As part of its Digital Supply Chain Roundtable Series, the LCL was welcomed by Goodyear in Colmar Berg at the end of November to discuss the impact of same day delivery services on supply chain processes.
Following a presentation by Prof. Alexander Hübner on the topic of same day delivery, roundtable participants discussed the challenges businesses face by the increasing attractiveness of online-only retailers. As a result, retailers across the board are moving to offer goods online and adopting omni channels, with data showing that same day delivery in particular is perceived as an emerging threat.
However, as participants explored, this raises numerous challenges, such as the structure and cost of warehouse management and managing these new business channels. For example, should extra fees apply for same day delivery? Do you allow goods bought online to be returned at a physical store?
Goodyear shared their efforts to be closer to customers by establishing multiple, smaller warehouses but also pointed out the cost-related issues to this project. These plans were carried out as part of a wider transformation of the company from the mass-production of tires to more sophisticated on-demand products. With technology and demands evolving, Goodyear is set to open a new facility showcasing robotics and 3D printing. The company is also working on chip-embedded tires that can deliver data on performance and recommend optimal maintenance.
An active debate evolved around generational divide with respect to adoption of same day delivery, the feasibility of same day delivery in urban vs rural geographies, implementation in business-to-business environments, and the potential impact on the environment. A discrepancy was pointed out between what sales and marketing departments might think best for a company and what logistics assesses as feasible.
Are we ready for same day delivery? “It depends,” concluded Prof. Hübner. However, one thing is sure: the pressure is on.
The Digital Supply Chain Roundtable Series forms part of the LCL’s executive education offer. Roundtables are hosted by partner companies and open to professionals from the industry in order to facilitate exchange with the LCL’s researchers and students.