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.
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