Amazon Prime and Prime Pantry Mark Improvements in Personalized Distribution

It wasn't long ago when the only way to buy household items was to trek on down to the store and wait in line wasting your precious hours. For many business professionals and overwhelmed parents it can be difficult and time consuming to take a few hours out of the day to shop. Services like Amazon Prime and Prime Pantry offer an affordable and time efficient alternatives. Their services would not be possible without improvements in the distribution systems that takes advantage of urban density.

This is how it works. For $99 a year you can get access to a huge selection of movies, products, 2-day shipping and other services through Amazon Prime. The 2-day free shipping has mammoth appeal to a new generation online shoppers who like to save cost and time. Within a matter of a few days they have their products at a competitive price not influenced by location differences.

Prime Pantry works a little different but offers a one low cost shipping value of $5.99. Customers purchase a large box of  household items and have it shipped to their house in 1-4 business days. In my case, the order showed upon in 2 days making the service convenient and affordable. I was impressed enough to try it again when I need enough items to fill up the box again.

The two services are only possible through improvements in supply chain distribution. Home delivery is now an affordable option for people who don't have a lot of time, or who simply find it convenient to shop on line. If you are a busy parent with a household of children or you are a busy professional engaged in renaissance activities you are likely to use the service more.

For a new class of people who live in urban areas and don't own a car Amazon Prime and Prime Pantry complement their chosen lifestyles. They enjoy freedom from auto expenses by taking public transportation and shopping online. Services like Amazon affords them the opportunity spend their free time with friends, family, or recreational activities.

What makes all of this possible is the developing of shipping warehouses in major metropolitan areas. Without the ability to distribute products quickly and within a short time frame the company wouldn't be able to offer this service or grow additional interest among consumers. The locality of Amazon warehouses, and their investment in efficiency, is paying off in the market in a big way.

The distribution process is matching customer preferences closer by better bridging the gap between customer wants, e-commerce, and physical delivery.  Allowing customers to avoid annoying lines, purchase online with their debit card accounts and having the products show up in a day or so appeals to a wide swath of families and young professionals. An entire generation of people are being socialized to the merits of shopping through a few key strokes while spending their time in more enjoyable pursuits.

Using the Internet to Create Efficient Supply Chains

San Diego Bay Dock -M.Abel

Products move across the globe at a speed unseen at any time in history. Much of this movement is directly derived from improved manufacturing methods mixed with telecommunications technologies that coordinate supply chain mechanisms to create more efficient processes. Fatorachian, et. al. (2013) studied 67 companies to determine what impact the integration of Internet technology and its computational power has on the supply chain. The study helps companies push for greater technological development using the data processing methods of the Internet.

 

The supply chain is a necessary component of moving products and equipment to various locations where they are put to use keeping the economic engine running. Sometimes this may be within a city, a country, or across the globe but many of the processes have similarities. According to Gereffi (1999), the supply chain integration can be a main source of providing competitive advantages based upon networked relationships. 

 

The supply chain ensures that each of the components are connected together to reduce waste, improve speed, and meet timeframes. The supply chain can be quit complex and take into consideration large and small shipments. It is therefore important to have the right kind of information that integrates all of these components into a more integrated network. Generally, the more integrated the network the more cost effective it can be and this impacts the profits of a company in a big way. 

 

Enhancing the supply chain requires better collaboration, cooperation and understanding of different partners within the network (Kandemir, et. al, 2006). This integration often requires higher levels of software, information, and connecting systems that encourage the components to work well together. When a product is tracked and the systematic efficiencies are improved across multiple companies there is a natural reduction in cost and an increase in service. 

 

Most of us are familiar with tracking at UPS and Amazon. We experience supply chain technology when products are scanned in as they move from one point to the next. Each time the product is scanned the system can tell at what leg and juncture of the trip it is at. Customers may find this a benefit but companies also get the benefit of monitoring many shipments to reduce costs and lower the level of resources expended on logistical management. 

 

Those companies that can integrate their supply chain have much higher payoffs than those who don’t (Cagliano, et. al., 2005).  This is not an easy process and often requires a systematic redesigning of the process to integrate high technology information with ground based systems. The development of high data and fast information transference systems that can manipulate the functioning of physical systems takes time. 

 

According to the authors when a company can do this well they are able to generate significant benefits.  The authors found through their analysis that the use of Internet technology improved upon supply chain integration, logistics and returns processes, order processes, procurement, planning synchronization, inventory control, overall production, and customer relationship management. This means that the implementation of technology systems furthered significant strategic goals within companies. Business leaders should consider the improvement of their systems and updating of technology when possible. 

 

Cagliano, R., et.al. (2005) E‐business strategy: how companies are shaping their supply chain through the internet. International Journal of Operations & Production Management, 25 (12), pp 1309‐27.

 

Fatorachian, H., et. al. (2013). Role of Internet in supply chain integration: empirical evidence from manufacturing SME’s within the UK. Proceedings of the European Conference on Management, Leadership & Governance 

Gereffi, G. (1999) International trade and industrial upgrading in the apparel commodity chain. Journal of International Economics, 48 (1). 

 

Kandemir, D., Yaprak, A. and Cavusgil, S.T. (2006) Alliance orientation: conceptualization, measurement, and impact on market performance. Journal of the Academy of Marketing Science, 34 (3).