Example Answers to Strategic Human Resource Management Exam

Example Answers to Strategic Human Resource Management Exam Section A, Question 1 To what extent does the approach to Talent Management at Standard Chartered Bank display features of SHRM? Answer: By focusing heavily on its talent management program it can be clearly be seen that Standard Chartered Bank (SCB) is making the practice of SHRM as one of its key priorities. As can be seen from the article, the way SCB adopts its appraisal methodology is of a very strategic angle. By making it a global standard to conduct face-to-face performance appraisals every 6 months goes to show that SCB is reviewing its own performance management objectives to make sure that those objectives stay relevant and achievable, and that is a feature of SHRM. Being sensitive to different cultures by employing different appraisal methods also shows that SCB understands the importance of managers and staff identifying and dealing with real, actual problems in a way that is most familiar and effective to them. That is also another facet of SHRM as through such means, SCB is able to monitor its own competitiveness in the market. Through appraisals, SCB also classifies their employees into 5 categories ranging from high-potentials, to critical resources, then to core contributors, followed by underachievers and finally, underperformers. By doing so they are able to identify areas in which they are lacking and act upon it. Interestingly, as Geraldine Haley explains the classifications, it can be seen that SCB is already identifying the likely flow of talent in the bank and are taking actions to manage the flow. For example, when classifying certain employees as underperformers, Haley goes on to mention that this group of people do not fit the job requirements and they should be transferred to another role or be managed out. Clearly, whether the bank decides to place this group of employees in another role (which fits the idea of SHRM because by placing people where they perform best clearly benefits any company), or by managing them out (thereby reducing unnecessary manpower costs or replacement with a more pr oductive candidate), the intent behind both actions is clearly strategic in nature. The employee classification also allows the bank to understand the their potential and manpower mix which is critical because, the HR department would be able to plan in advance for staff mobility or develop different programs to help develop potential of their talents to another level. So far we are able to see that SCB does indeed view its employees as a strategic key asset in churning out profits for the bank. Yet another SHRM feature being displayed is the secrecy of employee classifications. As mentioned in the article, SCBs stance is that while they do not want certain employees to feel de-motivated and others to boast about their own performances, the whole point of the classification system is to inform managers that there might be actions required on their part to improve the situation. It is true that in SHRM, managers should not cause their staff to feel like they are being constantly monitored for poor performance because this will affect the staffs willingness to contribute towards the company. Again, either way, we see that the actions taken are closely linked to helping the organisation achieve its strategic corporate objectives. The classification system is also being used a guide for regional offices to strategically benchmark against one another to see where they stand. Ever since SCB has been experiencing a high staff turnover rate among newly recruited employees, a solution in the form of a global induction program named Right Start was implemented to curb this problem and they successfully brought down the rate of employees leaving by 5% (http://www.standardchartered.com/annual-report-07/en/business_review/people.html, 2008). SCB has also gone on to groom talents into leaders by means of providing coaching and self-help tools through various medias such as podcasts, videos and workshops. Another key concept is to allow talents to play to their strengths rather than on focusing on managing their weakness. As Hayley explains the strategic rationale on focusing on coaching talents with global roles in the bank, it is because a small 5% improvement from these top managers is enough to cause a huge positive impact on the banks earnings. Under the Best practice view in SHRM, there are 18 Key practices of which SCB can safely said to have achieved at least 50% or more: Realistic job previews; Use of psychometric tests for selection; Well-developed induction training; Provision of extensive training for experienced employees; Regular appraisal; Regular feedback on performance from many sources; Individual performance-related pay; Profit-related bonuses; Flexible job descriptions; Multi-skilling; Presence of work-improvement teams; Presence of problem solving groups; Information provided on firms business plan; Information provided on the firms performance targets; No compulsory redundancies; Avoidance of voluntary redundancies; Commitment to single status; Harmonised holiday entitlement (Source: University of Sunderland). It can be concluded that SCB is investing so much resources towards its human talent management program simply because it views it employees as human capital for the organisation and understands the wisdom in developing and managing its employees in close relation to the values and objectives of the company so that an effective workforce can be grown, and groomed to achieve the strategic objectives of the bank. Word count (865) 1.2 Comment on the relevance of this approach in the light of the recent banking crisis? Answer: The banking crisis of 2008 was largely due to the fall of banking giant, Lehman Brothers (LB). If LB had adopted SCBs view of employees as human capital in the organisation, it could have at least minimised the loss to a certain extent. For one, discussions between employers and staff would have been more open and problem issues could have been brought up and identified at an earlier stage. Inefficiencies in the organisation would have been uncovered if there were a global compilation of performance like in SCB, where CEOs were able to benchmark their performances against regional offices. In a way, having a certain amount of centralised control through talent management would also enable the monitoring of LB companies globally. It is interesting to note that when a German subsidiary of LB requested that top management in the USA forgo multi-million bonuses as a sign of taking responsibility for poor performance, the request was immediately struck off at the first instance. It seems that top management either did not know or did not bother to care what was going on in its other global offices. Therefore it is important for companies to have a solid leadership and to achieve that, organisations must start to take the first step in acknowledging its employees as key assets towards enabling the company to achieve it strategic goals and objectives. Thereafter that, the companys HR policies should be dawn to include short and long term strategies that are inline with the companys corporate objectives. Companies should also consider which view the company would adopt in relation to SHRM. For example, does the company suit the Best Practice view, Bes Fit view, Best Fit Integration view or Resource based approach? Each has its own strengths and weaknesses but the company has to decide which is the most compatible and allow the company to achieve its goals. Perhaps the culture of a company should also be set as culture can deeply affect a employees willingness to contribute positively to the company. Every organisation aims to communicate its own objectives and goals to its employees so a to align the values and attitudes of the employees towards commitment in performance for the company, and in this respect, having an appropriate culture will greatly enable the employee to settle comfortably into the company and be motivated to perform well. Retaining talent is crucial in a companys route of progress and much effort should be put into talent management where employees will feel like that are an important part of a company that cherishes their contributions and seeks to develop and groom them for further growth in their career. With SHRM as the key basic guiding principle, companys should therefore seek to create a pool of talent that will steer it in the right direction, both in good times and bad. Word Count (473) 1.3 Why is it important to measure the impact of SHRM? What might be included in a evaluation strategy to measure the impact of SHRM in an organization to achieve strategic integration? Answer: It is important to measure the impact of SHRM because, firstly, strategies that are formulated into HR policies are closely linked to the strategic objectives of its organisation. The reason why this is so is because the company understands that attitudes and performances of its employees makes a significant difference towards achieving organisational goals. Therefore when an organisation decides to employ the HR unit as a strategically, resources are being invested to make sure the HR unit contributes towards the attainment of those objectives. In measuring the impact of SHRM in a company, there are 18 Key practices of SHRM might be used to ascertain the degree of SHRM present in the company: Realistic job previews; Use of psychometric tests for selection; Well-developed induction training; Provision of extensive training for experienced employees; Regular appraisal; Regular feedback on performance from many sources; Individual performance-related pay; Profit-related bonuses; Flexible job descriptions; Multi-skilling; Presence of work-improvement teams; Presence of problem solving groups; Information provided on firms business plan; Information provided on the firms performance targets; No compulsory redundancies; Avoidance of voluntary redundancies; Commitment to single status; Harmonised holiday entitlement (Source: University of Sunderland). Other possible measurements could be in the form of appraisals where performance management objectives are being reviewed. Through the appraisals the organisation would be able to know how it is faring against the achievement of its own targets relative to the overall performance of the employees. Word count (287) Section B, Question 4 4. What are the main features of a Performance Management system? In what ways can organizations ensure that such systems fulfil strategically useful outcomes (30 marks) Answer: 4.1 Main Features of a PMS The main features of PMS are: PMS consists of business-led outcomes that may be assessed against definite business objectives; PMS is integrated with interlocking procedures and flows of information; There is a mix of quantitative and qualitative objectives; There is a focus on both system design and manner of implementation. Because PMS are sensitive to process and culture, it is hence flexible; PMS rely on a participative approach by mangers and staff alike, which can align with other organisational processes, for example, employee religions, communications and decision-making processes; Lastly PMS have a distinctive and adaptable quality of being people and systems-oriented (Source: University of Sunderland). There are 6 other features of PMS that links it to the overall business strategy of a company which might also guide organisations in ensuring strategic outcomes are met: Objective setting; Ongoing review of objectives; The development of personal improvement plans linked to training and development; Formal appraisal and feedback; Pay review; A competence-based organisational capability review (Source: University of Sunderland). 4.2 Ensuring PMS Fulfils Strategically Useful Outcomes The best way to ensure that PMS is able to fulfil strategically useful outcomes is for the organisation to be involved in the setting of performance objectives and thereafter measure those objectives. When setting clearly defined performance management objectives organisations can gear the scope and nature of the objectives to reflect the organisations own corporate goals. These performance objectives should also be linked closely to the individual employees as well as the organisations capability resources. When setting objectives, coverage should include competence and skill development, ability in meeting operational targets, and creating a suitable corporate culture. Objectives are generally defined into 3 categories: productivity and output related, job-related and person-related. For productivity and output related objectives, these are a measure of quantifiable output targets like: Cost reduction Achieving sales quota Meeting production volumes. For job related targets, these involve meeting the main objectives of the job laid down in its description according to the specified level of competence: Achieving main responsibilities and accountability. Meeting tasks as described in the job description. Meeting the obligations and service relationships to internal and external customers. For person related objectives, these affect the behavioural outcomes of the person performing his job, such as sharing knowledge an ideas with co-workers. Organisations recognise the importance of linking organisational culture with person-related objectives as it can help to bring about a positive change in the organisations culture. For instance, an organisation that wants to have a culture that is collaborative in nature will set objectives on employees and measure an employees research report on the number of references made to other employees work or the number contributions made by the employees colleagues in the report. This type of objective will change a person behaviourally so that he or she is able to meet the performance objectives. As organisations are beginning to shift away from individualistic performance objectives such financial goals and moving towards objectives which links the workforce to the corporate objectives or wider environment such as quality and effectiveness of business processes, other measurements are being introduced to maximise the potential and skill of the workforce through a commitment-oriented strategy. Thus, organisations have also realised that to engage the wider environment, they have to identify the relationship between the 3 key stakeholders an the organisation: Investors who require return on their investment through dividends; Customers who require quality and service for which they pay; And employees who require a healthy and rewarding working environment that provides job security (Source: University of Sunderland). Now that the inter-relationship has been identified, organisations are better able to communicate expected levels of competence from employees and will also be able to appropriately empower staff to deal with activities as a result of their integration. Lynch and Cross (1995), created a model that shows this relationship (see Figure 4.A). This model also identifies the broad measures and integration of objectives at each individual level. Figure 4.A shows The Performance Pyramid from Lynch RS and Cross (1995) (Source: University of Sunderland) 4.2.1 Appraisal Systems As the link between objectives and organisational resources are important, it must therefore be integrated with appraisal systems. Appraisals do the job of reviewing the performance management objectives, and it traditionally occurs annually between the manager and staff. However, as the need for objectives to stay relevant and achievable all the time, reviews of the objectives are beginning to occur more regularly. Hence it can be said that regular reviews also encourages the building of relationship and the occurrence of coaching through such regular discussions. In the design of appraisal schemes, there are 2 types of orientation schemes that emerge: the control orientation and the developmental orientation. In the control orientation approach, it is always assumed in a negative light that a senior entity in the organisation decides the goals, targets, objectives and rewards for the employees to achieve. This results in employees feeling insecure as they feel that they are being constantly monitored and may lead to a breakdown in commitment. Often, when adjustments are introduced to ease such worries, the appraisal scheme becomes ineffective as manager do not address real issues which may cause a loss in motivation or damage in relations between the manager and employee. Standardised controls are put in place so as to maintain consistency and equal treatment for all, however it sacrifices flexibility in the process. The level of impact is low on performance with the exception of a few existing high performers. Thus, this approach is effective when targets are clear and staff are used to it. The emphasis is not so much on enhancing performance through feedback and motivation but more on t he managements authority over the employees. In the case of the developmental approach, the manager is not in control whereas employees are the ones who take the initiative to address uncertainties in wanting to know how to improve themselves. Employees want to be helped and supported through problems and they learn through failures and success. The strengths in this approach include less resistance between the manger and staff, and being able to handle problems in an open way. Problems can also be dealt with on a more objective basis without souring relationships. Employees are also given high trust in their integrity. However, the weaknesses with this approach include less visible outcomes being produced and the manager has to take on a more consultative or counsellor role that they might not be able to perform well in. 4.2.2 Types of Appraisals There are a few types of appraisals which organisations may choose to adopt including the, self-appraisal, top-down appraisal, peer appraisal and multi-directional appraisal. Top-down appraisals are traditional and feedback is gathered from the staff while objectives come only from the top. The weaknesses of this type of appraisal are that too much emphasis is being placed on traditional organisational hierarchies. Favouritism might also be prevalent and employees might not have full knowledge in structures where managers posses a wide span of control. Self-appraisal methods are hardly used. It gives the employees more ownership and a much higher degree of participation in the appraisal scheme. Managers adopt a more supportive and advisory role where they engage in discussions with the staff on setting of objectives. In the upward appraisal model feedback is given from the bottom to top. Employees are often asked to provide such feedback anonymously. Organisations that use this method recognise the need to provide more effective working systems for employees to work more efficiently. In the peer appraisal model, members of the same team are being asked to appraise one another. There may be sensitivities involved when using this method as members might show favouritism to particular members or dislike towards certain members might be the reason for poor rating given. In contrast to the peer appraisal method, multi-directional appraisals sets up to obtain feedback from the outside of the team and it often also includes gathering feedback externally from customers. Its key strength is its being able to overcome the lack of knowledge from a single appraiser as it gathers feedback from many sources. However its biggest weakness lies in the lack of control over hostile ratings being given. Thus appraisals are also a tool to ensure that performance objectives meet strategically useful outcomes. Word count (1409) Section B, Question 5 5. Why are reward management systems critical to SHRM? How can organizations develop reward systems strategically? (30 marks) Answer: 5.1 Why Reward Management Systems are Critical to SHRM In strategic human resource management (SHRM), strategies that are being implemented into a companys human resource policies are closely connected with a companys main adopted strategy in order for it to aid in achieving company objectives. SHRM does so by means of recruiting, developing, maintaining and retaining an efficient, productive workforce. As employees make up a companys workforce, they should then be regarded as key assets in a company. Reward management systems are therefore critical to SHRM because they are used to reward and compensate employees in manners that impact employees positively for the company. For example, well-developed reward management systems uses rewards to motivate employees to grow and develop their potential, thereby increasing the quality of efforts contributed towards the company. Rewards and compensation systems are also critically used in aligning the culture, objectives and philosophies of the company with efforts of the employees, this allows employees to identify themselves as part of the company and thus strengthen their loyalty and commitment towards the company and its objectives (Sherman et al., 1998). In todays competitive environment where companies compete for talent and expertise, rewards play an important role in both the recruitment of talent and retention of long serving employees who have difficult-to-source tacit knowledge in their field of expertise. Having a flexible reward management system also means that a company is able harness other forms employment, for example, hiring of part-timers with relevant experience to temporarily fill in during short-term projects. 5.2 Developing a Reward System Strategically Rewards systems in companies practicing SHRM must obviously be strategic in nature. According to Lawler (1984), there are nine points to consider when making strategic decisions in developing reward systems in companies. The nine points are termed as follows: Base of rewards. Performance and Incentivisation scope for progression. Market position. Internal versus External comparison. Centralised versus de-centralised reward. Degree of pay hierarchy. Reward Mix. Process issues. Reward systems consequences/integration. 5.2.1 Base of Rewards Salaries can be based on 3 options: The type of job a person undertakes. The persons contribution in the job. The knowledge and skill level people possess within the job. The 1st option is to pay based on the growth and development an individual undertaking a job. This is typically done through internally comparing a particular job with other jobs within the company using a job evaluation which measures the tasks that the job is required to perform. External comparisons could be used, whereby companies compare the wages offered by other companies against their own. Job based rewards are typically found in larger organisations where job and pay equity is predominant; an example would be jobs in the public service sector where job grading is used. The 2nd option is to pay based on the individuals performance within his or her job and is commonly implemented in cases where the jobs are small in number or job scopes that are distinct and pay has to be individual. Performance based pay is used to balance job demands and contributions made in order to motivate the individual to enhance performance. The 3rd option is to pay based on the need to acquire new s kills and knowledge so as to enable organisations to meet the new market challenges. 5.2.2 Performance and Incentivisation scope for progression. This point considers the many types and ways of using incentives, whether as a part of an individuals salary or an additional portion. However, the main dilemma lies in reconciling strategic objectives with the use of suitable incentives to motivate and enhance employee performance and commitment to the company. Companies will have to decide the forms in which incentives will take and how it will be distributed as well as the positive and negative repercussions it might bring to the company or its employees. For example, substituting commission for a fixed bonus payout to sales employees might cause low-performers to be happy, while high-performers might become disgruntled they could have earned more on a commission scheme. 5.2.3 Market Position As labour markets are vulnerable to the economy, market trends and political influences, radical changes may happen anytime within the labour market. For example, if there is a labour shortage in certain industries, organisations would be forced to pay a higher wage to acquire the labour needed. As such, organisations are finding it difficult to sustain an internal sense of fairness that comes from a formal measurement of job equity within internal wage structures. Therefore, reward strategies need to be formulated to answer to such external uncertainties, and also be flexible (if it is not already so) enough to accommodate different wage schemes and levels when required. 5.2.4 Internal versus External comparison As reward systems are key to hiring, retaining and developing employees, it is important for a company to benchmark its reward policies against the external and internal environment. Hence, it is important for companies to understand the logic behind market rates of pay and benefit and to know where and how to collect data required to conduct pay and benefits surveys. These surveys are often conducted so that companies are able to rely on the information to make adjustments to current pay and benefit rates, thus staying competitive in their pay and benefit policies. Companies should also be able to present data in a meaningful manner so that proper analysis can take place. Job evaluaton (JE) is defined as a systematic procress by which relative worth of jobs are determined so as to establish which jobs will be paid more over others in the organisation (Sherman et al., 1998). The key features of JE are: A process which compares the relationships between jobs based on demand placed on employees. A process of judgement made by understanding of job descriptions and roles required to perform the job. A process of analysis after generating point factors from judgements, to enable job ranking. A process of structuring whereby job descriptions are formulated, problem solving, identifying key factors equivalent to job knowledge, and more. Score formulation also takes place to establish ranking, building wage structures and create job-grading systems. The important decisions to make in a JE are the selection of appropriate factors and their levels, as well as how value of factors will be expressed. 5.2.5 Centralised versus de-centralised reward Organisations often have to struggle to decide if reward systems should be managed in a centralised or de-centralised manner. Centralised controlling is tight and usually means a standardised rate of wage increment. This may cause employees to be less motivated and innovative in their contribution which becomes unhealthy for the company, this holds true for employees who belong to a business unit selling a varied number of products and services. In this case, it might be better having a de-centralised control of rewards system and empower managers with discretionary authority to reward employees accordingly, hence boosting morale. 5.2.6 Degree of Pay Hierarchy Pay hierarchies exists in organisations and reward systems are dependent on them to a large extent. Pay hierarchies show the distinct difference in power and often reflect career progression. However, organisations are gradually moving away from such distinct hierarchies in pay systems by formulating wage structures that encourages wage overlap and opportunities for increment. Graded wage structures are commonly used and though not all are exactly the same, they share common features such as: A salary grade allocated to a job based on an individuals contribution, the labour market and the degree of complexity present in a job. Salary bands or grade in which employees belong to and have to gain promotion in order to progress on to a higher salary band. Each band consists of at least minimum entry point, market or mid-point and a maximum point that employees can achieve. Salary bands are associated with each other; usually the maximum point of a starting salary band is the commencement of the next salary band. The degree of overlap will have to be determined by the organisation. As employees move up along the band, organisations will have to decide if employees move up to fixed points along the bands or should employees be allowed to skip certain points and progress at a faster rate instead. 5.2.7 Reward Mix Although pay is often identified to be the key ingredient in a reward mix, other benefits such as free annual health screening, pension schemes, certified-skill upgrades, use of company vehicles, etc, are just as useful in rewarding employees. When creating a reward mix, the challenge for companies is to identify the strategic reasons for having each benefit in the reward mix and their costs to the company. 5.2.8 Process Issues In the discussion of process issues, the 1st strategic issue to be considered is communication and transparency. As communicating pay objectives to employees clearly is important in achieving positive human resource results, the existing culture of companies usually decides how open the dialogs are. Traditional companies adopt a closed system and keep salary ranges unknown for purposes of pay review. Other companies with open systems often publicise the salary structure and criteria for which salary increment can occur. Open systems tend to instil confidence and fairness into employees as decision-making becomes more transparent and criteria are made known. The 2nd strategic issue concerns with employees degree of involvement in pay decisions. A company aiming to achieve a team-based operating culture and high employee involvement in all aspect of human resource management should consider allowing employees to be involved in determination of job salaries too. Companies adopting close -based systems usually applies HR policies onto its employees and ultimately, companies have to decide whether leveraging highly on employees trust and commitment or otherwise, is more suited to the companys culture. 5.2.9 Reward Systems consequences/integration As HR objectives change over time, so should reward objectives because rewards should be integrated into HR systems. And if the objectives are inline, then the integration between rewards and HR systems will serve well to make a positive impact on employees who in turn stays committed to churn out more positive contributions for the company. Word count (1700)

Watermelons :: essays research papers

Watermelons Watermelon is truly one of summertime’s sweetest treats. Watermelons are fun to eat and good for you. Watermelon seeds were brought to this country by African slaves. Today there are more than 100 different varieties of watermelons. The flesh may be red, pink, orange, or yellow. There are seedless varieties and super-sweet round ones that fit nicely into the refrigerator. Watermelon is a tender, warm-season vegetable. Watermelons can be grown in all parts of the country, but the warmer temperatures and longer growing season of southern areas especially favor this vegetable. Producing a good watermelon is a bit tricky in the short northern season. Gardeners in northern areas should choose early varieties and use transplants. Mulching with black plastic film also promotes earliness by warming the soil beneath the plastic. Floating row covers moderate temperatures around the young plants, providing some frost protection in unseasonable cold spells. Harvesting is particularly critical because watermelons do not continue to ripen after they have been removed from the vine. They should be picked at full maturity. No amount of thumping, tapping, sniffing, or shaking can actually give a clue to ripeness. One main kind of watermelon is a seedless watermelon. These melons are self-sterile hybrids that develop normal-looking fruits but no fully developed seeds. The seeds for growing them are produced by crossing a normal diploid watermelon with one that has been changed genetically into the tetraploid state. The seeds from this cross produce plant, when pollinated by normal plants, produce seedless melons. In seedless watermelons, rudimentary seed structures form but remain small, soft, white, tasteless and undeveloped tiny seed coats that are eaten virtually undetected along with the flesh of the melon. Seed production for these seedless types is an extremely labor intensive process that makes the seeds relatively expensive. Because germination of these types is often less vigorous than normal types, it is recommended that they be started in peat pots or other transplantable containers. Here the germinating conditions can be closely controlled. Once transplanted, cultivation is similar to that for regular watermelons. For pollination necessary to set fruit, normal seed types must be interpolated with seedless melons. The pollinator should be distinct from the seedless cultivar in color, shape or type so that the seedless and seeded melons in the patch can be separated at harvest. Because seedless types do not put energy into seed production, the flesh is often sweeter than normal types and the vines are noticeably more vigorous as the season progresses.

A case study of Amazon on its supply chain management Essay

INTRODUCTION Every company has their own supply chain in order to sort or produce goods. However, the company needs to manage supply chain to maximize its highest benefits. By having effective supply chain management, the company can ensure that the right product or service will be available at the time to the right place and at the right price (Kamal 2007). Amazon is one of the companies that have best supply chain practices in order to respond high level of responsiveness for the customers. Thereby, this paper explains about Amazon Company, analysis of Amazon’s supply chain, recommendations and barriers to implement will be discussed. Company background Amazon is an American commerce company based in Seattle, Washington, USA. The company used to be only a bookstore, but now it diversified into difference type of products. The goal of Amazon is to provide one stop shop experience where the customer can find everything on Amazon as earth’s biggest selection (Warman 2012). Amazon operates as a pure internet retailers that does not have retail store at all while the delivery will be done through Amazon’s networks of distribution centres. This operation makes the company is able to provide wider range of goods and lower cost of products with high quality. Moreover, it is also increase customer satisfaction as it supports customer convenience. An effective supply chain strategy makes the company is able to respond high level of responsiveness. Amazon balances between cost of distributions and level of services by having the efficient distribution centres and multi-tier inventory networks. However, there is a competition from substitution brands that provided the same service as Amazon, which are eBay and Walmart. Currently, eà ¸ ºBay is pushing shipping fee to the seller in order to reduce cost for the buyers while Walmart introduced free shipping to the customers but buyers have to pick up the item at the store (Amazon strategies 2010). ANALYSIS OF AMAZON SUPPLY CHAIN Most of the companies need successful supply chain management to create sustainable competitive advantages. There are various benefits from having an effective supply chain management such as inventory reduction, delivery service improvement and shorter product life cycles (Fawcett et al 2008). This part provides the scenario of Amazon’s supply chain strategy, how Amazon manages in wider context, factors influencing its supply chain, and strategic and operational implications will be evaluated. Supply chain strategy of Amazon Strategic fits According to Chopra and Meindl (2007), supply chain strategy and competitive strategy should have aligned goals. Amazon has identified their customers as highly responsiveness. In order to respond with high uncertainty demand and availability of products, the four main components drive the outcome of Amazon are having several distribution centres as a storage facilities, multi-tier inventory management, highly efficiency transportation and implement information systems to provide real time information within its supply chain. All of these factors explain how both strategies of Amazon are fit together and that makes Amazon’s supply chain successful. Inventory outsourcing The advantage of outsourcing is to help the company to focus on its core activities and cost savings (Bucki N.D.). Amazon is one of the companies that need to gain those benefits from inventory outsourcing. However, there is another side of outsourcing deals as well. Chandra (2008) argued that the company should not outsource even it was not their core activities when the demand level is increasing. The company is able to optimize the service if the stock is owned and managed efficiently. So Amazon decided to outsource only some part of its inventory in order to mitigate risks and optimize services. The products that are frequently purchased or popular were keeping and managing in-house while other products are stocked by distributors. The products will be shipped after Amazon has requested. The company acted as a trans-shipment centre (ICMR India 2003). It was a right decision for Amazon and the company is able to reduce the cost of holding large amount of  inventory while the cus tomer service is better as it shipped faster. Managing the supply chain with its wider context and organization context Price differentiated customers Dispatch and delivery options were used to divide customers into each category based on responsiveness because difference customers need difference service levels and difference prices. Amazon has provided many types of deliveries in difference costs such as free super saver delivery, one-day delivery, First-class delivery and etc (Amazon 2013). Each type of delivery reflects how fast the delivery is. It means if the customer needs very high responsiveness, get the products by tomorrow, the buyers are willing to pay more. So Amazon divided customer segments to match with its distribution systems and inventory strategy in order to control cost and service level. The company also received increased flexibility (Duran et al 2006). Moreover, there is a membership programme called Amazon prime. It provides unlimited one-day delivery for one year and it costs 49GBP. Once the buyers are member of prime, buyers will get discount if the buyers want to get express or evening delivery. The memb ers will also able to borrow kindle books for free (Amazon prime 2013). Push-pull strategy Amazon has started with pull systems. There is no inventory, no warehouse and no overhead. The company acts as a middleman who taking the orders and it will be filled by Ingram book group (Simchi-levi et al 2007). When the time has passed, the growth of the company has forced Amazon to hold some inventory in order to respond customer needs by having several distribution centres. So the strategy has changed to push-pull. The inventory is hold using a push strategy while orders are shipped using a pull strategy. The decoupling point of Amazon is distribution centres. However, some of slow items are still used pure pull strategy as there is no inventory. By having several distribution centres, the holding cost for Amazon is increased as well. Inventory segmentation The inventory network of Amazon is multi-tier inventory management. This will help the company plans and offers real time optimization service that  allows Amazon to have minimal amount of inventory needs to achieve its service level (One network N.D.). By having this network, Amazon is able to offer nearly unlimited selection. Nonetheless, the problem is each tier treats separately while not concerns about inventory of another echelon. Then bullwhip effect occurs which is inventory holding higher in each tier because there is no sharing information across the tier (Lee 2003). Amazon’s multi-tier inventory is composed of three tiers. The first tier is Amazon distribution centre. The inventory will be aggregated in distribution centres, which enables the company to hold fewer inventories. The second tier is wholesaler and partner DCs. If the products are not available from Amazon’s DC, the company will use IT systems to search for this product in partner inventories in order to assign which party will be responsible for this order. By doing this, the customer service will be high as there is no stock out experiences. Lastly, publishers, manufacturers, vendors and third-party sellers are included in third tiers. All these parties help the company to fulfill unlimited selection of goods offer in Amazon (Chiles and Dau 2005). Factors influencing Amazon’s supply chain configuration now and future Transportation Amazon provided many choices of delivery to balance cost of transportation and level of service. The company does not have large scale to contact full truckload. So the company provides free shipping in order to achieve longer lead-time of transportation. This will help company able to reduce cost and achieve economy of scale (Robinson 2010). However, the company is provided highly responsiveness options as well, which is cost company a lot. Even though the customers are willing to pay higher price to get the products faster, it should not cost anything from Amazon but it is not like that. Amazon cannot utilize its highest benefits of its transportation systems. That is why the company needs to design its supply chain networks to minimize the costs. Order sourcing The challenge of Amazon is to make decision which internal warehouse or  external partnership should be the one who responsible for this customer order. Once the order has been places via website, customer is expected to get products on time. Finding the lowest solution in short period of time is the hardest things when there are many items located in difference places and it needs to deliver in single delivery. So, the company decided to implement technology such as warehouse management systems to get real time and single view of inventory for effective sourcing (RedPrairie N.D.). Evaluate strategic and operational implications Supply chain network Amazon operates eight distribution centres within United Kingdom (UK), which are Rugeley, Hemel Hempstead, Marston gate, Doncaster, Petreborough, Dunfermline, Gourock and Swansea. Locations are selected base on distance to markets, Close to transportation mode such as Motorway and main rail link, Airport and river (Amazon Location 2013). According to Melendez (2013), several DC would help the company provides quicker deliver, lower transportation costs and easy access. Furthermore, sometimes transportation hubs, also known as injection points, were used to reduce the cost of transportation in high customer demand areas. The products will be shipped from DC to transportation hubs with full truckload. Then the inbound trucks will be unloaded the packages and load into outbound trucks which runs by a smaller carrier partners such as UPS, DPD and Hermes (Amazon Carriers 2013; Chiles and Dau 2005). Moreover, Amazon adopted drop shipment approach. The order will be picked, packed in Amazon package and delivered by supply chain partners, which are manufacturer, wholesaler and third parties. By doing this, the company is able to survive from its huge losses but it caused negative effects as well. It is about 33 percent of Amazon’s single orders are multiple products. Nonetheless, it needs to pool specific goods from difference location and ships the collective goods as one delivery, which takes time and causes a delay that leads to customer dissatisfied. (Pilai and Dutta 2004) Transportation The most difficult factor of transportation is to gain efficiency due to large numbers of small order from customers, so the company cannot gain advantage of the scale at all. Amazon used transportation hub to reduce the cost of transportation. The hub is acted as a cross docking to transfer goods to last-mile delivery. Amazon will aggregate the demand and ship it to transit hub together in order to achieve less than truckload or full truckload. Nevertheless, it needs to accumulate in term of region zone. So it takes longer time to complete this strategy. Hence, the company has introduced difference delivery option such as free super saver delivery in order to get longer lead times/ available to promise day. By doing this, Amazon is able to achieve economy of scale which is lower its cost and the customer satisfaction stays on acceptable level. However, sometimes goods are not available to the customer on time because the time spent on accumulate took longer than it should be and whe n the demand is high (Amazon 2013; Chiles and Dau 2005; Robinson 2010; Barzeski 2009). Technology As Amazon does not have a storefront, so it needs to provide the perfect visual store experience to compensate the touch of products. The company utilizes from its own technology innovations to differentiate itself from other e-commerce. The innovation includes A9 and one click ordering. The former aspect is a subsidiary company, which provides product search engines and search inside the books whereas the latter aspect is used to speed up ordering process, and introduce product recommendations, which determine customer interest from previous purchases (A9 2013; Curtis 2013). Amazon also needs an innovation to support back-end supply chain integration and execution. The company have advance warehouse management systems to support order sourcing, labour management, load balancing, process alternative and supplier collaboration. All these factors make an efficient process to support multi-tier inventory of Amazon (Chiles and Dau 2005). Besides, Amazon has been critiqued about unbearable working conditions, mandatory overtime and using human as a robot which is pushing workers to physical limit. Employees within its DC walked more than 15 miles a day to look for products and every move has checked by computers. Therefore, the company decided to use Kiva robot to deliver shelves stocked with  merchandise to DC workers instead of workers to walk around and find products. There are 1,400 kiva robots in three DC. By having these robots, Amazon can improve productivity and reduce cost up to 50 percent annually in area of warehouse efficiencies (Soper 2011; Kais er 2013). Nevertheless, this robot costs Amazon large amount of money. It is more cost effective if Amazon just hires human workers. Is it worthwhile to invest for? Wagstaff (2012) argued that the benefit of this investment for Amazon is outweighed. The company will have better publicity, improve reputation about ethical and avoid lawsuits. In addition, Amazon also launched prime air, also known as drones, which is able to delivery goods to customers within 30 minutes after buyers place the orders. The process of prime air starts from packages pass on a conveyor belt and drone will lift it off with the package and go straight to customer’s address. However, this innovation has not allowed to use nowadays. The fastest possible will be around 2015 (BBC 2013). RECOMMENDATIONS The problem is Amazon depends on courier such as UPS and FedEx too much in order to reduce the cost of transportation and make it efficient. Recently, this courier causes negative reputation for Amazon that cannot deliver the products on time when the demand is high and the customer satisfaction is decreased (Jayakumar 2013). Hence, the company should run its transportation with their private fleet in last-mile delivery because responsiveness is a crucial factor for Amazon. According to Hirsch (2010), the benefits from using private fleet is not only better customer service and greater visibility but also hold 100 % control of driver for safety, enhance branding and no driver shortage during high season/demand. Besides, private fleet will become a true competitive differentiate point as it is a connection point to customers (Schulz 2010). Furthermore, bullwhip effect is another issues. This issue happened because there is lacking of integration along the supply chain. The current stage of Amazon and its supply chain partner is cooperation. So the company should  raise the relationship to be coordination with its suppliers or become the best scenario which is collaboration. Besides, all companies along supply chain should share their information and communication in order to reduce barriers, reduce excess inventory and enhance business synergy (Cao and Zhang 2010). BARRIERS TO IMPLEMENT RECOMMENDATIONS As the writer’s recommendations, the obstacle to implement this suggestion are fluctuate demand and highly investment. Because of demand uncertainty, the company cannot know for sure what exactly amount of goods must be deliver for this area in this month. So the private fleet might not worth the cost of investment. Moreover, there is highly investment on private fleet. The cost of truck is expensive but it can be lease instead of buy to reduce the cost of maintenance as well. The cost of workers and training are another factors. The company needs to train driver to drive with manner. Lastly, the company needs to check on mile-drive and fuel every day in order to prevent fraud which takes time a lot. When the problem happened, the driver might have an excuse not to responsible for the problem. So many companies have decided to install GPS to track each driver but it costs large amount of money as well (Lynch 2007; Liccardi 2013). CONCLUSION Supply chain management plays a crucial role on Amazon’s successful. The company’s primary goal is to offer one stop service that customers can find everything on Amazon’s website and it will deliver it to buyer place within a promise time. In order to do this, the company needs to have cooperated with partner to do multi-tier inventory systems to provide nearly unlimited goods. Moreover, it needs an effective distribution networks to deliver merchandise to the customer on time. All of these are reflect the main strategy of Amazon to provide high responsiveness to the customers.