This morning, i read an article in the newspaper as to how Amazon is starting a pilot project with India Post to test its Cash on Delivery model. I found the idea to partner with the indian postal service simply amazing. Not only is the idea intuitive in nature, but also seems like common sense – why did no one think of this before? India Inc has been ruing the lack of proper supply chain infrastructure and here you have a distribution network that spans to the remotest villages possible.
What other avenues can the postal service be used for?
1. ITC could extend its e-choupal network to places hitherto new boundaries by franchising it to India Post
2. The Postal service infrastructure, if improved a bit, can be used as an effective first response to natural disasters
3. MNCs looking forward to enter the FMCG arena can tie up with India Post to tap their distribution system
What other avenues do you think the Indian postal service can be used for?
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