Sunday, September 29, 2013

The Role of IT on Amazon

As this week's topic deals with the importance of IT and the effects of it on supply chain management, it is only fitting that Amazon is a big presence within this topic. Amazon has fine tuned its management system so that they are efficient and effective; leading the wave in the current age of innovation. In the past, "we [online shipping retailers] looked at the transportation costs, inventory carrying costs, the taxes and a couple of other factors to come up with a network of DCs [distribution centers] to service customers in a set of zip codes". Each factor was carefully thought out and carefully analyzed. However, with the introduction of information technology (IT), the games has completely been revolutionized; where, according the Jim Tompkins, president of Tompkins International, "we realize that how much we sell in a given area, like San Francisco, is dependent on the level of service we can provide in an area". 

The use of IT aids in supply chain integration in that it allows for efficient, timely, and transport business information to appropriate parties. With more and more specific information and analysis, a more evidence-based decision can be made. Through IT, "sharing of this information enables multiple firms to engage in synchronous decision making and can lead to improvements in production, planning, inventory management, and distribution" (Sanders 2005). Because of the significance the role that IT plays, it is the backbone of the structure of the supply chain. One of the biggest improvements that the use of IT has given is the freedom to go beyond the walls of an individual firm. 

This is a bold statement, but without IT, there would be no Amazon. At the current state that Amazon is in, it just would not have been possible without the help of technology.

With this background, what is the next "IT"? Simply put, we are in the age of innovation and technology, especially, is drastically improving. With the current IT we have and the role it plays in the world, what creations and inventions, or even modifications, to the current IT model we use can drastically change the playing field, specifically within the online retailing environment. I am very interested and looking forward to witness the change and to see what innovative methods will be created in order to surpass the current model we have.


1 comment:

  1. Internet advertising is the basic need of most of the businesses now a days this is only possible due to boom of eCommerce.Now you can find almost each product online with its features and the best deals in purchasing them.

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