OPER3160 Grocery Gateway Case Study
OPER3160 Grocery Gateway Case Study
Executive Summary
To: Al Sellery, CEO, Claude Germain, Chief Operating Officer
From: Dominique Van Voorhis, Vice-President of Industrial Engineering and Operations Systems
Subject: Customer Delivery Operations
Issue: Grocery Gateway would like to increase their deliveries from 2.7 to 4 per hour and provide recommendations for improving and optimizing the delivery operations. To optimize delivery operations, two solutions are recommended. One, an upgrade to the route optimization software should be purchased to provide a more effective analysis of route suitability and set out appropriate delivery times. Two, a change in the cash collection from point of delivery to point of purchase will further increase operation efficiencies. These changes to operations are expected to increase the number deliveries per hour to help meet the organization’s objective to become cash flow positive in 2001 on a variable costs basis.
Internal Analysis
The company’s target was to achieve 4 stops per hour for delivery drivers; however, recent management reports have shown only 2.7 stops per hour for October 2001. If no additional deliveries can be made, the delivery system will move on to the next delivery window. The lack of synchronization between systems indicate a sign of systems failure.
Currently, in 2001 the internet retailing market is in its growth stage making it relatively new technology to many potential clients. Grocery Gateway has an opportunity to grow given the fact that it serves one of the largest populated centers in Canada, the Greater Toronto Area (GTA).
SWOT Analysis
Strengths
-Grocery Gateway is a financially strong company as it has managed to raise $70 million through private sector financing. This money can be used to help with future growth. The company was also the largest direct online grocer in 2001 and has 125,000 registered users.
- Grocery Gateway’s website, grocerygateway.com, offers a high level of
Executive Summary
To: Al Sellery, CEO, Claude Germain, Chief Operating Officer
From: Dominique Van Voorhis, Vice-President of Industrial Engineering and Operations Systems
Subject: Customer Delivery Operations
Issue: Grocery Gateway would like to increase their deliveries from 2.7 to 4 per hour and provide recommendations for improving and optimizing the delivery operations. To optimize delivery operations, two solutions are recommended. One, an upgrade to the route optimization software should be purchased to provide a more effective analysis of route suitability and set out appropriate delivery times. Two, a change in the cash collection from point of delivery to point of purchase will further increase operation efficiencies. These changes to operations are expected to increase the number deliveries per hour to help meet the organization’s objective to become cash flow positive in 2001 on a variable costs basis.
Internal Analysis
The company’s target was to achieve 4 stops per hour for delivery drivers; however, recent management reports have shown only 2.7 stops per hour for October 2001. If no additional deliveries can be made, the delivery system will move on to the next delivery window. The lack of synchronization between systems indicate a sign of systems failure.
Currently, in 2001 the internet retailing market is in its growth stage making it relatively new technology to many potential clients. Grocery Gateway has an opportunity to grow given the fact that it serves one of the largest populated centers in Canada, the Greater Toronto Area (GTA).
SWOT Analysis
Strengths
-Grocery Gateway is a financially strong company as it has managed to raise $70 million through private sector financing. This money can be used to help with future growth. The company was also the largest direct online grocer in 2001 and has 125,000 registered users.
- Grocery Gateway’s website, grocerygateway.com, offers a high level of