161–170 of 291 posts
http://www.econtalk.org/archives/2017/12/rachel_laudan_o_1.h...
Earlier quoted context omitted.
Surely though there were human people in each store who could have helped them with this, you know the ones that have been ordering the stocks and fulling the shelves for years?
One might think that such a new process could have been rolled in gradually - i.e. start with 20% backroom overhead, and begin reducing a percent a week until there is indication of overreaction. Why jump into the deep end of the just-in-time logistics pool right away?
This is all about eliminating a few hundred man-hours a week. Instead of having 2-3 guys unloading trucks and staging inventory, the whole staff is engaged, and is wasting a lot of time unless the trucks are loaded perfectly.
It’s insane. Instead of the fish or cheese guy selling me high margin product, he’s hunting for cartons. When I worked at a computer store in college, they did something similar, and same store weekday sales of premium products (which drove profitabilty) dropped 25%. But they saved 160 man hours of labor, or about $1,600, which was much less than the lost sales.
Empty shelves are a way bigger problem in retail grocery than spoilage. If you lose a box of cauliflower, OK, it costs money, but if you lose an entire customer, even just for a few months, that's a loss of revenue in the thousands of dollars. And you will lose that customer. "The audience ams a fickles mistress, Toki." And nobody goes to the "super" market to feel like Soviet Russia or the apocalypse. Ahh but wait,…
you lose a case of cauliflower to spoilage, you lose $5. lose a case-worth of sold cauliflower, you lose out on $100 of revenue. this systems sounds penny-wise and pound-short.
OTS sounds like a good thing overall if it is less wasteful and lower cost. With Amazon's logistics, they should be able to use the data from these food shortages to better inform the OTS system of what to order and when to order it. Maybe it's bad in the short-term, but the insights are still valuable for better logistics.
I suspect this will smooth out as they collect more data about what's going empty, etc. If as the article states there was millions in inventory sitting in the stock rooms, each store probably wasn't doing very good inventory management and demand planning, so didn't have good data to begin with to inform a new system.
I suspect this will smooth out as they collect more data about what's going empty, etc. If as the article states there was millions in inventory sitting in the stock rooms, each store probably wasn't doing very good inventory management and demand planning, so didn't have good data to begin with to inform a new system.
Wow, I wonder how new this system is - I've been to Whole foods in the last 3 days and it looked nothing like that picture. I wonder if these images are extreme cases that happened after 1 strange situation, and the article makes it look like a nationwide epidemic.
There are a few things that happen every New Year that combine to contribute to shortages: - Distributors have changed delivery schedules to work around New Year's Eve and Day. - There's a large increase in demand for produce and some other ingredients (resolutions) - Employees at the store and regional level take a few more vacations than usual, since we aren't able to during much of the holiday season. People also…
Is it though? If OTS drastically decreases the backstock, wouldn't it also decrease the ability of a store to respond to these kinds of changes?
looks like somebody is ripe for digital transformation with IOT, predictive analytics and machine learning on top of it.