The predictive supply chain: learning from the Amazon Christmas experience

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As we are all so familiar with Amazon, it makes a great model to describe three personal observations that could/should lead to new customer experience and supply chain standards for all businesses.    Amazon as Santa’s Little Helper With Christmas approaching, I am being asked for a list of things that I would like as […]

As we are all so familiar with Amazon, it makes a great model to describe three personal observations that could/should lead to new customer experience and supply chain standards for all businesses. 
 
Amazon as Santa’s Little Helper
With Christmas approaching, I am being asked for a list of things that I would like as a gift. I have no idea, but I know where to turn to for help. I browse my buying history, look at related products and suggestions and simply click a button to create a wish list.
 
Now I have to consider what I will be giving to others for Christmas. Then I really start to appreciate how Amazon looks more and more like Santa’s Little Helper (and not the Simpsons character). 
 
1. What to buy – putting analytics into action
Some people are impossible to buy for. Fortunately, Amazon has a plan for those people too. Its analysis of customer behaviour and their related purchases are used to offer all kinds of suggestions. Want to know the ideal present for a teenage nephew? Put something you know he likes into Amazon’s search box and see what comes back under the ‘customers who bought this also bought…’ section. This is only the first step for Amazon’s analytics. A couple of years ago Amazon patented something called “anticipatory shipping”. Concerned that customers were put off online shopping by the time it took to receive an order, Amazon devised a system that would predict what a customer would buy next and ship it before they ordered. I remember that book clubs used to do the same, but with less analytics.
 
2. Where to buy it – a single, accessible source of truth for the information that matters
Most of us are familiar with traipsing around one store after another searching for that elusive Christmas present. Often it’s the ‘must-have’ toy that is in such demand that finding one is virtually impossible. They even made a film about it with Arnold Schwarzenegger. Amazon does away with that. Its website shows you whether the item is in stock, when you can expect to receive it and if stock is low then Amazon will tell you when it will be available.
 
3. Where and when will it be delivered – flexible, scalable infrastructure
My Amazon delivery address options number nearly a dozen different choices. Instead of buying presents, wrapping them and posting them myself, I can order them from Amazon, have them gift wrapped and delivered at a time convenient for the recipient. The company’s best customers – its Prime members – get free next day, or even same day, delivery. There are cheaper options that are correspondingly slower but the choice is with the customer.
 
This combination of ease, simplicity and flexibility has made Amazon a Christmas essential for lots of shoppers. Why wouldn’t you want your customers to have the same experience from your supply chain? 
 

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