Amazon.com, Inc. remains one of the top online retailers throughout the world, with active international operations in the majority of countries. The company’s ability to process up to 400 orders per second largely depends on the effectiveness of its international supply chain management (Ovenden, n.d.). The purpose of this paper is to analyze Amazon’s supply chain with the focus on possible risks, advantages, and disadvantages of operating globally.
Amazon’s Supply Chain
Amazon’s supply chain involves producers of goods or suppliers, warehouses and storage areas, distribution centers, a support team and managers to work with orders, distributors, and customers. This supply chain is considered to be simple, and the company’s success depends on locating warehouses and distribution centers close to large metropolitan areas (Ovenden, n.d.). Furthermore, the company uses the services of its distributors to guarantee the delivery of products within the shortest period of time, including same-day delivery.
This process involves the cooperation of thousands of employees worldwide. Amazon works not only as a retailer but also as a logistics company to process its operations, and key steps of the process include placing an order, contacting the closest warehouse, bringing the order to a distribution center, sorting products by their bar codes, packaging, and shipping orders (Crandall, Crandall, & Chen, 2014; Ovenden, n.d.).
Risks, Advantages and Disadvantages of International Operations
Despite Amazon’s efforts in delivering goods within 1-7 days internationally, there are risks of delays for customers because of mistakes in the process of ordering and distributing the order. However, warehouses and distribution centers work most effectively in the United States, when the distribution of goods internationally depends on the work of shipping companies and post services (Crandall et al., 2014). If customers do not receive the product within the set time period, they are dissatisfied and can give negative reviews and feedback that influence other customers’ opinions. Amazon follows a consumer-centric approach to address its consumers’ needs.
Advantages of international operations include Amazon’s ability to reach as many customers as possible and improve annual profits. The number of goods sold by Amazon grows regularly, leading the company to a prominent position among online retailers. As a result, the company is one of the most influential internationally recognized retailers, and its competitive advantage is significant. Still, disadvantages include risks associated with the availability and delivery of goods (Dawson, 2015). It is important to constantly control the number of different goods in warehouses to address demands and guarantee that customers will receive their orders in different regions of the world on time.
Ethical Behavior and Unethical Practices
To promote ethical behavior, Amazon refers to supply chain standards developed for both local and global operations. According to these principles, safety of operations should be guaranteed, legal wages should be granted, child labor and forced labor are prohibited, ethical treatment is ensured, and corruption is prohibited. Amazon regularly conducts audits for its suppliers and members of the supply chain internationally to make sure that these standards are followed by the company’s partners and to identify areas for improvement (Amazon.com, Inc., 2018).
However, some employees report unethical practices typical of Amazon’s workplaces that are associated with inappropriate working hours, unfair treatment, and discrimination related to sick leaves and opportunities for work-and-life balance, for example (Kantor, 2015).
It is important to state that the European Union and North American Free Trade Agreement contributed to improving ethical practices and setting standards for global cooperation. Although Amazon adopted the internationally recognized principles developed by these organizations, it still needs to continuously evaluate how ethical practices are realized in its facilities worldwide (Ferrell, Fraedrich, & Ferrell, 2014). Additional challenges associated with global supply chains include addressing legal and economic issues, as well as trade laws, associated with operations in different countries.
Conclusion
This paper has provided information on Amazon’s global supply chain and its organization. It is possible to note that the company is focused on overcoming challenges related to operating internationally and strengthening its leading retail position. Ethical practices, and related issues, followed by the company have also been considered and discussed.
References
Amazon.com, Inc. (2018). Supply chain standards. Web.
Crandall, R. E., Crandall, W. R., & Chen, C. C. (2014). Principles of supply chain management (2nd ed.). New York, NY: CRC Press.
Dawson, J. (2015). Amazon’s international growth challenge. Web.
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2014). Business ethics: Ethical decision making and cases (10th ed.). New York, NY: Cengage Learning.
Kantor, J. (2015). Inside Amazon: Wrestling big ideas in a bruising workplace. The New York Times. Web.
Ovenden, J. (n.d.). Amazon’s supply chain process. Web.