Amazon: Automating the Supply Chain Using Mobile Technology

Amazon is a corporate behemoth that dominates e-commerce and e-fulfillment. What started out as an online bookstore is now a complex online ecosystem that involves thousands of moving parts, including employees, suppliers, and shippers. As Amazon expands and grows, the need to innovate and streamline their supply chain becomes paramount. One of the ways that Amazon innovates their supply chain management is via technology like mobile apps and social media. Their increasingly automated systems alleviate costs, and improve overall speed and productivity.

Amazon is known for their extensive catalogue of over 400 million products, but also their efficiency in merchandise management.  Amazon customers can choose a variety of shipping options, and in some cities can have their purchase delivered in an hour. Being able to deliver such ambitious  delivery times requires that all parts of the supply chain are working in perfect synchronicity. How does Amazon accomplish this feat? They use social media to communicate in real time and harness the power of technology to circumvent traditional bottlenecks associated with supply chain management.

 

Amazon has adopted a customer-centric supply chain to align their supply chain with their company priorities. This model inverts the traditional approach to supply chain management and starts with the client and works backward. Essentially, Amazon maps the supply chain directly from the customer backwards. This method ensures that Amazon can respond to customer needs and align company priorities across the supply chain.

So, how does Amazon use social media to improve their supply chain?

1. Amazon Flex: Amazon has turned to social media, including Facebook, to crowdsource the delivery of packages. Similar to Uber, Amazon drivers can sign into an app and are notified when a package is ready for pick up. Flex has an official Facebook page that recruits drivers in various locales and drivers can post updates in real time.  There are also private Facebook groups for different locations where drivers can take photos of their activities, ask questions, and discuss common problems with other drivers.

2. Project Dragon Boat: Amazon is working on a project code-named “Dragon Boat”. Under this plan, Amazon will become a shipping and brokerage company. The goal of this project is to streamline the supply chain and expedite parcel shipping and delivery. Sellers would book directly with Amazon instead of UPS or DHL in an entirely automated process. This automation will eliminate delays associated with traditional methods such as document handling and freight booking.
   

   “With a few finger taps on their smartphones, merchants in China will summon Amazon trucks to pick up products from their factories and warehouses, Merchants will be able to book cargo space online or via mobile devices, creating what Amazon described as a “one click-ship for seamless international trade and shipping.” – Bloomberg News

3. RFID and Social Media Integration: Amazon has announced a partnership with Auburn University Radio Frequency Identification (RFID) Lab to pilot a project  to tag items, Dave Clark, Senior VP of worldwide operations says,
   

   “It gives us better tracking of shipments out to customers, and, when connected to our existing software and robotics infrastructure, it should help us to further speed delivery to customers.”

Integrating RFID with social media platforms will allow Amazon to deliver updates in real time across various platforms.

Amazon has many players across borders and time zones, and it can be difficult to communicate with all the players in the game. Social media alleviates that difficulty by making these communications more accessible.  Ranjan Sinha says, “Social networking allows you to stay in touch, in real time, with your entire supply chain so you can manage it more efficiently, save time, keep everyone in the loop, and increase productivity.”

 

According to Ranjan Sinha the benefits of using social media in supply chain management are numerous, and include:

1. Building relationships: A prime indicator of success in the relationships between supplier and retailers. A relationship built on trust must be nurtured and based on mutual respect. Employing social media within these relationships makes communication more accessible, thus breaking down barriers.
2. Data gathering and analysis: Identifying bottlenecks can be made easier using real-time data including videos, and photos on social media. Things like smartphone apps and employee websites and social media groups make problems more visible and easy to correct.
3. Information sharing: Notifications about shipment delays, weather problems, and political upheavals allows retailers to adjust their schedules or find alternative accommodations.

Lessons for Others

Amazon approaches supply chain management by focusing on customer needs and behaviour.  By using social media to streamline their supply chain, Amazon has been able to improve their overall efficiency and offer a more reliable and rapid delivery of products. By thinking out of the box, Amazon positions itself as a global leader and continues to innovate supply chain management practices.

If you have concerns as to the accuracy of anything posted on this site, please send your concerns to Peter Carr, Program Director, Social Media for Business Performance.

---

References