Thursday, December 8, 2011

Virtual Logistics?

I came down the stairs from my apartment and held door for a UPS lady who had seven packages in one hand, and three in the other, struggling her way up the stairs, delivering for the holiday season. I wondered, is there a better way to deliver the packages? Of course most of the logistics companies are now using technologies like bar codes and electronic signatures to shorten the time of each delivery so that the whole process is more efficient. But the delivery person still needs to drive, to look for the address, to carry the packages up the stairs, to knock on the doors and get signatures. Are there ways to reduce inefficiencies in the process?

A simpler solution: the reverse logistics of sending packages out. How about going old school and pick up our packages from the UPS office? Just as how we bring the packages to the UPS offices, why can't we go and pick up the packages from UPS office? There will be no more missed deliveries because we choose when to go and pick up our packages. We are so used to the good service of having everything delivered to us that the idea of picking up your own package is almost unthinkable. Plus there's this trouble of carrying your package all the way from the UPS office back to your house. Perhaps you need to drive to pick up that package; is this really more efficient than having the UPS guy delivering them?

How about instead of having the packages delivered to the UPS offices, have it delivered to the CVS right around the corner? You can go to CVS and pick up your package when you are notified electronically that the packages have arrived. In densely populated place like Taiwan, 7-11 serves this function. You can pick up books ordered on-line at the 7-11 downstairs, send you packages across different 7-11s, and even return goods through the 7-11 stores. Since 7-11s are anyways delivering products from their distribution center to local stores, why not use the space to deliver goods ordered on-line? The customers themselves serve as the deliver guy of the last mile. The model is of course more applicable in metro areas with dense population.

The bottom line: now that we've exploited a lot of technologies in the supply chain, are there ways that by small changes in the behavior that we can further increase efficiency?

There's another option: just as how Zynga changed people's appetites for virtual goods in FarmVille, maybe we can all be content with virtual goods delivered on-line, instead of physical ones!

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