and restructuring of the company. Amazon’s supply chain model is one of the world’s largest, most efficient, and modern supply chains.

The company is an e-commerce store and has removed such a link as a retail store from its supply chain, delivering products directly to consumers from a distribution center. Amazon’s uniqueness lies in the fact that it is not an online store but an online platform where almost everyone can sell their products. The next step in optimizing the supply chain will be the widespread introduction of automation in warehouses (Banker, 2021). Amazon spends considerable money on developing software and robots to work in warehouses. This will allow the company to collect orders with high speed and accuracy and reduce delivery time.

Conscious Capitalism and a Christian Worldview

A conscious business understands that all stakeholders are essential and connected to each other, so the business should look for ways to optimize value creation for all these individuals. A common sense of purpose and basic values, on the other hand, motivates all stakeholders in a conscious business. Conscious capitalism differs from the responsibility of business as it integrates the interests of all stakeholders and combines concern for interests and profitability; social responsibility here lies at the very core of the industry. Thus, Amazon’s supply chain integration would acquire additional components. They will be aimed at helping the community and pursuing sustainable development.


Banker, S. (2021). Amazon supply chain innovation continues. Forbes. Web.

Cohen, R. (2018). How Amazon’s delivery logistics redefined retail supply chains. Journal of Supply Chain Management, Logistics and Procurement, 1(1), 75-86.

Goh, S. H., & Eldridge, S. (2019). Sales and operations planning: The effect of coordination mechanisms on supply chain performance. International Journal of Production Economics, 214, 80–94. Web.

Haslam. (2022). Global procurement: The risks and benefits to the supply chain – global supply chain. Global Supply Chain Institute | Haslam College of Business. Web.

Huang, M., Tu, J., Chao, X., & Jin, D. (2019). Quality risk in logistics outsourcing: A fourth party logistics perspective. European Journal of Operational Research, 276(3), 855–879. Web.

Onyusheva, I., & Seenalasataporn, T. (2018). Strategic analysis of global e-commerce and diversification technology: The case of Inc. The EUrASEANs: Journal on Global Socio-Economic Dynamics, 1(8), 48–63. Web.

The Role of Supply Chain Risk Management in Company
Operations and Supply Chain Management