Supply Chain Management

Supply Chain Management

DescriptionThe text on the following page was developed and given as part of a task in the Master course “Future Internet Opportunities” in Spring 2017.

Select some of the problem mentioned and write an essay that covers the supply chain from factory to end user. The essay shall contain a focus on value adding- and lean management issues in warehouse and distribution to end-customer.

Be aware that food has several important issues like temperature, freshness, outdating, and general quality. And food in a normal grocery store will come from more than 50 countries.

Several attempts on food e-commerce in Norway have disappeared during the last years, but there are profitable small scale cases in Norway and large scale cases abroad.

There are at least two main business concepts: one is to utilize existing grocery stores, and one is to establish “dark stores”. A dark store is a warehouse without customer in its building.

Expected volume is 6-10 pages. Use format similar to the journal papers in the Supplychain Module on canvas.

Minimum topics:

Abstract

Introduction/ Background

Theory/ Method

Analysis

Discussion

Conclusion

References

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Chances of e-commerce in the food retail sector

Who are we?
SSI Schäfer is the world’s leading supplier of warehousing and logistics systems. Headquartered in Germany, the company operates 55 subsidiaries across five continents with more than 8.600 employees. Products and services offered include the warehouse management software WAMAS® as well as automated and manual material handling equipment, such as automated storage and retrieval systems (AS/RS), shuttle storage systems, conveyors and robotics. As a general contractor, SSI Schäfer offers turn-key solutions as well as service and maintenance required to run the system with high efficacy.

The food retail industry has long been a core competency of SSI Schäfer. The range of solutions comprises solutions for manual warehouses through to fully integrated automated storage and case picking systems. SSI Schäfer has been a technology pioneer in many fields and aims to maintain that status in emerging businesses, such as online grocery.

What is the problem?
Traditional supermarkets have started to automate their warehouses in order to operate efficiently. This is especially true in high labour cost countries like Germany or Norway. Automation equipment is geared towards creating stable, store friendly pallets or roller cages at low cost per unit. Their customers are traditionally supermarkets (i.e., B2B) and the warehouses are prepared for their demands.

A new business field is internet grocery shopping (e-commerce), which enjoys rising popularity among consumers. They can choose from a variety of home delivery services or pick-up locations to receive their groceries. Vendors are partly established food retail companies (traditional supermarkets) and partly independent operators specialized on e-com solutions (e.g. Amazon, Kolonial.no, AllyouneedFresh.de).

However, there is no profitable supply network design yet – some retailers fulfil orders in stores (by picking groceries individually from supermarket shelves), others use dark stores, dedicated warehouses or already existing warehouses. The majority of them is currently operating at loss in the e-commerce sector – margins in the food retail business tend to be low whereas logistics costs are rising for the B2C business. Also, consumers (in the B2C business) pose different challenges compared to B2B customers – orders are smaller, divers and time until delivery is getting shorter (e.g. same day delivery).