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(TIỂU LUẬN) several difficulties have arisen for amazon during the COVID 19 epidemic since limitations have harmed and interrupted company operations

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ASSIGNMENT COVER PAGE Course Code OMGT2085 Course Name Intro to Logistics & Supply Chain Mgt The location where you study Saigon South Campus Title of assignment Group Report File(s) submitted Docx Student name and student e-mail address Le Phung Hoang Minh - s3759204 Nguyen Pham Phuong Nhi - s3758282 Nguyen Duong Minh Hieu - s3878647 Hoang Dang Duong - s3881724 Nguyen Phu Cuong - s3879078 Le Nguyen Ha Thi - s3878453 Learning facilitator in charge Ms.Hang, Nguyen Thu Assignment due date September 19, 2021 Date of submission September 19, 2021 Number of pages including this one 29 World count 4613 words Executive Summary The logistics and supply chain industries are quickly expanding and have emerged as one of the world's most promising sectors According to Kherbach and Mocan (2016), the expansion of the economy and globalization has enabled the creation of a single market, and logistics and supply chain have become important components in this process Service development and consumer demand have been spurred by the rise of these sectors Logistics and supply chain management is therefore essential to increase a company's competitiveness as well as efficiently solve shortage concerns (Kherbach & Mocan 2016) Examining the logistics and supply chain management of an Amazon in Vietnam will be the goal of this research Specifically, this report will illustrate Vinamilk which is one of the third-party sellers of Amazon The supply chain channel map initially reveals the supply chain features and procedures, and then three key flows, including product, financial, and information, are also displayed in the first part Aside from that, the four major operations in supply chain management, which include procurement, packaging, transportation, and warehousing, are clearly outlined based on theories and Amazon's system structure and performance criteria Next, discussion A will be examined in the following report Particularly, discussion A focuses on Amazon's supply chain core competencies, as well as the benefits and difficulties of implementing a push system, and the impact of a good buyer-supplier relationship on a company's supply chain The function of technology in today's modern period has also been emphasized, along with its numerous advantages As a result, RFID and robotics plays an important role in improving Amazon supply chain management Several difficulties have arisen for Amazon during the COVID-19 epidemic since limitations have harmed and interrupted company operations Firstly, the demand volatility should be mentioned because customers’ demand will be affected during the Covid-19 pandemic due to several factors such as income, price However, the competitive number of stocks which is maintained in warehouses in order to stimulate customers’ demand will be the solution for this problem The interruption of the supply chain under the COVID-19 is another problem due to the reduction of the number of transportations In this situation, decentralization of distribution can help Amazon solve the problem Production stoppages is the final problem which is mentioned in this report The regulation changes and the training course for the workers should occur to improve the quality of the workforce in the future Table of Content I Introduction… ………………………………….……………… … ………… II Identify supply chain aspect……………………………………… …… …… a) Supply channel map description……………… … ………………………… … Upstream…………………………………………… ……………….…………… Downstream………………………………………… ……………….…………… b) Supply chain actor description………………………… ……………… ……….……8 Production flow………………………………………….…………….………….… Information flow……………………………………………………….……….…… Financial flow………………………………………………………….….…….…… c) Major supply chain activities…………………………………………… ……… … Procurement………………………………………………………….….…….…….9 Warehousing…………………………………………………… …………….… 10 Packaging…………………………………………………….…….….……… … 11 Transportation………………………………………….……………….………….12 III Discussion a) Discussion A………………………………………………………….…….……… 13 Core competence of the chain………………………….…………….….………… 13 Supply Chain network characteristics……………………………… …………… 14 Relationship in supply chain…………………………………….… …………… 15 Technology………………………………………………………… …………….16 b) Discussion B…………………………………………………….………….……… 17 Demand volatility………………………………… ………………… ………….18 Production stoppages……………………………… ………….…… ………… 19 Transportation disruption………………………………… ………… ………….20 IV V Conclusion………… ………….……………………………………………… ….20 Summary of teamwork…………………………………………………… ……… 21 VI References………… ……………………………………………………………….22 VII Appendix ……………………………………………………….………………….28 I Introduction Amazon Vietnam is a part of Amazon organization based in the United States which is one of the giants in the cloud computing e-commerce artificial intelligence consumer electronics Industry Amazon wants to be the most customer-focused firm on the planet Their aim is to constantly improve the customer experience by utilizing the internet and technology to assist customers in finding, discovering, and purchasing anything, as well as to enable companies and content producers to maximize their success (Amazon n.d) Additionally, when buyers purchase products sold and delivered by a third-party vendor, they are protected by the A-to-z Guarantee It addresses both the timeliness of delivery and the quality of your products In addition, Amazon also contains approximately 10 million sellers and 20 websites around the world Kannan and Tan (2010) felt that if a company can optimize its supply chain, it will hold the key to long-term development As a result, because Amazon has a global distribution network, it is critical for them to enhance their supply chain management In this study, with Vinamilk as the primary customer, we will analyze Amazon Vietnam's supply chain by addressing the three key flows and four important processes in their supply chain Discussion A focuses on the supply chain's competency and various linkages, whereas discussion B delves deeper into the present problems that Amazon is facing and makes solutions based on available facts II Identify - supply chain aspect/ process selected a) Supply Channel Map Description Figure Channel Map for Supply Chain about Vinamilk Upstream The upstream procedures include preparing and storing material processes to control the capacity of the material, level of inventory, and scheduled delivery (Alkhatib 2017) Based on the channel map, the raw materials and packages of Vinamilk are being imported from leading and reputable sources in the world such as the US, New Zealand, the Netherlands, etc to ensure the best quality products The collecting centers will process materials and quality control these raw materials and move them to either Ho Chi Minh or Hanoi Warehouse From there, the products are being manufactured in 11 international standard factories and mega international standard factories After the products are packaged and labeled properly, the products will be transported back to the Distribution Centers and ready to be stored/ shipped Downstream The downstream’s process contains distributors and customers, in which the main functions are storing and distributing the final goods from the manufacturing to the final consumers (Shkoukani, Alnaghi & Abulayl 2013) After the final products are being transferred to the Distribution Centers, they will be delivered through main channels The first and second channels include modern trade to supermarkets and convenience stores, while the other distributors include Giac Mo Sua Viet stores, Retailers, and Wholesalers delivery as later-onshelves for the end consumers The third channel will be distributed to schools and companies Another channel is through e-commerce including e-shop and other online platforms such as Tiki, Shopee, and Amazon using outsourced logistic services to deliver to domestic end-users Last but not least, the products are being exported and are handed to foreign customers through fulfillment center services b) Supply Chain Actor Description Production Flow Any company's objective is to minimize logistics expenses while maintaining a specific level of service quality by regulating physical flows in a logistics chain (Hamoudi, Bellaouar & Petiot 2021) To begin, cows are brought from the United States or milk can be purchased from local farms Second, raw ingredients from various nations and regions are delivered to Vinamilk's manufacturers in VietNam Vinamilk has a center equipped with sophisticated machinery and equipment to assure the highest quality of fresh milk such as cold storage, uses barcodes, deliver information to households, Automatic cleaning-in-place (CIP) technology, enhanced sanitation to maintain food hygiene and safety, quick cooling tanks with large volumes and great flexibility (Vinamilk 2019) After that, the raw materials are processed and manufactured into end goods The finished goods will be delivered to warehouses located in the North and South of Vietnam Other distributors, e-commerce fulfillment centers such as Amazon, traditional trade/modern trade warehouses, important accounts (school/hospital), and exports outside of the country are next Information Flow Utilizing sophisticated information platforms that support effective information exchange across supply chain participants and across supply chain stages (Riikka 2009) Vinamilk has finally established an automatic method for calculating optimum production rates as forecasting throughout the connected factory chain Moreover, the technology issues inadequate or maximum storage notifications in order to modify production requirements at manufacturers as well as inventory levels at distribution With the help of Vinamilk's delivery management software, it is now possible to keep track of shipments in live time as well as see a breakdown of operational data by vehicle and driver (Vinamilk 2020) Financial Flow Inventory management, the processing of logistically induced financial flows, and supporting procedures with an immediate connection to logistics, such as stock insurance management, are examples of logistically driven financial processes (Hans & Moritz 2009) Long-term assets were managed and new investments were made by the company in order to maintain high asset management effectiveness and future growth appropriateness while minimizing waste and asset loss (Vinamilk 2021) Vinamilk must manage its cash flow proactively since its cash outflow will be greater than its cash inflow As a result, they must be adaptable in order to minimize cash flow disruptions, maintain appropriate financial supply, and manage financial activities c) Four Major Supply Chain Activities Procurement Procurement planning, determining qualitative, quantitative, and time-related material requirements, and purchasing externally purchased items are the fundamental functions of 10 inherently far more successful at changing policy in keeping with consumer expectations and market opinion Supply chain network characteristics In inventory, a push system is one where the business orders products, then does its best to sell the products that existed in inventory to the consumer since products are likely to always be in stock (Koo 2020) As stated by Hunt (2019), by avoiding pricey per-order costs, the push system lowers the cost of manufacturing products and shipment cost-effectively as the company places larger orders and less frequently The push-type production system offers economies of scale by being mass-produced in large quantities at a low cost It can rapidly respond to customer orders without worrying about demand changes due to sufficient spare inventory (Plex 2020) Therefore, push inventory management is strongly dependent on longterm forecasts and customer demand estimation, especially the adoption of a demand forecast that drives the MRP process to guarantee that supplies are accessible for production while keeping inventory to a minimum According to Pavel (2021), the pull system helps to save on storage costs, minimal losses on the unsellable products, and less upfront investment in inventory since it aims to order only enough products to keep a minimal amount of stock on hand in response to customer demand, rather than forecasting and placing bulk orders in advance A pull strategy is a distribution mechanism that is fueled by instant consumer demand as producing nothing unless there is demand is the objective of a pull-based lean manufacturing system (Roser 2018) As with Just-in-Time manufacturing, the pull technique relies on the right quantity delivery of raw materials or semi-finished goods, resulting in very low inventories (Hessing 2018) Product storage and distribution are outsourced by Amazon for items that aren't regularly purchased or requested for quick delivery, as well as for items for which the storage costs outweigh the marginal returns on sale (Johnson 2020) Along with inventory outsourcing, the segmentation of consumers into price-differentiated customers gives the firm flexibility and agility in the market as demand changes dynamically (Juneja 2020) This gradually gave way to Amazon keeping some products in its own warehouses, and the company now employs a push-pull strategy in which inventory is kept in a push strategy and orders are sent in a pull strategy Confirming to Bauer (2021), the distribution center aggregation guarantees that Amazon keeps a huge amount of stocks and responds to demand in a dynamic manner 15 Specifically, Amazon stocks the frequently purchased and ordered products in its own warehouses in order to be responsive to consumer requirements while without compromising on delivery and lead times (AWS, 2021) Moreover, Amazon can rely on its partners and wholesalers to supply the customer with the required product whenever an ordered product is not available in its own distribution centers Especially for vendors in the F&B industry like Vinamilk, whose products are fresh milk, the shelf life is very short and must be kept in appropriate conditions to keep away from causing product problems and customer dissatisfaction Therefore, Amazon must predict customer demand accurately to avoid inventory stagnation Despite being one of the largest retail companies in the world with an extensive supply chain scale, Amazon faces challenges while employing both push and pull strategies in delivering goods to consumers As reported by Mullaney (2017), Amazon yearly addresses the demand and supply problems by stocking up more inventory to meet the possibly large volume of orders, especially during a peak season sale Nonetheless, there was a huge logistical issue with Amazon's system being overwhelmed with the enormous amount of consumers placing orders at this time and many customers didn't receive their items (DispatchTrack 2020) In addition, shoppers have complained that goods marked as available become sold out while customers are still in the process of checking out due to limited inventories Relationship in supply chain Amazon.com is constantly adding features to make the shopping process on the network more attractive to customers The “Gift Ideas” section offers gift ideas for new and attractive gifts for each point of the year Provide "Community" section information about products and the opinions shared by customers with each other The “Ecard” section allows customers to choose and send free e-mails to their friends and relatives Amazon.com has been constantly adding extra attractive services as above for its customers The CRM system of Amazon.com works through one-on-one marketing Since 2002, when a customer visits Amazon's website for the second time, the cookie file has been used to identify the client and display the greeting line “Welcome back, Tommy”, and offer activity-based shopping suggestions to the customer's previous purchases Amazon also analyzes the shopping process of regular customers and sends email suggestions about new products to clients Statistics of opinions and customer reviews for products license the row up the main selection and the high-end of 16 the client goods in the shopping process at Amazon.com is much better than that of traditional shopping system All of Amazon.com's efforts to create events for customers’ comfort and peace of mind when shopping and encourage shopping again Amazon makes sure that what we are developing is based on a real customer need and we are continuously iterating and honing the design to meet our customers’ high expectations (Amazon n.d) Technology RFID Technology Agus (2008) suggested that the adoption and use of new technology in the supply chain has a statistical relationship with product quality and business performance Therefore, Amazon has developed RFID in their supply chain, specifically focused on tagging and driving inbound items through their fulfillment process (Clark, 2015) RFID makes Amazon more efficient at transportation and inventory management RFID in manufacturing can support processes that demand excellent quality Firms with strong technological competencies achieve higher levels of gains than those with lower (Garcia, Avella & Farnandez 2012; Singhry, Abd Rahman, & Ng 2014) According to that, these are efficient ways RFID helps Amazon supply chain management operate better: Supporting Inventory Management Taking inventory manually can be time-consuming, laborious, and inaccurate Passive RFID tags can reduce the need for hand-scanning, resulting in an immediate improvement in inventory tracking and also maintaining low inventory, and reducing wastage In another case, an RFID inventory management system can increase the visibility and tracking of inventory in a factory It’s easier to know which product is low on stock and needs to stay on top of WIP in the company's plan Increasing Productivity RFID in manufacturing can automate the collecting of information on the location and movement of products from scans and tracks progress, weighing the box once it's packed to ensure the order is correct (Amazon n.d) The operation is fast and precise, making it more dependable and efficient than traditional methods Product identification through RFID inventory management systems is also faster than entering codes manually or using other 17 scanning equipment RFID in manufacturing boosts productivity and lowers costs by speeding up processes and reducing manual tasks Transportation The RFID system controls the supply chain by linking the different parties involved in transporting items from the manufacturer to the seller to the customer It guarantees that coordinated items flow efficiently from each supply chain network section Important indicators, such as shipping class and weight splits, shipment density, carrier utilization reports, and so on, maybe analyzed rapidly by Amazon Many transportation management systems use radio-frequency identification (RFID) technology to track shipments via supply chain networks in order to reduce transportation costs and improve warehouse operations This system provides extremely accurate real-time location monitoring and shipment information Automation & Robotics In this competitive logistics industry, besides the crucial human factor, technology is also a major strategic component Automation and robots are two developing technologies that are gaining traction in the Logistics and Supply chain industries Robotics is an automated form of transportation that combines contemporary technology, which is called robots to substitute human activity Picking, packing, transporting, and other activities, which are done by the cooperation between warehouse staff and the robots It has transformed the market in a significant way by simplifying procedures and shortening the time it takes for a product to reach the customer (GlobalTranz Resource 2013) By reducing human error in the logistics process, increasing labor productivity, and freeing human labor from physical labor, this technology advancement will assist increase work efficiency by automating activities now performed by humans As a result, Amazon can gain numerous advantages by applying suitable robotics technology for their company b) Discussion B 18 COVID-19 has had an impact on every industry Despite the fact that food supply chains are still operational, the pandemic's shocks have negatively impacted all aspects of the industry (Weersink, Massow & McDougall 2020) Food supply chains around the world are experiencing disruptions, are becoming increasingly vulnerable to shocks, and are finding it difficult to cater to demand (Karwasra et al 2021) Specifically, the dairy industry is among the sectors that have suffered the most because milk goods are highly perishable and rely on complex distribution networks that are time-sensitive (Mishra & Shekhar 2012) This section will discuss the impacts of COVID-19 on the most affected Vinamilk’s logistics activities: demand volatility, production stoppages, and transportation disruptions Demand Volatility Identification of Issue When the issue of how the COVID-19 pandemic affects consumers’ demand is examined, it is seen that the demand varies depending on the price of foodstuffs, income level of consumers, socio-demographic situation, consumption, shopping preferences, and time constraints (Bakalis et al 2020; Cranfield 2020) The COVID-19 pandemic divides society into two groups of people in terms of attitudes Among the group with a positive attitude about the pandemic, there are always people with uncontrollable emotions of anxiety, leading to acts such as hoarding commodities, medicine, and food (Nguyen & Bui 2020) As a result, panic buying and stock pilling behaviors have drastically increased the demand for food, including dairy products (Nguyen & Bui 2020) However, sales for dairy goods have fallen after the panic buying by consumers during mid-March, creating highly fluctuating demand and uncertainty in the market (Sharma & Sinha 2020) According to Aday (2020), COVID-19 outbreaks interrupted the daily routine and caused stress, which resulted in higher consumption of fat and sugary foods Additionally, demand for products for home baking and a backlog of storable products caused higher dairy-based goods demand (Sharma & Sinha 2020) On the other hand, higher raw materials prices in contrast with lower consumers income can negatively affect sales of many dairy firms, Vinamilk in particular (Giap Van 2021) Lastly, diminishing demand for dairy products in institutional purchases with schools, colleges, offices, and restaurants remaining closed (Huffstutter 2020) can contribute to the inability of demand forecast and stimulate ambiguity and uncertainty in the supply chain because of instantaneous demand volatility (Gunessee & Subramanian 2020) 19 Solutions It is suggested that due to the high volatility in consumer demand and unpredictable changes in consumer behaviors, firms should maintain the optimal inventory at a competitive price to stimulate demand and reduce deterioration (Rana et al 2020) Furthermore, a loosely coupled strategy was proposed, which adjusts demand to match production limitations by highlighting capacity availability and flexibility, since it might assist firms' decision-making in the postpandemic period (Zhu & Krikke 2020) Production Stoppages Identification of Issue The dairy industry has faced various problems during COVID-19 such as reduced efficiency caused by the need to follow social distancing, scarcity of available workers, and reduced supply of raw materials (Karwasra et al 2021) Disruption in supply has also caused additional delays and production capacity has been reduced due to a fall in the availability of resources, limiting the output of dairy processing industries (Karwasra et al 2021) Firstly, the potential for labor shortages within food processing industries due to worker illness, selfisolation, or movement restriction heavily impacted labor-intensive industries, such as dairy processing (Hobbs 2020) Moreover, food supply chains dominated by a few concentrated processors (e.g., dairy processing) may be particularly vulnerable (Hobbs 2020) Secondly, as suppliers are at the starting point of every supply chain, disruption occurring at this level will influence all supply chain activities (Hallikas et al 2004) The initial period of lockdown was very crucial for dairy farmers as there was no clear guidance about what should be considered an essential commodity, which has severely affected the dairy farmers’ uncertainty and led to supply disruption (Sharma & Sinha 2020) Moreover, the closure of facilities also contributed to the production stoppages issue (Ivanov 2020) Solutions The industry should carefully consider the regulations by the government and determine the number of available workers (Aday 2020) Additionally, the local labor force should be trained and activated in the event of high movement restrictions and lockdowns It would be an opportunity to ensure a reliable and long-term workforce for the future (Aday 2020) Also, 20 it is important to create more incentives to encourage workers, leading to higher productivity and profitability (Aday 2020) Transportation Disruption Identification of Issue Because the transportation management processes averagely account for 60% of the total logistics costs and considerably high value in terms of customer satisfaction, a disruption in this aspect can cause huge losses in both profitability and customer satisfaction of a business (Muerza, Larrode & Moreno-Jimenez 2017) Due to the pandemic, governments around the world have made significant restrictions on the transportation (land, water, and air transport) of goods For instance, reports showed that using trucks for food distribution declined 60% since the restrictions (Bakalis et al 2020) Consequently, the product flow in the supply chain has been severely disrupted (Walters, Wade & Suttles 2020) Solutions Decentralization of distribution centers is suggested to avoid drawbacks and risks associated with transportation disruption (Aday 2020) Low-scale facilities located near the consumers reduce the storage and transportation costs and minimize the environmental impacts (Almena et al 2019) Decentralization provides flexibility in the supply chain and mitigates the risks of perishable goods It also helps to simplify the administrative procedures in order to reach poor and disadvantaged people (Almena et al 2019), especially in the COVID-19 pandemic IV Conclusion The study report described three primary streams such as product, financing, and information through the channel map Furthermore, the four key selected operations (for example procurement, packaging, transportation, and warehousing) are repeated, and more information about each of these activities In addition, the information and theories are presented and clearly separated in two A and B Discussion A provides some fundamental notions regarding the core competency and impact of the supplier and buyer relationship It 21 also evaluates the advantages and problems of the push-pull system Amazon also applies modern technology such as RFID and robotics in order to improve supply chain management Next, following discussion B mainly illustrates several problems affecting the company, such as demand volatility, production stoppages, and transportation disruption This report also provides variable effective solutions to avoid these problems such as the number of stocks, decentralization of distribution, the regulation and training course for the workforce V Provide a summary of teamwork Team member’s name Commitment to the group project The actual level of contribution Team member’s signature Le Phung Hoang Minh ● ● ● ● Upstream Downstream Packaging Transportation 17% Minh Nguyen Pham Phuong Nhi ● ● ● ● ● Production flow Information flow Financial flow Procurement Warehousing 17% Nhi Hoang Dang Duong ● Executive Summary 17% ● Introduction ● Discussion A (Technology) ● Conclusion Nguyen Duong Minh Hieu ● Core competencies 17% ● Supply chain network in use ● Relationship in SCM 17% ● Discussion A (Technology) Le Nguyen Ha Thi Ho Phu Cuong ● Discussion B (Demand Volatility) (Production Stoppages) (Transportation Disruption) 17% Duong Thi Cuong 22 VI References Agus, A 2008,’ The importance of incorporating new technology and innovation in supply chain management (SCM) processes in enhancing performance’ Vol 16,pp, 32-38 Anh Tu 2019, ‘Amazon has to the specific time frame for Vietnam Website’, VnExpress, 18 October, viewed 18 September 2021, Amazon 2014, ‘Amazon Packaging Certification Guidelines’, company report ver 4.1, Amazon Network, viewed 17 September 2021, Amazon n.d, ‘Our mission’, Amazon, viewed 14 September 2021, Amazon n.d, ‘Getting packages to customers’, Amazon, viewed 17 September 2021, Amazon n.d, ‘How your package gets from Amazon's warehouse to your front 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Amazon in Transportation Management,” Aptude IT Consulting & Support Services, viewed 17 September 2021, Walters, L, Wade, T & Suttles, S 2020, 'Food and Agricultural Transportation Challenges Amid the COVID-19 Pandemic', Agricultural & Applied Economics Association, vol 35, no Weersink, A, Massow, M & McDougall, B 2020, 'Economic Thoughts on the Potential Implications of COVID-19 on the Canadian Dairy and Poultry Sectors', Canadian Journal of Agriculture Economics, April, vol 68, no 2, pp 135-258 Zhu, Q & Krikke, H 2020, 'Managing a Sustainable and Resilient Perishable Food Supply Chain (PFSC) after an Outbreak', Sustainability, June, vol 12, no 12, p 5004 VII Appendix Appendix 1: Push and Pull Supply Chain method 29 ... RFID and robotics plays an important role in improving Amazon supply chain management Several difficulties have arisen for Amazon during the COVID- 19 epidemic since limitations have harmed and interrupted. .. harmed and interrupted company operations Firstly, the demand volatility should be mentioned because customers’ demand will be affected during the Covid- 19 pandemic due to several factors such... on the channel map, the raw materials and packages of Vinamilk are being imported from leading and reputable sources in the world such as the US, New Zealand, the Netherlands, etc to ensure the

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