Divide and Rule

The Pizza Problem

I love Pizza and frequently order from a shop that guarantees to deliver a Pizza at my doorstep within 30 minutes from placing the order. I always wondered what it takes for them to receive an order, prepare a Pizza, get it packed with sides, travel to the destination locality, search for the correct house and then ring the bell – all within 30 minutes – every single time.

Usually it takes around 12-14 minutes to prepare a Pizza and they cannot cut short that time. Packing, billing etc. will take its own 2-3 minutes as well and then the delivery guy has to travel a certain distance which s/he cannot fly and cover (I stay in Bangalore and the traffic here is a maddening). So what are they doing differently for making the timely deliveries?

One fine day I happened to visit their store and peeped into their back room. There was a map of my area in a frame with the glass-top and on the glass they had drawn straight lines something like this –

Curious about the map and those partitioning I asked the store manager about the specifics of the map. He told me that he has divided full area into imaginary zones and assigned one each to his delivery boys. The delivery boys are supposed to know every main road, every cross road and every landmark of that zone. So that when they are out for delivery in their own assigned zone they do not waste time finding the destination. The manager said that it is impossible for 6 delivery boys to know full 6 Km² of that area but it is very much possible for one single person to know 1 Km² of the same area. Now, all he needs to do is that the right delivery person is assigned to the order placed from the right zone.
It struck to my mind that their problem is similar (if not the same) to the one in a typical warehouse, i.e. to fulfill an order quickly. And for a similar problem why can’t we have a similar solution? Why can't we too 'Divide and Rule'? –


Warehouse Partitioning
What if we partition the Warehouse Storage locations into zones and assign those zones to individual pickers? Take the example of a Warehouse which is 10,000 sq. ft., has roughly around 4000 storage locations and around 8 pickers cover those 4000 locations. Now it is impossible for 8 pickers to know what is where in 4000 locations. But it is very much possible for 1 picker to know what is where in his quota of 500 locations. This does not mean that the picker will have to know exactly which box contains what, but he can have a rough idea in his mind that the items in his zone are in so and so order, the smaller SKUs are kept here and next to them are the fragile ones… and so on.

This will solve two problems – first being the quickness in identifying an item, which can be a lot quicker than earlier when the picker was dependent on the system to guide him. It is like searching for a house in a neighborhood with the help of GPS (which more often than not will take you to the correct house) Vs. searching for a house in your own neighborhood (to which you are well versed of and you do not need a GPS). Obviously you will find the house (read location) faster when it is in your own neighborhood.

Secondly, one of the major pain points for the workforce in a warehouse is that they have to walk a lot. I read an interview of a Picker who worked in a large Amazon Warehouse that he had to walk over 30 miles a day (within the warehouse off course). This might be a one off case but we all know that a pickers typically has to walk a LOT. So if we go for ‘Warehouse partitioning’ approach, the distance travelled by the Pickers can be reduced drastically as well. Which in turn will keep them happy and less tired, which in turn will add to more productivity for the Warehouse.

There can be some challenges with this approach like what if a picker who is familiar from his zone is unavailable (then the business will run as it does today, depending on the systems available today – big deal) OR the picking traffic for one zone is more than the other (that is why the partitioning has to be done more sensibly in our case and we cannot just put squares like that in case of the Pizza Store) OR there can be some other similar problems, but with due diligence (I believe) those problems can certainly be tackled I believe.

There can be an argument against this approach saying that we are going back to old / manual ways. Well first of all, not everything is bad with ‘old ways’. Secondly, the suggested approach will be a hybrid between the old and the new ways of doing the job!!!

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“Same Day Delivery - Need Of The Hour”. Really?

E-commerce in India (though growing rapidly), is still in its nascent phase. People like me (not the early adopters) have moved from ‘Skeptical’ to ‘Comfortable’ zone while buying online. The motivators that took us to an Online store (or an ‘E-tailer’ so to say) from a Brick and Mortar store were heavy discounts, convenience of sitting at home and shopping, available reviews of products, ease of comparing the products, ease of returns, time to think and buy instead of impulse buying and a few more. Things that I lost in the process were to touch and feel the product before buying it and that immediate satisfaction / happiness when I pay for something and get that right then without any time delay. Well we are smart enough to overcome the first issue (more often than not) by visiting some mall over the weekend have a look at that phone or that shoe or that wrist watch that we intend to buy, come out of the store and order it right then through our smart phones. And that’s it, we are done, the item will be delivered at our door step. But wait… this might take its own sweet time. Depending on our location and the Online retailer’s warehouse, we might get the item somewhere between 3 to 15 days or more. Now, in this cut throat competition world of E-tailing, the top dogs have come up with the concepts of ‘Same Day Delivery’. Recently Amazon and Flipkart have launched ‘Amazon Now’ and ‘Flipkart Nearby’ respectively which promise a delivery within a few hours. Sounds crazy? Not really… Let’s see how is it possible -

How do they do it?

Same day delivery (or delivery within a few hours) is easier said than done. The E-tailers will probably need a separate Supply chain which works on a minimal lead time at every node. Among other things the E-tailer must have - 1) A highly efficient team that understands and plans according to the customers’ buying pattern 2) A smart warehouse 3) Swift logistics partners.

After the new system is built up and the customers start placing ‘Same day delivery’ orders at the Online store –

Needless to say that it will need a lot of Financial muscle for the E-tailer to build and then sustain this model. The product category has to be such that it requires less space and fetches high margin to the E-tailer. Price point cannot stay as competitive as it was before. But as they say “No pain - No gain”.

Will it really work?

As described above, the for the same day delivery all the components involved in the new model of supply chain have to work like an orchestra and produce a symphony. If any link of this chain gets broken the E-tailer is unable to live up to its promise. It results in an unhappy customer and a few unhappy customers in this internet enabled world may hurt badly to E-tailer’s brand image. So after putting so much effort, after spending loads in getting the infrastructure up the E-tailer still risks its brand image by promising something that it may not always control i.e. to deliver products within few hours. One needs to understand that this is way different from a ‘30 mins Pizza delivery’ (because of so many variables involved here).

And for a moment let us assume that the Orchestra is in sync and producing a beautiful symphony. Are the end users in India ready to pay more to get the product on the same day? I don’t think so. We are the people who do not mind waiting for weeks to get something along with our friends travelling back from the US just to save a few dollars. We are the people who stood in queues for kilometers and to whom police had to control (in Mumbai) when Big Bazar offered some discounts during their initial days. We are the people who do not mind travelling extra miles even to different cities sometimes to save some extra bucks. So we don’t really mind waiting for a few days if we get something cheaper (compared to receiving it the same day).

While it might be a great idea to beat the competition but there are things that attract Indian customers more than faster service, like MORE DISCOUNTS.