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The Impact of Cloud Supply Chain on Amazon’s Supply Chain Management Practices

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From the study, I learned some significant insights regarding the importance of cloud supply chain in enhancing the competitiveness of an organization. Cloud computing according to Truong (2014) is transforming the way businesses are conducting their operations due to its IT-based and flexible solutions. Therefore, cloud computing facilitates organizations such as Amazon to provide their clients with on-demand computing services characterized by high availability, scalability, and reliability in a distributed surrounding. However, it is worthy to note that organizations can only sustain and create their competitive advantages if they utilize cloud computing as a unique and valuable resource. Given the fact that multiple business domains are adopting and expanding the use of cloud computing, supply chain practitioners have started showing interest in it. It is undeniable that the use of cloud computing can significantly benefit supply chain management because of its ability to not only reduce the startup expenses but also to improve supply chain integration, boost inter-firm collaboration, minimize lead time, increase the visibility of the supply chain, and reduce the time that a company takes to respond to its customers.

From the study, I also understood that there had been a dramatic growth in the cloud supply chain solutions. In fact, Truong (2014) points out that the adoption of cloud in the supply chain management increased by 40% in 2013. The increase was attributable to the fact that many companies consider cloud as their main avenue of sourcing applications even though this technology is new in supply chain management. There are still questions regarding the usage of cloud computing technology in enhancing the performance of the supply chain while subjecting organizations to nominal risks.

I also realized that many organizations are in pursuit of cloud-based solutions because of the gains they will accrue from it while failing to consider the difficulties and challenges that define the use of cloud computing. Organization management needs to make strategic decisions before incorporating cloud supply chain solutions in their applications and in-house systems. Incurring unexpected and extra expenses is obvious when implementing cloud-based supply chain solutions because of the transition process, adherence to new regulations, and the need for employee training (Vanpoucke, Vereecke, & Muylle, 2017). In this context, a cloud-based solution increases recurring costs while reducing startup costs, which is a situation that undermines the supply chain efficiency. The use of cloud-based solutions also causes privacy and security issues because the applications and systems of the organization such as customer data are in a remote server; hence, the importance of vendors guaranteeing their clients that there would be an address of any potential legal issues, privacy issues, and data leakage. Organizations supply chain executives should take a leading role in controlling and assessing risks connected to the adoption of cloud computing in the management of their supply chain.

Summary of what I learned about the Importance of Supply Chain Management Integration and how it can be realized

From the study, I understood that the integration of supply chain entails the creation of a smooth process through the design of well-coordinated materials and information flow within the system. Another aspect was the coordination of tactics and exchange processes between partners in the supply chain. Enhancing the smooth flow of materials and information eliminates the boundaries that exist between parties in the supply chain in addition to reducing uncertainty triggered by the bullwhip effect in the supply chain. Arguably, the smooth flow of materials and information in companies causes a significant reduction in inventory and make the order cycles more reliable. However, the utilization of information technology such as cloud-based solutions, which have a crucial role in promoting the integration of supply chains, would result in a well-organized supply chain.

Information technology allows partners in the supply chain to boost the complexity and volume of the information exchanged along with increasing the real-time sharing of the data. Consequently, there is extended visibility in the supply chain. However, effective integration of the supply chain requires the merging of both operational integration and information exchange tactics. Information exchange tactics entail the coordination of communication and information transfer whereas functional integration involves coordinated and collaborative decision-making process and work processes among partners in the supply chain resulting in the development of joint activity (Vanpoucke et al., 2017). I also noted that there are two types of integration that occurs in the supply chain: customer integration and supplier integration. The primary objective of supplier integration is to enhance upstream visibility in the supply chain while reducing uncertainty. Uncertainty reduction happens through suitable information exchange, which consequently diminishes the risk that results from demand volatility, fluctuations in lead-time, and orders changes. Customer integration, in contrast, is defined by the flow of materials, services, and information to the end users including the flow back of information to the focal firm from the clients. The competitive standing of the supplier and the empowering of customers in an integrated supply chain happen through ensuring that adequate resources and attention are towards activities such as customer service, transaction execution, order customization, and information search. Supply chain managers must ensure that customers are included in the decision-making process to boost materials coordination at the principal company.

From the analysis of supply chain integration, I realized that companies primarily focus on integrating their supply chain for one key reason that is to streamline their process. Once there is the streamlining of the organization processes, the organization automatically reduces transaction costs, obtains higher responsiveness, and smoothen the flow of information. Therefore, organizations can utilize information technology not only to gain a competitive advantage but also to recognize the competitive potential of their resources including information sharing that is not only costly to imitate but also rare and valuable.

What I Learned About How Amazon Can Utilize Cloud Supply Chain Management Practices

As discussed previously, it is evident that cloud computing is transforming the manner in which companies are working with their business partners as well as how they are operating their businesses. The aspect of cloud-computing is cutting-edge capabilities that make it the main sourcing method for supply chains. In this case, organizations such as Amazon are better placed to improve and assess the efficiency of their operations through cloud computing. Accordingly, I found out that Amazon has issues when it comes to the management of its inventory due to poor management of its supply chain. The company’s supply chain inefficiencies coupled with supplier mistakes exhibit a negative impact on the performance of the company (Gupta & Jones, 2014). Therefore, the use of the cloud supply chain will significantly help Amazon in streamlining its process and enhancing its competitive advantage in the industry. Moreover, Amazon would access information that is more accurate and transparent in addition to tracking the lifecycle of its products.

Currently, the company is assuming a traditional approach to the management of its supply chain even though it is transactional. With the adoption of the cloud supply chain, the company can also scale its operations minus the need to overhaul its entire supply chain system. Since most of the company operations happen online, the use of the cloud supply chain will enhance the company’s flexibility because of its ability to connect all partners in the supply chain. According to Handfield (2017), Amazon can exploit the cloud supply chain to enhance its inventory management and deployment because of its flexibility. Likewise, Amazon can develop the cloud supply chain to increase the flow of information, materials, and other resources to customers and its suppliers besides adequately responding to the needs of its clients. The advancement would improve its operational efficiency and customer satisfaction.

Summary of What I Learned From the Project

I recognized that companies in today’s business environment are competing based on the efficiency of their supply chains. It is the underlying reason that a majority of companies are adopting cloud computing to enhance their supply chain operational efficiency. However, some organizations fail to yield the benefits of the cloud supply chain because they fail to account for the challenges associated with the adoption of this technology. Some of the problems include the increase in recurrent costs including the need to train employees, transition process, and adherence to new regulations. Therefore, strategic decisions should be made through the involvement of key stakeholders before shifting to cloud computing.

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