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The Last Miles Of Amazon Complexity

Miles Of Amazon Complexity

Rivers become amazingly complex in their last few miles.

If you have not yet done that try and navigate the Amazon delta from the sea up to the river – it is an enlightening experience.

As a former ship’s master, I have had the privilege of navigating up a number of rivers – Ganges, Amazon, St Lawrence, Houston, Delaware, Hudson, Nile, Mississippi, and many others.

The complexity of the naturally evolved network of the rivers’ last miles must be seen to be believed. You can get lost for your entire life in the intricate network if you do not retain tight control over your perspective.

Today, GPS would be a big help but even then you will need a good map and good navigation skills.

In this blog post, there are some illustrative pictures of the last miles of the rivers that I navigated.

Picture Miles Of Amazon Complexity

Global Supply Chain Group - rtt

The last mile of every network is almost always the most intricate, complex and difficult to navigate.

To get to our fingertips, blood travels in the smallest blood vessels, capillaries, which are less than 1mm long each.

So you can imagine how sophisticated the network is and utmost caution is needed at all times. The same applies to businesses.

If you get it right – you will win.

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Amazon is in news for its attempts to set up the last mile services. This will put them in competition with FedEx and UPS in the territory they have owned for decades. Their core competence is delivery to the last miles.

Will Amazon be able to outcompete them? In Amazon’s arsenal is predictive shipping.

At the beginning of this year, Amazon has received a patent for its “anticipatory shipping” technique. Possessing intimate knowledge of their customers, sometimes even more than the customers themselves, Amazon can control the entire end-to-end supply chain, they can create shops, they can change the entire e-commerce sphere.

The odds seem to be in their favour. They can hire and learn from UPS or FedEx. Infrastructure can be bought off the shelf. They also have very high-quality self-developed software.

But the jury is still out. If they fail – they will lose their shirt.

The last mile of every network can bankrupt a company because of the sheer complexity, cost and customisation involved.

Surely, you wouldn’t want to be in a situation where there was only $5,000 left in your company’s pocket. Not everyone would be as lucky as the founder of FedEx who gambled that amount and turned it into $32,000, just enough to save the company back in the 1970s.

For many others, bankruptcy was inevitable.

Webvan filed for bankruptcy in 2001 for being over-optimistic about its “last mile” while the real issue lied in how to get customers to the first mile. Good Amazon waited.

Why?

Because their strategies build on each other. If Amazon succeeds, it will build a 5-STAR Business Network that will give it a substantial, lasting competitive advantage – over not only retailers but also courier companies and distributors.

At a later stage, once it has figured out its own network, it can outsource what is not considered necessary.

Miles Of Amazon Complexity Network

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What will it outsource?

Know 5-Star Business Miles Of Amazon Complexity

Practically everything except for customer-facing interface. Because that gives it immense strength in the 5-STAR Business Network.

Its ability to understand customers and make them the right offers.

Fulfilment can be modularised and outsourced – but only once Amazon knows the best way to do it themselves.

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ABOUT THE PRINCIPAL AUTHOR

Today, Vivek and his partners are among 20-30 people on the planet earth who have this deep understanding of supply chain systems, practices and tools. CEOs, COOs, executives and Boards call them in most challenging situations once they know the full potential of supply chain based transformations. Following are key milestones in Vivek's journey:

  • Started in 1983 as a merchant navy cadet at 18 years age, worked his way to qualify as a Captain – qualified to take command of any merchant ship, worldwide.
  • Earned a top tier MBA from UNSW at the top of his class.
  • Joined highly regarded strategy consulting firm Booz Allen & Hamilton, consulting to the CEOs, Boards and senior management of global corporations within Australia.
  • To learn and specialise in supply chain – against all odds, sought out the co-inventor of supply chain in Germany and convinced him to be a partner in his firm, GLOBAL SUPPLY CHAIN GROUP, launched in January 2000.
  • More than 500 successful blue chip projects with high impact business transformations in large corporations using the full power of SUPPLY CHAIN MANAGEMENT.
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If you are deeply passionate about the world of business and supply chain networks as I am, and enjoy digging answers to critical questions that will help build and steer your business with wisdom, then join me. This book is a journey of exploration through the world of business networks that run along the veins of today’s commercial world.

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OUTPERFORM OUTSOURCE OUTPROFIT

The trend of outsourcing continues to grow unabated with the whole gamut of services, from simple to mission-critical tasks. There is not a single company on earth that does not outsource anything. It is not just about cost arbitrage, it is also a finer expression of division of labour at the organisational level. Like all leverage, outsourcing is a double-edged sword too. On one hand, it allows you to do more, faster. On the other hand, if it goes bad, it can easily kill your business. If you do not believe that is possible – you can google the Fox Meyer saga from the 90s and see for yourself.

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UNCHAIN YOUR CORPORATION

Businesses Are Chained By Unseen Chains. If You Are Looking For Ways To “Unchain Your Corporation” A Successful Business Transformation Is Required.

Successful Business Transformations Are Difficult, Yet Rewarding.

Business Transformation Is Fast Becoming A Question Of Survival In The Modern Globalised Era.

Modern Supply Chains Integrate Businesses And Economies Faster By Systematic Information Sharing From Internal And External Sources.

Companies Can Multiply Profits By Progressively Ramping Up Cohesion And Collaboration Of All Moving Parts In B2B Network To Achieve Tighter Integration.

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GREEN SUPPLY CHAIN – AN ACTION MANIFESTO

It is generally accepted that environmental consciousness is now changing to environmental proactiveness as organizations are discovering that it makes good commercial sense.

Boards are asking the management to review their policies related to environmental norms, not only to bolster their corporate social responsibility aims, but also because consumers are asking for greener supply chains

It is also widely agreed that consumers will increasingly prefer to buy more and even pay more for products or services provided in an environmentally sound manner.

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