Amazon Bets Big On Faster Shipping

Amazon Bets Big On Faster Shipping

November 15, 2019

Amazon spent $1.5 billion to improve its transportation and warehouse infrastructure and increase its inventory to cut its Prime shipping from two days to one.

The next-day delivery investment has brought benefits, including new record sales, improved revenue growth, increased warehouse and shipping staff, and happier customers. However, shipping costs have also increased 46% in the company’s second quarter.

Investors are overall optimistic about the outlay, but Amazon’s recently predicted weak holiday demand, which has raised some concerns.


Video Spotlight: Amazon’s profit falls due to same-day delivery costs, and other top business news


This post is based on the CNET article, Amazon’s next-day shipping ambitions are costing it a fortune, by Ben Fox Rubin, October 25, 2019, and the YouTube video, Amazon’s profit falls due to same-day delivery costs, and other top business news, by CityNews Toronto, October 25, 2019. Image source: Daniel Grizelj/Getty Images

Discussion Questions:

1. Is Amazon’s one-day Prime shipping a strategic capacity decision?

Guidance: Yes – it enables Amazon to meet customers’ demand for next-day delivery, increases operating costs, reflects a long-term commitment to e-business, and enables competitiveness in e-retailing.

2. What investment did Amazon make to cut its Prime shipping from Continue reading

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Y’all, It’s Back: Popeyes’ Chicken Sandwich

Y’all, It’s Back: Popeyes’ Chicken Sandwich

November 4, 2019

Popeyes Louisiana Kitchen announced that its chicken sandwich would return on Sunday, November 3, 2019.  The company also released a simple ad called “Open Sunday” to announce its availability.

Sunday, November 3rd is important in two ways.  First, it is National Sandwich day.  What better day to re-introduce a very popular sandwich.  Second, it’s a reminder to customers that one of its main competitors–Chick-fil-A–is not open on Sundays. In its 20-second ad, a highway sign shows Chick-fil-A’s “Closed Sunday” tag; an “Open Sunday” tag is added for Popeyes.

The original release of the sandwich, in August 2019, went viral after a twitter war with Chick-fil-A.  The twitter war eventually grew to include many other restaurants’ chicken sandwiches.  For Popeyes, the response was overwhelming. Inventory that had been forecast to last two months ran out in two weeks, and the chain had to temporarily remove the sandwich from its menu.


Video Spotlight: Open Sunday


This post is based on the Thrillist article, Popeyes Just Revealed When Its Chicken Sandwich Is Coming Back, by Kat Thompson, October 28, 2019, and the YouTube video, Open Sunday, by Popeyes Louisiana Continue reading

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GM Parts Start Stocking Out

GM Parts Start Stocking Out

October 25, 2019

As the UAW strike continues, GM faces stockouts on repair parts. Dealer lots are getting low on some models as well.

Before the looming strike, GM built up to an average of 77 days of supply of cars on dealer lots.  The typical days of supply is 60-65 days of inventory on dealer lots.


Video Spotlight: In tentative UAW deal, GM trades cash bonuses for future flexibility


This post is based on the NBC News article, Bad luck if your GM car needs spare parts or a repair, as UAW strike continues into its fifth week, by Paul Eisenstein, October 14, 2019, and the YouTube video, In tentative UAW deal, GM trades cash bonuses for future flexibility, by PBS News Hour, October 17, 2019. Image source: Shutterstock / Syda Productions

Discussion Questions:

1. Today’s vehicle manufacturing is based on lean/JIT systems.  How much leverage does UAW have in negotiations today compared to yesteryear?

Guidance: Remind students that vehicle manufacturing in the 1970s did not embrace quality management, lean/JIT, or many other common practices of today’s operations.  This is a good opportunity to review the development of modern operations.  Given that lean/JIT is Continue reading

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