Amazon will soon deliver to businesses and homes. If we accept that a 2 full-time DVM equivalent veterinary hospital places 10 orders weekly to replenish its inventory, then it is likely that those orders will arrive in 20 to 25 different boxes.
Some of these boxes come via UPS, FedEx, U.S. Postal Service and some from distributors or manufacturers. This can add up to three to five deliveries daily, counting office and janitorial supply deliveries. Adding Amazon to this mix, makes a receiving plan supplemented by efficient inventory replenishment cycle management top priority.
Source: Wall Street Journal, September 27, 2016.
Tackling the delivery business, Amazon executives publicly say, is a logical way to add delivery capacity — particularly during the peak Christmas season. But interviews with nearly two dozen current and former Amazon managers and business partners indicate the retailer has grander ambitions than it has publicly acknowledged.
Amazon’s goal, these people say, is to one day haul and deliver packages for itself as well as other retailers and consumers — potentially upending the traditional relationship between seller and sender.
INSIGHTS: It was a privilege to work with and train veterinary teams about inventory management during a 15-year period in my animal health career. “Replenishing against a forecast” instead of reacting to stock-outs remains a prime area for improvement in the product replenishment cycle. A more efficient replenishment cycle will decrease the number of purchase orders as well as the number of packages received. The value of a purchase order will increase but it will reduce the accounts payable volume in kind.
Here are links to recent, related AHD posts:
- Inventory availability critical to distributor relationships, August 15, 2016
- Editorial – Carrier rate hikes will affect cost of goods, September 25, 2016
- Best price does not guarantee best value, August 15, 2016