Supply chain management and third party logistics are gaining huge importance in this modern era. These days’ logistics is considered to be an integral part of any given business around the globe these days.
What is Supply Chain ?
Supply chain includes all the activities of a business process including all vendors, search providers and customers. It involves all the movement of fund, material and all the related information about the business through the full logistics process. It includes the buying of raw material to delivery of the final product.
What is Logistics ?
Official Explanation: “Logistics is that element of the supply chain method that plans, utilizes, and controls the effective, effective flow and storage of goods, services, and relevant details from the factor of origin to the point of intake in order to meet customers’ requirements.” Council of Logistics Management
Logistics is basically the process of moving of the products or goods to the destination at the least possible cost. Logistics involves the responsibility of exercising efficiency and accuracy in the process, selection of medium and their proper execution is the biggest concern of the logistics process.
Supply Chain Management (SCM)
The process of supply chain management includes the control of all the funds, information of the products, and materials, throughout the whole process of product creation.
Reasons why companies would want to move into a long term partnership may include:
- To achieve the strategy.
- Benefit from each other’s strategies.
- Reduction of risk.
- Increase return on investment.
- Providing more affordable service to beat the competitors.
What is Third Party Logistics ?
It basically includes the transportation and other third party logistics services that are provided by some in order to accomplish tasks that were previously being done in-house by the company itself. Third party logistic services allow companies to assemble a very efficient and customer oriented distribution network. 3PL’s industry has really increased the real world technologies being designed by the companies. The advanced techniques of 3pl logistic services provide a long term prospect of high quality service and fulfill the tight delivery time frames.
Amazon is enthusiastically investing in areas like digital content, cloud computing and services, along with expanding its distribution network. Company’s costs and expenditure in fourth quarter also reported a 17% increase in fulfillment cost and 42% increase in technology and content expenses. Despite the increasing expenses and investments, Amazon still performed with amazon revenue calculator better than Wall Street expectations in terms of profitability.
Holiday season gave rise to sales, along with company deciding to increase its prime members, gave a boost to the fourth quarter sales. Amazon also provides two days free shipment in United States and discounted access to movies; books & music exclusively to prime members as added incentives.
Jeff Bezos, CEO Amazon said, “We were confident when we increased the price of our prime membership that our clients would still believe it as the best buy in the shopping history.” Amazon’s Prime Membership increased by 50% in United States and 53% globally in 2014. In United States only, there are almost 40 million prime members, as reported by Consumer Intelligence Research Partners.