MY FIRST REAL JOB BEGAN WHEN I WAS 12 YEARS OLD. THAT
exalted position was in a local neighborhood grocery store, long before
the proliferation of supermarkets around the country. “On-line”
ordering was very popular then, and my primary responsibility was
to take orders over the telephone, laboriously record them in a ticket
book, and then gather the items from the shelves and load them into
two bushel baskets attached to my bicycle. From there, I would embark
on my same-day (often same-hour) last-mile delivery. From my basket
to your kitchen table—at that time, there was no better service available than that from your local grocer.
Since that time, the retail environment has been turned on its
ear. Consumers started to warm to the on-site shopping experience,
In 1962, an Arkansas retailer named Sam Walton
opened the first Walmart store in Rogers, Ark.,
forever changing the retailing landscape. That same
year, Target and Kmart opened their first stores,
joining Walmart in the rush to compete on low
prices. As the country entered the economic reces-
sion of the 1970s, customers demanded even lower
prices, and the discount retailers grew exponentially.
In the 1980s, the so-called “category killers” and
club stores drove prices down even further. Costco and Sam’s Club
were launched in 1983, joining the rapidly expanding Walmart, the
four-year-old Home Depot, and Best Buy, among others, in the chase
for consumer dollars.
In the late 1990s, another game-changing force swept through the
retail landscape. By 1999, the whole country seemed to be caught up in
the mystique of the Internet and the allure of online ordering. Despite
its promise of speed and convenience, e-commerce got off to a rocky
start. The problem was that many, if not most, of the Internet retailers
had invested enormous amounts in marketing and technology, and
virtually nothing in distribution systems. During the 1999 Christmas
season, nearly 50 percent of all online consumers experienced delivery problems. Of course, most of the issues are now behind us, and
Internet sales topped $304 billion in 2014.
And now, we have perhaps the biggest retail supply chain game
changer of them all—Amazon. Reinforced by the best technology
BY CLIFFORD F. LYNCH fastlane
How long is your last mile?
available, with a network of over 100 distribution centers, Amazon seems determined to
provide the best customer service of any retailer. Same-day delivery is being tested in various
cities, and we have all heard about the drones.
Amazon is also said to be considering several
other unconventional local delivery options
such as Uber and even bicycle messengers. (It
makes me wonder if I should have held onto
my bicycle.)
But what about the competition—those
companies that don’t have vast distribution
networks? They’re learning that the real problem is not the much-dis-cussed last-mile delivery; it’s
the point from which you’re
trying to fill and deliver those
orders. Where are you going
to locate your inventory?
Right now, many companies, including Walmart, are
experimenting with filling
online orders from stores.
But most of the stores were
designed for on-site shopping and have limited space
for shipping operations. As
The most interesting point to all this is the
confirmation that there are few new delivery ideas, but old ideas can become relevant
again with technology and fresh thinking—and
maybe a new bicycle.
Clifford F. Lynch is principal of C.F. Lynch & Associates, a provider
of logistics management advisory services, and author of Logistics
Outsourcing – A Management Guide and co-author of The Role of
Transportation in the Supply Chain. He can be reached at cliff@
cflynch.com.
