Innovations in Distribution Strategy
This readings feature a discussion of logistics, including a case study of the future of same-day delivery. This case illustrates how companies can find competitive advantages through becoming better at logistics. Home delivery, as a service logistic, has been popular in the United States since the end of World War II and the advent of suburban growth. More recently, the service has once again been increasing in popularity for many reasons that may vary from target market to target market. For example, when Tom Monahan created Domino's Pizza, the market for pizzas on college campuses was very high. Therefore, when Monahan started his Domino's business, he decided to offer free home delivery guaranteed within 30 minutes.
More recently, Amazon and other online retailers have begun experimenting with same-day delivery. This brief case (two pages) considers the question of whether same-day delivery is going to expand or disappear in the future.
For this lesson, read the Chopra case study article and review the readings on logistics.
Post your answers to the following questions, making sure your response is cohesive and well-reasoned:
1. What are the characteristics of businesses that can succeed with same-day delivery?
2. What are the potential trade-offs when companies consider this type of service to offer to their customers?
3. What factors related to innovation would increase the likelihood of success and why? In formulating your response, consider the following along with any other factors that you think are important:
Does home delivery reduce any costs?
Is the location of warehousing facilities important?
Can multiple customer orders be bundled together (urban versus rural market)?
Is the inventory mix important (e.g., simple or complex)?
Are there transportation or technology advances available?