Walmart Raises the Stakes for Supply Chain Reliability

Walmart Raises the Stakes for Supply Chain Reliability

February 19, 2018

Walmart has raised the stakes for supply chain reliability. Its new on-time, in-full delivery guidelines (OTIF) were rolled out in 2017, with escalating requirements for 2018.

Both early and late deliveries get the thumbs down; failure to meet the metrics results in the supplier being fined 3% of the value of their order.

Requirements vary, depending on whether the shipment is a full-truckload or less-than-truckload (LTL) shipment. But either way, suppliers and 3PL’s cannot use weather or other uncontrollable events as acceptable reasons for failure to deliver in full and on time.

This post is based on the Supply Chain 24/7 article, Keeping Pace with Walmart’s On-Time Delivery Requirements, by Scott Bolduc, February 5, 2018. 

Discussion Questions
1. Assume that you are responsible for designing a lean supply chain for a supplier to Walmart. Find a company that supplies packaged water to Walmart from an internet search.  (Or find another company that supplies Walmart if you choose.)  How would you improve the supply chain to become lean to meet the demands Walmart has now imposed for suppliers such as your chosen company?

Guidance: Students should review lean supply chains, facility location considerations, and the Continue reading

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Whole Foods and Prime Time Delivery

Whole Foods and Prime Time Delivery

February 17, 2018

Amazon is piloting free delivery within two hours from a Whole Foods location for Prime members. One hour delivery will also be offered for $7.99.

This post is based on the CBS News article, Amazon to deliver Whole Foods groceries for Prime members, by Aimee Picchi, February 8, 2018. 

Discussion Questions
1. What additional capacity will be required for Amazon to offer fast delivery? How can this additional capacity be generated without requiring significant resources?

Guidance: This is a thought question for students to discuss.  Students should note the use of technology to quickly schedule and route truck deliveries, possible changes to service design within Whole Foods to free personnel to drive the trucks, and potentially outsourcing to a 3PL to implement the shipping service.

2. How does Amazon’s acquisition of Whole Foods change the supply chain system for Amazon?

Guidance: Students should be asked to explore the differences in inventory perishability between Amazon’s traditional products and grocery products.  How does perishable inventory impact the design of a lean supply chain?

 

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