The Wonders of Amazon and The Extended Supply Chain


Why would a buying organization use a firm like Amazon as a supplier network given its fees based on the percentage of the goods? This is the question Pierre Mitchell poses in his PRO research brief "Amazon vs. SAP/Ariba and the Coming Battlegroundpublished earlier today. The article was Part 2 in a series "The Future of B2B E-Commerce in the Extended Supply Network" – you can also check out "Part 1 - The Big Picture." He also asks if Amazon will ever become a B2B supplier network that enables the "e in e-commerce" instead of just a "virtual retailer/distributor with awesome supply chain and e-commerce capabilities that uses its information network capabilities to enable its physical network and financial network."

Addressing the first question, Pierre writes:

"Well, [Amazon] does have very strong supply chain and financing capabilities, and it knows a little something about managing information given that it has dominant share in the infrastructure as a service industry with Amazon Web Services ... Amazon also knows how to sell its value to suppliers, to enable suppliers, to integrate them and to offer them tons of value-added services. The biggest of these services include inventory management and financing."

So - what can we expect in the future? Is a battle coming between Amazon and SAP/Ariba? Will Amazon move from the physical to the virtual supply chain? Make sure to check out Pierre's PRO brief to find out more!

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