Is Walmart Dropping Drop Shippers?

Is Walmart Dropping Drop Shippers?

September 29, 2018

Walmart is experimenting with its policies for online orders involving items that are drop shipped directly from the vendor to the customer.  Specifically, it is considering changes to products called “everyday consumables.”

In the past, Walmart would pay for UPS ground shipping to have the item shipped from the vendor directly to customers.  However, as the retail giant searches for increased profitability in the fourth quarter, it has dropped this policy on lower-priced items (items with a wholesale price of $28 or less).

Many vendors have seen their items on Walmart’s web site display as “out of stock,”  even when these items show as “in-stock” in internal Walmart databases.  This has resulted in zeroed sales from the Walmart web site for many vendors with lower-priced items in the everyday consumables category.

This post is based on the Talk Business & Politics article, Walmart.Com Tests New Fulfillment Protocol for Consumables, Some Vendors in Limbo, by Kim Souza, August 30, 2018. Image source: creativenature © 123RF.com.

Discussion Questions:

1. Why is Walmart changing its policies?

Guidance: This relates to the problem that many online retailers are facing—the last mile delivery.  Free shipping (for 2 Continue reading

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Using a Big-Business App to Grow a Small Business

Using a Big-Business App to Grow a Small Business

September 6, 2018

A small business owner of a chauffeur company in the San Francisco Bay Area has successfully grown despite the competition from Lyft and Uber.

A major reason for his success involved the installation of a reservation system that is typically employed by much larger companies.  This reduced his back office overhead and increased his productivity significantly.

This post is based on the LCT article, Operator Made Bold Moves With His Small Fleet, by Martin Romjue, August 9, 2018. Image source: © Juice Images / age fotostock.

Discussion Questions:

1. Describe how better scheduling software impacts staffing, service quality and productivity.

Guidance: After students list the improvements to staffing, service quality and productivity, the instructor can easily lead a discussion on how all of these aspects are inter-related.

2. Why does the owner want to own one of every type of fleet vehicle?

Guidance: Students should recognize that having the capacity to fulfill all customer needs is the rationale for owning one of every type of vehicle.  It also allows flexibility in scheduling to meet the capacity needs for various assignments.

3. How important is staffing to the success of this business?

Guidance: Students Continue reading

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China and Industry 4.0

China and Industry 4.0

September 3, 2018

China is leading the world in implementation of Industry 4.0.

Industry 4.0 is a digital factory concept that promises to dramatically increase productivity, decrease inventory holding costs, improve quality, and increase forecasting accuracy.  The IT architecture has to be built around the company’s unique business needs and processes instead of building a strategy around a particular technology to make Industry 4.0 work.

Investments in Industry 4.0 should have a payback period of less than two years.

This post is based on the McKinsey article, Imperatives for China’s factories of the future, by Anil Sikka, August 3, 2018. Image source: Shutterstock / Phonlamai Photo.

Discussion Questions:

1.  Industry 4.0 requires a major investment in IT architecture, e.g. data, analytics, robots. Are there limitations to implementation of Industry 4.0 that were not mentioned in the article for companies in the United States?

Guidance: Review the concept of scalability.  Students should recognize that the costs of implementation may limit Industry 4.0 to larger companies.  Additional issues that should be noted are workforce availability to implement and operate the IT architecture, and the requirement for tighter supply chain integration.

2. What happens to break-even quantity when Industry Continue reading

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