Case Study: Innovations in Distribution Strategy

The business that tends to succeed through the same day delivery tends to demonstrate various aspects of the delivery feel, distribution centers as well as the warehouses established within the major metropolitan cities. Also, such companies must provide a proof for the reliability thereby being able to offer convenience to0 the consumer shopping experience. In Chopra's article, it can be observed that both Walmart and Amazon both demonstrated these features. In chapter 11, we learned that the consumers are less concerned with the manner in which the product was moved but more concerned with rapid delivery of the goods or services they want at any given time. In the circumstances whereby the consumer wants a product same-day, they will have to understand that there will be a convenience fee associated with better delivery terms. The companies will have to apply their concept of physical distribution to make their business successful.

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Various potential trade-offs are associated with the same-day delivery. Notably, one trade-off will integrate the overall cost of a good versus the cost of its physical storage in a warehouse. As mention in the article, Chopra mentions that Walmart charged a delivery fee of $10 with no minimum order. On the other hand, the Amazon is charging $8.99, in addition to the $0.99 for the shipping purposes. It implies that in any case, the customers decide to order the products that must be delivered the same day, they will have to take into account the monetary value of the product to experience the benefit of the same-day delivery. The absence of the promotional use constitutes to another trade-off. The price reduction prompts the consumers to pay a few more dollars because of the sale tax. The risks of the return investment is another potential tradeoff related to the same-day delivery. Any consideration to have a same-day delivery as part of the distribution channel must ensure that the company has the business. The warehouse places huge costs on the firms, covered under the total cost approach.

Various factors related to the innovations are likely to succeed. With each generation that becomes more vital regarding the manner in which the firms go to business, the instant gratification need will still propel the same day delivery process. Fundamentally, the physical location of the warehouses constitutes one of the major factors that influence success. Establishing numerous warehouses in the densely populated areas supports the chances of production. Consumers are attracted to the populated cities where they believe they can get readily available same-day delivery services from the many established warehouses close to them. Establishing more warehouses enhances the bundling of many orders together. Bundling of orders assists the companies to reduce the transportation costs that could have been incurred by the customers' product. It further helps the company to eliminate the driving costs in the close neighborhoods several times. As such, it enhances time management before an order is placed in the next day.

Conclusion

In my view, the inventory mix is determined by the size of the company. I believe that companies such as Amazon and Walmart are large and can afford the inventory mix as they have huge capitals to store their products in warehouses. The small companies should, therefore, focus on the selected items to protect them from spending more on the storage of the items. Through the development of technology, there is a possibility that the same-day delivery will emerge to become more common.

References

Chopra, S. (2013, May 13). Cases: The future of same-day delivery: Same as the past? Watertown, MA: Harvard Business Publishing