Amazon’s innovations in the supply chain are raising the performance bar across industries, not just in retail.
We have all heard the stories about what Amazon is doing to bricks and mortar retail. While the e-tail giant has done many things right over the past 20 years, their focus on supply chain excellence is what propelled them to become the world-dominating force we see today.
Corporate leaders all see what Amazon has done and are challenging their supply chain leaders to do better, across all industry sectors. The Amazon secret weapon isn’t drones. Companies that were born in the internet age and that matured in the mobile and social eras have an advantage over the establishment in that they were built around singular, powerful, networked technologies.
Today, a company can access very advanced solutions at a small fraction of the cost it once required. As the big, established leaders grew, they acquired new technologies but the results are a hodge podge mix of old and new systems that run in silos. This adds up to make things complex and inefficient, and in the supply chain, that’s a recipe for getting disrupted into oblivion.
There was a recent story in Material Handling & Logistics, that describes how Maersk Line is racing to innovate and stay relevant before Amazon becomes its own shipping line and potential competitor. Why would Amazon even consider in-sourcing such a capital intensive process? Because they want to move at a speed that the supply chain and logistics industry was never designed to support.
“Amazon is not interested in phones and email — they want to be hooked up electronically and digitally so the business transacts on its own,” Soren Skou, the CEO of A.P. Moller Maersk. “This matches our new strategy: they want end-to-end container shipping and we want to offer the whole service.”
Emerging capabilities such as blockchain, IoT, artificial intelligence, machine learning are all being woven into the vast, complex arena of global supply chain management. As things become more connected and automated, it will be interesting to see how many companies thrive or parish in this new operating standard. Innovation will be key.