The Impact of Amazon on the Supply Chain Industry
Amazon has been revolutionary within the retail sector and has transformed how supply chains operate. Explore the powerful impact it is had on these industries in this video with John Manners-Bell.
Hello, I'm John Manners-Bell. I'm Chief Executive of Transport Intelligence, founder of the Foundation for Future Supply Chain, and also author of the book 'Logistics and Supply Chain Innovation'. So how has Amazon transformed supply chain management? Well, I think at the outset, we can say that the impact that Amazon has had on the logistics and supply chain industry has been really profound. And I don't think it can be overstated. It's transformed, of course, E-retailing, but retailing as well. And on top of that, all the processes involved in the logistics and supply chain. And how has it gone about that? Well, firstly, it's transformed the customer experience.
So, people nowadays can order goods in the morning and probably expect them in the afternoon or at the very latest the next day. It's also transformed the customer expectation and experiences as well. So, you're able to track your parcel as it's being delivered. And at the same time as this, the range of goods which you're able to order is now far, far times greater than it's ever been in the past. Now, it's been able to do that, as well as keep prices at a very low point, as well.
And of course, this has had a huge impact on the retailing sector because many other retailers just haven't been able to compete and we can see that many have gone out of business, such as Woolworths or Debenhams, and many more besides, so, as it's actually grown to market dominance, it's looked to the third party logistics industry to keep up and of course, in many cases, it just hasn't been able to keep up.
Consequently, Amazon has designed its own logistics operations. It's designed its own networks of last-mile delivery agents, for example. It's invested hugely in warehousing, and not just in warehousing facilities, but also in the technologies within warehousing. So, robotics and automation, for example. And it's hard to do that because it needs those efficiencies to be able to fulfil millions or even hundreds of millions of orders in a way that it's able to remain profitable. So, it's had an enormous impact on the logistics and supply chain industry as its dragged the industry with it by really attaining market dominance.