Holste Says: Given today�s logistics and distribution realities, same day delivery may seem far-fetched. What Do You Say? Click Here to Send Us Your Comments Click Here to See Reader Feedback

Like instant coffee and fast food, same-day shipping is a great time saver and appreciated convenience for most busy consumers, especially if there is little or no extra cost. Online retailers are offering this service across limited promotional SKUs, as a way of attracting new customers. Still, only a few retailers are actually equipped to provide rapid response services.

While relatively new to B2C retailing, B2B wholesalers have been doing this for years. For example; highly automated wine/sprits order fulfillment DCs where overnight delivery to retail stores is required. Due to the relatively high product cost, liquor stores limit their inventory to the available shelf space and restock on a one for one basis. POS systems place replenishment orders in-sync with finely tuned order fulfillment systems in the DC. Many other similar examples exist throughout the food service industry, especially where perishable (fresh) items are involved.

What is really new (and very interesting) is the potential for same-day delivery now being tested by Amazon for groceries in selected markets. If Amazon can pull-off same-day grocery delivery, and adapt that model to other consumer items, it ostensibly means consumers can order anything online and receive it the same day. This is well worth watching as the stakes are very high If successful it could eventually impact on traditional retailing across the globe. Google is also testing same-day delivery. Read more on this interesting development “How Close to Reality is Amazon Same Day Delivery?”

Given today’s logistics and distribution realities, same day delivery may seem far-fetched. For most distributors, providing same day shipping is fraught with major challenges such as, not being able to plan ahead, which impacts on DC productivity. Of course, in the name of customer service, DC staff is always willing to jump through hoops a few times a day. But, when it becomes routine, the daily workload is not only unpredictable, but unplanable.

Understanding the Cost Factors

So what are the cost factors for expedited service? It’s not just the premium shipping cost, which can often be passed along. Not just the extra cost to walk one order through the DC. But, the cost of not being able to:

Perhaps the most difficult to manage unintended factor is the impact on the workforce - most employees are prepared to work unexpected overtime every once in a while. But, when the end of every day is a variable, it disrupts their lives, keeps them from being able to pick up their kids from school or childcare on time and their families from being able to plan on them.

Final Thoughts

At the DC - how many hours are lost waiting for the orders to come in? How many times each day are DC managers forced to search for fill-in work to use up the work shift hours? How many employees leave because they can't plan their lives around the erratic schedules? These are the costs that are being absorbed in DCs and passed along through the supply chain because we've made instant response the norm. Highly automated, flexible and agile systems may offer some relief, but they are not magical cure-alls.

No dough, perfecting expedited services will require major changes in the current DC order fulfillment model. However, looking back, not that long ago it took days, even weeks (depending on the season), to receive your catalog order. Now we order online and expect next day delivery. Who knows maybe same-day delivery will be the real-deal?? One thing is for sure - putting the “Rapid Response Genie” back in the bottle is not going to happen!