BSS052-6 Assessment 1 (Amazon)

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BSS052-6 Project and Operations Management Assessment 1 Operations Management Report 1 | P a g e

Table of Contents Introduction .............................................................................................................................. 3 Critical Discussion on Relevant Operational Management Areas ....................................... 3 Effect of Operational Management in Amazon ...................................................................... 3 Operational Management Decision Areas within Amazon Inc. ............................................. 4 Inventory Management of Amazon .................................................................................... 4 Location Strategy of Amazon ............................................................................................. 4 The Process Design of Amazon ......................................................................................... 5 Theoretical Discussion on Operational Management Areas .................................................. 6 Scientific Management Theory .......................................................................................... 6 Operational management theory ........................................................................................ 6 Supply chain and logistic theory ........................................................................................ 7 Comparison with another contemporary one using the 4 Vs ............................................... 8 4 Vs of Apple Business .......................................................................................................... 8 4 Vs of Walmart Business ...................................................................................................... 9 Improvement in Operational Management ......................................................................... 10 Utilizing Sequential Pattern Inflow Management ................................................................ 10 Implementation of The Justified Approaches ....................................................................... 10 Reduction in Material Movement ........................................................................................ 11 Application of the Bottleneck Management Policies ........................................................... 11 Optimization of Inventory Management .............................................................................. 12 Conclusion ............................................................................................................................... 13 References ............................................................................................................................... 14 2 | P a g e

Introduction Amazon's research and development team has introduced innovative retail frameworks to measure the financial effects of the company's global expansion. E-commerce has been able to mobilise its base through the widespread use of dependable technology to provide better, more lasting outcomes. With the help of "operational management" potential and worldwide growth plans, Amazon.com, Inc. has moved its focus from financial stability and expansion to operational management. If the organisation can improve the quality of its corporate performances and make reliable financial projections, it may be able to keep its finances stable ( Pierleoni et al., 2019). Amazon relies on a huge group of third-party vendors to supply the goods and services it advertises. The purposes of the research are to create and implement environmentally friendly business practises, to critically investigate the significance of operational management, and to conceptually assess the role of "operational management in decision-making" domains in the selection process. Critical Discussion on Relevant Operational Management Areas Effect of Operational Management in Amazon The success of the online retail giant's business model and day-to-day operations form the basis of Amazon's marketing approach. Since this is an increase of almost 43.8% from the previous year, "$108.518 million" in net sales is projected for Amazon's fiscal year 2021. In order to maintain its financial health and adapt to its unique market expansion, the company's performance and operational vitality will need to undergo certain changes ( Cui et al., 2019). Amazon is able to forecast profits and plot a course towards long-term growth thanks to the expansion of its operational services and the effective application of its operational management tools. Amazon's overall revenues have been steadily rising thanks to the company's strong operational performances, which have been predicted accurately by Amazon's operational management. Amazon's key operating tactics are based on the exploration of fresh ideas, the mobilisation of technology, the evaluation of projects' economic viability, and the development of financial resources. The strategic benefits and managerial efficacy of a corporation might be enhanced by increasing efficiency and classifying financial operations ( Athayde et al., 2019). Amazon's revenue has climbed "185%" over the last five years, and a 3 | P a g e

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"$387 billion" growth is projected by 2020. Growing profits and a more adaptable structure are indicators that the company is making progress through operational management. Operational Management Decision Areas within Amazon Inc. Inventory Management of Amazon Both the tactical and strategic aspects of the company's marketing development have continued to provide excellent service. The effectiveness of inventory procedures and long- term adjustments depends on a company's capacity to accurately assess and examine its operational stability. Strategic planning and other approaches might be used to broaden the scope of financial best practises. Maintaining a strategically mobilised and categorised marketing capacity is crucial for the organisation to realise the necessary financial and operational benefits ( Delfanti, 2021). Settling on tried-and-true methodologies and establishing just-in-time inventory management standards helped maintain operational consistency. Figure 1 Amazon Multi-Tier Inventory model Source- Delfanti, 2021 Location Strategy of Amazon The company has improved its operational efficiency and overall business stability via the use of e-commerce technology and the associated sustainable practises. More precise operational estimates might result from learning more about the company's expansion and the spread of its effective business approach. One of the most efficient ways to improve Amazon.com's operational viability is to ensure that the company's operational resources and 4 | P a g e

raw materials are always easily available ( Fisher et al., 2020). Depending on the company's operational routes, the management of the company's operations and the cyclical swings experienced by the various parts of the organisation might be significantly affected. Building warehouses in the company's main sales regions might help it expand. Figure 2 Amazon operational management decision areas Source- By author, 2023 The Process Design of Amazon In order to achieve its utmost potential, Amazon may be required to refine its processes and technologies pertaining to product optimisation. Several automated systems have been developed to enhance efficiency within operational frameworks and guarantee timely delivery of goods or services ( Tou et al., 2019). The implementation of artificial intelligence (AI) and cloud-based ordering systems has significantly enhanced operational efficiency in several domains. 5 | P a g e

Figure 3 Amazon’s Process Design and Operations Management Source- Tou et al., 2019 It might be said that Amazon is endeavouring to establish a sustainable business model. The operational viability of the organisation and the number of justifiable upgrades saw growth due to the classification of productive methods and the implementation of sustainable practises. Nevertheless, the use of automated ordering systems and procedures has the potential to enhance output ( Humphries et al., 2020). Theoretical Discussion on Operational Management Areas Scientific Management Theory It is advised that businesses utilise inventive strategies and implement environmentally sustainable standards in order to achieve maximum levels of production. It is essential for a company to develop creative ideas and carry out any required modifications in order to guarantee that its operations are carried out in an effective manner. This is because both of these activities have the ability to increase productivity. Businesses have the opportunity to improve their methods of forecasting and data collecting by adopting and adapting modern financial practises ( Delfanti, 2021). This improvement might help businesses make better business decisions. On the other hand, one could argue that Amazon.com, Inc.'s development into new business areas would benefit from improved logical thinking and the precise implementation of pre-established goals since these factors would allow the company to reap more advantages. 6 | P a g e

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Figure 4 Scientific Management Theory Source- Delfanti, 2021 Operational management theory Financial incentives have been suggested as a mechanism to promote the adoption of "operational management theory" among employees, fostering the utilisation of corporate resources and stimulating the generation of creative strategic concepts. In order for Amazon.com, Inc. to sustain its leadership in environmentally responsible business practises, it is imperative to do a strategic analysis of the company's aims, expectations, and dynamics. The utilisation of simulation has the capacity to shed light on the inner workings of a business, particularly in the realms of marketing strategy and organisational enhancements ( Delfanti and Frey, 2021). The potential for enhancing the company's success through enhanced management and technological methods is readily apparent. Implementing stricter budgetary controls and enhancing oversight of employee conduct might yield favourable financial outcomes for Amazon. Supply chain and logistic theory Understanding Amazon's SCM requires delving into the company's complex inventory system. 7 | P a g e

Figure 5 Supply chain and logistic theory Source- Ives et al., 2019 First, by merging its warehouses, Amazon can reduce its inventory and adapt more swiftly to fluctuations in customer demand. When an item is out of stock at an Amazon fulfilment centre, the company will try to locate it among its numerous wholesale suppliers or partner fulfilment centres. In addition, Amazon profits from efficient distribution because of its use of cutting-edge, real-time information technology ( Ives et al., 2019). Amazon serves as a go- between for its clients and the merchants, publishers, distributors, and manufacturers from whom products are ultimately procured. Comparison with another contemporary one using the 4 Vs In operational management, the 4V model may be used to assess the sustainability of the organization's initiatives and the efficacy of its current strategies. Sustainable market practises and certain financial approaches integrated into corporate strategy may increase financial performance and growth. Amazon, Inc. stands to save on operating expenses and increase production management capabilities with the use of the volume dimension model ( Angelopoulos et al., 2023). If an organisation switches to a volume dimension model, productivity might not change. 8 | P a g e

4 Vs of Apple Business 4 Vs High/Low Description Volume High The 4V model may be used in operational management to evaluate an organization's sustainability and strategy. Sustainable market practises and financial strategies may boost firm success and growth. The volume dimension model might save Amazon, Inc. money and improve production management. The specified model and explanation may improve corporate outcomes ( Siqueira-Gay et al., 2020). Variety Low Amazon.com, Inc. may maintain more of its functionality and strategic expansion in-house to better reasoning and management of vital business resources. A company must prove its financial and operational viability to stay profitable and strategic. If it implements efficient constitutional models and achieves sustainability, the corporation may be able to attempt innovative manufacturing techniques ( Choi et al., 2022). Variation in Demand High Amazon employs a variation model for every product development, which may be updated to increase operational strengths through better developmental analysis. Amazon's R&D team is always improving ways to graphically display a business's operational domains' viability and demand configuration. Visibility High The operational management four-factor model ends with "visibility." Transparency is vital for economic growth and business rationale. To boost operational performance, do this. Financial planning, including business marketing estimates, may benefit from an in-depth analysis of economic prospects and strategic evolution ( Dutta and Dutta, 2019). To optimise productivity, after-sale services and customised finance procedures can be improved. 4 Vs of Walmart Business 4 Vs High/Low Description Volume High Walmart does not manufacture any of the things it sells, despite its private label labels. It uses thousands of suppliers from the US and several Asian nations as its primary sourcing regions. The corporation competes on pricing, despite the diversity of the items it offers. The corporation is able to keep prices low for customers because of the sheer amount of goods it sells and buys from its suppliers ( DeArmond et al., 2019). Variety High Despite its private label labelling, Walmart does not produce any of the products it offers. Its key sourcing locations are the United States and a number of Asian countries. Despite its wide range of products, the company remains 9 | P a g e

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competitive because to its low prices. Because of the massive volume at which the company transacts with its suppliers, it is able to pass those savings on to its clients ( Aversa et al., 2021). Variation in Demand High It is only natural that Walmart's profits would fluctuate with the seasons. During the Christmas season, many items experience a dramatic increase in demand, causing them to quickly sell out. In any case, management is always preparing for the unexpected. To keep up with the growing number of online purchases sent through walmart.com and samsclub.com, Walmart has significantly improved its fulfilment capabilities in recent years ( Ketokivi and Mahoney, 2020). Walmart also largely depends on its massive army of part-time workers during the Christmas crunch. Visibility Low The Amazon shops and the associated delivery services, similar to those of Walmart, are the most prominent facets of the corporation. The significance of customer service in promoting Walmart's retail brands cannot be overstated, since it is a crucial aspect of the company's operations. Customers have a strong connection to Walmart, so much so that they frequently visit the store on weekends and holidays even when they have no plans to buy anything ( Zamri et al., 2020). Improvement in Operational Management Utilizing Sequential Pattern Inflow Management In order to improve its management structure and operational usage procedures in its financial structure, the company must modify its sequence of policies and long-term advertising plans. If Amazon.com, Inc. rethinks how it deals with long-term challenges and how it categorises marketable securities, it may be able to provide stability to the business. Strategic policymaking might benefit from enhanced manufacturing processes and the use of appropriate techniques. The odds of the company's technical viability and operational stability improving as a result of the creation of proper communication tools and the depiction of sustainable practises are high ( Goulding et al., 2019). Focusing on fiscal stability and growth can help a business last longer. Implementation of The Justified Approaches Improving operational management often requires the successful implementation of such solutions. Growth in a company's most important areas of focus requires constant attention to detail and careful management of operations. Data systems must be kept current and 10 | P a g e

deployed as needed in marketing departments. To assess Amazon's fiscal health and operational feasibility, however, evidence of crucial decision points and doable research fields is necessary ( Garrett et al., 2021). In order to boost operational viability and integrate marketing goals into critical business variables, new techniques of execution and processes are required. Figure 6 Improvement in Operational Management Source- By author, 2023 Reduction in Material Movement Non-value-added activity and specific categorization as business viability necessitate further development within the operational management processes of the corporation's activities. For the company's financial performance to remain strong, strategic adjustments must be made to the firm's prospects and the company's economic situation. By implementing changes to processes and establishing new operational procedures, strategic capabilities in operational management may be maintained. Amazon current success suggests that the company's plans for growth and its capacity to maintain operations may be sufficient. However, it is still crucial to keep overhead costs low ( Rudke et al., 2020). The equilibrium between total demand and total supply may be used for the betterment of marketing strategies, financial development, and marketing utilisation procedures important to the company's operations. Application of the Bottleneck Management Policies Both the consistency of an organization's operations and its marketing efforts might benefit from the strategic use of principles related to bottleneck management. If Amazon were to adopt practises that are more friendly to the environment and make strategic use of the 11 | P a g e

resources it has available, it could be able to improve its operating efficiency and make rapid development easier. It is essential to continually apply quality management methods and effectively deploy critical business components in order to obtain increased and justified achievement in the firm sectors ( Solari et al., 2021). This can be accomplished only by adhering to certain practises. In spite of this, there is evidence that suggests improving the organisational structures inside a company might potentially maximise the systematisation of the company as a whole and raise levels of productivity. Optimization of Inventory Management The inclusion of environmentally friendly policies into budget projections calls for a strategic approach to inventory management and resource optimisation. This is required in order to fulfil the requirements of the budget forecasts. Amazon.com, Inc.'s continued prosperity in the future will be dependent on the company's ability to successfully incorporate environmentally responsible business practises into its core operations ( da Cruz et al., 2021). Figure 7 Inventory Management Strategies Source- da Cruz et al., 2021 The long-term financial health of Amazon.com, Inc. might potentially be improved by the company's monitoring of financial predictions and the implementation of tailored promotional plans for a variety of various sectors. Amazon may be able to get closer to a 12 | P a g e

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more sustainable business model by improving its stock-level reduction efforts as well as its utilisation of flexible components to their fullest potential ( Mak and Max Shen, 2021). Conclusion The above makes it easy to see how operations management and the technologies it uses might improve Amazon.com, Inc.'s bottom line in the long term. The company's long-term focus and careful use of a variety of financial methods have led to its tremendous success. Location, inventory management, and the use of appropriate financial instruments and processes are all crucial to a business's long-term success. In this light, it is evident that the "4 V's operations management model" has to be deliberately adopted by a firm in order to present an open and honest picture of its core business practises and the rationale behind them. Amazon's capacity to develop stable financial plans and get insight into essential business elements is crucial to the company's ability to increase its service offerings. Amazon, Inc.'s management effectiveness increased as the company adopted a new strategy and standardised its approach to financing. Its future potential is very sensitive to the adjustment of a few critical elements. 13 | P a g e

References Angelopoulos, S., Bendoly, E., Fransoo, J.C., Hoberg, K., Ou, C.X. and Tenhiala, A., 2023. Digital transformation in operations management: Fundamental change through agency reversal. Journal of operations management, Forthcoming . Athayde, S., Mathews, M., Bohlman, S., Brasil, W., Doria, C.R., Dutka-Gianelli, J., Fearnside, P.M., Loiselle, B., Marques, E.E., Melis, T.S. and Millikan, B., 2019. Mapping research on hydropower and sustainability in the Brazilian Amazon: advances, gaps in knowledge and future directions. Current Opinion in Environmental Sustainability , 37 , pp.50- 69. Aversa, P., Haefliger, S., Hueller, F. and Reza, D.G., 2021. Customer complementarity in the digital space: Exploring Amazon’s business model diversification. Long Range Planning , 54 (5), p.101985. Choi, T.M., Kumar, S., Yue, X. and Chan, H.L., 2022. Disruptive technologies and operations management in the Industry 4.0 era and beyond. Production and Operations Management , 31 (1), pp.9-31. Cui, R., Zhang, D.J. and Bassamboo, A., 2019. Learning from inventory availability information: Evidence from field experiments on Amazon. Management Science , 65 (3), pp.1216-1235. da Cruz, D.C., Benayas, J.M.R., Ferreira, G.C., Santos, S.R. and Schwartz, G., 2021. An overview of forest loss and restoration in the Brazilian Amazon. New Forests , 52 , pp.1-16. DeArmond, D., Emmert, F., Lima, A.J.N. and Higuchi, N., 2019. Impacts of soil compaction persist 30 years after logging operations in the Amazon Basin. Soil and Tillage Research , 189 , pp.207-216. Delfanti, A. and Frey, B., 2021. Humanly extended automation or the future of work seen through Amazon patents. Science, Technology, & Human Values , 46 (3), pp.655-682. Delfanti, A., 2021. Machinic dispossession and augmented despotism: Digital work in an Amazon warehouse. New Media & Society , 23 (1), pp.39-55. Delfanti, A., 2021. The warehouse. Workers and robots at Amazon . Pluto Books. 14 | P a g e

Dutta, P. and Dutta, P., 2019. Comparative study of cloud services offered by Amazon, Microsoft & Google. International Journal of Trend in Scientific Research and Development , 3 (3), pp.981-985. Fisher, J., Stutzman, H., Vedoveto, M., Delgado, D., Rivero, R., Quertehuari Dariquebe, W., Seclén Contreras, L., Souto, T., Harden, A. and Rhee, S., 2020. Collaborative governance and conflict management: Lessons learned and good practices from a case study in the Amazon Basin. Society & Natural Resources , 33 (4), pp.538-553. Garrett, R.D., Cammelli, F., Ferreira, J., Levy, S.A., Valentim, J. and Vieira, I., 2021. Forests and sustainable development in the Brazilian Amazon: history, trends, and future prospects. Annual Review of Environment and Resources , 46 , pp.625-652. Goulding, M., Venticinque, E., Ribeiro, M.L.D.B., Barthem, R.B., Leite, R.G., Forsberg, B., Petry, P., Lopes da Silva‐Júnior, U., Ferraz, P.S. and Cañas, C., 2019. Ecosystem‐based management of Amazon fisheries and wetlands. Fish and Fisheries , 20 (1), pp.138-158. Humphries, S., Holmes, T., de Andrade, D.F.C., McGrath, D. and Dantas, J.B., 2020. Searching for win-win forest outcomes: Learning-by-doing, financial viability, and income growth for a community-based forest management cooperative in the Brazilian Amazon. World Development , 125 , p.104336. Ives, B., Cossick, K. and Adams, D., 2019. Amazon Go: disrupting retail?. Journal of Information Technology Teaching Cases , 9 (1), pp.2-12. Ketokivi, M. and Mahoney, J.T., 2020. Transaction cost economics as a theory of supply chain efficiency. Production and Operations Management , 29 (4), pp.1011-1031. Mak, H.Y. and Max Shen, Z.J., 2021. When triple‐A supply chains meet digitalization: The case of JD. com's C2M model. Production and Operations Management , 30 (3), pp.656-665. Pierleoni, P., Concetti, R., Belli, A. and Palma, L., 2019. Amazon, Google and Microsoft solutions for IoT: Architectures and a performance comparison. IEEE access , 8 , pp.5455- 5470. Rudke, A.P., de Souza, V.A.S., Dos Santos, A.M., Xavier, A.C.F., Rotunno Filho, O.C. and Martins, J.A., 2020. Impact of mining activities on areas of environmental protection in the southwest of the Amazon: A GIS-and remote sensing-based assessment. Journal of environmental management , 263 , p.110392. 15 | P a g e

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Siqueira-Gay, J., Sonter, L.J. and Sánchez, L.E., 2020. Exploring potential impacts of mining on forest loss and fragmentation within a biodiverse region of Brazil's northeastern Amazon. Resources Policy , 67 , p.101662. Solari, C.A.R.S., Wojtaszewski, P. and Frei, S., 2021. The acquisition of Whole Foods Inc. by Amazon. In Managing Negotiations (pp. 3-26). Routledge. Tou, Y., Watanabe, C., Moriya, K., Naveed, N., Vurpillat, V. and Neittaanmäki, P., 2019. The transformation of R&D into neo open innovation-a new concept in R&D endeavor triggered by amazon. Technology in Society , 58 , p.101141. Zamri, N.E., Mansor, M.A., Mohd Kasihmuddin, M.S., Alway, A., Mohd Jamaludin, S.Z. and Alzaeemi, S.A., 2020. Amazon employees resources access data extraction via clonal selection algorithm and logic mining approach. Entropy , 22 (6), p.596. 16 | P a g e

BSS052-6 Assessment 1 (Amazon)

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