Every organization has a supply chain of some kind; we all struggle with the logistics of delivering our products or services to customers and clients. And in a world where someone builds a better mousetrap every five minutes, the mantra is “innovate or die.”
February 11, 2018
Every organization has a supply chain of some kind; we all struggle with the logistics of delivering our products or services to customers and clients. And in a world where someone builds a better mousetrap every five minutes, the mantra is “innovate or die.”
At the January Preview Luncheon at City Club of Fort Worth, Dr. Laura Meade, professor of supply chain practice, brought up the biggest innovator on the scene right now – Amazon. Using an approach that mimicked the collaborative atmosphere of a TCU Executive MBA classroom, she opened up the floor for discussion about the ways Amazon has surprised us.
Here are the top eight things we heard.
1. Faster delivery - even in Afghanistan. Amazon is unbelievably responsive – for instance, same-day diaper delivery that arrives at your house faster than you can get to the store. And that’s global: incoming student and US Army Chief Warrant Officer Brian Goff talked about a deployment in the tiny town of Jalalabad, Afghanistan, where FedEx took at least 2.5 weeks to deliver a letter, while Amazon shipped him a new computer monitor in just five days.
2. Subscribe & Save. Amazon is competing with Sam’s and Costco by offering discounts on bulk items. The “subscribe” feature lets you set-and-forget your orders, so you get regular deliveries of staple items whenever you need them, without having to think about it. Not only is this a threat to bulk retailers; it could decrease impulse buying and make it harder for competitors to convince consumers to switch brands.
3. Amazon Fresh. Amazon is bringing back the milkman and more after buying Whole Foods to expand their fresh grocery delivery service. However, a new order-to-shelf inventory system implemented before the acquisition is reportedly failing to keep shelves stocked. Can Amazon catch up, or will customers shop somewhere else?
4. Amazon Assistant. This browser extension instantly compares the prices of products you are looking at with prices of the same products on Amazon. Competitors had better look at lowering prices, increasing value and streamlining the online ordering process to stay afloat.
5. Amazon Go. Amazon isn’t abandoning the bricks and mortar – they’re just updating the technology. Automatic scanners replace the checkout line at the Amazon grocery store in Seattle, which opened to the public on January 22. CEO Jeff Bezos’ net worth went up $2.8 billion after the grand opening. Amazon holds a patent on the technology, so competitors must either invent their own or perhaps focus on their own grocery delivery service.
6. Dash Buttons. Dash Buttons offer one-touch ordering on specific products from major brands. You can download digital buttons to your phone, or purchase physical buttons to place around your house – for instance, a button to reorder Tide placed in your laundry room. That’s a true Internet of Things advancement which, again, will make it harder for competitors to convince consumers to switch brands.
7. Sky Warehouse. While none have been built yet,Amazon holds a patent for a floating dirigible warehouse that would launch drones for deliveries – which could improve responsiveness even more, and could be especially useful for handling instant deliveries to large events like sports and concerts.
8. Dragon Boat. Amazon’s “Operation Dragon Boat” involves building a global shipping and logistics operation that would allow them to control the supply chain from factories in China all the way to doorstep delivery in the States. This could mean more control over prices and quality, as well as opportunities to make socially responsible decisions in the production process. It could also give Alibaba, Amazon’s biggest competitor, a run for their money.
With the retail giant advancing on so many fronts, it’s clear that to survive in this market, we have to continually innovate our supply chains for efficiency and added value. Here are five questions that will help you strengthen every link in your supply chain.
It’s going to help to have an MBA with real-world relevance and connections to classmates across a variety of industries. So take the next step:
- Start your Executive MBA application today to learn more about supply chain and other vital business strategies.
