Whole Foods Takes Stock

Whole Foods Takes Stock

January 30, 2018

Amazon’s acquisition of Whole Foods has led to a few changes in how inventory is managed, and the results are empty shelves, unhappy customers, and – according to some employees – lagging morale.

Whole Foods has implemented Amazon’s inventory system, called Order To Shelf (OTS).  When implemented correctly, OTS can reduce the number of stockouts and amount of inventory carried.  However, the conversion has not been trouble free.

Part of the problem may lie in Whole Foods’ use of small, local suppliers that are not used to the OTS system.  It also highlights a difference in company cultures, as Amazon’s more centralized way of managing inventory clashes with the local autonomy previously given at the store level to manage out-of-stock situations.

This post is based on The Register Citizen article, Internal Documents Reveal That Whole Foods Is Leaving Some Shelves Empty On Purpose, by Hayley Peterson, January 20, 2018. 

Discussion Questions
1. Why use Order to Shelf (OTS)?

Guidance: OTS has the potential to greatly reduce costs associated with inventory and the labor involved in stocking shelves.  The OTS system takes items directly from the shipping dock to the shelf.  This Continue reading

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2018 Supply Chain Predictions

2018 Supply Chain Predictions

January 10, 2018

What’s on the menu for 2018?  Expected supply chain management trends include:

  • increased supply chain visibility software use
  • the disruptive impact of the sharing economy of supply chain distribution networks
  • the increased need to improve supply chain speed (the so called “Amazon Effect”)

This post is based on the Supply Chain Digital article, Supply Chain – Predictions for 2018 Trends, by Greg Kefer, December 8, 2017.

Discussion Questions
1. Why is “supply chain visibility” a necessary ingredient to modern supply chain design?

Guidance: This is a thought question for students to discuss.  Some possible answers may include the need to coordinate with suppliers and distributors,  ability to better operate strategic sourcing efficiently, empower mass customization throughout the system, decrease inventory levels, avoid back orders, etc.

2. How could Uber and similar “sharing economy” outfits disrupt current logistics operations?

Guidance: This is a thought question for students to discuss ideas.  It may be helpful to start the discussion by illustrating that small packages could be delivered in local locations cheaper and faster with Uber perhaps than FedEx.  Ask students for an example of how warehouse space could be in someone’s unused garage for inexpensive Continue reading

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