What Must You Know About the Impact of Amazon on the Supply Chain?

May 16th, 2018

In less than 20 years, Amazon has gone from a humble online book merchant to the most prominent force in retail.

Most recently, the company’s revolutionary approach to supply chain management has been turning heads of industry experts with its disruptive practices. Supply chain professionals must keep one eye on the impact Amazon is having on their industry or risk becoming out of touch.

The following list shows the key impacts Amazon has had on the supply chain industry.

Breaking down industry siloes

With the rise of retail platforms like Amazon’s Marketplace and eBay, wholesale companies can now market directly to consumers. In the past, wholesale companies depended on trade shows and face-to-face sales, but with Amazon, they can quickly list their products without having to create their own site or eCommerce solution. Furthermore, Amazon makes wholesale products discoverable online, minimizing SEO concerns.

On the other side of the equation, consumers are increasingly looking to buy straight from the source and eliminate the middleman: Smart shoppers realize they can save when buying from wholesalers and producers, not retailers.

In addition to facilitating direct sales, Amazon has also become a producer of goods. The massive volume of people that go to and order from their marketplaces mean they can generate goods in large amounts and enjoy the advantages of economies of scale.

Breaking ground on the last mile

One part of the supply chain that retailers find especially challenging is last-mile logistics. Storing, packing and shipping products to the customer within three to five days can be an operational headache, particularly if you deal with large-order volumes. However, Amazon has perfected the last-mile game, as evidenced by the success of Amazon Prime

This optimization of last-mile logistics is among the main factors behind Amazon’s success. Under the surface, Amazon has an army of personnel devoted to the lastmile. There are more than 70 fulfillment centers across the United States that employ at least 90,000 full-time staff. These fulfillment centers have made Amazon FBA and Amazon Prime Now a success because they offer the attractive option of outsourcing warehousing and delivery. Furthermore, merchants using Amazon FBA also reap the benefits of having Amazon deal with returns on their products and offer customer service for them.

By doing this, Amazon has totally changed the last part of supply chain management.

Robotics

Amazon has more than 100,000 robots in fulfillment centers around the world. This degree of automation is what allows Amazon to offer services like two-day international shipping, and more automation is probably coming in the near future.

At the moment, bots are accomplishing basic tasks like picking and packing items, under the oversight of human staff members. Every year Amazon runs the Amazon Picking Challenge (APC), a contest where robotics scientists vie for a $25,000 prize for developing the best picking bot.

Apply today!

At ZDA, we keep an eye on the latest supply chain developments to better serve both job seekers and our clients. If you’re currently looking for work, apply to any of these supply chain industry jobs today!

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