Love this post, Varun. With the size and range of products in these mid-size fulfillment centers, this space is going to stay very labor-intensive for a lot of companies for a long time. With delivery time demands and thin margins, every ability to reduce (or eliminate, to DT’s point) picking time and warehouse inefficiencies is incredibly valuable. I am not too familiar with either pick-to-light or pick-to-voice technologies, but can see from your outline where they fall short. I like the idea of more mobiles devices such as the HoloLens in particular for warehouse layout. Automated route-planning for orders would be very valuable, especially over time as historic order data can be accumulated. Distributors may find better ways to lay out the floor, and these types of devices would likely be better equipped to handle changes in warehouse layout.
This was an interesting read – thanks for posting, ARS. I understood that one could order from Macys.com and pickup in a selected store, but I didn’t realize that Macy’s might also ship from a local store to cut down on shipping costs and times, and to better manage store-level inventories. That is a novel approach, and I wonder how many other traditionally brick-and-mortar retailers are already adopting that same approach, and what cost benefits have been realized (is the cost of holding inventory at a distribution center for online orders actually any higher than the cost of shipping to a store, than using store inventory to ship to the customer?).
Hi Joanna, thanks for posting this. I had heard of B Fresh and wanted to check it out in person, but I wasn’t aware of the digital pricing screens they had. Grocery has long been able to resist some of the impacts of modernizing shopping habits/demands, with the regular grocery trip being so essential to everyday consumer life. But, Grocery has long been a low margin/high volume business, and a hugely labor-intensive business, so as others have pointed out a digital pricing mechanism could be huge, particularly in a small footprint store where perhaps carried items rotate more frequently. Being able to more cleanly and quickly update and track pricing changes will be really beneficial for stores like B Fresh going forward.
Thanks for posting this, Spencer. I remember reading about Amazon’s planned bookstores before the first opened up. My first instinct was, “that’s weird.” It seems that the physical bookstores that have survived Amazon’s dominance in the space are smaller, local bookshops. Once-massive chains such as Borders and Barnes and Noble have been wiped out or severely crippled. It will be interesting to see whether the Amazon Books store outposts are money-makers for Amazon, or if they are merely another tool for data-gathering and brand-building. Certainly the factor that will most help Amazon here over other retailers will be their inventory management and logistics.
I am definitely intrigued by Wal-mart’s partnering with ride sharing services to deliver orders to customers. Seems like a great way to take advantage of a large footprint of brick-and-mortar stores and leave the logistics to other companies. I’ve seen similar transitions within the grocery industry as retailers are deciding to partner with third-party services to do the order picking and/or delivery. It’s an interesting move to compete with delivery service that is getting ever faster with Amazon Prime and Prime Now.
Cool post, Casey. I definitely don’t think of Fast Food when I think “sustainability.” To Sophie’s point, I too would really like to see McDonald’s keying in on overlaps between changing consumer tastes and more highly sustainable food products. McDonald’s is constantly testing out menu tweaks (with widely varying success…). It does look like their current campaign features some different flavors, and features burgers made of either ground beef or chicken breast, though overall not necessarily more sustainable options. One way McDonald’s could go is to introduce more alternative proteins, for example as veggie burgers, which are on some global menus already.
One key thing McDonald’s needs to consider with any menu tweaking it does is production – a key to keeping low costs for McDonald’s is operating efficiency – controlled menus with common ingredients and standardized preparation.
Cool post, Matt. I wouldn’t have expected a solution like this to already exist. Another thought for your “Steering More Toward Sustainability” comments – can they develop the capability in their software to collect and report data on water consumption and/or soil degradation? It would be interesting to learn if Trimble can continue to develop products that help farmers not just maximize their production, but minimize their impacts on the environment. I do see some water management tools, so perhaps this is already incorporated to some degree.
Interesting! It’s challenging to think about a product like ketchup for Kraft Heinz, which pretty much has to come from tomatoes. That really narrows the options down for adapting. In terms of operating decisions, I agree that Kraft Heinz should reduce SKUs in order to reduce production costs overall. And not just in volumes – there are a lot of slight variations in products – it would be interesting to see how critical each of them are to Kraft Heinz’s portfolio. For example, in “regular” flavored ketchup alone, I see Regular, No Salt, Reduced Sugar, “Simply Heinz,” and Organic.
Nice post, Alex! I like MM’s curiosity about what coffee growers can do. I wonder though how many coffee growers actually have the resources to diversify their locations. The majority of coffee producers in some of the biggest exporting countries (Mexico, Costa Rica, Guatemala) are small/family farms. The time and capital required to invest in new lands to ensure ongoing production may simply be too high. My understanding is that in Brazil, however, coffee is primarily produced on large plantations – so there may be some opportunity there.
This does have me wondering – are small coffee farmers completely dependent on a stable climate to maintain their businesses? Is the only way for these groups to maintain their livelihoods to stop climate change altogether?
Thanks for your post, ecanabarro! I looked at Starbucks, too, and focused on a few different steps they have taken. To Marcelo ‘s point, Starbucks has dedicated some of its funded initiatives to farmer assistance in maximizing yields. Just last year, Starbucks invested in a brand new research center for studying and developing new coffee blends, which supplements their existing program of “Farmer Support Centers.” These centers provide farmers with access to expertise in soil management and other factors that help in producing good yields. Here’s some further info:
I really like T@HBS’s point about the transportation costs on the environment of the entire supply chain. That’s something that I haven’t thought about, and I wonder what Starbucks is doing to become more green there.