Tuesday, October 1, 2013

Same day delivery to help small and medium Size Businesses
This week we read articles related to global supply chains and how technology has played a major role in its evolution.  The article “IT in Supply Chain” emphasizes 4 key macro features that IT companies need to focus on to make efficient solutions for supply chain viz. upstream, downstream, internal suuply chain and transaction management foundation. While SaaS models are famously used by organisations like SalesForce and Microsoft for the various services they provide, I want to discuss something which is very revolutionary- “Same day delivery”.

Companies like eBay , Amazon, Walmart, Target are experimenting with this model in select areas and gauging its success. Below diagram shows how Amazon is building fulfillment centers (FC) with 100 miles of an MSA(Metropolitan statistical areas) in order to make same day delivery a success.

Apparent approach is setting up warehouses close to metropolitan cities, as that is where Amazon is expecting major demands from. While these services are currently localized, once fully developed and optimized can be extended to small businesses too. It’s only a matter of time before it becomes common. There are startups like Deliv which focus on bridging the last mile gap only. They connect the malls/retailers to the customers. They are only present for the last mile. Postmate and Task rabbit combine technology and people to offer fast services.

Development of same day delivery models can be established by large retailers, like Amazon, eBay etc. This  could be logistically complex but eventually lucrative and small-medium businesses will eventually buy into this model. Also a very well developed e-commerce system would be required for this.

Eventually I see, small and medium retailers benefitting from the same day delivery model and competing with the large businesses on the same front as all they would need from the same day delivery model is only the last mile completion. What do you think?


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