How Walmart and Others Are Achieving Same-Day Delivery
As we’ve covered before on this blog, the next challenge for supply chain management is feeding our growing need for instant gratification. This is not pie-in-the-sky, futuristic stuff. Companies are doing this right now, and they’re using slick new inventory management solutions to be sure they have the products to deliver.
A piece on the Wired.com blog recently did a great job of showing how three big companies – Walmart, eBay and Amazon – are surrounding the logistics problems of same-day delivery. The findings are instructive for all companies looking to hold or gain market share in the new economy.
Here’s a summary:
Walmart: Use Retail Outlets as ‘Forward-Deployed Inventory Centers’
It’s a simple concept, really. Walmart starts with a huge advantage because it already has inventory scattered across the nation, with 158 distribution centers and 4,005 stores.
Walmart is running a pilot (www.Walmart.com/togo) in five pilot locations – Denver, Philadelphia, Minneapolis, northern Virginia and San Francisco/San Jose. In those areas, you can order an in-stock product by noon and get it delivered the same day. Workers, sort of like your personal shoppers, push wheeled racks down aisles. Your list of items is placed in a blue bin that is delivered to your door.
According to Wired, Walmart uses algorithms to track everything purchased (1.2 million transactions per hour) to anticipate what stores need. The same algorithms will be used to track home-delivery orders.
Amazon: From Robot Picker to Delivery at Home or in a Secure Locker
What Amazon lacks in retail space, it makes up with highly efficient distribution centers – more than 40 and growing, Wired said. As soon as you push the button, your order is routed to the closest warehouse that can offer same-day service. Robots work in warehouses stacked precisely – to the 1/100th of an inch – to take your product to a human picker for boxing.
The product arrives at your home, via third-party courier, by 8 p.m. In some locations, your order can be left at a secure locker housed in a 24-hour convenience store. You use a pickup code to open the locker.
eBay: The City as a Huge Warehouse
EBay’s model, as described by Wired, maximizes the capabilities of supply chain management. It envisions your entire city as a massive warehouse. Basically, the company sends personal shoppers – they’re called “valets” – to the retail outlets where you bought your goods, whether Best Buy or Target, using the GPS-fed location from your cell phone. The courier’s progress is updated in real time through the app, now available only through iOS. The app also will show you what your “valet” looks like. You pay the courier via PayPal or by swiping your credit card with the valet.