SCOR model of Amazon - Grade: 5.5 PDF

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SCOR model of Amazon The supply chain operations reference model (SCOR) is a management tool used to address, improve, and communicate supply chain management decisions within a company and with suppliers and customers of a company. The model describes the business processes required to satisfy a customer’s demands. It also helps to explain the processes along the entire supply chain and provides a basis for how to improve those processes. Amazon is an American multinational company that offers various types of products. The company is based in Seattle, Washington, United States of America. Amazon initially started as a bookstore. However, it has continually diversified its products over time. The primary goal of this American multinational corporation is to offer a one-stop shop experience for its customers, where they can get all the company’s products . The company operates as a pure internet retailer that do not have any physical retail store. All its products are supplied and delivered to its esteemed customers through Amazon’s networks of distribution centers. This form of business operation enables Amazon to offer diverse, high-quality types of products at relatively low prices. Online retail chain system reduced its cost of operation as thus selling its products at affordable prices. Also, it facilitates customer satisfaction since it promotes customer convenience.

The presence of an efficient supply chain management helps Amazon company to respond to the customers' tastes and preferences effectively. Amazon has managed to strike a balance between distribution costs and levels of services by establishing efficient inventory networks as well as distribution centes. However, the company is experiencing competition from other enterprises that provide substitute brands in the market such as Walmart and eBay. SCOR is a supply chain management model that addresses improves and communicates supply chain decisions within a company to its suppliers and customers. It describes the processes required to satisfy the demands of customers as it explains the process along the entire supply chain thus providing a basis for improvement. It thus focuses on the planning, sourcing, making, delivery, and returns which are the five primary areas of the supply chain . In the process of handling restitution of packaging, containers, and defective products, the performance of Amazon involves management of return inventory, business rules, assets, regulatory requirements, and transportation. Adopting SCOR model in its operation thus enables Amazon to identify the possible challenges within its operations thus allowing full leverage of capital invested, supply chain roadmaps creation and aligning business functions that have seen it through an average of three to six times return on its capital investment annually.

Amazon has also incorporated IT in its supply chain is Electronic Customer Relation Management (E-CRM), which is an electronic platform that plays the role of managing customer services . The Amazon management team utilizes this system in analyzing customer’s information such as historical transactions and personal data which is crucial for e-retailer to study the loyalty or shopping habit of its customers. Also, the customer’s browsing record and transaction history help the company in developing relevant marketing strategies for the new products that suit the current tastes and preferences of consumers in the market . E-CRM performs functions such as data mining and data analysis to create a comprehensive customer database that can be utilized in decision making. E-CRM has helped Amazon to increase its market share across the globe, enhance speed response, reduce operation as well and enhancing customer satisfaction.

Challenges and Solutions Although Amazon has positioned itself as one of the leading e-retailer company as the globe, it stead needs to re-evaluate its supply chain so as to make the significant breakthrough in e-retail business. Regarding technology, the company does not have a storefront and as such, it should improve its visual store experience as a mechanism for compensating the touch of its brand product. Also, the company has been criticized for unfavourable working conditions of its workers in DC

such as long working hours, mandatory overtime and increased workload which pushes employees to physical limits. Amazon can enhance its labor productivity and reduce operation cost by having robots to work in DC and other demanding areas. The transportation sector also needs some improvement. The company’s dependence on logistics third party companies such as DHL as a mechanism of lowering transportation costs makes the supply chain system more efficient. However, third party firms such as DHL are causing negative reputation for Amazon due to their failure to deliver the products to clients on time. Therefore, Amazon should carry out its transportation activities with their private fleet in last-mile supply since responsiveness is a key factor this e-retailer company....