Grocery Gateway Case Study

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The first is the creation of a network of small warehouses concentrated in places where the greatest demand is. It will allow reducing the number of required trucks and the number of drivers.

Secondly, Grocery Gateway could concentrated its effort in the areas where the tendency to growth is the highest, for instance, in Georgetown (23.8% of growth over last week), Etobicoke (15,2% of growth) and Toronto (11%).

Thirdly, Grocery Gateway could ask its customer to pay online. This could reduce the time needed for the drivers to receive payment from the customer and help in achieving the scenario of 4 stops per hour.

Fourthly, a low cost call center should be established to relieve drivers of contacting the customers before delivery. The call centre can call the customers and send a message to the driver that the customer is at its home for the delivery.

Fifthly, the company should use their customer database in order to analyze purchasing behavior, send out coupons, specials and incentives to promote spending during slow seasons.

6. What is the cost benefit of purchasing the software from Descartes?

Descartes’ software will reduce costs spending on deliveries, salaries and staff. On average the driver needs 15 minutes for set-up, about 30 minutes to drive to the delivery area, 30 minutes to return to the fulfillment center and also 15 minutes to close-out. According to the statistic, the company spends $30 per hour for the vehicle and drivers. Descartes’ software could reduce this delivery window to 30 minutes and achieve 4 stops per hour on the particular area. From 6:30 a.m. to 10:30 pm (16 hours) the company could make 60 deliveries per day instead 34. That is an increase of 26 deliveries which will increase the revenue of the company by 26 * $135 = $3510. It will be in addition to the variable cost saving the company will save by achieving 4 SPHOA instead of 2.7. So, this software is able to establish the cost-effective delivery routes by using such parameters as the speed of the vehicle, time spent at the client’s door, the number of totes and so on. Also, Descartes’ software system provides drivers with most effective directions and maps for their routes.

7. What information might be useful to collect over the next few days as part of your analysis?

There are many customer reviews on the Web, so it is possible to analyze Gateway’s feedback and its delivery service. Comparing Gateway’s case study with other top-rated grocery delivery companies, such as Tesco, Ocado, Peapod, one could define all pros and cons the Grocery Gateway has.

Refernces:

1. Grocery Gateway: Customer Delivery Operations P Fraser Jhonson 902D03

2. Tesco Case Study Mark Palmer http://www.emeraldinsight.com/doi/pdfplus/10.1108/09590550510577110

3. Grocery Gateway Business Model: An interview with Grocery Gateway CEO Claude Germain by Nicholas Seiersen