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Webvan

Webvan. Solving the last mile. E-Operations: A Guide to How the Internet Streamlines Operations Advantages. Reduced Facilities Cost Self-Sourcing Job Specialization/Scheduling ( Temporal Consolidation ) Centralized Inventory ( Locational Consolidation )

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Webvan

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  1. Webvan Solving the last mile

  2. E-Operations: A Guide to How the Internet Streamlines OperationsAdvantages • Reduced Facilities Cost • Self-Sourcing • Job Specialization/Scheduling (Temporal Consolidation) • Centralized Inventory (Locational Consolidation) Source: Boyer, K.K., “E-Operations: A Guide to How the Internet Streamlines Operations”, Business Horizons, Vol. 44, No. 1, January-February, 2001, pp. 47-54

  3. E-Operations: A Guide to How the Internet Streamlines OperationsChallenges • Technology is Critical • Increased Shipping Costs • Accountability/Legality • Communication Barriers

  4. E-commerce Methods Superior = +3 Traditional Methods Superior = -3 Neutral = 0 Facilities Cost: Self-Sourcing: Job Specialization: Scheduling: Inventory: Information Intensity: Shipping: Accountability Legality: Communication Barriers: Visible/High Cost Virtual/Low Cost Low High General Purpose Specialized Steady Demand Fluctuating Demand Low High Low High Bulky/Fragile Products Virtual Products Low High Low High Scalability: High Low E-Operations Profiling:Evaluating the Net Benefits/Deficits of E-Business

  5. Webvan Takeaways • Webvan’s failure is attributable to a mismatch between the business model and operational capabilities • The essence of the mismatch was trying to go “the last mile” without getting a price for it. • Operational mismatches have plagued e-commerce start-ups.

  6. Webvan: Making Deliveries

  7. Webvan: Picking OrdersWhat is “Pick to Light”

  8. Webvan: Stocking the DC

  9. Webvan: Optimizing Delivery Routes

  10. Webvan: Packaging Orders

  11. Webvan: Design of Order Fulfillment • Key Questions: • Where/how many DCs? • Where/how many LS? • How many Trucks/LS? • Routing of Trucks Local Station Distribution Center

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