In the several decades I have been in the supply chain industry, I have seen any number of changes in almost every aspect of the industry. However in my opinion, there are just three developments that have made more of an impact than everything else combined – globalization, technology, and Wal-Mart. All three have influenced supply chain managers to adopt new mindsets and develop new skills and processes. Wal-Mart, in particular, has raised the level of warehouse and trucking operations to an art form; and with more than 40 regional import distribution centers, 140 domestic facilities, 6500 trucks, 5000 trailers and 4600 stores, it could aptly be called a, “state of the art supply chain that sells stuff”.
But what is Amazon.com up to? Since 2010, it has spent almost $14 billion on new distribution centers. It now has 89 facilities and more are planned. Never mind that they don’t have stores. Their goal is to be in a position to deliver most of their orders on the day they are received.
Wal-Mart of course, is not far behind with similar programs of its own already underway.
This level of customer service, if widely adopted, while no doubt extremely pleasing to the consumer, could keep consumer goods manufacturers and retailer supply chain managers up at night.
How good does our service have to be?
How many distribution centers do we need?
Where should they be located?
How do we deliver?
I believe that these and a host of other unanswered questions could keep supply chain professionals on the edge of their seats for years to come.