In case you hadn’t heard, Amazon purchased Whole Foods last month, and the move checks out. AmazonFresh has been struggling to play ball in the $800 billion game of food retail, according to Fortune. Groceries spoil quickly and they’re fragile, making it difficult to architect a downstream delivery service that stands in for a brick-and-mortar presence. Amazon’s new squeeze provides that presence, and grocers everywhere are terrified (grocery stocks plummeted immediately following the acquisition).
But the $13.7 billion question is, what will Amazon do next? Now that the company has locked down its own chain of grocers, they’re in a “prime” position to facilitate the ever-elusive two-way supply chain in an industry that was probably a least likely candidate for it.
The writing is on the wall: If grocers – and for that matter, any retailer that’s beefing with Amazon – want to avoid expiration, they need to step up their game. And that means facilitating the two-way supply chain. It’s not pie in the sky. It’s just an exercise in route optimization.
What type of stream flows in both directions?
The answer is the supply chain you wish you had. Traditionally, deliveries are made from point A to point B, sort of like a ferry route. Fleets bringing deliveries downstream stick to that route, and those going upstream with returns do the same. That’s because the concept of nodal delivery routing that enabled returns to be picked up as deliveries are made was far too complex to fathom, especially in the days of manual route planning.
However, as anyone who’s ever used uberPOOL knows, the idea of nodal routing is not an impossibility when advanced algorithms are doing the math. Trucks leave the warehouse full of deliveries and come back full of returns (but hopefully not too many). It’s a simple, beautiful idea that has potential to save organizations significant time and money, while optimizing their delivery routing.
Take action before it’s too late
Many people, like The New Yorker’s Joshua Rothman, are convinced that Amazon intends to “vertically integrate nearly the entire process of consumption” and that the Whole Foods acquisition is the juggernaut’s first step toward doing that in the market for grocery delivery.
Be that as it may, grocers and other consumer retailers are not dead in the water – but they do need to start innovating, and fast. One of the most immediate, cost-efficient transformations they can make is to use a route optimization service like nuDeliverIt, which enables swift development of the two-way supply chain.
We have the technology. It’s time to start using it.