As Thomas Edison is to the light bulb, Henry Ford to automobile manufacturing, Fred Smith to express shipping, and Jeffrey Straubel to electric cars, Jeff Bezos’ lasting impact may be supply chain innovation.
The media-shy Bezos has always had an interest in the way things work and how to make them better. His interest in the power of information technology-driven commerce started in the mid-1990s after he left Wall Street to set up a business selling books in Seattle. However, his store named Amazon.com would be different from traditional book stores of the day — it had no walls except for the ones that housed books for distribution.
Bezos’ supply chain methodology became an instant hit with shoppers and repotedly within 30 days of starting his business he shipped books throughout the United States and to as many as 45 countries. People gravitated to his Website, easily browsed for books, paid for them online and had them shipped to their doorstep. It wasn’t long after that Amazon.com was selling anything from music, electronics, clothing, and small appliances — a virtual online department store.
But with any innovation, many brick-and-mortar companies were skeptical of Bezos’ success at first and figured it was a fad that would crash and burn, or simply remain an interesting niche. They couldn’t be more wrong. The so-called “Amazon effect” has logistics managers at many retailers and those shippers that supply them under pressure now more than ever to respond to a variety of customer demands and desires — not just those who walk through the door. Shippers are being forced to ask themselves how they can provide a 24/7 shopping experience for their customers, as explored in detail by Associate Editor Eric Kulisch in “Breaking down the wall“.
While the Amazon effect will not eliminate walk-in stores, it will change the way logisticians evaluate and manage their supply chains. It will also initiate changes among IT providers, third-party logistics services and carriers in how they respond to these shipper changes.
Most shippers can’t be the risk taker that Bezos is. He is brash and has the financial wherewithal to give unconventional supply chain process changes a try, even if they fail, unlike most logistics executives who are beholden to limited resources and other corporate constraints. However, the changes that do work for Bezos and make his Amazon even more of a threat to traditional retailing will force the supply chain evolution.
Bezos and supply chain innovation
