Amazon has disrupted the way supply chains operate. The focus of supply chains have changed from cutting costs to decreasing the time to reach the customer. Cutting off a good couple of hours at a few places in the supply chain, will result in savings of up to an entire day, thereby making same day deliveries a reality. Given that Amazon and other online retailers are competing in this space, if any company needs to compete with them to either acquire market share or retain them, then the usual supply chain solutions would not help in gaining a competitive advantage. The idea is basically the concept of Micro Warehouses, a mini storage location in a crowded residential area that has come to define today’s cities, that aims to capitalize on location advantages.
So what are the basic stuff one must consider to see if it is feasible or not?
1. Location costs: this is something that needs to be considered. There are quite a few pockets in urban areas where real estate renting is relatively cheap and comparable to warehouse rates
2. Infrastructure costs: such a warehouse would basically be a storage location, containing only a few items that would have the highest turns.
3. Replenishment: How would such a micro warehouse be replenished?
4. IT Infrastructure? A simple barcode scanner would be enough to keep track of the inventory there.
5. Delivery: i envisioned cyclists doing the last leg of the milkrun. saves on cost and proofs you from rising costs of transportation.
What do you think? Will it work? let’s discuss