Two Fatal Flaws of Amazon: Hint – Both are In Its Supply Chain – PART 1

Two Fatal Flaws of Amazon: Hint – Both are In Its Supply Chain – PART 1


Vivek Sood




March 30, 2019

If you asked an Uber driver in Sydney today what is the greatest strength of Amazon – they will probably tell you that it is their supply chain.

If you probed further and asked again – where exactly in the supply chain is the strength?

More often than not, you would get the common answer that it is Amazon’s network of warehouses from which it can seemingly instantly fulfil orders at the lowest possible costs.

More astute observers might also identify Amazon’s unique and un-ending focus on customer service – calling it a demand-driven supply chain. Supposedly, that is the bane of the traditional retail – with brick-and-mortar store being closed left, right and centre.

Conventional wisdom agrees that this analysis is right on both counts. These are the things that allowed Amazon to be immensely successful and become the slayer of the large box retailers everybody loved to hate.

So then what is there to be churlish about?

How could either, or worse, both of these big strengths suddenly turn into weaknesses?

Under what circumstances would they become a millstone around Amazon’s neck?

These are important questions – especially because those circumstances are almost gurantee to eventuate in a not too distant future.

But, is this the right time to answer these questions, or to merely ask the questions.

I am not going to answer these super important questions in this blog – because the purpose of this blog post was just to anchor this thought, not the reason for it.

Before that time comes, I will certainly come back and write a PART 2 of this blog, revealing my reasons for saying so – with evidence and case examples.

Meanwhile, a press release of this material is being issued so the date and content stays on record.

Those who live by the sword, die by the sword.

Copyright - These concepts, frameworks and ideas are copyright of GLOBAL SUPPLY CHAIN GROUP from the time of their creation. Do NOT copy these without permission and proper attribution.


  1. These ideas and concepts will be usually expressed by our thought leaders in multiple forums - conferences, speeches, books, reports, workshops, webinars, videos and training. You may have heard us say the same thing before.
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Vivek Sood

Our Quick Notes On Five Flows Of Supply Chain Management

Part of our new “Quick Notes” series – this report answers your most pertinent questions of the topic.

  • What are the five flows of SCM?
  • Why are they important TO YOU?
  • How can you map, track, and optimise these flows to serve YOU?
  • What is the importance of difference between "Supply Chain" and "Value Chain"?
  • What are the stellar case studies of each of the five flows?


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  • Warehouse networks keep the companies close to their customers. That is why Amazon has worked on maintaining up-to-date and well-organized warehouse networks. Besides occupying a warehouse, a strategic warehouse location is of key importance. And when it comes to supplying chain management, companies now realize that supply chains are complex, with a myriad component like procurement, warehouse networks and operations, inventory, transportation, order processing, and customer service, plus the systems necessary for these operations. Companies want their goods to be safe from damage and theft. Basically, a warehouse is great for storing surplus goods, which customers and clients don’t need immediately. This means they’ll need adequate storage for their surplus goods until their customers and clients start putting in orders. Amazon is smartly dealing with its warehouse networks to ensure the smooth flow of supplies.

  • Plenty of things can turn out badly with Amazon stock, and these migraines may keep going for quite a long time before everything gets dealt with. Coming up short on the stock is a bad dream. Nobody on Amazon will purchase items that are out of stock since they’re acclimated with comfort. Your watchword rank, Best Seller rank, and income will quickly fall.

  • A good and interesting article Vivek. The worldwide supply chain network is very precarious. At the point when organizations like Amazon work absolutely, they will convey annihilating greater indicators. In any case, it just takes a supply network to be off a tad before those focal points vanish and, contingent upon the size of those mistakes, conceivably transform into hindrances.

  • It is anything but difficult to recognize the regions that Amazon does well in its SCM. Be that as it may, there are segments and parts of the SCM of Amazon where enhancements can be made. This segment distinguishes those areas and proposes a few proposals that Amazon can pursue and actualize to make its SCM world class and be a wellspring of a maintainable upper hand. Amazon depends, as it were, on dispatch organizations, for example, FedEx and UPS. Identification of such solution seeking areas is important.

  • Lethal imperfections in the production network, well, Amazon’s not the only one. No organization deals with its inventory more predominantly than Apple, an ace at applying colossal monetary influence to guaranteeing it gets what it needs when it needs. But then, it’s, for the most part, well-inspected new remote AirPod earbuds were inaccessible as of not long ago. Moment delight additionally is hard to come by for Google’s top of the line cell phone, the Pixel. A model I investigated purchasing recorded a three-to-four-week delay before supply.

  • Good article Vivek. I was keen to read more about Amazon flaws and weaknesses. You have mentioned some very significant points in this article. What are the circumstances that could be problematic for Amazon in the future and what possible flaws still exist within Amazon? I never knew before how Amazon is doing a better job as compared to their competitors. Now I know what the accelerating force at the back of Amazon is. Warehouse management is a tough job. It seems warehouse management is not a big deal Amazon as they are successfully managing their supply chain all across the globe. Would be waiting anxiously for part2 of this article.

  • Good customer service creates a lasting impact. When a customer has a bad experience with your company, he/ she would most probably discontinue using your product or service. On the other hand, if you provide an instant query resolution, best quality products, good customer service or simply live up to their expectations, they are likely to become your long-termed customers. The type of customer service you provide creates a lasting impact on your customers. Whether the impact is a good one or a bad one totally depends on you. It also helps companies to generate revenues or increase. As you have already mentioned in the Amazon case, exceptional customer service is responsible for developing loyalty in the consumers. When consumers love a brand, they readily market their products. This eventually drives an increasing ability to maximize revenues. I appreciate Amazon for strengthening their customer services.

  • Amazon understands how important is customer service to maintain their reputation and earn the client’s trust. You may have the best of products but they are of no use if you cannot convince people to buy them. Your business is bound to fail if you are unable to meet the expectations of today’s customers. Customer service holds a major significance for any business. Exceptional customer service not only helps in retaining the present customers but also helps drive in the new ones. When you provide quality customer service, your customers tend to trust you more and share their experience further. In other words, exceptional customer service triggers word-of-mouth marketing which is the most powerful marketing tool today. This is so because people prefer going for something that their known suggest rather than what you tell them about your company.

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