Operations Management and Planning of Amazon

The internet and e-commerce

The internet has provided challenging strategies in the way businesses conduct their operations. Global e-commerce is expanding in the modern world, making internet channels the most efficient approach to thrive in a competitive market arena. E-commerce sales increased by 21.1% in 2012, approaching $1 trillion for the first time. Amazon’s main online business competitors include eBay, Wal-Mart, and Barnes & Noble. Proper operation management and planning is not simply a norm for practically all types of businesses; it identifies the best approaches to establish brands, earn consumer loyalty, produce long-term revenues, and accomplish goals and objectives (Stewart, 2011). Without proper management and planning, business is doomed to lose to their competitors. Operations management involves the administration and review of business practices to create the highest level of efficiency in the organization, it emphases on the development and conversion of organizational resources such as labor, and materials into goods and services to maximize profit within the organization (Verdaasdonk, and Wouters, 2001). On the other hand, planning is the development of plans and strategies that can allow the business to seize opportunities and meet challenges ahead.

Amazon’s evolution

Amazon has evolved over the years to become the world’s number one online retail store. Currently, the store has over 244 million loyal online shoppers locally and internationally. When it was first launched in 1995 by Jeff Bezos, the company was just an online bookstore which received so much criticism from people that it was doomed to fail. Amazon has expanded and the company has started selling other products other than books such as music, electronics, pharmaceuticals, groceries, home improvement products and pet supplies. The company also offers a shopping place for other sellers such as chain and supply management expertise and networking infrastructure. The company has achieved great success and popularity since it started (Marcus, 2004). Good operation management and planning has significantly contributed to Amazon’s success.

Operations and management plans for success

The success of Amazon can be linked to its operations and management plans (Najdawi, Chung and Salaheldin, 2008). Process and capacity design, under this operations management objective, the company applies the use of extensive automation to strengthen its business process. The company has automated its product ordering process to improve the capacity of accepting many orders. Location selection and strategy is another operational management objective, by 2008, the company possessed around eight depositories in U.S and fifteen others around the world which are equipped, large and with hundreds of employees. The distribution points are located where there are many customers. Layout strategy, each of the Amazon distribution centers is equipped with the latest materials that apply the use of technology for instance pick up to light systems which utilize a terminal display to guide workers through the process of goods delivery. Amazon uses frequency technology to direct workers to storeroom locations by the use of radio signals. The company uses voice technology, to effectively communicate with employees. Using the Scheduling objective, has enabled the manager’s schedule for both short term and long term needs of the business to make sure the resources satisfy the customer need. (Liu and Jiang, 2011)

Advanced supply-chain systems

The e-commerce company has the most advanced supply-chain systems in the world. The homemade system handles the chain supply such as transportation and warehouse management, inbound and outbound shipping, inventory planning, and demand forecast. The company utilizes six sigma approaches its distribution operations. The company makes sure that customer shipments are made on the required time.

The Amazon vision

The Amazon vision is “To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online.” the concept rhymes with the company’s primary objective of being the world best online business company. The company focuses on three elements of the vision i.e. customer prioritization, the widest selection of products and global reach. The company has adequately planned for its operations by identifying objectives and vision that they can easily manage. The company’s vision and mission have pushed the company to become the most successful and largest retailer in the world. Some of the operational plans that the company has exhibited to realize its goals include improved distribution workflow. The company hires employees with regard to the number of operations in a distribution center, as discussed above; the company employs over one hundred employees in a particular outlet to make sure that customers are never delayed.

Reference

Liu, S., & Jiang, M. (2011). Providing Efficient Decision Support for Green Operations Management: An Integrated Perspective.

Marcus, J. (2004) Amazonia. Five years at the Epicenter of the dot-com juggernaut, The New Press, New York, NY.

Najdawi, M. K., Chung, Q. B., & Salaheldin, S. I. (2008). Expert systems for strategic planning in operations management: a framework for executive decisions.

Stewart J.M (2011).Amazon says long term and means it.

Verdaasdonk, P., & Wouters, M. (2001). A generic accounting model to support operations management decisions. Production Planning & Control, 12(6), 605-620.