Can the Amazon model transfer to healthcare?

In this Bloomberg View article, Amazon is trying to find competitive advantage through shipping.

Large companies don't need help with their shipping costs as they have the size and capability to negotiate prices on their own. On the other hand, small to medium size companies are forced to use freight forwarding. Here is a brief summary of the process:

The role of the forwarder is all-encompassing. The job includes negotiating the best rates and most efficient use of multiple modes of transport, including trucks, rail and ocean-going vessels. The forwarder has to prepare all the accompanying paperwork as well, including customs documentation. When a problem arises -- say, a container is delayed at port -- the freight forwarder is expected to have the longstanding relationships needed to get it moving again.

The customer-service aspect of freight forwarding in particular has long resisted automation; there's no easy way to replicate relationships with shipping companies and port officials. But that doesn't change the fact that freight forwarding is opaque and highly inefficient. For example, the ability of forwarders to determine the best rates and speeds for shipping is oftentimes limited to a proverbial (and sometimes real) rolodex. Online portals where manufacturers can track their shipments are largely unknown. Stop by one of the many freight forwarders who offer their services in a port city like Shenzhen and you're almost certain to see a fax machine humming.

Amazon thinks that they can improve on the model.

Amazon thinks technology can eliminate many of these inefficiencies. For example, determining the fastest and most cost-effective shipping rate is really a question of data collection and analytics -- two things Amazon does very well (and smaller startups are already doing successfully). Amazon's size and data capacities should allow the company to buy up many more containers and coordinate more shipments than any individual freight forwarder could.

If they are successful, they could certainly find some significant competitive advantage.

Is there a similar opportunity for a nimble company to perform the same function in healthcare?

Bloomberg: Will Amazon Revolutionize Shipping?

I can't do your job, but I can learn about it

Original post:  November 23, 2011

I am in a cross-functional meeting with our distribution partners. I enjoy listening to the presentations from other areas of the company. It is even more interesting to hear the feedback from our customers.

We all have our own perceptions and understanding of our own jobs. We might evenhave some understanding of our overall role in the larger organization. One area that is hard to comprehend is how we are perceived by others. This particular group was particularly vocal and candid. If you can take constructive criticism, it is actually an excellent way to make improvements.

I find that this type of meeting really helps me to put all sorts of seemingly disconnected information together. It's fascinating to gain visibility into how products are picked and the reasons why it doesn't necessarily reach the customer on time or in optimal condition. I did not realize the full impact of ordering product by pallets or truckloads on operational efficiency. It's also important to understand that some of the practices that are convenient or economical for us are not always beneficial for our partners.

I am amazed at the diversity of different tasks that are deployed across our enterprise. I had no idea that there was so much skill required in picking our products out of the warehouses and transforming them into shrink-wrapped units that are sent to customers. Similarly, there are many unseen back-office applications that are just as critical to the smooth flow of commerce as the initial sales and marketing efforts. All of these units have to work in tandem in order to keep product moving from our plants and warehouses to our customers.

I have gained a new level of respect for my fellow colleagues. Please accept my humble thanks for all that you do!