Amazon’s Response to the Supply Chain Crisis
Undoubtedly, the deluge of headlines about the Supply Chain Crisis has become so all-encompassing that it’s easy for new reports to become lost among the noise. However, for business professionals in the Amazon sphere, Macarta has compiled a complete guide outlining Amazon’s broad form response to the most recent global market crisis.
Current State of the Supply Chain Crisis
Due to the emergence of Covid-19’s Omicron variant, the global supply chain volatility will likely continue into this new year, putting us further behind on the long trek back to pre-pandemic operations. As experts warn that these problems won’t be going away anytime soon, it would do us all well to investigate how top global retailers continue to respond to this unprecedented global event. Amazon’s strategy of self-sufficiency has thus far successfully navigated the holiday season and, operating under the assumption that market volatility doesn’t tank their success, a broad-form solution to the supply chain crisis is becoming readily apparent.
Black Friday Deals — in October
To keep their significant share of the digital marketplace from gridlock during the Holiday Season, Amazon released Black Friday deals over a month early. On October 4th, 2021, Amazon announced “deep discounts across every category” including fashion, home goods, toys, and electronics. This announcement, arriving on the heels of Amazon’s newest Prime feature which revolutionizes gift-giving from Amazon, highlighted the company’s focus on maximizing potential holiday earnings without congesting the supply chain around Turkey 5.
Other retailers, such as Target, also announced early holiday bargains in October, but many were limited only to random “Sale” days or brief Deal periods. Few followed the Amazon approach of redeveloping the five-day holiday shopping season into a nearly two-month purchasing extravaganza.
Assisting Platform Sellers
By mid-November, Amazon let their grand strategy out of the bag in an official blog post, much to the benefit of suppliers on the platform, and outlined their primary goals for navigating the current market climate. The post highlighted that Adobe Analytics expected that out-of-stock messages would increase by 172%, even as Amazon showcased its own substantial supply chain consisting of the entire spectrum of material transport. For more direct services related to Amazon’s supply chain management, check out the introductory guide: Supply Chain Management here.
Planes, Crates, and Shipping Containers
Unlike other retailers, Amazon has seemingly limitless resources for taking on problems as they arise. However, much of their strategic maneuverability stems from costly purchases five-to-ten years ago. Their payoff has been greater successes this shopping season than others, but an unavoidable fact is that it is major corporations, like Amazon and Walmart, which are exacerbating this crisis.
Amazon Air
Thanks to its private aerial fleet, Amazon has been incredibly well-positioned to combat disruptions in the greater market. With major hubs in Cincinnati, San Bernardino, and Leipzig, along with new destinations always being added to an already expansive list, AmazonAir is a vital part of the company’s global delivery apparatus. With nearly 100 planes at their disposal, ranging from twin-engine turbines to 737s and 767s, this private shipping subsidiary’s global reach has helped Amazon products move relatively smoothly around the world, or at the very least alleviated some shipping headaches that smaller retailers have been forced to grapple with.
Chartered Ships
As AmazonAir soars through the skies, the shipping lanes of the Pacific have seen just as much attention from Amazon. Chartering their own ships, sending them to smaller ports, and utilizing their vast armies of delivery vehicles to get products where they need to be, Amazon has pushed their own supply chain to the limits, sacrificing excess profits to maintain brand image and customer satisfaction. The most impressive aspect of the “Amazon Navy” is that they’ve been chartering their own ships for years — something which has more than paid off.
Shipping Crates
Amazon’s reach extends even further than transportation logistics. For the last few years, Amazon has been constructing its own 53-foot shipping crates in China. These thousands of shipping crates, owned 100% by Amazon, offer the company an incredible lifespan for shipping. Whereas other multinational retailers, to say nothing of smaller businesses, have to contend with a limited supply of shipping crates to get their products across the Pacific, Amazon further outperforms by their ability to recycle the crates into the railway system — while the competition has to send them back to China.
Amazon Workers
Planes, trains, and ocean freighters are all impressive components of the ever whirling Amazon machine; however, without the necessary manpower required to oil this system, everything would fall apart. As arguably the most vital aspect of Amazon’s supply chain infrastructure, acquiring workers to run these stations during this holiday shopping season was of the utmost importance. In 2021, Amazon aimed to hire over 150,000 seasonal workers—a 50% increase over 2020—despite the waves of resignations that have been sweeping the nation. As the global supply chain continues to stagger, physical laborers have never been more in demand.
Moving Forward
Amazon enters 2022 with an accomplished supply chain strategy. While everyone eagerly awaits the end of the supply chain crisis and, of course, the pandemic, anyone working in the Amazon sphere can rest a little easier. Having successfully navigated a holiday season that seemed hopeless, Amazon’s strong emphasis on self-reliance has shown it to be continuing as a strong market performer, while also crafting the future of supply chain logistics. With another notch of unprecedented experience under their belt, Amazon looks even more well poised for whatever inevitable problems the world continues to throw at it.
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