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​Amazon: A Lesson in Supply Chain

There is no better system to base your supply chain on than Amazon

22Sep

Not long after the internet was conceived, a slew of sites sprang up that would change the world. It soon became apparent that few things would remain unaffected by this new technology. Without a doubt one of the biggest powerhouses of the world wide web soon became Amazon.com, and it remains so to this day. But with Amazon serving customers across the globe, with user accounts numbering over 300 million, it is astounding that they manage to reach everyone, running such an efficient business. There is no better model for supply chain than that of Amazon warehouses.

So how do they do it? Let’s take a look into their process a little bit, and delve into how they manage to fulfil millions of orders each day.

Warehouses

It all begins with the Amazon warehouses. These are the things upon which an entire business is built. A far cry from Jeff Bezos shipping out books from his house, there are now more than a hundred Amazon warehouses in the US alone. Based on demand, they are all over the world, and, though independent sellers can use Amazon to sell things, Amazon warehouses fulfil the vast majority of orders.

A System

Absolutely instrumental to Amazon’s process is the system in place. When you consider that these warehouses are absolutely massive and that many Amazon orders are slated for two-day, next day, or even same day delivery, it means that the system for tracking and fulfilling orders has to be completely flawless. If you were to go inside an Amazon warehouse, what you would find would be apparent chaos. But in actual fact, it is highly organized chaos. Rows upon rows of boxes and goods, all arranged in a sophisticated fashion, making the most of the latest technology.

Technology

It can hardly be a surprise that a website that was founded on new technology, has continued to blaze trails when it comes to continuing to take advantage of the latest high-tech developments. Using the best inventory methods, the latest greatest conveyor systems, and now, they even use actual robots to find and collect packages in warehouses. Quite simply, Amazon manages to keep on top of their order load by constantly staying ahead of the technological game. When drones made their way into public use, who was the first to test out same day drone deliveries? You bet it was Amazon. And when drones are approved for commercial use, who will be the first to implement them? Right again.

Collaboration

It is important to note that a lot of Amazon’s business model is also built upon collaboration. Now, more than 40% of Amazon orders are sold and fulfilled by third-party vendors, through the Amazon Marketplace. They also collaborate with big retail services, such as Nordstrom, to provide an avenue for their online brand, through “Fulfillment By Amazon.”

Amazon is an incredible powerhouse of a business, and it keeps going from strength to strength. Anyone looking to start a business that they hope to be even half as successful would do well to learn from this model. Through smart supply chain management, willingness to adapt to changing technology, and embracing collaboration with others, Amazon has become, and continues to be, a force to be reckoned with.

Sources

Image courtesy of Frank Gaertner/Shutterstock.com

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