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Amazon Leaps into Supply Chain Tech with AWS

Amazon muscled into third-party logistics with its fulfillment and transportation services. It was only a matter of time before it delved into supply chain tech

The e-commerce company revealed Tuesday its cloud services division, Amazon Web Services, launched AWS Supply Chain. The software visibility tool pushes its business into a segment that’s been hot among investors and shippers alike in recent years as companies sought out tools during the supply chain crisis that would help them mitigate risks and reduce costs. 

The launch was announced during the company’s annual AWS re: Invent cloud computing confab taking place in Las Vegas this week. 

Amazon touted its “nearly 30 years” of “logistics network experience” in its pitch to businesses interested in using the machine-learning based application, which stitches together multiple data sources to identify patterns that can then be used for inventory planning. 

“Customers tell us that the undifferentiated heavy lifting required in connecting data between different supply chain solutions has inhibited their ability to quickly see and respond to potential supply chain disruptions,” AWS Supply Chain vice president Diego Pantoja-Navajas said in a statement Tuesday. “AWS Supply Chain aggregates this data and provides visual, interactive dashboards that provide the insights and recommendations customers need to take actions toward more resilient supply chains.” 

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AWS Supply Chain can help companies’ planning and procurement executives take real-time reads on inventory levels, identify shortages and make suggestions for moving product from one facility to another. Employees within a company also have the ability to chat with one another via a messaging function. 

It also opens up the tool to an increasingly important seller segment for logistics service providers: the small- and medium-sized businesses (SMBs). These are companies that may not have the resources of large enterprises, but they’re sourcing and selling to a global audience. 

That’s one of the reasons major players in the space, such as Flexport and Shopify, are focused on supply chain products that service those types of businesses. 

“SMBs don’t have big logistics departments. They’re just regular people like us trying to run their business,” Flexport senior director of new product development Steve Bozicevic told Sourcing Journal in September. 

Bozicevic is also general manager of the company’s Flexport Flow Direct, which is positioned as a supply chain solution to smaller businesses. 

“We really emphasized growth through big accounts, but over the last three to five years, the SMBs have really taken off,” Bozicevic said. “More and more people are leaving their jobs or creating side gigs to run their e-commerce stores.” 

AWS Supply Chain is currently being previewed in North Virginia, Oregon and Frankfurt with the company saying accessibility will be expanded “soon.” 

Users aren’t required to sign a contract and pay based on usage for data storage, demand planning data and stock-keeping unit insights generated. 

AWS Supply Chain further pads a growing portfolio of services Amazon’s been building, aimed at simplifying the various aspects of supply chain for businesses, from warehouse storage and fulfillment to, now, inventory planning.   

The company’s Amazon Logistics division handles the movement of cargo via transportation modes such as ocean, air and last mile delivery

In August the company launched Amazon Warehousing & Distribution, which handles the storage aspect of supply chain with space for brands to house their inventory. Next year the service is expected to add on to its capabilities by allowing businesses to send product to wholesale customers or stores.