Similarities and Differences of the Supply Chain Strategy Used by Amazon and Takashimaya (Research Paper Sample)

Similarities and Differences of the Supply Chain Strategy used by Amazon and Takashimaya
Executive Summary
Supply chain strategy refers to the processes and procedures that an organization puts in place to ensure its goods reach the final consumer in time. An efficient supply chain design significantly reduces operating costs and creates customer satisfaction and loyalty. For example, Amazon maintains one of the largest and most sophisticated supply chains that primarily rely on technology to connect millions of vendors and buyers in different parts of the world. On the other hand, Takashimaya uses a traditional supply chain design where a single warehouse handles goods that are sold through its discount stores. Both supply chains serve the needs of each organization, but Amazon's supply chain significantly reduces distribution costs and has higher product availability.
Introduction
Amazon is a multinational online retailer specializing in a wide range of products and services. The company operates what is believed to be the most significant supply chain globally that connects consumers and vendors in more than 50 countries (Alaimo, 2018). On the other hand, Takashimaya is a multinational discount store that uses the brick and mortar model, where consumers make purchases directly from its stores. There are vital differences in the main features and organization of the supply chains used by the two companies. While Amazon's supply chain tends to rely more on technology and includes millions of vendors, Takashimaya's supply chain is less sophisticated and involves fewer vendors and less technology.
Analysis of Supply Chain Strategy
A critical difference between the supply chain strategy used by Amazon and Takashimaya is the role played by vendors in the management of inventory. At Amazon, vendors play a crucial role in managing the stock that is to be shipped to customers. Vendors manage all the merchandise at Amazon, as an item is only sent to Amazon's warehouse when a buyer makes a purchase (Philip, 2018). Amazon, as a result, does not incur high warehousing costs related to holding products until they are purchased. Since vendors manage all the inventory, there can be no shortage or surplus, as products are delivered to Amazon once a customer makes an order. Takashimaya, on the other hand, manages its inventory. Vendors deliver products to the company's warehouse, where they are stored until a buyer makes a purchase. The company, as a result, incurs higher stock holding costs and can experience shortages or have a surplus of certain products when there are unexpected changes in demand.
Amazon also relies on technology to a great extent in the management of its inventory. Through technology, vendors can directly manage their inventory at Amazon's warehouse and get a confirmation immediately it is delivered to a customer (Terdiman, 2018). In most cases, there is no official communication between Amazon and the vendor, as buyers deal directly with the vendor using technology provided by Amazon. Therefore, all parties involved in the supply chain can track inventory through the supply chain with ease. At Takashimaya, the organization manages most of the stock without the use of sophisticated technology. The organization sources merchandise from vendors that are then delivered to the company's warehouse. Vendors and customers have no way of tracking the inventory. Technology, therefore, plays a minor role in Takashimaya's supply chain.
Amazon's supply chain also features a great deal of planning and coordination that enables it to deliver millions of products every day. Unlike most other retailers, Amazon maintains different warehouses that make it possible to get products as