Archive for the ‘Logistics’ Category

Jet: Start-up targets Amazon and Walmart … say, what?

July 29, 2015

After months of testing and and network-building, the e-commerce start-up Jet.com opened its digital storefront last week, marking the official kickoff of the company’s ambitious effort to battle Amazon and Walmart for price-conscious customers.

According to the Washington Post, Jet is taking a new approach to pricing. Its algorithm doesn’t simply look at the price of each individual item in your online shopping cart.

It looks at all the items you want to buy, as well as your Zip code, to determine which retailer or warehouse can ship that unique combination of items to you the cheapest.

Shoppers can only buy things on Jet if they’ve signed up for a $49-per-year membership.

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Let’s dig a little deeper and assess the odds …

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“Slow-boating”: What’s up with Amazon?

June 3, 2015

I used to heap high praise on Amazon. Not so much any more.

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First, some background …

Free shipment time from Amazon used to be one of my primary economic indicators.

If a free shipping order arrived in 2 or 3 days, I concluded that the economy wasn’t  doing so well.

Why?

Free shipments essentially fly stand-by,

If there’s space on planes & trucks then they get loaded.

If there isn’t, then the orders sit on the docks.

So, in a slow economy, orders come fast.

In a hot economy, orders take longer.

At least, that’s the way things seemed to work.

Not so predictable these days.

What’s up?

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Frozen Twinkies: “No impact on quality or taste” … say, what?

July 10, 2013

It’s been a while since we’ve posted on Twinkies near-death experience.

You probably remember that Hostess Brands – Twinkies parents – filed for bankruptcy after one of its unions balked at a new contract … concluding that no wages were better than low wages.

The company’s brands and assets were bought by Metropoulos & Co and Apollo Management Group.

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The new owners are consolidating operations, ditching the high wage unions and … deep-freezing Twinkies.

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Hurrican prep: Plenty of Pop Tarts, but no D batteries … here’s why.

August 29, 2011

It was interesting shopping for hurricane supplies on Thursday & Friday.

First stop: RadioShack to buy a battery-powered portable AM-FM radio.

Sign: no D batteries.

Clerk acted like he’d never heard of AM or FM

Next stop, the local Giant food store.

Already out of water.

Out of water?

Next stop: the local Ace Hardware.

Chalked on the sidewalk: No D batteries, no propane, no water.

Translation: go away

Hmmm. A pattern?

Next stop: Home Depot.

Piled in “impulse alley”: generators, flashlights, first-aid kits … but, in fairness, no D batteries

Next stop: Battery Warehouse.

No Ds, but plenty of AA, AAA, and Cs.

I bought some Cs, hoping they’d fit in something useful if the power went out.

Punch line: Hat tip to HD – with whom I have a love-hate relationship – for emergency preparedness.

It’s not an accident …

Excerpted from NPR: “Stores’ Hurricane Prep Starts Early”

Hurricane Katrina taught big-box retailers that they need to be an integral part of hurricane preparation and relief efforts.

For nearly a week in advance Irene, big-box retailers like Walmart and Home Depot were  getting ready.

They’ve deployed hundreds of trucks carrying everything from plywood to Pop-Tarts to stores in the storm’s path.

It’s all possible because these retailers have turned hurricane preparation into a science.

At Home Depot’s Hurricane Command Center in Atlanta, for example, about 100 associates have been trying to anticipate how Irene will affect its East Coast stores from the Carolinas to New York.

They have been focusing on stocking a short list of items including generators, chain saws, water and tarps.

Those supplies were flowing to stores because of a process that began months ago, at the beginning of hurricane season.

“We take storm product, both pre- and post-strike product, we stage those in containers and we have them in our distribution centers, really ready for a driver to pull up and pick up and take them to our stores.”

Walmart is able to anticipate surges in demand during emergencies thanks to a team of meteorologists and a huge historical database of sales from each store as well as sophisticated predictive techniques.

That system is helping them allocate things like batteries, ready-to-eat foods and cleaning supplies to areas in the storm’s path.

“They know exactly what people want after a hurricane … for example,  the most popular food item after a major storm  is strawberry Pop-Tarts.”

OK, plenty of Pop Tarts … now, how about those D batteries?

My bet: all the lithium is going to Chevy Volts.

Stock up !

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Sharpen your pencil, there’s a Walmart truck at your loading dock.

June 3, 2010

Punch line: Walmart is starting to pick-up merchandiser at suppliers docks — rather than have the stuff shipped to WMT distribution centers for subsequent redistribution to stores. Three reasons:

(1) WMT can usually move the stuff cheaper because deals in economical full truck loads and has highly productive logistic processes in place

(2) WMT has the clout to command price reductions that may exceed the suppliers cost cuts

(3) For sure, suppliers will allocate more of their fixed costs to WMT competitors who don’t have the scale, interest or capability to do their own picck-ups

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Excerpted from BBW: Why Wal-Mart Wants to Take the Driver’s Seat, May 27, 2010

Wal-Mart, the world’s largest retailer, has become famous — and at times infamous — for the power it wields over its suppliers … to create environmentally friendly packaging and exclusive product sizes, and to participate in joint advertising promotions.

Now, Wal-Mart wants to take over U.S. transportation services from suppliers in an effort to reduce the cost of hauling goods.

The goal: to handle suppliers’ deliveries in instances where Wal-Mart can do the same job for less, then use those savings to reduce prices in stores.

Wal-Mart believes it has the scale to allow it to ship everything from dog food to lawn chairs more efficiently than the companies that produce the goods.

Manufacturers would compensate Wal-Mart by giving the retailer lower wholesale prices for the goods it transports.

Until now, suppliers made most deliveries to Wal-Mart’s distribution centers. The retailer then used its fleet of 6,500 trucks and 55,000 trailers to ferry goods between the regional centers and individual stores. Under the new program Wal-Mart will pick up products directly from manufacturers’ facilities.

That will allow Wal-Mart to carry more per truck and improve on-time delivery rates … and give it  more sway in negotiating fuel prices, thanks to its larger purchasing volume.

The price cuts Wal-Mart is seeking are twice as much as the cost of transporting goods in some cases. In two instances, Wal-Mart asked for a 6 percent reduction in the price it pays for products based on its own cost calculation, while suppliers estimated the actual expense was equal to about 3 percent, the people say.

One side effect of the Wal-Mart plan is that consumer-product manufacturers may face increased transportation costs on deliveries to other retailers as they lose economies of scale on their own delivery fleets.

Suppliers may have to go along with the plan even if their other remaining transport expenses rise because Wal-Mart is so big.

The bottom line: By attempting to take over the transportation from its suppliers, Wal-Mart hopes to achieve efficiencies to cut its own prices.

Full article:
http://www.businessweek.com/magazine/content/10_23/b4181017589330.htm?chan=magazine+channel_news+-+companies+%2B+industries

Home Depot: Leveraging its “late mover advantage” … huh?

March 1, 2010

Once heralded for its in-store customer service, Home Depot cost-reduced itself into 2nd place in the retailing category it created.

Now, it tries leverage it “late mover advantage”.  Say what ?

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Excerpted from WSJ: Home Depot Undergoes Renovation, Feb. 24, 2010

Home Depot is regaining momentum after belatedly tackling its biggest fix-it task to date: remodeling itself.

The world’s largest home improvement chain  is redesigning the way it ships merchandise to stores, answers customers’ questions, and showcases its wares on the Internet.

The goal is to improve productivity and expand profits by revamping a slew of business practices that never changed during the company’s mushrooming growth in the 1980s and 1990s, and that look primitive compared to current trends in retailing.

The most dramatic change is that Home Depot is phasing out the antiquated practice of having suppliers send dozens of half-empty trucks directly to its more than 2,200 stores.

A network of “rapid deployment” warehouse centers being completed this year will combine shipments, trim costs and cut truck trips to stores by up to 50%. That will let more of Home Depot’s orange-apron-wearing workers shift from shipping docks to store aisles, in hopes of tackling a festering reputation for bad service.

Home Depot is claiming a “late-mover” advantage will allow it to avoid the costly mistakes that other retailers made modernizing operations.

Home Depot executives concede that the company’s supply chain still won’t be state of the art after the upgrade, though it will be a big step forward.

To tackle the perception that Home Depot workers are always too busy to help customers, the company is spending $60 million on hand-held devices that will help workers check on the spot if something is in stock.

Communication was also a problem at Home Depot. Mr. Ellison said he was stunned to discover that store managers were drowning in hundreds of emails from headquarters.

So Mr. Ellison says he cut it to one email a week, on Monday, and set up a hotline for managers to complain if the edict is violated.

In addition to its supply chain fixes, Home Depot is waking up to the Internet after being embarrassed that Amazon.com — which sells more drills online than Home Depot. Now the company is building a site that not only sells what stores do, but features do-it-yourself videos to help customers with projects. “We’re now building a site that fixes people’s problems.”

Full article:
http://online.wsj.com/article/SB10001424052748704188104575083081020924838.html?mod=WSJ-hps-LEFTWhatsNews