Logistics Management, Essay Example

Measurement of Amazon’s Performance and Supply Chain

The performance measurement of a company like Amazon.com is divided into two ways mainly the financial ways of measuring performance, and the nonfinancial ways. Amazon can measure its performance by focusing on profitability and the flow of cash within its systems

Profit

This involves the determination how much money the company makes monthly, quarterly, half-yearly, or annually. In this case, a profit and loss statement is used showing the net revenues of the company made compared to the total expenses. This shows how much money the company gets or loses in a certain specified period. The compensation of the owners must be included during the computation of the net profit in a clear measurement of Amazon’s performance while using this method.

Cash flow

Another financial method that Amazon can use to evaluate its performance is the use of cash flow statements. This statement shows the various changes of cash that the business handles in a given period. It shows the difference between the cash that the business is left with compared to the cash that the business started with during the start of a financial year. When the value of the cash flow is positive, it means that the business (Amazon in this case) is doing well.

The nonfinancial ways of measuring the organization’s performance include measuring the loyalty of the customers, satisfaction of the employee, among other nonfinancial factors, which affect the profitability of the company directly. Development of logistic models is necessary in the evaluation of company’s performance using nonfinancial ways. Amazon can measure its performance in the supply chain by using metrics like the ones for procedures on the planned orders, the method of order entry, and the time it takes between the order of the goods and its reception among others. Flexibility method may also be used in measuring performance in the supply chain of the company. In a company like Amazon, which sells a variety of goods, the commodities should be available at any time when the customer needs them.