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Amazon and Alibaba Group’s Supply Chain Resilience to Balance Internal and External Risks Through Cross-industry Collaboration

As evident during and after the 2003 SARS pandemic, most organizations depend on the flexibility of their supply chain to respond to these unexpected events. Both Amazon and Alibaba Group’s investments are mainly focused on ensuring the supply chain remains flexible against these unexpected events. Amazon relies so much on technological innovations applied in its operations and distribution chain. The company has thousands of warehouses all over the world offering the most compelling delivery system among the major e-commerce stores in the world. Amazon has recently expanded its services to offer other services such as Amazon Web Services, and Amazon Pay. Before this expansion, Amazon relied on various tech payment companies to offer its services, receive payment from clients, and connect with distributors. Currently, with its technological advancements, Amazon has grown into an all-inclusive e-commerce store.

Cross-industry collaboration makes much sense to organizations in their early stages. Only huge companies can stand on their own at least for a while. Smaller organizations need several other players that offer different services. American retailer Office Depot and Alibaba announced their partnership in 2019. This partnership was meant to empower small and medium-sized businesses to tap into the global B2B e-commerce marketplace. Amazon launched the delivery service partners that were meant to encourage its employees to have their delivery services. By offering other sectors a hand in the company’s success, there is more ownership of a brand to a larger base of customers than if a company acts on its own. Cross-industry collaborations can come in many ways such as payment gateways, for example, the integration between Alibaba and PayPal.

Huge companies are showing the need to collaborate with other organizations whether within the industry or from another sector. As changes in the global market are imminent, it is clear that much more is expected from key players in these industries in terms of collaboration. More collaborations help spread the risk among the many players, with each specializing in a specific part of the supply chain. With increased competition among top companies in the e-commerce industry, it might take a while to experience a complete collaboration that benefits the consumer. Post-pandemic, integration, and collaboration remain an important factor between key supply chain members to ensure a common target and future gains (Govindan et al., 2020). A rise in the degree of integration is one of the major features of supply chain evolution in the last few years. With the emergence of improved communication and information systems, organizations have been able to achieve a more complete integration than ever before.

The Impact of Technology on e-Commerce. An Analysis of Amazon and Alibaba Group’s Supply Chains and Competitiveness.

The e-commerce sector has experienced a huge impact on the rise in internet usage in the last five years. Consolidation in the e-commerce sector largely improves communication between various parts of an organization such as marketing and production. Technology advancement is a major trend in business world trade for the last few decades. It provides a company with more opportunities with or without unexpected events in the global market. Any organization that leverages technology in its operations, is bound to have huge impacts by having a more responsive supply chain. Preparing for the unexpected does require machines and inventions that can accurately record and keep data, retrieve it when needed, and develop ways to automate what cannot be done by real hands. Some events hinder the applicability of human capital, calling for labor-intensive methods of solving a task (Araz, 2020).  There are several types of technologies that a company may apply to ensure its supply chain is agile and visible. Moving ahead of the competitors is the main source of competitive advantage.

Alibaba hugely uses the Internet of Things like the use of mobile technology to enhance customer payments electronically and offering a mobile-friendly supply chain. Internet of Things plays a huge role in connecting e-commerce stores to consumers in the most effective way. Electronic payments are a good option in the current world where more transactions are done online. On the other hand, Amazon uses technology to speed solutions at its distribution centers through innovation and automation. By using robotics, Amazon manages to pick and pack orders and store inventory without involving many employees as was traditional, saving time and cost in its distribution of goods. The Amazon scout, a robotic system that is capable of delivering packages to customers at the door-step is progress in reducing lead times.

The Internet of Things (IoT) represents innovative objects and devices that have the potential to collect and transmit data (Atzori et al., 2010). Conventional information and communication technology (ICT) helps in monitoring functions of a supply chain like storage, transportation, and returns (Mattern & Floerkemeier, 2010). The IoT umbrella has seen a rise in new smart devices, increasing the potential to address the real-time capturing of information and its exchange. Technology bridges the gap between the digital and physical world, facilitating information synchronization for greater supply chain integration. Amazon is moving towards capturing new markets from the Internet of Things capabilities through the use of the “Dash” button that reorders staple products, and the rolling out of new robotics systems in its warehouses. Internet of Things complements ICT capabilities, whose alignment with the supply chain strategy improves organizational performance.

The process of building an innovative supply chain requires enormous investment. It has taken Amazon and Alibaba Group many years to develop the kind of supply chain they currently have. There are steps to having a responsive supply chain for smaller companies, but this is a huge feature that cannot be ignored by any future-oriented company irrespective of its size. With the changing times and successive occurrences that affect the global market substantially, organizations and managers have to rethink their supply chain strategies to remain competitive. Technology carries a huge significance in the progress and sustainability of a business, with supply chains that are technologically developed and showing more resilience and agility. Organizations need to leverage the increased access to technology to aid an increase in access to technological gadgets in the world. Managers and key players in e-commerce can improve their supply chains through collaborations, and cross-industry collaborations for expansion and mutual benefit.

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