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.
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?