Global Supply Chain Management

Global Supply Chain Management

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“Today supply chains do much more than just physically moving products and materials from
one location to another. The digital, interconnected world demands that supply chains also serve
as a connected, coordinated information ecosystem that delivers maximum flexibility, visibility,
and transparency,” notes Scott Sopher, a principal with Deloitte Consulting LLP and leader of its
Global Supply Chain practice.
Based on the above statement, you are asked to choose a sector/industry (e.g., food,
technology, healthcare, retail, services, automotive), and critically:
i. Appraise how the supply chain structure has been evolved in the last five years in terms
of globalisation, consolidation, and integration
ii. Evaluate how cooperation and creation of logistics clusters help to alleviate the
demand amplification (bullwhip effect) phenomenon
Discuss how advanced technologies (e.g., Big Data analytics, Internet of Things,
Omnichannel) enhance connectivity and improve overall supply chain performance in
the sector/industry.

Explanation & AnswerSolution by a verified expert

Supply chains are doing so more today than simply just shifting goods and services from one place to another. The modern, interconnected world needs supply chains to also serve as a related, organized ecosystem of knowledge that provides full flexibility, visibility, and accountability.
Retail sector faces a few supply chain issues/challenges, they are: logistics and inventory issues, higher cost, and delivery time and challenges to long-term relations with its suppliers. Retail sector can make few improvements into its supply chain practices to ensure better efficiency and customer service, and they are employing demand-forecasting, relaxations for their suppliers and vendors, and indulging in better sustainability efforts.
Based on the above statement, I would like to choose the retail sector for further explanation.

Step-by-step explanation

1. Today's North American retail environment looks very different from five years ago. The way customers make buying decisions has changed dramatically: they are in shops, using their smartphones to compare prices and product reviews; family and friends are automatically weighing in on social media shopping decisions; and an ever-growing number of online retailers deliver goods directly to them, often on the same day, when they are ready to purchase.
An example of retailers who have evolved in the last five years in terms of globalization, consolidation, and integration is Amazon.
Globalization of amazon.com
In 2014, 37% of Amazon's sales came from international markets, but the year-over-year growth rate has been decelerating.
Amazon's North American net sales increased 22%, while its international sales increased only 3% in the third quarter. In all of 2014, North American sales increased 25%, while international sales only increased 12%.
"International revenue growth continues to be a mystery and is a confusing part of the Amazon story", analysts at investment firm Stifel write in a post-earnings note.
In March 2012, Kiva Systems Inc. agreed to be acquired by Amazon.com Inc for $775 million in cash and it is the second biggest takeover of Amazon. Kiva Systems Inc. is the manufacturer of robots that move around warehouses, grabbing and moving shelves and crates full of products.
Consolidation and integration of Amazon:
In the report of Barr (2012), it is cited that the reason for Amazon takeover Kiva is that the acquisition of Kiva took place when Amazon added a lot of new distribution centres in recent years to service its rapidly growing business. In a statement, Dave Clark, Amazon's vice president of global customer satisfaction, said that "Amazon has long used automation in its fulfilment centres, and Kiva 's technology is another way of increasing efficiency by delivering items to select, pack and store directly to employees". Therefore, Kiva warehousing technology allows online orders easily and with fewer employees fulfilled by retailers.
Amazon's other acquisition is Zappos. Zappos is a retailer of online accessories and clothing that has become a leader in the online industry, offering its customers the best possible service. In July 2009, Zappos agreed to be purchased by Amazon. Many of the reasons why the author purchased Zappos from Amazon are alluded to by Jeff Bezos' YouTube video about Amazon and Zappos.
 
2. Amazon.com's logistics and supply chain management activities help the company create value to its customers by providing satisfactory service with efficient use of technology. It offers a wide range of products to its customers to select through its websites. It focuses on offering its customers a cost effective and organized way of getting the end product to exhibit their high level of commitment towards its customers to ensure customer satisfaction and timely delivery as amazon.com is maintaining 7 distribution channels with more than 2.7 million products and stocking them regularly. It is now using software to forecast purchasing more accurately which will allow its supplier to be better aware of delivery dates and volumes which will reduce the chance of any inventory going to the wrong location leading to loss of time and effort.
Creation of logistics clusters helps to alleviate the demand amplification:
The method built by amazon to maximize the flow of goods and to help from the supplier to its fulfillment centre is that in its many large distribution centres, it stocks all the merchandise from the supplier. It uses a programme showing the buying patent by area that allows suppliers to predict delivery dates and quantities and also increases their contact with the supplier. Amazon.com has the same form of engaging partnership with its supplier as it has with its consumers.
 
The vital system that has improved the flow of orders from the distribution centers to customers is the use of telecommunication. This system has allowed the free flow of information back and forth. With this system, once the order is placed and recorded in the computer, it ensures that all products are kept properly inside the box before it is taped and labelled for further distribution and then the next process continues with a network of trucks and postal hubs or courier services being set up which completes the delivery process by successfully delivering the right product to the right customer at the right time.
 
3. Amazon is quickly advancing towards becoming a High-technology company. It is evidenced by their current business model, which unlike its earlier product-focused model now relies on providing services to their customers as well. This includes devices such as Kindle, Amazon fire stick as well as Amazon AWS services for large-scale corporate businesses. If Amazon continues in the same direction, it can easily be considered a High-technology company.
Amazon Go is a new charging store from selling the products to the customers. We have created the world's most advanced technology, so you don't have to wait for a shop at any time anywhere. Just use the Amazon Go app to enter the store, select the product as you want and go with the product with a walkout shopping experience. So there is no wait for the products, just sit and order and your order will be delivered on your door steps.
It enhances connectivity and improves overall supply chain performance in retail sector in the following manner:
 
-Amazon has a lot of products at a reasonable and affordable price at your door steps at overnight also if you want to pay for the products.
-They run sales in which they make products cheaper or no more expensive and you might pay on brick also. They have products that are not found in the physical stores.
-You can order any time just sitting on the couch and your order will be delivered in 1 or 2 days.
The use of such advanced technologies would have offered a without checkout experience to the customers and eliminated the long queues that are all usual in traditional shopping experiences.
The world of Amazon before Amazon Go was probably not so advanced in using and leveraging technologies like machine learning, Artificial Intelligence, Computer Vision, and check-out bereft retail stores that are revolutionizing the technology and physical world. The IT & IS systems before this were not so advanced and revolutionary when compared to Amazon Go.
 
Reference:
https://www.mckinsey.com/industries/retail/our-insights/how-retailers-can-keep-up-with-consumers
https://www.nap.edu/read/6369/chapter/5#26
https://risnews.com/amazoncom-acquire-zapposcom#:~:text=Get%20great%20content%20like%20this%20right%20in%20your%20inbox.&text=Amazon.com%20Inc.%20has%20announced,best%20possible%20service%20and%20selection.
https://www.pocket-lint.com/phones/news/amazon/139650-what-is-amazon-go-where-is-it-and-how-does-it-work
https://www.forbes.com/sites/andriacheng/2019/01/13/why-amazon-go-may-soon-change-the-way-we-want-to-shop/#1d35db386709
https://www.forbes.com/sites/shelleykohan/2020/03/15/amazons-sharing-of-cutting-edge-technology-may-change-the-way-you-shop-for-groceries/#2c86aa293e31
 
 
 

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