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The ‘Amazonization’ Of The Supply Chain   by John Dickey

The ‘Amazonization’ Of The Supply Chain by John Dickey

Back in 2013, I read an article that talked about the “Amazonization” of the supply chain. I know that six years seems like a lifetime – especially in the high tech world, and in some ways it is. However, with all the talk of the digital supply chain and the increasing focus on moving important processes beyond the cloud to the edge, the transformative impact of the Amazon distribution model is moving from concept to actualization.

In case you either did not read or recall the article aptly titled “The ‘Amazonization’ of Customer Expectations,” the main focus was on the potential yet unrealized threat that Amazon presented to traditional distribution models.

Along these lines, the CEO of specialty building products distributor C.H. Briggs Julia Klein stated at the time that while she was “not seeing a direct threat from Amazon today,” she was “very paranoid” about the possible threat Amazon would pose in the future. Specifically the belief that Amazon is driving customer expectations from the standpoint of “ease of ordering, technical infrastructure, and the speed of delivery.”

According to Klein, the Amazon distribution model “puts incredible pressure on distributors because we can’t afford that technical infrastructure.” As a result, once you experience that high level of functionality with Amazon at home, you begin to “expect that in every part of your world.” And it is regarding this last point that leads to an “Amazonization” of all interactions. Or to put it more succinctly across the entire end-to-end supply chain, digital expectations at home affects digital expectations at work!

Certainly, and as Jon Hansen wrote in a related article Distribution On The Edge: How Digital Is Decentralizing The Distribution Supply Chain the move towards computing on “the edge” via personal IoT devices means that the expectation for greater speed, capability, and convenience will only increase at the user level.

The digital revolution which will see a steadily increasing number of people working beyond the cloud on “the edge” in a decentralized world has opened the door to more vendor options. These options, which lower the cost of switching from long-term partners has shone a light on the inefficiencies of traditional electronic distribution platforms. This gap between customer expectation and the fulfillment capability of distribution technology based on for example ERP systems is in my estimation the threat to which Klein had referred back in 2013.

Recognizing that the threat is becoming real, what is the best way for distributors to optimize their existing infrastructure so that they are better able to introduce the needed technological advancement to remain competitive and profitable in a digital marketplace?

As one of the panelists on the March 27th webinar BEYOND ACCURACY: How Distributors Are Transforming Customer Experience In The Digital Age I will provide my take on how distributors can position themselves to get in front of the digital wave that is transforming our industry and the market as a whole.

Use the following link to reserve your seat today.

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